American Oil and Gas Reporter - July 2018 - 106

ConventionSection: Western Energy Alliance
Checkerboard Leasing
Sgamma says NEPA revisions are
needed to prevent situations in which
one lateral on a 20-well pad touches a
minority of federal minerals and subjects
the entire well pad to federal regulations.
"That is important, because as our laterals have gotten longer and because the
West is such a checkerboard, where because you have a leasehold that could
contain some private land, some federal
land, and an Indian allottee, you have a
mixture of ownership," she describes.
"That minority of federal ownership
should not trump those other mineral
owners. That is a very important issue
for the Alliance."
Similarly important as revising NEPA
regulations is ensuring the next administration cannot discard these changes,
Sgamma says. "We are working on legislation in Congress," she reports. "It
says that if a well is on nonfederal surface
and happens to access a minority of
federal minerals, less than 50 percent,
then no NEPA is required. That goes beyond this instruction memorandum."
Considering the dynamics on Capitol
Hill, Sgamma laments the extent to which
energy has become a partisan issue. The
oil and natural gas industry has longstanding friends among Republicans, but
she notes that it also has allies on the
other side of the aisle, with conservative
Democrats such as Representatives Collin
Peterson from Minnesota, Jim Costa from
California and Henry Cueller of Texas
expressing their understanding of the
benefits of domestically produced energy.
Frommer points out that through his
years in the oil and gas business he has
been involved with many presidential administrations, adding that he believes
himself fortunate to serve as Western Energy Alliance chairman under a White
House that is responsive to industry requests to streamline regulatory hurdles.
"A good pricing environment definitely
helps too, but many of the projects we
want to do on federal lands always have
had such a long time frame, it almost
mirrors dealing with offshore projects,"
he compares. "You have to plan multiple
years in advance to get a development
program in place on federal tracts anymore.
But, I see we are making strides in improving that."
Annual Meeting
Frommer predicts annual meeting attendees will bring an optimistic mood

to Avon.
"We are excited about having a great
lineup of speakers, hopefully many representing the current administration who can
help further the president's goals for energy,
and help us on the state of the regulatory
streamlining that we hope continues."
An optimistic mood seems common
across the oil and gas industry these days,
Sgamma suggests. "It is a good atmosphere
right now: you have a situation where
we went through a downturn; industry
got leaner and meaner and more efficient;
and we are not going gangbusters. We
are growing responsibly and not going
crazy. That is a good place for industry
to be," she assesses
The industry is taking advantage of
new opportunities, keeping gasoline prices
low for consumers, and keeping costs in
line because prices cycle up and down,
Sgamma observes, adding the trade association's job is to get the industry back
to where it was before the downturn.
"The Alliance remains lean and
mean as well, just like our companies,"
she says. "We always are doing more
with less. That is good for competition
and good for making sure companies
get value for their dollar from the association."

Brian Fakhazadeh, vice president of
development and operations for the Western Alliance, says speakers at the annual
meeting are:
* Doug Benevento, EPA Region 8
administrator;
* Amy Harder, a reporter for Axio;
* Brian Steed, acting BLM director
(invited);
* Representative Brian Cuellar, DTx. (invited); and
* Frank Fannon, assistant secretary
of state (invited).
Following the family and member reception and dinner opening the annual
meeting, the Western Alliance will host
"Cigars Under the Stars," which Fakhazadeh describes as a tradition of several
years.
As part of the annual meeting, Frommer
will hand his chairman's gavel to Jeff
Lang, executive vice president of operations for BIP Energy.
"I hope my incoming chairman has as
much fun doing his job as I have. I am
sure he will," Frommer predicts. "I hope
I am passing the gavel off with the association in a strong financial position, with
increased membership, and with an optimistic outlook on regulatory improvements
going forward."
r

Environmentalists' Lawsuits
Threaten Regulatory Reforms
DENVER-Legal action initiated by
Western Energy Alliance is helping block
an Obama-era regulation on venting and
flaring, although whatever new federal
regulations emerge are likely to face their
own court actions, warns association President Kathleen Sgamma. She characterizes
a revised regulation as a high priority for
the group.
According to the Bureau of Land Management, the Waste Prevention Rule issued
in 2016 prohibited venting of natural gas,
except under certain specified conditions,
such as an emergency or when flaring is
technically infeasible. It provided for a
base level of "allowable" flaring that decreases with time, and included requirements to update inefficient equipment
and follow best practices to minimize
waste through venting.
On April 4, the U.S. District Court for
the District of Wyoming ordered a stay
of the rule, pending finalization or with-

106 THE AMERICAN OIL & GAS REPORTER

drawal of the agency's proposed revisions
for the Waste Prevention, Production Subject to Royalties, and Resource Conservation rule the Obama administration issued in November 2016 with a Jan. 17,
2017 effective date (AOGR, May 2018,
pg. 18). Compliance with key provisions
was not required until Jan. 17, 2018, but
the U.S. District Court for Northern California blocked an attempt by Trump administration to delay compliance (AOGR,
March 2018, pg. 30).
In October 2017, the Western Alliance
and Independent Petroleum Association
of America petitioned for a preliminary
injunction against the 2016 rule in the
Wyoming court, asking the court to block
the rule because it exceeded the bureau's
authority regarding waste prevention
(AOGR, November 2017, pg. 15).
The two industry groups argue the
eleventh-hour Obama-era rule threatens
to shut in marginal wells, and since the

American Oil and Gas Reporter - July 2018

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