American Oil and Gas Reporter - February 2018 - 27

Liaison Committee

Sides Coalescing On Controversies
By Del Torkelson
OKLAHOMA CITY-Reflecting on
three-plus decades of collaboration by
the Liaison Committee of Cooperating
Oil & Gas Associations, Domestic Energy
Producers Alliance (DEPA) Chairman
and Continental Resources Inc. Chief
Executive Officer Harold Hamm urged
Liaison participants to value the synergy
and teamwork found within the group.
"In our industry, we share ideas and
build on others' experiences without worrying about who gets credit. We simply
are looking for the answer. That is the
beauty of the Liaison Committee," he said.
However, discussion at the Jan. 9 Liaison
meeting demonstrated that industry opponents also are working together on matters
ranging from local oil and gas oversight to
anti-pipeline efforts. Moreover, some Liaison
participants observed, those anti-development groups have expanded their coalitions
far beyond environmental activism.
"It is like a hydra," compared Energy
Equipment & Infrastructure Alliance
(EEIA) President and CEO Toby Mack.
"There are 15-20 organizations that will
coalesce to fight a pipeline project wherever they see an opportunity. They are
allied with every injustice movement on
the planet-economic, racial, gender, indigenous, climate, you name it-and they
bring in all these forces to try to stop
midstream infrastructure."
The activists do so to break what they
consider the industry's weakest link, he
said. "Pipelines clearly are the front line
of the 'keep it in the ground' movement,"
Mack characterized. "They see opposition
to pipelines as a way to choke back production and consumption of oil and gas."
Liaison met at the Oklahoma Independent Petroleum Association's headquarters in Oklahoma City on the second
day of DEPA's 2018 Annual Meeting,
held Jan. 8-10 in Oklahoma City. DEPA,
the nationwide collaboration of 29 member
organizations and more than 10 million
royalty owners that was founded by
Hamm, notes that it represents a majority
of the individuals and companies behind
the U.S. oil and gas renaissance, uniting
to educate national decision makers on
why the future of the independent energy
industry is vital to the U.S. economy.
Anti-Pipeline Polemics
The midstream controversies discussed
during the Liaison meeting included Pennsylvania regulators' decision to halt con-

struction on the Mariner East II pipeline
because of state claims that the project
had violated its permits, as well as efforts
by the Ohio Environmental Protection
Agency to require stormwater construction
permits for large pipelines under the jurisdiction of the Federal Energy Regulatory
Commission.
In another example, Michigan Oil &
Gas Association President and CEO Erin
McDonough pointed out that the concerted
anti-development efforts to shut down
Enbridge's Line 5 oil pipeline, which
crosses the U.S.-Canadian border under
Lake Michigan's Straits of Mackinac,
dealt with a line not only already approved
by the Pipeline and Hazardous Materials
Safety Administration, but also in place.
"If that happens, this will be one of
the first times an existing, safely operating
piece of critical infrastructure will have
been shut down," she observed. "A ballot
initiative on that failed, but it has become
a tremendously popular issue . . . and has
sucked all the oxygen out of the room."
Gubernatorial candidates from both
parties will call for adding new, stricter
construction standards, McDonough predicted, but if the company acquiesces,
the implications will spread.
"If this line is saddled with unreasonable requirements, they will trickle down,"
she forecast. "This pipeline has been
tested and retested. PHMSA says it is
safe. If the environmental activists succeed
in having something dramatic happen
with this, we are going to see it spread
throughout the rest the country."
Constraints And Consequences
With regard to unbuilt projects, Mack
emphasized the need to make sure pro-

pipeline voices were heard in venues
such as state water quality regulatory
hearings. "Permitting hearings have become big, messy, emotional, contentious
venues for the opposition to scream, yell,
hoot and holler," he described. "I have
seen that really impact how regulators
look at the political environment."
Industry opponents may attract allies
from beyond green groups, Mack said,
but EEIA is working to counter that by
amplifying pro-development voices.
"Pipeline contractors often hire a lot of
union labor," he noted. "Then there are
the construction equipment, trucking, materials, supplies and services companies.
From clearing rights of way down to
restoration, these projects have a big food
chain. The number of potential stakeholders is enormous."
Mack pointed to the natural gas price
spikes during a spate of frigid January
temperatures-when natural gas at the city
gate topped $35 an Mcf in Boston and
exceeded $175 an Mcf in New York-as a
teachable moment.
"It is all because of pipeline constraints," he expressed. "We would be
wise to push that story aggressively because it is a poster child on the need for
additional transmission and distribution
capacity."
Even so, McDonough cautioned, the
industry should not always take the lead
in offering such observations. "Generating
the message is important, but we also
need messengers people will listen to,"
she advised. "For instance, when we
speak on Line 5, we are not many peoples'
trusted messenger, so they cannot hear
our message, but local chambers of commerce are very powerful messengers."

The Liaison Committee's teamwork is
a significant asset to the industry, asserts Domestic Energy Producers Alliance Chairman and Continental Resources Inc. Chief Executive Officer
Harold Hamm.

FEBRUARY 2018 27



American Oil and Gas Reporter - February 2018

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