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and waste or some portion thereof, including
recycled water and treated constituents."
Liability concerns under the old law
prevented produced water custody from
changing hands, Shelby explains. Under
that scenario, she recounts, when Continental made a considerable capital investment in a water recycling facility
some years ago, it could not recoup some
of those dollars by offering recycling
service to other operators, nor could the
company sell its own recycled water to
operators interested in using it for fracturing operations.
"It was unclear who owned this water,
which made things very inefficient," she
describes. "We all realized we had to
change the law to clarify the process and
get rid of a lot of legal ambiguity. And
now service companies are trying to come
in and fill the gaps with their own recycling
facilities, and offer the water sourcing
and logistics for multiple operators."
As Secretary Wagner's working group
began to refine the bill's language, Shelby
recounts, landowner representatives succeeded in adding language to help prevent
them from ceding contemporarily unrecognized assets. "They really wanted to
preserve their ability to own this water
and anything in it," she details. "If, 30
years from now, technology brings to
light some constituent element that we
do not appreciate now, they want to make
sure they are not giving that all away."
After negotiations reached unanimity
and SB 1875 attained its final form, its
prospects next faced the challenge of the
shrunken legislative calendar. "In some
respects, getting this heard in time was a
bigger burden than passing it," Shelby
acknowledges. "We had an agreement
between historically nonaligned parties
right before Oklahoma went into lockdown. We had to take advantage of the
fact that everyone was comfortable moving
forward with this language, and could
not simply assume we would be able to
get there again."
Therefore, Simmons recounts, the stakeholders threw their weight behind getting
the legislation passed. "Initially, the produced water bill was not on the list of
must-pass priorities in the session's closing
days," he notes. "We were fortunate that
all the preliminary work had been done so
that, with agreement by all parties, it was
easier to accomplish in the final hours."
Shelby says everyone at the statehouse
was focused on issues related to COVID19. "We had to label it a priority bill with
the legislature in order to get it passed,
because legislators came back for two
weeks and that was it," she recalls.
And while SB 1875 proved to be a
nice victory for the Alliance, she adds, so

was the lack of momentum behind antiindustry bills, as well as elected officials'
dawning recognition of a point that Oklahoma industry representatives have been
making for years. She notes that the sudden
swing in crude prices and fall in industry
activity have illustrated to policymakers
the hazards of putting too many state revenue eggs in the oil and gas basket.
"It was a good session in that no one
was trying to raise our taxes, which is

unusual," she concludes. "Thank goodness
they weren't, because our state really
relies on oil and gas production, which is
best seen by what has happened with the
recent oil price slide. A lot of our messaging to the legislature about the state's
overdependence on oil and gas revenue
proved accurate. Everyone saw how Oklahoma needs to diversify its revenue sources
so the state is not subject to the whims of
the Saudis or the Russians."
❒

Kansas Lawmakers Vote Down
Governor's Energy Office Move
By Del Torkelson
TOPEKA, KS.-The truncated 2020
Kansas legislative session concluded in
late May with a short veto meeting focusing
on the coronavirus pandemic. However,
the 2020 session did see lawmakers pass
some energy-related legislation, reports
Kansas Independent Oil & Gas Association
President Edward Cross.
That statehouse action was a response
to Executive Reorganization Order 46
(ERO 46), which Governor Laura Kelly
signed to move the Kansas Energy Office
from the Kansas Corporation Commission
to the Department of Administration. The
office, funded by the federal State Energy
Program, oversees conservation, efficiency
and alternative energy programs.
According to Cross, an ERO becomes
law unless one chamber of the legislature
votes to reject it, and KIOGA urged lawmakers to do so out of concern that moving
the Energy Office into the executive branch
could make it a vehicle for discouraging
hydrocarbon production and use.
"I had several meetings with the governor's staff in which I expressed concerns
that the administration could use the Energy Office as an avenue for policy and
would push a green standard that would
promote everything but fossil fuels," he
recounts. "The governor's office assured
me it was not going to do that, but we
still weren't comfortable.
"I told the governor that I was not
going to say one thing to her and something different to a legislative committee,
and that we simply did not see eye-toeye on this," Cross adds. "The governor's
office did not like our position, but we
support a free market approach and I
hope she respects that."
According to Cross, he urged lawmakers
to reject ERO 46 in individual meetings,
testified against it in a House Energy Committee hearing and urged the House to

pass HCR 6031 to reject it. The House
did so, he indicates, which was not a hard
sell in a Republican-controlled chamber
already inclined toward skepticism about
the Democratic governor's numerous EROs.
"The House considered them to be unilateral
decisions made by the governor without
any legislative input," he describes. "The
House vote was March 18. They adjourned
(until May's veto session) on March 19."
Back To Square One
Cross says the 2020 Kansas Legislature
went well for the state's independent oil
and gas companies. "Overall, it was the
best we could hope for this year," he assesses. "We didn't get everything we
wanted, but nothing harmed us."
Among the group's legislative priorities
that fell victim to the abbreviated session
was an abandoned well bill, Cross reports.
The association supported legislation to
combine two funds for remediating abandoned wells-one for wells drilled before
1996 and the other for wells thereafter-
into a single account, while also clarifying
how the Kansas Corporation Commission
is to assign well-plugging responsibilities
(AOGR, April 2020, pg. 75).
"We got it through the House-it was
in general orders on the House floor-but
not through the Senate," Cross reports.
"It basically fell by the wayside because
they had to focus on the budget. Since
this was the second year of a two-year
cycle, our abandoned well bill will have
to be reintroduced next year."
And next year promises to be a session
to watch, he considers. Kansas has not
been spared from the pandemic downturn
that has taken huge bites from most states'
revenues, he observes, and the next session
will follow November's election.
"We could have big budget problems
at a time when the next election is distant,"
he warns. "That could be a time to worry
about tax increases."
❒
JUNE 2020 29



American Oil and Gas Reporter - June 2020

Table of Contents for the Digital Edition of American Oil and Gas Reporter - June 2020

Contents
American Oil and Gas Reporter - June 2020 - Intro
American Oil and Gas Reporter - June 2020 - 1
American Oil and Gas Reporter - June 2020 - 2
American Oil and Gas Reporter - June 2020 - Contents
American Oil and Gas Reporter - June 2020 - 4
American Oil and Gas Reporter - June 2020 - 5
American Oil and Gas Reporter - June 2020 - 6
American Oil and Gas Reporter - June 2020 - 7
American Oil and Gas Reporter - June 2020 - 8
American Oil and Gas Reporter - June 2020 - 9
American Oil and Gas Reporter - June 2020 - 10
American Oil and Gas Reporter - June 2020 - 11
American Oil and Gas Reporter - June 2020 - 12
American Oil and Gas Reporter - June 2020 - 13
American Oil and Gas Reporter - June 2020 - 14
American Oil and Gas Reporter - June 2020 - 15
American Oil and Gas Reporter - June 2020 - 16
American Oil and Gas Reporter - June 2020 - 17
American Oil and Gas Reporter - June 2020 - 18
American Oil and Gas Reporter - June 2020 - 19
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