American Oil and Gas Reporter - November 2017 - 95

Governor Asa Hutchinson tells AIPRO
that Arkansas needs the strong, reliable,
consistent and affordable energy its members provide. Hutchinson chairs the Interstate Oil and Gas Compact Commission and Southern States Energy Board.

wells and related facilities," Khoury said.
AIPRO had been scheduled to hear
from Ken Wagner, a senior adviser with
the U.S. Environmental Protection Agency,
but he was called to Washington to address
hurricane recovery efforts. Arkansas Department of Environmental Quality Director Becky Keogh delivered a message
on his behalf. "What a new day when a
federal agency asks a state agency director
to pinch hit," Keogh marveled.
At the recent Environmental Council
of States meeting, she said Wagner emphasized a number of matters in the
agency's approach to state and federal
programs:
* The significance of the rule of law;
* Cooperative federalism; and
* Getting back to the basics with the
states.
According to Keogh, the relationship
between EPA and the states has "healed
and changed from a year ago."
Essential Energy
The second day of AIPRO's convention
began with a visit from Arkansas Governor
Asa Hutchinson, who also chairs the Interstate Oil and Gas Compact Commission
and Southern States Energy Board.
"Energy production is important to
Arkansas and we have a voice on the regional and national levels," Hutchinson
assured. "The Fayetteville Shale is the
reason we came through the recession
better than other states."
He went on to say that Arkansas's
economy was booming, with more people
working than ever, and the state ranking
among the country's top five in attracting
direct foreign investment. "Energy cost

makes a difference, allowing us to bring
in more industry, which drives the demand
for oil and natural gas," he said. "We
need strong, reliable, consistent and affordable energy, which you provide."
However, he posed, "What are we doing to support Arkansas producers? We
are listening to you on tax policy reform
and fostering a common-sense regulatory
environment."
In addition to EPA Administrator Scott
Pruitt's cooperative federalism approach
to working with states on regulatory
issues, the governor said, ongoing efforts
to promote a healthy business climate
for the oil and natural gas industry include:
* Creating a legislative task force to
evaluate tax policy;
* Asking President Trump to support
infrastructure improvement through the
Energy Caucus of the National Governors
Association; and
* Moving the Arkansas Energy Office
to the Arkansas Department of Environmental Quality, where it can better leverage
the $14.6 million Volkswagen settlement
for the Clean Cities program, which emphasizes compressed natural gas conversion.
Exports, Domestic Outlook
Market analyst Jim Williams, with
WTRG Economics in London, Ar., addressed liquefied natural gas export opportunities and the domestic natural gas
outlook.

"LNG: Who imports it?" he asked.
"Asia uses two-thirds of it, with Japan
being number one."
He indicated other LNG growth opportunities could be found in China and
South Korea. In 2017, one-third of LNG
comes from Qatar, at 10.1 billion cubic
feet a day, while the United States supplies
0.4 Bcf/d. "Forecasts show that growth
for LNG depends on where the pipelines
will be," he added, noting that U.S. export
capacity is on pace to triple in the next
two years.
"Asia is the growth market for the
world," Williams said. "Will the price be
attractive? No."
Domestically, Williams said natural
gas production had increased 50 percent
during the last 10 years and that pipeline
expansion projects were on the rise.
Arkansas production, however, had
dropped by a third, Williams noted. He
attributed that to the fact that Arkansas
contained "too many dry gas counties."
National Political Climate
According to Marty Durbin, executive
vice president of the American Petroleum
Institute, Washington's political atmosphere
made the current period both a "challenging
time and a time of opportunity."
The oil and natural gas industry must
take the long view toward public affairs,
he advised, because "our production
cycles don't match with election cycles."
Moreover, he continued, "The issues

TOP: Pausing after the
awards presentation are,
from left, AIPRO President
Mike Callan, Stephens Production Co.; AEEF President Andy Miller, Southwestern Energy; Jaime
Cavitt, Springdale Schools;
Marty Durbin, American Petroleum Institute and Tom
Parker, Arkansas Petroleum
Council. Cavitt received the
Arkansas Energy Rocks!
Outstanding
Educator
Award at AIPRO's Annual
Meeting, Sept. 28, at the
Embassy Suites in Little
Rock. BOTTOM: Congratulating William R. Brown
(center), of XTO Energy Inc.,
are Callan (left) and Miller
(right).The Arkansas STEPS
Network program recognized Brown for his work
to promote safety, health
and environmental improvement in the exploration and
production of oil and natural
gas in Arkansas.

NOVEMBER 2017 95

American Oil and Gas Reporter - November 2017

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