American Oil and Gas Reporter - September 2019 - 90

ConventionSection: Indiana Oil & Gas Association

INOGA Looks Forward To
Finding Firmer Footing
By Del Torkelson
EVANSVILLE, IN.-Although America's independent oil and natural gas producers share a reputation for tolerating
risk, Indiana Oil & Gas Association President Chuck Robinson suggests that uncertainty tends to sap some of that intrepid
spirit. The Hoosier State's oil patch certainly is more active than it was only a
few years ago, he acknowledges, but says
it appears on the verge of plenty more if
companies could get a better grasp on
some variables.
He raises the analogy of runners awaiting the starting gun. "People want clarity
on a few things," describes Robinson,
president of Robinson Engineering & Oil
Co. in Evansville. "Once there is confidence, companies will start to deploy
more capital."
An important unknown that may become better understood soon relates to
regulatory revisions being worked on by
INOGA and the Indiana Department of
Natural Resources Division of Oil & Gas,
he notes. Those rules no doubt will be on
the lips of INOGA members when they
gather for the association's 2019 annual
convention, scheduled for Oct. 10 at the
New Harmony Inn in New Harmony, In.
Good Operating Environment
By no means does the state regulatory
structure constitute the only uncertainty
that restrains Indiana producers, Robinson
reasons. Speaking in early August, he
noted that the United States' trade relations
with China appeared to be worsening.
"The trade issues with China and some
other geopolitical factors really are hitting
our industry," he assesses. "There is widespread support for the president in our
industry, but like the farmers, we seem
to be taking a hit for the greater good of
our country."
That and other trade tumult, such as
tariffs on imported steel, hit oil and
gas companies, Robinson considers,
but the collective economic toll-and
resultant drag on commodity values-
looms largest. "Oil prices are our biggest
concern," he relates. "I hope some things
90 THE AMERICAN OIL & GAS REPORTER

can be settled soon in ways that also
settle the markets."
Indiana's larger operators seem to be
a bit more sure-footed about investing in
projects, he assesses, but even they do
not seem to be going full throttle. "They
certainly are fulfilling their drilling commitments, but I don't think they are
drilling as aggressively as they could or
ultimately would like to," Robinson suggests. "It is a cautious approach.
"The mid- and small-sized operators
are focused primarily on trying to improve
existing production," he continues. "Many
focus on waterfloods, general lease maintenance, or well workovers and trying to
improve existing production, rather than
drilling new wells."
As he looks across the Illinois Basin,
Robinson notes that the composition of
production does not tend to vary considerably from one area to another, although Illinois' deeper producing horizons tend to provide wells with more
natural pressure and, therefore, stronger
output. Nevertheless, he insists, the industry has a lot going for it on his side
of the state line.
"Indiana is a great state in which to
operate," he characterizes. "The state has
produced a lot of oil and we are proud of
its economic strength when compared
with some neighboring states. I think a
lot more can be done in our state."
If companies understand the lay of
the land, he says, they will crunch the
numbers and get to work on profitable
projects. "If some regulatory uncertainties become certainties, if we know
what the regulations are going to be-in
Indiana particularly-we will see more
activity," he predicts. "Illinois has more
activity than Indiana, and I think that
primarily is because of regulatory uncertainty. Once that is finalized, a lot
more outside folks may come here to
deploy capital.
"Operators in Illinois are drilling
deeper, tight oil wells in limestone formations that are doing very well," Robinson observes. "I think a lot of that can
be done in Indiana, but it has not quite
developed here."

Amended Regulations
Robinson acknowledges that the regulatory revision process has taken longer
than many would prefer, but he emphasizes
that INOGA and the DNR's insistence
on doing the job right is a big reason for
that. Part of that due diligence involves
the state's interest in hearing INOGA's
input, he indicates.
"Both INOGA and DNR want to address everything and have a comprehensive
rules package that is appropriate, manageable, reasonable and, from a
producer/operator's standpoint, palatable,"
he describes. "We feel a pretty big responsibility to the future of our state and
industry to make certain we get it right.
"Nothing happens instantly with any
governmental entity, but the ball is moving
forward, even if it is not moving as
quickly as INOGA or DNR would like,"
he assures.
According to Robinson, the amended
rules will include changes to some midstream regulations, but the vast majority
of the focus lies upstream. "It is more
about the oil and gas operating regulations," he describes. "For instance, there
have been some changes to the way we
look at wellbore integrity and simply
making sure all natural resources are protected properly."
Large portions of the revisions are
complete, or nearly so, Robinson reports,
but other pieces have required more back
and forth between stakeholders and regulators. "The vast majority are pretty
well squared away, but the package has
to be presented together," he notes. "We
have worked directly with DNR in a
give-and-take on certain adjustments."
"Once the amended package is approved for preliminary adoption by the
Indiana Natural Resources Committee,
the package will go through the entire
public comment period," Robinson says.
"If all goes well, the amended rules would
then be approved by the same committee
and become final."
Although there is no specific timeline,
he adds, the hope is to present a large
portion of the changes to the NRC this
autumn. In the meantime, he expresses

American Oil and Gas Reporter - September 2019

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