American Oil and Gas Reporter - October 2018 - 93

to keep your personnel on and then when
things heat back up, competition likes to
go with experienced hands, so you have
price cost inflation from that side of
things," he says.
Moreover, Robertson says, PBPA members also continue to advocate for additional electrical transmission and distribution in the region, Robertson says.
"The large majority of communities
in which our members operate understand
the great benefit that oil and gas provide
to our communities, but also understand
that, along with the incredible growth,
come challenges on which we all need to
work together to find the best solutions,"
he considers. "That's the great thing about
the Permian Basin. We live in the oil
patch we work in. People benefit from it,
and they see the challenges as good problems to have."
ESA
In mid-September, the association supported Texas Comptroller Glenn Hegar's
revision of the Texas Conservation Plan
submitted to the U.S. Fish and Wildlife
Service to add protections for the dunes
sagebrush lizard, Shepperd says.
By the end of September, USFWS
was expected to announce whether it
would launch a process to reconsider listing the lizard as endangered or threatened
under the Endangered Species Act in response to a May 8 petition from the
Center for Biological Diversity and Defenders of Wildlife to restart the process,
he reviews.
USFWS in 2012 declined to list the
lizard after Texas and New Mexico submitted separate conservation plans designed to enlist oil and gas companies to
take measures to help preserve the habitat,
Shepperd says. However, the basin's ensuing sand mine development to supply
operators with proppant was not anticipated when the states submitted their
original plans and agreements to USFWS,
he says.
"The revised Texas plan has been submitted for comments, and our hope is
that the service will deem the new plan
sufficient to prevent the need for a listing,
but it may well determine a listing is
warranted," Shepperd acknowledges. "That
would give us another year, essentially,
to provide further detail on the actions
that would be required and the level of
support that would be forthcoming from
operators to agree to use the new proposed
conservation measures."
Sand mining's impact on the lizard
habitat and the potential ramifications
during any USFWS process is a concern,
Shepperd adds. "We are very happy to
have the sand mining industry in the

Permian, because it reduces transportation costs and makes sand more economical for our members," he says. "On
the other hand, we want to make sure
that mining is done in such a manner
that it does not cause unreasonable concern about habitat impact and influence
USFWS to list the lizard."
While PBPA and others have supported
the concept of legislative changes in
Washington to curb ESA abuses, Walker
notes results have been limited. PBPA
will continue to ensure that scientific
facts provide the basis for any ESArelated processes that affect member operators, he says.
The focus on providing accurate scientific information helped the association
and counties in New Mexico win a court
challenge in 2016 that overturned an USFWS listing for the lesser prairie chicken,
Walker points out.
"Our organization tries to get the scientific data out in the same way we did
during the first process involving the
dunes sagebrush lizard," Walker says.
"We try to inform our members, regulatory
agencies, legislators and the public about
the actual scientific facts and let that information speak for itself."
Tariff Impact
Also on the federal front, PBPA members continue to be affected by tariffs on
imported steel, Robertson notes.
"When we talk to our members, generally they respond that this is a cost of
doing business that must be factored into
operations," he says. "The tariffs seem to
impact the midstream segment more than
upstream operators. Certainly, it is a cost
that our members would prefer not to
have in a perfect world, but we support
long-term administration goals to make
the United States energy independent."
Tariffs on imported steel have forced
up prices for some consumables such as
coiled tubing, Walker reports.
"Pricing from my suppliers actually
has gone up," he confirms. "Some of the
foreign pipe is not coming in. Cudd has
a pipe inspection service in Channelview,
Tx., and we actually had to lay off some
personnel because the amount of pipe
we are inspecting is dramatically less
than it once was. The tariffs have had an
effect on the cost of doing business and a
negative cost in terms of personnel in
that product line."
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American Oil and Gas Reporter - October 2018

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