American Oil and Gas Reporter - April 2019 - 104

ConventionSection: Kansas Independent Oil & Gas Association
after the commission established working
groups and asked stakeholders to review
its regulations covering four programs,
the association urged it to first tackle the
abandoned well issue. Edward Cross,
KIOGA's president, adds the groups have
expressed frustration with the slow
progress of the multifocus effort. "The
groups have decided that, rather than
moving ahead on all four sets of changes,
the focus perhaps should be put on the
abandoned wells issue and then move
ahead with the other revisions."
According to Cross, KCC staff members are considering changes to abandoned well regulations in light of contradictions imposed by the commission's
2008 Quest order and the 2015 John N.
Denman Oil Co. v. State Corporation
Commission decision in the Kansas Appeals Court. The first deems an operator
taking a new oil or gas lease only responsible for plugging those wells he
drilled and reworked or that impact the
lease, while the court ruling held state
law required the "original operator" who
abandoned the wells to plug them (AOGR,

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September 2018, pg. 123).
"That is really important. Everything
that we have heard indicates that KCC is
making a very conscious effort to come
out with some new regulations on who is
responsible for plugging those wells,"
reports White, president of White Exploration Inc., in Wichita.
When KIOGA holds its midyear meeting, April 17-19 in Mulvane, Ks., it will
invite all of the KCC commissioners, including the newest member, Susan Duffy,
Cross says. Duffy, the former Topeka
Metropolitan Transit Authority general
manager, was appointed to the commission
in late February, replacing Jay Emler.
The other regulatory revisions under
consideration by KCC cover:
· Injection volume limitations for
saltwater disposal wells in south-central
Kansas;
· Temporary abandonment of wells
under the 100 series of regulations; and
· The commission's budgeting
process, including revenue sources.
KIOGA also continues to monitor
requests by the Kansas Register of Deeds
to again increase recording fees, White
says, even though the state has imposed
higher fees during the past several years.
The deed registers group also is seeking
a predictable fees structure and wants
to convert the state to electronic document recording.
"The proposal to impose a predictable
fee structure was a joint effort by the
Kansas Register of Deeds Association
and Land Title Association," he says.
"After numerous meetings, the Kansas
Register of Deeds has agreed not to pursue
it until further study is made. The entire
issue was based on the Truth in Lending
Act's three-business day closing rules.
On transactions, primarily residential ones,
closing companies say they are having a
hard time satisfying the three-day provision
of having the closing costs in hand three
days in advance of closing."
White adds the Kansas Register of
Deeds also is looking to replace the revenue it lost when the state eliminated the
mortgage registration tax, but it has agreed
not to pursue that for the time being.
Electric Rates
Electric rates charged by utilities and
cooperatives across western Kansas are
another ongoing issue being monitored by
KIOGA, Cross says. The association has
been seeking rate concessions from the
power providers for more than a year, with
oil operators struggling to pay their electric

104 THE AMERICAN OIL & GAS REPORTER

bills (AOGR, August 2018, pg. 118).
"The Senate recently passed a bill to
authorize a study of electric rates. That
is one of the bills (KIOGA Electric Committee Chairman Adam) Berens' group
wanted, after it proposed some amendments. The reason it passed was that
group and the electric utility groups got
together and agreed to the parameters of
that study," Cross says. "All the parties
were in agreement. The bill now goes
over to the House. KIOGA supports that
electric rate study, and is looking forward
to seeing what happens in the House."
Under the Senate's provisions, an independent contractor will research and
write the study, Cross says. According to
the bill's language, the study will look at
retail rates of Kansas electric public utilities, he adds.
"The association is making some
progress on that issue," Cross assesses.
"The study will provide information that
may assist future legislative and regulatory
efforts in developing electric policy that
includes regionally competitive rates and
reliable electric service."
In addition to legislative relief, Cross
says KIOGA is seeking industry supporters
to run for election to the co-op boards. Last
fall, the two industry allies failed to win
their races. He adds that it is difficult to
find qualified candidates, since the co-ops
require board members to live in the areas
served, not only have businesses there.
If working through the co-op boards
proves ineffectual, a statehouse solution
is another option, White observes, though
that would entail a much longer road,
and the state's electric utilities and cooperatives have a lot of allies in Topeka.
"KIOGA has tried to deal with the coops through their industry associations,
and that association continues to tell us we
have to deal with the co-ops individually,"
he reports. "That makes it a lot slower. It
is a problem, and whether it takes complete
deregulation of the electric utilities to solve
the problem, I do not know. But we are
long way away from that."
This does not seem to be a problem in
many other states, White observes. He
points out many KIOGA members operate
in Texas and Oklahoma, where the electric
rates are much lower than in Kansas.
Dealing With Prices
More Kansas operators are making
plans to drill this year than they did in
2018, Cross predicts.
"Last year was a recovery year for the

American Oil and Gas Reporter - April 2019

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