American Oil and Gas Reporter - August 2016 - 80

ConventionSection: Kansas Independent Oil & Gas Association
prices represents a serious long-term threat
to the industry's next generation of workers.
Operators have long experienced the cyclical nature of oil and gas markets, and he
points out how the latest downturn now
faces an additional burden of calls to shift
the world to a zero carbon-energy future.
"When oil prices went to $100 a barrel
and field activity was screaming, jobs were
paying very well, and that brought about a
lot of interest," Powell recalls. "I know attendance in college classes for petroleum
engineering and geology skyrocketed. Certainly, any young person probably is more
inclined to ask where he could get the best
job and make the most money. But, he
probably also wants to make sure that once
he gets that nice job, the rug doesn't get
pulled out from under him."
White House Threat
While many market indicators are positive, Powell points out the signals from
Washington are not as favorable. The Obama
administration seems to be pushing to enact
as much anti-industry regulation as possible
before it leaves Washington, he says.

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Powell cites methane emission regulations released by the U.S. Environmental
Protection Agency as one example of
Obama's crusade to put oil and hydrocarbon producers out of business. The
updated provisions of the Clean Air Act's
New Source Performance Standards impose new limits on methane and volatile
organic compounds produced by oil and
gas sites (AOGR, June 2016, pg. 34).
"Now, the administration wants to include existing production, and to remove
any exemption for low-producing wells,"
Powell says. "That clearly shows this administration does not understand depleting
resources. As these wells deplete and get
less productive, they also tend to have
fewer, if any, methane emissions. It does
not take much additional regulatory cost-
which offers no accompanying benefits-
to put those wells out of production, and
therefore reduce production and employment in the United States."
Requirements in the methane regulations include monitoring and recapture
technology on operating wells, the cost
of which threatens a significant portion
of the more than 400,000 domestic stripper
wells, he says.
"EPA does not have the staff to even
begin to enforce those regulations," Powell
asserts. "Even if the agency turned that
authority over to the states, the states
would have very little interest in staffing
up to take on such a large regulatory
burden that is detrimental to the industry
with little, if any, benefit to Kansas. KIOGA needs to do everything it can to stop
this rule, or to limit it to large facilities
and force EPA to take a look at the costs
versus benefits."
He notes that as part of its benefits calculation, EPA argues that the captured

methane can be sold, but that is true only
if the well is near a pipeline and the
operator can afford to compress the gas to
pipeline specifications. "EPA does not understand the industry, it does not want to
listen to anyone from the industry, and it
does not want input. Probably the reason
is because it is not concerned about whether
it is hurting the industry," he says.
Wichita Meeting
Margery Nagel, convention committee
chairwoman, says KIOGA's annual meeting will sport a 1920s theme to honor
both the El Dorado oil field that dominated
the Kansas industry in that decade, as
well as her grandfather, who got his start
in that field. The meeting's theme will
extend to the Century II Expo Hall, where
oil field exhibitors will be flanked by
1920s cars, she describes.
Cross adds that this is the second year
KIOGA is meeting at the downtown Wichita site.
"KIOGA is excited about the venue,"
he says. "The association moved there
two years ago because it was bursting at
the seams at the airport location. Unfortunately, market prices have gone down
and that has cut attendance, but looking
ahead, Century II is a good venue with
lots of room. As things turn around, KIOGA will have room to grow."
The new venue allows the association
to have all attendees seated in the same
hall for meals, and to host all exhibitors
in one indoor location, Nagel says.
The speaker lineup will target key industry challenges, she offers, including
Robert Grenier, an expert on counterterrorism who will deliver the luncheon
keynote address. Nagel says he will
discuss political events in Saudi Arabia

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American Oil and Gas Reporter - August 2016

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