American Oil and Gas Reporter - April 2018 - 143

ConventionSection: Kansas Independent Oil & Gas Association
White agrees that there are several
reasons for Kansas operators to take a
small victory lap in McPherson. "I think

KIOGA members will be cautiously optimistic, with the price increases in oil,"
he offers. "I don't think there will be a

Kansas drilling boom, but activity certainly
is increasing to a certain degree."
r

Steel Tariff Likely To Affect Operators
TOPEKA, KS.-President Trump's tariffs on steel and aluminum likely will
have international implications, and Edward Cross, president of the Kansas Independent Oil & Gas Association, predicts
that as Congress considers acting on the
White House plan, the voice of Kansas'
oil and gas producers will be part of the
consideration.
A request for information from the
president's staff as well as several congressional members prompted Cross to
state how the tariffs of 25 percent on imported steel and 10 percent on imported
aluminum would impact operators.
"There still is uncertainty on the impacts
those tariffs could have on oil country tubular goods," he reports. "I don't know if
OCTGs are in or out of the tariff, or what
impact a tariff could have on shifting domestic steel used for OCTG to other markets, which could diminish oil field use
of steel. It is also unknown what kind of
impacts this will have on U.S. exports,
including oil and natural gas."
KIOGA Chairman Kenneth White says
equipment suppliers note the pipe market
already is in disarray, as the OCTG sector
recovers from the activity downturn. "It
appears if the 25 percent tariff on imported
steel goes into effect, that probably means
our pipe prices will go up by that amount.
That is not good," he warns.
A presidential initiative to withdraw
from the 1989 North American Free Trade
Agreement also could impact Kansas operators, Cross says. Since 2010, natural
gas exports to Mexico have jumped 445
percent, while crude oil transfers have increased 320 percent. Cross says as international negotiations slow, a unilateral U.S.
exit from the agreement is possible. He
adds that several oil and gas organizations
are pushing to retain a low- or zero-tariff
trade structure for energy-related products
and investments if NAFTA is renegotiated.
KIOGA also continues to monitor the
tax policies that the White House revised
this year, White says, adding the reforms
are likely to be significant positive impacts
on the oil and gas industry. "The biggest
thing that happened with President
Trump's tax bill was the preservation of

intangible drilling costs and percentage
depletion. Any savings from lower tax
rates in our industry generally gets put
back into the ground," he notes.
Revised Regulations
Actions in Washington are likely to
have impacts on Kansas oil and gas operators that extend beyond steel prices
and trade practices, Cross notes, pointing
to new emissions rules coming from the
U.S. Environmental Protection Agency
as only one example of shifting federal
regulations. EPA announced in March
that it was going to withdraw the 2016
control techniques guideline (CTG) for
the oil and gas industry, he says.
The Clean Air Act requires states to
implement reasonably available control
technology (RACT) to reduce volatile
organic compound emissions, including
methane, from existing sources covered
by a CTG, EPA states. Those recommendations for oil and gas activities include replacing high-bleed pneumatic
controllers with low-bleed units, and replacing rod packing on a regular schedule
(see story page 101).

The revised CTGs target new methane
sources, and EPA also had proposed to
impose those regulations on existing
sources, he describes.
"KIOGA is excited about that, because
it and a number of other associations encouraged the federal government to take
that step," he says. "EPA was making that
move based on a report by the Environmental Defense Fund that contorted data
to identify low-producing wells as super
methane emitters. EDF based its methane
emissions data on the percent of production
instead of the actual amount of emissions."
The association also is monitoring the
lesser prairie chicken and its status under
the Endangered Species Act, Cross says.
As part of KIOGA's response, he reports
relating to congressional members and
their staffs how proposed listing changes
may impact oil and gas operations in
Kansas and the rest of the nation.
Kansas Governor Jeff Colyer met with
Interior Secretary Ryan Zinke at the end
of February to discuss the impacts of
listing the lesser prairie chicken, Cross
says, adding Colyer sought federal recognition of the state's conservation efforts

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APRIL 2018 143


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American Oil and Gas Reporter - April 2018

Table of Contents for the Digital Edition of American Oil and Gas Reporter - April 2018

Contents
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