American Oil and Gas Reporter - August 2018 - 119

ConventionSection: Kansas Independent Oil & Gas Association
the settlement becomes confidential."
As of mid-July, Dillard said he wasn't
aware of any producer yet turning to the
KCC for relief. "There isn't a hard and
fast way (the commission) determines
what is equitable and fair," he muses.
"It's my position when any of these gathering systems changes hands, just because
the new owner paid too much doesn't
mean he gets to recover his costs by
jacking up the rates on producers. That
is economic waste, and the KCC should
be charged with preventing it."
Electric Rates
KIOGA Electric Chairman Adam
Beren expresses similar frustration regarding the association's efforts to win
rate concessions from the state's rural
electric cooperatives. KIOGA even has
enlisted the aid of lawmakers, meeting
twice with RECs in discussions facilitated
by Kansas Senate Utilities Chairman Rob
Olson, R-Olathe: once in January and
again on April 25.
At the latter, Beren reports, "The utilities indicated they were not willing to
do anything based on the suggestions we
have made over the past two years."
He recalls that KIOGA has suggested
three ways electric utilities can provide
relief to struggling oil operators:
* A marginal load rate could keep
small wells on line so that utilities didn't
lose 100 percent of the load and had to
transfer sunk costs to other customers.
* A load control rate for operators
who can shut off wells during peak load
periods. "Utilities offer them to irrigators,
in most cases, and to large industrial
users, but they don't offer them to the
rate classification oil customers are in,"
Beren observes.
* An economic development rider
could encourage wells already shut in to
come back on line.
"Those are three win/win ideas we
thought everybody would benefit from,
but for whatever reason, the utilities have
not yet seen it that way," Beren remarks.
Even though in the past decade, Kansas'
electric rates have gone from the 14th
cheapest in the nation to 35th, part of the
problem, White suggests, is lack of public
concern. He recalls going to a Southwest
Kansas REC rate hearing where the only
two people present to protest a proposed
rate increase were himself and "a local
fellow on a fixed income."
"I can't find a gubernatorial candidate
who seems to really care about it," he adds.

KIOGA does have allies in its quest,
Beren says, pointing to a group of large
industrial users including Occidental
Chemical Corp. (formerly Vulcan Chemical) in Wichita, which he says was able
to get a resolution introduced in the
Kansas Legislature this year to require a
study on why Kansas' electric rates were
higher than those of nearby states.

"We are going to have to bring in
allies; this is not only an oil issue," Beren
states, noting that rates on Kansas' largest
utility have gone up 70 percent during
the last 10 years.
"We have to get our arms around this
as a state," he says. "When there is a big
problem, usually there is a big solution."
r

Providing Defensible Data Is
Key To Undoing Federal Regs
TOPEKA, KS.-For the past year and
a half, the Trump administration has been
working to undo a variety of regulations
imposed on the U.S. oil and gas industry
by the Obama administration. The Kansas
Independent Oil & Gas Association, says
President Ed Cross, like many other state
and national producer groups, is doing
what it can to help.
He says association representatives
met with the Environmental Protection
Agency in February and again in May
about the agency's determination
whether it should regulate oil and gas
wastes under Subtitle D (nonhazardous
waste) of the Resource Conservation
and Recovery Act. Also in May, KIOGA
met with the Department of Energy regarding EPA's methane regulations and
grid resiliency initiative, and with the
Department of Interior on the lesser
prairie chicken.
In almost every case, Cross reports,
federal officials were receptive and nonadversarial, but there is more to undoing
a regulation than flipping a switch. "They
want defensible data and information because they are certain they will be sued
and they want to be able to defend (their
positions)," he says. "That is what we
have been trying to provide them."
Sometimes, such as is the case for
EPA's RCRA decision, that involves getting nonindustry voices to chime in. Cross
notes that RCRA requires EPA to determine every three years whether it is necessary to regulate various classes of waste
under Subtitle D. When several environmental groups sued EPA in May 2016
for failing to make that determination for
oil field wastes, the agency agreed to do
so by March 2019, he recalls.
The fact that the statute makes state
enforcement of any EPA Subtitle D
rules voluntary does not matter, he points

out. The mere existence of federal standards could provide the basis for citizen
suits against operators, even if they
were complying with state rules, Cross
explains. "That really is what the environmentalists want."
Consequently, he says, it is important
for EPA to rule that Subtitle D regulations
are not needed because states already are
regulating oil field wastes adequately.
Cross reports Kansas Governor Jeff Colyer

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AUGUST 2018 119

American Oil and Gas Reporter - August 2018

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