American Oil and Gas Reporter - May 2017 - 87

ConventionSection: California Independent Petroleum Association

Political Headwinds
Buffet California
By Bill Campbell
BAKERSFIELD, CA.-Like oilmen
everywhere, members of the California
Independent Petroleum Association are
concerned about oil and gas prices. But,
says Chairman Steve Layton, "The concern
about price is secondary in California to
the concern about all the regulatory and
political issues we face."
As CIPA prepares for its 2017 annual
convention, June 8-11 at the Portola Hotel
& Spa in Monterey, Ca., the state's
industry "is in a much better place than
we were 14 months ago," assesses Layton,
president of E&B Natural Resources in
Bakersfield.
Noting that oil prices have held fairly
stable since last November, he remarks,
"If there is stability, even at a relatively
low price around $50 a barrel, people
can figure out how to make things work.
You aren't going to see massive developments, but (companies) can adapt and
keep things going.
"Investments are being made in California," Layton says. "That translates to
additional work, which translates to additional jobs."
All that, he says, is a testament to
California's tremendous natural resources.
But, he quickly adds, "It certainly doesn't
speak to the political environment. We
are fighting tremendous headwinds on
the political and regulatory fronts."
One of those winds frequently blows
from the California State Legislature,
suggests P. Anthony Thomas, CIPA's director of government affairs, which this
year has a supermajority of Democrats
in both chambers.
Although action on industry-specific
bills wasn't expected to begin until later
in the month, Thomas says an early indication of how California politics may
play out came on April 6 when the Democratic majority pushed through a $52
billion transportation and infrastructure
bill that will raise the state's gasoline and
diesel excise taxes from $0.24 and $0.16,
respectively, to $0.36 a gallon. SB 1 also
increases license fees between $25 and
$175 a year, depending on vehicle value.

CIPA Annual Meeting
Monterey, Ca.
Thursday, June 8
10 a.m.-Noon CIPA Executive Committee
Meeting, Portola Hotel
Noon-3 p.m. CIPA Board Meeting
3-4 p.m. California Natural Gas Producers
Association Board Meeting
5-6:30 p.m. Welcome Reception

Friday, June 9
9:30 a.m.-3 p.m. CIPA Scramble Golf
Tournament, Poppy Hills Golf Course
Shotgun Start
Transportation from Portola Hotel Not
Included
10 a.m.-12:30 p.m. Whale Watching Cruise
Leaves from Fisherman's Wharf
10 a.m.-1 p.m. 17-Mile Segway Tour
7:30-10:30 p.m. Dinner at the Monterey
Bay Aquarium

Saturday, June 10
7:30 a.m.-3:30 p.m. Trade Show, Portola
Hotel
7:30-8:30 a.m. Continental Breakfast
8:30 a.m.-12:15 p.m. General Session
Robert Fryklund, Chief Upstream Strategist, IHS Energy
Donald Gautier, Consultant to the California Council on Science and Technology
Legislative Panel
9 a.m.-Noon Point Lobos Nature Walk
12:30-3 p.m. Membership Luncheon
5:30-7 p.m. Chairman's Reception
6-11 p.m. Kids Camp
7 p.m.-12:30 a.m. Gala Dinner, Awards
and Dancing

Sunday, June 11
8-9:30 a.m. Send-Off Breakfast, Portola
Hotel

Other "big picture" items, Thomas
mentions, are proposals for free education
and single-payer healthcare, along with
the cap-and-trade greenhouse gas emissions reduction proposal that will be debated this year. "There are no fewer than
20 proposals to reduce greenhouse gases,
ban some ingredient used for production,

or spend resources from the GHG reduction fund," he observed in April.
Many of those bills, he adds, are based
on the belief the state will sell $1 billion$2 billion a year in emission allowances,
which may be a shaky assumption, based
on the results of an early-March capand-trade auction, in which only $8.2
million of a possible $600 million in allowances were purchased.
Find Common Ground
Layton acknowledges that "there are
a number of people in the legislature
who do not like the business we are in."
Others, he reflects, may not be philosophically opposed to oil and gas, but
are concerned about the safety and environmental impact of exploration, drilling
and production. Those concerns aren't
helped, he notes, by the constant barrage
of inaccurate and misleading information
about the industry.
CIPA's approach, Layton says, in addition to constantly educating lawmakers
and their staffs, is to look for common
ground. "Even though there may be concerns about what we do, a lot of folks
understand that without economic activity,
there isn't going to be money to build
roads and bridges, or to fund schools,
healthcare, efforts to reduce air pollution,
or whatever it is.
"There has to be a source of revenue,"
he goes on. "Whether it is income, sales
or property taxes, for the most part it
comes back to a business. Either that
business is paying the taxes, or that business is employing somebody who is
paying the taxes. That is a common
ground we have with a number of these
legislators."
Opposition Legislation
Disdain for and/or lack of understanding about the industry leads to a variety
of bills CIPA must either oppose or
attempt to alter, Thomas says. One example, he cites, is SB 465 by Senator
Hannah-Beth Jackson, D-Santa Barbara,
whom Thomas describes as "a coastal
Democrat who has challenged the oil industry publicly, and introduced damaging
MAY 2017 87

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