American Oil and Gas Reporter - December 2016 - 90

ConventionCoverage: Oklahoma Independent Petroleum Association
ern Alliance had been forced to make
some difficult decisions amid the industry
downturn, but also pointed to provisions
made during the good times. "I have
been squirreling away money in my legal
defense fund for years, so that has gotten
us through," she related. "Litigation is
our last line of defense."
After all, Sgamma observed, industry
advocates cannot simply run for cover in
tough times. Although it can be advisable
for companies to slow or postpone projects
according to changes in cash flow, associations have no such option. "We cannot
scale back because the Obama administration sees blood in the water," she assessed. "It is not giving us a break on
regulations that are extremely difficult to
implement, nor with additional expenses
during downtimes. We cannot simply say
we cannot respond to a regulation; we
have to."
Fortunately, Sgamma reported, Western
Alliance members recognize that. "We
have had success raising funds for specific
litigation," she detailed.
She pointed to estimates that showed
how the Bureau of Land Management's
proposed venting and flaring rule threatened
to add $100,000 to the cost of each new
well on federal and tribal lands. "We
asked people to give us a fraction of what
they were planning to spend on their wells
to fight that," she said. "It took about
three weeks to raise the funding."

Punitive Regulation
Sgamma opened her remarks earlier
that morning by considering the Obama
administration's aggressive regulatory approach. She said the oil and gas industry
had made significant environmental strides
in a number of ways, citing as an example
how Wyoming producers had reduced
their surface footprints an average of 70
percent.
"We respond to any legitimate environmental concern and minimize those
impacts," she described. "However, this
war on oil and gas is going far beyond
legitimate environmental oversight to
punitive regulation. These regulations
exist to make it more difficult for the operator."
According to Sgamma, the past couple
years have seen the Alliance engage in at
least 60 regulatory processes from the
Department of Interior and Environmental
Protection Agency that have entailed
pushing more than 58,000 pages worth
of paper. Much of that has dealt with the
Endangered Species Act, she continued,
which did not abate after DOI settled a
lawsuit with anti-development groups to
reach listing decisions on several hundred
species in six years.
When DOI signed the deal in 2011,
Interior Secretary Ken Salazar predicted
it would stem the tide of ESA lawsuits,
but Sgamma asserted it had failed miserably. "These two groups still are respon-

sible for 88 percent of new species petitions
and 53 percent of new ESA lawsuits,"
she advised. "They set USFWS's agenda
for six years, but WildEarth Guardians
has petitioned for 417 new species listings."
Fortunately, Sgamma suggested, many
of those species are found in the Southeast
United States, which she said could add
impetus to congressional reform efforts.
"The sooner other parts of the country
realize the ESA is not about species protection, but about environmentalists controlling industry, land and the private
sector, the sooner we actually can have
some fundamental change," she held.
Sgamma's remarks also considered
the extent to which oil and gas opponents
were attempting to demonize methane
emissions in much the same way they
had attempted to scare the public about
hydraulic fracturing. Meanwhile, she said,
EPA's rules to limit the oil and gas industry's methane emissions rest on a
flimsy foundation that will be tested in
litigation. "EPA has not done the endangerment finding necessary for it to regulate
methane emissions as a greenhouse gas,"
she observed. "It is not a criteria pollutant
under the Clean Air Act. Therefore, EPA
needs to go through a full process of
identifying any danger of methane emissions."
In the meantime, she noted, EPA is
moving forward with an information collection request about companies' existing
operations. "That is a massive factfinding," Sgamma described. "Once EPA
gathers all that information, it will come
forward with a rule to regulate emissions
from existing sources. Suddenly, EPA
will be putting very expensive regulations
in place to identify sites' emissions and
put controls on them, which will make
many marginal wells uneconomic." ❒

Coming In January

Pausing before the panel discussion about oil and gas issues throughout the country
are, from left, Ed Cross of the Kansas Independent Oil & Gas Association, Kathleen
Sgamma with the Western Energy Alliance, Alex Mills from the Texas Alliance of Energy
Producers and moderator Mike Terry with OIPA. One topic panelists tackled dealt with
how their respective groups continued to respond to public policy challenges amid the
industry's slow period.

90 THE AMERICAN OIL & GAS REPORTER

The Tech Trends reports open with
a look at cutting-edge technological
solutions now on the drawing boards
that could enhance reservoir performance, increase recovery, and lower
costs. Guest authors also assess
emerging technologies in geophysical
interpretation, artificial intelligence
and data analytics, unconventional
reservoir characterization, microseismic, completion diagnostics, and digital communications.

American Oil and Gas Reporter - December 2016

Table of Contents for the Digital Edition of American Oil and Gas Reporter - December 2016