American Oil and Gas Reporter - February 2016 - 79

for dubious public health benefits, Longanecker reviews.
Oil Field Theft
According to Miller, the Senate Natural
Resources and Economic Development
Committee and the House Energy Resources Committee are assessing whether
current statutes are adequate to prosecute
oil field theft. They also are reviewing
RRC enforcement policies, including
whether maximum fines are an effective
deterrent. The two legislative committees
also are examining noncompliance through
a cost/benefit analysis and weighing the
need for greater public accessibility to enforcement and compliance data, she adds.
Legislators passed a bill last session
to tighten enforcement, Miller notes, but
Governor Greg Abbott vetoed it. The
governor cited concerns that an authorized
second-degree felony charge constituted
an overreach because of fears that the
bill's broad language could result in
charges against routine business practices
initially unsupported with appropriate paperwork, Miller observes.
"We lobbied for it, but the governor

vetoed it," Miller recounts. "As our former
attorney general, I think he considered
the legal language a bit broad. We are
going to be very involved in how the discussion on oil theft plays out during the
next legislative session."
TIPRO also will keep a sharp eye on
the House Committee on Natural Resources' broad look at state and regional
water planning processes, the advantages
and disadvantages of water markets, and
the state's progress in encouraging regional
groundwater management, Miller says.
According to Longanecker, the discussion
provides TIPRO an opportunity to educate
new lawmakers about the stringency of
RRC rules and the groundwater protection
they already provide.
Statewide Rule Changes
In mid-January, the Texas Railroad
Commission approved changes to
statewide rules 5, 31, 38, 40, 45, 51, 52,
and 86 governing unconventional fracture
treated (UFT) fields, with amendments
designed to better synchronize the practices
of horizontal operations with the state's
regulatory requirements, Longanecker

describes.
The commission defines a designated
UFT field as one in which horizontal
drilling and hydraulic fracturing must be
used to recover resources from all or part
of the field and that is developed using
either vertical or horizontal drilling techniques, according to a TIPRO summary.
The proposed UFT field rules are intended
to streamline requirements and the regulatory process, and ultimately simplify
and possibly reduce field rule hearings,
TIPRO indicates.
The RRC also is proposing amendments to Form P-16. If the commission
adopts the proposed changes, under
Statewide Rule 40, operators will be required to file the P-16 for all horizontal
wells, and for all wells in any field designated as a UFT field.
RRC staff estimate that state revenue
will increase $77.4 million during the
first five years after the amendments take
effect, Longanecker says. "As companies
seek greater efficiencies during this downturn, this will allow our members to
reduce the required paperwork and administrative burden," he adds.
❒

TIPRO, Industry Exhibit Endurance
AUSTIN, TX.-As oil prices fell below
$30 a barrel in mid-January, Raymond
Welder, chairman of the Texas Independent
Producers and Royalty Owners Association, said he reminded himself how he
and his fellow independents must hold
fast to the knowledge that industry conditions would one day improve.
"TIPRO truly is made up of independents; and independents have shown
time and again the ability to survive and
thrive in tough environments," reflects
Welder, president and chief executive officer of Welder Exploration and Production
Inc. in San Antonio. "Our independent
nature is a big reason why the industry is
so strong. Nothing lasts forever and this
too shall pass."
Members preparing for the association's
70th annual convention, Feb. 22-24 at
the Grand Hyatt on San Antonio's historic
Riverwalk, can look forward to speakers
and networking opportunities that can
help members through hard times, Welder
says.
Tested And Tough
Witnessing the strain industry conditions are placing on companies is especially difficult to behold when friends
and neighbors suffer, Welder acknowl-

edges. Nevertheless, he emphasizes,
TIPRO members have endured similar
times before.
"TIPRO membership always has been
necessary, but it never has been more
critical," Welder declares. "The necessity
of having a credible and forthright industry
advocate such as TIPRO never has been
more important. We are so grateful for
the staff and leadership, who continually
prove that this is one of the industry's
premier advocates."
Annual conference speakers will include analysts, policymakers, regulators

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Fax: 432-367-1115
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FEBRUARY 2016 79

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American Oil and Gas Reporter - February 2016

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