American Oil and Gas Reporter - September 2016 - 107

ConventionCoverage: Kansas Independent Oil & Gas Association
he noted, Republicans never controlled
both the House and Senate until 1994.
"It has gone back and forth since, so real
power is at stake," he observed.
He also said some peoples' tendency
to subsist in ideological echo chambers
prevented them from understanding other
outlooks. "A conservative can wake up
every morning and never hear nor read a
liberal point of view . . . or a liberal can
go all day without ever encountering a
conservative point of view," he mused.
According to Tyler, good political
communication centers on stories, and
he acknowledged that oil and gas companies' story was not as simple as the
one told by the industry's opponents. He
said that the top 14 environmental groups
had combined assets of $11 billion and
raised an average of $3 billion a year.
Nevertheless, he said, those groups
constantly circulate a story about oil and
gas producers' presumed greed. "Who is
greedy: the people who push assets away
from themselves to create prosperity or
the environmentalists who collect all this
money to destroy you?" he asked. "Prosperous societies do not tolerate dirty air
or dirty water. The world's 25 most polluted places also happen to be the 25
poorest because people do not have resources to clean their environments. Prosperity cleans environments."
Middle East Turmoil
During remarks at KIOGA's luncheon,
former Central Intelligence Agency agent

Effective political communication centers
on stories, asserts MSNBC political analyst Rick Tyler, who worked on the presidential campaign of Senator Ted Cruz,
R-Tx. According to Tyler, industry opponents depicted oil and gas companies
as villains, but the industry's story as
provider of a crucial component of modern life was less simple to convey.

Robert L. Grenier, chairman of Enterprise
Research Group Partners LLC, noted that
he had followed the Middle East closely
since starting his career in 1979. He suggested the area's tumult was worse than
ever. "You may have to go back to the
original Muslim conquest in the Seventh
Century to find anything that approaches
what we are seeing in the Middle East
right now," he related.
Grenier cited three drivers behind Mid-

dle Eastern events:
* The aftermath of the so-called "Arab
Spring;"
* The rise of the Islamic State; and
* The Sunni/Shia divide.
Regarding the outlook for Libyan oil
production, he acknowledged that civil
strife had kept the country's output well
below its capacity.
"Libyan production has been bouncing
around," he allowed. "If 1 million-plus
barrels a day come back on line from
Libya, obviously it would have a substantial market impact."
However, one could argue that Libya's
problems are a product of too much
democracy, he continued, noting the country had three national governments and
nobody could agree on who controlled
its oil infrastructure.
"We are not going to see full production
from Libya for some time," Grenier predicted. "But, there is a growing realization
that something must be done. Most of
the fighting is against ISIS. I would not
be terribly surprised if, in the next year
or so, we see enough political stability
where . . . Libya is able to come together
on some sort of convention that will
allow its oil to be produced and distributed.
It is not going to happen tomorrow. The
political division and distress is very,
very deep. But, if you bet Libyan oil is
going to remain low for the next year,
you are probably safe."
r

Good News Ahead For Electric Rates?
By Bill Campbell
WICHITA, KS.-While Kansas has
seen electricity rates rise at the fourth
fastest rate in the country in recent years,
the consensus of a panel discussion on
electrical issues was that the future looks
better for rate payers.
Two Kansas electric cooperative officers and a wholesale marketing professional joined KIOGA Electric Committee
Chairman Adam Beren in a morning seminar during the Kansas Independent Oil
& Gas Association's annual meeting in
Wichita.
Later in the day, another panel offered
"survival tips" from the perspectives of a
producer, tax adviser, and attorney.
Beren set the stage by noting that

electricity accounted for 33-50 percent
of his company's lease operating costs,
depending on location.
Further, Beren pointed out, Kansas
experienced a 35 percent overall electric
rate increase from 2008 to 2014, going
from average of 7.5 cents a kilowatt/hour
to 10.5 cents. During that period, he said,
Kansas dropped from having the country's
13th cheapest electric rates to 32nd.
He said his company's in-state electricity rates ranged from 9.6 cents a kw/hr
to 11.0 cents, depending on the provider.
He compared that with the 6.0 cents a
kw/hr the company paid its largest utility
in Oklahoma, the 6.8 cents a kw/hr it
paid its largest provider in Texas, and the
8.5 cents a kw/hr it paid its largest provider
in Nebraska.

Asked by Beren to address the rise in
Kansas' electric rates, Stuart Lowry, president and chief executive officer of Sunflower Electric Power Corporation in
Hays, Ks., pointed to such things as
Kansas' participation in the Southwest
Power Pool, the expense of upgrading
transmission facilities and/or building
new lines to serve wind generating facilities, and environmental challenges.
"There has been a transformational
change in the electric industry over the
past 10 years," Lowry asserted. We exercise
control over fewer and fewer costs at the
local level."
Earnest A. Lehman, president and general manager of Midwest Energy Inc. in
Hays, added rising property taxes to the
list of costs beyond the utility's control.
SEPTEMBER 2016 107

American Oil and Gas Reporter - September 2016

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