American Oil and Gas Reporter - March 2017 - 85

ConventionCoverage: Pennsylvania Independent Oil & Gas Association

Policy Challenges
Muddle Outlook
By Del Torkelson
PITTSBURGH-As he opened the proceedings on Feb. 1 at the Rivers Casino
in Pittsburgh, Chairman Gary Slagel suggested that most of the audience at the
Pennsylvania Independent Oil & Gas Association's winter meeting expected 2017
to be better than the preceding year.
Moreover, he assessed, some key evidence
seems to buttress that hope.
Unfortunately, developments in Harrisburg, Pa., should temper members' optimism, advised Slagel, a government affairs specialist for Steptoe & Johnson in
Southpointe, Pa. Along with a steady
stream of new regulatory proposals and
policies, he indicated, Pennsylvania oil
and gas companies face a number of unwelcome legislative proposals, especially
a severance tax.
"The budget shortfalls facing the commonwealth both this fiscal year and next
are not the fault of this industry, and we
should not be viewed as the solution,"
Slagel maintained. "For years, Pennsylvania's conventional producers have asked
the commonwealth for very little. Unconventional producers invested billions making
Pennsylvania the second-leading natural
gas producer and have asked for nothing
in return: no tax breaks, no tax incentives,
no state grants nor low-interest loans.
"All we wanted was an environment
in which we could grow and flourish to
make Pennsylvania great again," Slagel
determined. "The industry lived up to its
side of the bargain, but I am not sure we
are feeling much in the way of warm
fuzzies out of Harrisburg."
Another PIOGA speaker, Spillman
Thomas & Battle attorney James Elliott,
discussed some of those regulatory initiatives. Meanwhile, Scott Perry with the
Pennsylvania Department of Environmental
Protection's Office of Oil & Gas Management acknowledged some strained relations between the state and industry,
but said the department was committed
to a collaborative regulatory environment.
PIOGA's luncheon speaker, Terry
Madonna, director of the Floyd Institute's
Center for Politics and Public Affairs,

offered his analysis on the 2016 elections
and considered their implications for proceedings in both Harrisburg and Washington.
Other speakers at PIOGA's 2017 winter
meeting included:
* State Senator Scott Wagner, RYork, who discussed his background and
considered the state of Pennsylvania government;
* Joe Bastardi of WeatherBell Analytics LLC, who discussed long-range
weather forecasting and considerations
regarding climate change; and
* Timothy S. Knobloch, president of
James Knobloch Petroleum Consultants
Inc., who offered an overview of horizontal
well activity in the Appalachian Basin.
Four-Point Plan
Spillman Thomas & Battle's Elliott
reviewed federal and state regulatory developments, emphasizing initiatives to
address oil- and gas-site methane emissions. In Pennsylvania, he noted, that
largely began in January 2016 when the
state launched new rules and policies to
reduce methane emissions. When Gov-

Spillman Thomas & Battle attorney James
Elliott discusses the general permit-5A
that the Pennsylvania Department of Environmental Protection has released for
methane emissions from unconventional
wells. Elliott told PIOGA he did not expect
the permit for conventional wells to differ
very much.

ernor Tom Wolf announced the initiative,
Elliott recalled that the governor said the
volume of saved natural gas would offset
compliance costs. He then unveiled a
four-point plan that included a new general
permit for unconventional well sites.
PIOGA representatives met with DEP
staff and fulfilled the department's request
to survey members about the equipment
needs typical to unconventional versus
conventional projects, Elliott recounted.
At a December meeting, he continued,
PIOGA representatives saw a draft version
of the general permit-5A for unconventional wells, which he said was each 43
pages long.
"We have quite an extensive regulation
for a variety of sources," he described.
"Each source category is going to need
extensive compliance certification, notification before and after certain events,
record-keeping, reporting, emissions testing, and periodic monitoring. That is not
for everyone in the source categories,
but it is very prescriptive and time consuming. Notification (can be) 24 hours
or five days, depending on the sources
and the event."
GP-5A is only the beginning, Elliott
advised. Although it applies to unconventional wells, conventional operators
should examine it also, he urged. "It
would be naïve to not look at this proposal
very carefully and provide comments,"
he suggested. "I do not see the Wolf administration changing dramatically for
conventional sources."
Even as he expressed uncertainty about
aspects of the state's plan to curtail
methane emissions, Elliott concurred with
Wolf's assessment that methane regulation
entailed a different dynamic. "The pollutant
getting all the focus is our product,"
Elliott observed. "People need to know
we have every economic interest in the
world to save every molecule possible.
We do not need additional government
overreach."
Encouraging Cooperation
DEP's Perry contrasted the difference
between an interest and a position. The
desire for a fast car is an interest, he inMARCH 2017 85

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