American Oil and Gas Reporter - September 2023 - 43

ConventionSec tion: Texas Alliance of Energy Producers
Nevertheless, Sullivan says, the urgency
of federal issues has prompted the Alliance
to turn more attention to federal matters,
even as it maintains its state-level activities.
" The Alliance has increased its presence
in Washington considerably during the
past few years, " he reports. " When the
administration changed over, we realized
there would be a lot of obstacles, so we
have become a lot more engaged at the
federal level. "
Chickens And Lizards
Recent actions by the U.S. Fish &
Wildlife Service are particularly apt examples
of federal overreach, Modglin
suggests. Despite substantial private
sector conservation efforts to preserve
them, USFWS is seeking to list both
the lesser prairie chicken and the dunes
sagebrush lizard under the federal Endangered
Species Act. Both species are
found in Texas.
" Congress has taken action to delist
the chicken, and it would be incredibly
foolish if the president did not sign
that, " Modglin says in reference to SJ
Res. 9, a Congressional Review Act
resolution Congress passed in late July.
" There was overwhelming bipartisan
support for that, as it should be when
Americans invest in successfully rebuilding
a species. "
The lizard presents a different challenge,
he muses, citing its remote desert
habitat, characteristic elusiveness and tendency
to flee presences of every sort.
Nevertheless, he observes, USFWS' Federal
Register listing proposal singles out
oil and gas activity as uniquely harmful
to dunes sagebrush lizard populations.
" Considering other activities are taking
place, including farming, ranching and
homebuilding, that is a shot across the
bow at our industry, " Modglin intones.
" It also claims that sand mining operations
in the area may disrupt the animal's biological
cycle. "
He expresses appreciation for Congressman
August Pfluger, R-Tx., who
has supported SJ Res 9 and called for a
similar measure to prevent a listing for
the lizard. " He has done a remarkable
job pointing out that this is entirely about
harming Permian Basin production, " Modglin
praises. " Hopefully Congress will
push back against USFWS. "
" Every oil and gas company is trying
to reduce its footprint every day, " Sullivan
says. " Look at the horizontal well pads:
Five years ago, a company might need a
five-acre pad to drill two wells. Now we
are down to 2.5-3.0 acres to drill 20 wells
with laterals that go three or four miles.
Sometimes we do that for economic reasons
and sometimes it is because of
surface issues such as an endangered
species. Whatever the reason, we work
within the rules, but we want them to be
smart and limited. "
" Best practices have evolved
substantially during the past couple
decades . . . How do we incorporate
that so that they can continue to
innovate in areas such as fluid
recycling and equipment? "
-Jason Modglin
Companies have undertaken voluntary
conservation measures for years, Modglin
notes, ones that may fall to the wayside
in the event of a cumbersome ESA regimen.
" Operators in the area set aside
land, keep their lights low and do everything
they can to not only protect the
habitat, but expand it, " he illustrates.
" Everyone is concerned about the possibility
of slow and costly new permitting
requirements above and beyond what already
is required. "
Annual Conference
Along with their frustrations about
politically-driven federal initiatives, Modglin
says many Alliance members are
wrestling with business issues such as
takeaway constraints and access to affordable
electricity.
Sullivan also perceives a recent uptick
in consolidation, and notes that when
those mergers and acquisitions take
place in a hot labor market, personnel
movement can sap some of the intended
efficiency gains.
" Especially in the Permian, people
are jumping from one company to take a
better deal with another, and then six
months later realize the grass is not that
much greener and so try to come back, "
he says. " Outside of a few exceptions,
there has been quite a bit of turnover. "
As Alliance chairman for more than
a year and a half, and as vice chairman
for two years before that, Sullivan reflects
that plenty has happened in that
time. " The industry has changed a lot
in the last three and half years, mainly
for the positive, " he assesses. " Covid
forced the industry to be more efficient
from a capital standpoint and an environmental
perspective. A lot of the
questions and concerns about our industry
have created efficiencies, which
is a testament to the resiliency of our
business and the amount of quality people
working in it. "
Although Sullivan's term runs
through the rest of the year, the 2023
Texas Alliance Annual Convention will
be his last as chairman. " He really has
tapped into the thriving private-equitybacked
companies, " Modglin relates.
" Traditionally, the Alliance has focused
on family-run operations, while these
younger companies have not been as
active in trade associations. Houston
has done a great job of attracting these
new members by helping them see that
if we do not speak up for this industry,
other people will be happy to speak up
against it. "
If the usual protocol holds, Modglin
adds, Alliance Vice Chairman Jason Herrick,
president of Pantera Energy in Amarillo,
Tx., will succeed Sullivan in 2024.
" He serves on a variety of advisory committees
on behalf of us and the Panhandle
Producers & Royalty Owners Association, "
Modglin says. " He is very active. "
" Jason is a great guy who is infinitely
smarter than me, " Sullivan comments. " I
worked at an operating company when I
became vice chairman, but since I no
longer do that, I do not face all the problems
so many of our members face every
day. Jason does, and his company is one
of the Panhandle's best operators. "
Although some aspects of the Oct.
4-5 annual convention were not yet finalized
in early August, Modglin noted
that the event would return to the Hotel
Drover in Fort Worth's historic stockyards
area.
" It is such a phenomenal space and
is always a fun trip for folks coming
from throughout the state, " he attests.
" We will have a great lineup of speakers,
with topics ranging from methane to
ESG and the federal government's continued
push on that. We also will have a
produced water panel and will get into
some key operational issues such as
electricity. And we will bring back our
popular young guns CEO panel.
" We will announce our keynotes
soon, " he adds. " We always have phenomenal
speakers and will continue to
push there. "
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SEPTEMBER 2023 43
American Oil and Gas Reporter - September 2023

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