American Oil and Gas Reporter - September 2017 - 92

In 2015, the legislature passed bills
clarifying that proppants qualified for the
state's sales tax exemption for manufacturing equipment, and that water hauling
for disposal purposes was exempt as well
(AOGR, May 2015, pg. 30). The Arkansas
Department of Finance & Administration
had ruled fracturing sand did not qualify
for the manufacturing exemption, and that
oil and gas wastewater was a solid waste,
which typically is subject to sales tax.
But more likely to be targeted, Baker
and Callan say, is a sales tax exemption
for equipment parts and repairs, which
was fully phased in just this year. "This
is something industry-again led by the
chamber of commerce-worked on for a
number of sessions," Baker says. "On
big equipment such as bulldozers and
that sort of thing, you are talking about a
pretty good chunk of change.
"One or two comments I have heard
indicate that will be in the mix of things
(the task force) will look at," he advises.
Callan acknowledges it is difficult to
quantify the importance of the exemption
to oil- and gas- related businesses because
of the downturn. AIPRO's argument, he
suggests, will be along the lines of, "If I
was a legislator, the point I would look at
is, when oil and gas prices do rebound,
what will be the tax impact on encouraging
the oil and gas industry to invest in Arkansas
as opposed to going to competing states?"

Healthy But Holding
Callan assesses the current state of the
oil and gas industry in Arkansas as healthy,
but in a holding pattern. "I think the industry
as a whole is in good shape, financially,"
he determines. "I don't know when investment levels will rise, but what we are
seeing now-at least in our company and
other companies we know a little about-is
that everyone is trying to position themselves
for when commodity prices do come back
to be more efficient in the ways we look
for and produce oil and gas."
Callan says he appreciates the efforts
by the Trump administration to undo a
number of Obama-era regulations, although he notes the pushback from radical
environmentalists and their allies has introduced a degree of uncertainty that is
difficult to navigate.
"A little more certainty about where
regulations are going and their intent would
help us all," he reasons. "We would know
a little better how to invest if we knew
what portion of each dollar was going to
be spent on regulatory compliance."
Annual Meeting
Callan says he is excited about
AIPRO's annual meeting, Sept. 27-28 at
the Embassy Suites in Little Rock.

92 THE AMERICAN OIL & GAS REPORTER

AIPRO Annual Meeting
Little Rock, Ar.
Wednesday, Sept. 27

9 a.m. Golf Outing, Country Club of
Arkansas
9 a.m. Sporting Clay Shoot, Blue Rock
Sportsman Club
Noon-5 p.m. Registration, Embassy Suites
Hotel
Noon-2:30 p.m. Exhibitor Setup
3 p.m. Welcome
3:05 p.m. China's Effect on World Oil
and Natural Gas Markets and Commodity Trends, Michael Drury, McVean
Trading and Investments
3:50 p.m. Regulatory Update
Larry Bengal, Director, Arkansas Oil
and Gas Commission
Becky Keogh, Director, Arkansas Department of Environmental Quality
4:45 p.m. U.S. Environmental Protection
Agency (Invited)
5:30 p.m. Break
6 p.m. Opening Reception in Exhibit Area
7 p.m. Dinner on Your Own

Thursday, Sept. 28

7:30-8:30 a.m. Exhibitor Setup and Registration, Embassy Suites
7:30-8:30 a.m. Breakfast in Lobby
Hotel Guests Only
8:30 a.m. Welcome
8:35 a.m. Arkansas Governor Asa Hutchinson (Invited)
9 a.m. LNG and Export Markets, Jim
Williams, WTRG Economics
10 a.m. Break
10:30 a.m. National Political Environment,
Marty Durbin, American Petroleum Institute
11:15 a.m. Arkansas Energy Rocks! and
Arkansas STEPS Networks Program
Updates and Awards
12:15 p.m. Luncheon
Keynote Speaker: Rex Nelson, Senior
Editor Arkansas Democrat-Gazette,
and Author of Southern Fried: Going
Whole Hog in a State of Wonder
1:45 p.m. Adjourn

He says activities begin on Wednesday,
Sept. 27, with golf and sporting clays
outings. Business sessions will get under
way at 3 o'clock that afternoon.
Among early speaker confirmations,
according to Baker, are Larry Bengal,
director of conservation and production
at the Arkansas Oil and Gas Commission;
and Becky Keogh, director of the state's
Department of Environmental Quality,
whom Baker says have become staples
at AIPRO conventions.
Also confirmed are economists Michael
Drury with McVean Trading & Investments LLC and Jim Williams of WTRG

Economics in London, Ar. Baker says
Drury is a commodities trader with expertise on China and India, and will provide AIPRO with a perspective on how
China is affecting global energy markets.
Williams is discussing the outlook for
U.S. liquefied natural gas exports.
In addition, Baker continues, American
Petroleum Institute Executive Vice President
& Chief Strategy Officer Marty Durbin
will provide a national political overview.
Reflecting that stock markets generally
performed well during the first six months
of the Donald Trump presidency, Baker
muses, "Certainly, politics can change that.
The 'honeymoon' should be over by the
end of September, and hopefully Durbin
can assess the administration's track record
and where it is headed."
As of mid-August, Callan reveals,
AIPRO was hopeful of procuring U.S.
Environmental Protection Agency Administrator Scott Pruitt as a convention
keynoter. And Baker says the association
also has invited Arkansas Governor Asa
Hutchinson.
To wrap up the 2017 convention on a
high note, Baker says AIPRO has secured
as its Thursday, Sept. 28, luncheon speaker, Rex Nelson, senior editor for the
Arkansas Democrat-Gazette in Little
Rock, who also appears regularly on various radio and television shows.
Baker describes the Arkansas native
as a humorist and author who "has a
tremendous memory of everybody he
has ever run into." His book, Southern
Fried: Going Whole Hog in a State of
Wonder, is described as "ruminations on
barbecue, politicking, football, frog gigging, trotlining, blues playing, horse racing, boxing, bird hunting, movie watching,
crappie eating, and other major issues of
the day."
Another highlight and new for this
year, Baker continues, will be recognition
of a school teacher "for outstanding classroom education in energy," as well as an
outstanding Arkansas STEPS trainer.
He notes that AIPRO has been involved
heavily in the Service, Transmission, Exploration & Production Safety Network
since its inception, and has continued to
hold monthly safety programs through
the downturn.
"When the industry starts up again,
we are going to need these (safety trainers)
more than ever," Baker reflects. "When
the rigs start to come back and companies
begin hiring, you aren't going to get experienced people back. You are going to
get new people and have to train them,
so our safety people are very important.
These guys are dedicated and good at
their jobs. We thought it was time to recognize some of them."
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American Oil and Gas Reporter - September 2017

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