American Oil and Gas Reporter - December 2016 - 86

Federal Encroachment
New Mexico State Land Commissioner
Aubrey Dunn told PBPA during the KickOff Breakfast that low oil and gas prices
had greatly slowed the flow of revenue
into state coffers and New Mexico school
budgets, but battles with the Bureau of
Land Management and other federal offices could cost the state even more.
The State Land Office is opposing revisions to the BLM's onshore orders and
federal rules to regulate venting and
flaring in what amounts to the bureau's
move to effectively take control of New
Mexico oil and gas production, Dunn
said.
"Federal overreach in New Mexico is
absolutely unbelievable," he marveled.
"I know you are seeing it from your
side."
U.S. Fish & Wildlife Service efforts
to list the Texas hornshell mussel under
the ESA could affect production and leasing of 90,000 state trust acres in southeastern New Mexico and production from
about 2,800 wells, he said. But a listing
would be equally harmful to Texas, Dunn
declared, because the mussel's habitat
includes waterways that traverse the
Delaware Basin.
"If you build a pad, road, or water
line, they are going to want you to make
sure none of that gets into the rivers," he
assessed. "A listing is going to be super
harmful."
However, victory is possible, Dunn
insisted, pointing to another state's legal
win that rebuffed USFWS's efforts to
list the Utah prairie dog. Utah proved the
species did not migrate nor was it used
for commerce, which blocked the federal
government's regulatory powers under
the ESA, he observed. Similar designations
could apply to the mussel and other
species, he suggested.

PBPA members should involve themselves in the advocacy their association
takes up, urges incoming PBPA Chairman
Clint Walker. Walker recounted how federal inquiries into hydraulic fracturing
prompted him to get involved with PBPA.

86 THE AMERICAN OIL & GAS REPORTER

Although the Texas Legislature has an established history of eliminating unneeded agencies
during the sunset review
process, the Texas Railroad Commission is a
necessary entity assures
Senator Kel Seliger (left),
R-Amarillo, as Senator
Craig Estes, R-Wichita
Falls, listens. Estes emphasized the importance
of keeping side issues
out of an RRC reauthorization bill and vowed to
help keep the legislation
focused on that.

Texas Swing
Texas Railroad Commissioner Ryan
Sitton called on PBPA to embrace policy-driven solutions that could help Texas
become the world's swing producer.
"Everybody in Texas knows that oil and
gas is the single biggest chunk of our
economy," he reviewed. "At the peak,
about 10 percent of world hydrocarbons
move through Texas."
Operators in the Permian Basin and
South Texas can bring new production
on line in only three months, Sitton said.
Thanks to such a comparatively quick
ability to respond to changing market
conditions, the state can shape a positive
message and push for policies that may
include selling more natural gas to Europe
to displace Russian gas, he said.
The RRC and industry also need to
cooperate to clear a common misconception that North Texas tremors are associated with hydraulic fracturing instead
of disposal wells, he said. Of the disposal
well permits the RRC has approved in
areas with faults, the commission has required operators to meet special conditions
on about 60 percent, Sitton pointed put.
The commission also will continue to
flex its muscle when dealing with unwelcome
encroachment from federal agencies, he
said. He noted efforts to find an operator
to intervene on EPA's behalf in an action
brought by environmental groups to force
a sue-and-settle outcome, but said the RRC
drafted a letter expressing the agency's interest to intervene on EPA's behalf.
Federal regulators, Sitton said, "are
going to have to deal with us."
Reauthorization First
State lawmakers who participated in
a panel discussion assured PBPA the 85th
Texas Legislature would push for a simple
bill to reauthorize the Railroad Commission for another 12 years.
"The sunset bill needs to be kept
clean," asserted Senator Craig Estes, RWichita Falls, chairman of the Senate

Natural Resources Committee. "Changes
in any way, shape or form need to be on
a separate bill, and I will exert as much
pressure as I can to make sure of that."
The variety of recommended RRC
changes can be debated separately, but
RRC reauthorization is essential after
two previous attempts bogged down in
debate about potential agency changes,
recounted Representative Chris Paddie,
R-Marshall, vice chairman of the House
Energy Resources Committee.
Senator Kel Seliger, R-Amarillo, whose
district also includes Midland, pointed
out that the state eliminated nearly twodozen agencies during the seven-year
speakership of Representative Tom Craddick, R-Midland, who moderated PBPA's
legislative panel.
"We have done away with 23 agencies
because we didn't need them," stated
Seliger, a member of the Natural Resources
Committee and chairman of the Senate
Higher Education Committee. "We have
to have the RRC, so anything that keeps
that authorization bill from passing needs
to be discarded."
Representative Brooks Landgraf, ROdessa, a member of the House Energy
Resources Committee, told PBPA members, "It's not good to abuse the sunset
process by turning it into something it's
not, and I certainly don't think we should
use the RRC sunset process to do addons. Anything that needs to be addressed
can be addressed separately."
Although RRC reauthorization may
seem a given, lawmakers pointed out upcoming battles were likely to include
grappling with a budget shortfall, reassessing the way Texas funded public
education, and shoring up Medicaid and
the state's Child Protective Services agency.
Lawmakers need to reconsider RRC
funding and consider other ways to fund
the commission instead of relying completely on industry, Paddie suggested.
Debate during the legislative session,
which convenes Jan. 10, likely will con-

American Oil and Gas Reporter - December 2016

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