American Oil and Gas Reporter - April 2019 - 107

pipeline tampering a felony, he says.
The original versions of HB 156 by
Representative Sam Whitson, R-Franklin,
and SB 264 by Senator Frank Niceley,
R-Strawberry Plains, create a Class E
felony of tampering with, destroying or
interfering with any pipeline, pumping
station or equipment used to transport,
store, or distribute crude or refined petroleum products or natural gas, a legislative summary indicates.
Similar prohibitions already are in
place to protect utility, communications
and railroad infrastructure, the summary
says. "TOGA is supportive of this issue
and it has been moving through the
committee process very smoothly,"
Laine assesses.
The association also is monitoring
other legislation, he reports. "There are a
handful of caption bills that have been
introduced that we are keeping an eye
on," he mentions. "A caption bill is a
piece of placeholder legislation that opens
the code to handle amendatory language.
Most of those bills are carried by legislators
who traditionally have been supportive
of the industry, but we are always careful
not to take anything for granted."
TOGA also continues to favor efforts
that will steer severance tax revenue to
producing counties, which includes a 3
percent levy on each barrel of oil and
Mcf of natural gas, Bible says.
"In terms of the Tennessee state budget,
we are talking about a relatively small
amount of money," he explains. "For
Scott County, where I live, it would
provide an extra $50,000 that perhaps
could make a big difference in the county
road budget. Tennessee has had a tremendously wet winter, with flooding, road
wash-outs, and landslides. Come spring,
more repairs may be needed for county
roads than we ordinarily have."
However, producing counties have expressed concern that if lawmakers give
with one hand, they may be tempted to
withdraw with the other, Bible notes.
"There has been a concern that if Scott
County accepts those additional severance
tax funds, it may lose other money and it
may turn out to be a wash," he says. "We
have gone back and are working with
county mayors and with the general assembly to make sure that if these counties
get an additional $50,000 a year in severance taxes, they don't lose $50,000 in
highway funds. We are trying to get it
built into the legislation that counties
will not lose funds if they take the severance tax revenue."
Ironing It Out
According to Laine, TOGA had a
series of high-level meetings with the

Department of Finance and Administration
in December, and the association sought
for Lee to insert the issue into his budget
because it would drain state revenue by
about $437,000 according to figures from
the legislative fiscal review office.
"However, the administration wanted
the money to be earmarked for some
specific purpose-education and tourism
were among the big contenders-instead
of going to the counties' general funds,
as it does now," Laine says.
Because each of the 11 counties receiving oil and gas severance tax revenue
use the monies differently, for purposes
including roads and education, he says,
TOGA was unable to reach a consensus
with state and county officials on the
best way forward with a legislative proposal.
"TOGA decided to wait until the finer
points of the issue can be decided before
introducing legislation," Laine reports.
"We hope to continue discussions with
the stakeholders during the off-session
and be ready in 2020 to pass legislation."
Fortunately, Bible adds, in none of
the discussions did a lawmaker ever
broach the possibility of a severance tax
increase. "There has been no real talk of
raising the severance tax since I have
lived in Tennessee, which has been a
little more than 20 years," he relates.
Stricter Standards
On the federal front, TOGA members
continue to monitor support for the socalled Green New Deal that has been
proposed in Congress, Bible says, although
he suggests that likelihood of a nearterm enactment seems remote. "There
will be a lot of noise, a lot of smoke but
no fire," Bible assesses.
With regard to environmental issues,
the association continues to keep an eye
out for any attempts to unnecessarily regulate industry operations, Bible indicates,
although Tennessee has seen relatively
little anti-industry activity recently. "We
appear to be in pretty good shape, particularly as far as environmental issues are
concerned and with any talk of anti-fracturing regulations," he says.
The potential stakes are significant if
that issue resurfaces, he acknowledges,
but Tennessee's Oil and Gas Program updated well casing and cementing requirements in recent years to ensure groundwater
protection, which has helped to pre-empt
anti-fracturing efforts, Bible reviews.
"Prior to the update, operators could
run 95⁄8-inch surface string and get away
with running a couple hundred feet of
that and then 3,000 feet of 7-inch, packing
it down with several hundred feet of cement," he describes. "Now, operators

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American Oil and Gas Reporter - April 2019

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