2018 Alliance Expo and Annual Meeting

April 24 - 25, 2018 Wichita Falls

Alliance President John Tintera Testifies at House Energy Resources Committee Hearing in Midland

Alliance President John Tintera testified at the Texas House Energy Resources Committee hearing in Midland on December 12. His testimony touched on several important topics, including the Railroad Commission Sunset Bill, TEXNET seismic monitoring funding, and using the Alliance’s Federal Regulatory Energy Delegation (FRED) initiative – SCR26 – to eliminate regulatory redundancy and federal overreach.

Here is John’s full testimony:

 

Testimony from the Texas Alliance of Energy Producers,
Midland Texas, December 12, 2017 – John Tintera

Introduction

The Texas Alliance of Energy producers is a non-profit advocacy association with over 2500 members representing independent oil and gas producers in Texas. This includes several hundred members who operate in the Permian Basin.

We are testifying today on monitoring the agencies and programs under the Committee’s jurisdiction and oversee the implementation of relevant legislation passed by the 85th Legislature.

For the Alliance, key legislation supports two main issues, 1) stability in the regulatory arena in which our members operate, and 2) regulations based on science, fact and due process.

 

RRC Sunset, RRC Funding, TEX NET Funding

The Texas legislature’s passage of the RRC Sunset Bill and fully funding our State Regulator were very important to the O&G Industry, and we appreciate the efforts of Chair Larry Gonzales and the entire legislature in addressing these pressing needs. We now have stability for the foreseeable future in our State oversight.

Also, continued funding for TEX NET seismicity monitoring was a legislative accomplishment. Some have drawn a correlation between produced water disposal and induced seismicity, and the ability for the State of Texas to establish the science and fact so our regulators can implement sound regulatory due process is vital.

Produced water makes up 99 percent of all oil field waste that is generated, up to 7 billion bbls per year, and the safe disposal, recycling and reuse is important to the Alliance, important enough for us to form an Alliance Water Committee to monitor, evaluate, and make regulatory and legislative recommendations on water topics during the interim.

 

SCR 26

A highlight of the 85th Session was the passage of SCR 26, led by Sen Estes and Chair Darby, the resolution called for Federal Regulatory Energy Delegations (FRED) to be moved out of DC and into Texas, where our Texas State regulators can use their superior experience and knowledge to eliminate redundancy, over reach, and regulations that are unnecessarily burdensome if not punitive.

The history behind this Resolution is not pleasant.  It’s called federal over reach and we have seen repeated examples of this since 2010.

  • Parker County EPA vs RRC
  • HF study
  • Endangered Species
  • WOTUS
  • Emissions Quad OOOO and ignoring industry comments to exclude marginal well from over regulation
  • Methane ICR

The Alliance has serious concerns that the biggest threat to oil and gas production and the tens of thousands of jobs and hundreds of millions of taxes the industry pays has come from the intentional manipulation of the federal regulatory process by the previous administration to the detriment of our industry.

The Texas Alliance Economist has compiled the following information:

* The Texas oil & gas industry currently directly employs about 230,000 workers – and climbing – in oil & gas extraction, service, and drilling companies.  That  230,000 direct jobs translates into an estimated 760,000 total jobs as the ripple effects of growing industry activity and payrolls are spread throughout the entire economy.

* Those jobs pack a punch — wages in the upstream oil & gas industry are the highest in the state among published hourly and weekly wages for various industries in Texas.

* Oil and gas production taxes alone comprise over 6% of all state taxes collected.  The industry pays numerous other taxes as well, however, and when the industry’s contribution to the sales tax, motor vehicle tax, hotel occupancy tax, franchise tax and various other taxes are included that number is easily double to well over 12% of all state taxes paid directly by the industry.

* The Texas Economic Stabilization Fund, otherwise known as the Rainy Day Fund, presently has a balance of over $10 billion.  Over all of its history the oil & gas industry has contributed over 85% of all revenue into the fund from the state’s crude oil and natural gas production taxes.  In recent years, that number has been much higher, and oil and gas production taxes in the five years 2012-2016 accounted for 97% of the contributions into the Rainy Day Fund.  The contributions by the state’s oil & gas industry are the very reason the State of Texas can boast an economic stabilization fund that is among the highest in the nation.

* The Texas oil & gas industry is clearly in a state of recovery from a long and debilitating downturn.  The Texas Alliance of Energy Producers Texas Petro Index has increased for 11 straight months as of October 2017, and that will continue well into 2018.  Every time the Petro Index increases, the oil & gas industry’s contribution to the statewide economy and to the state’s tax coffers improves.

Simply put, a healthy and vibrant statewide oil & gas economy remains critical to the overall well-being of the Texas economy as a whole.

 

Federal Opportunities

The Federal Regulators abandoned the triple- combo of science, fact, and due process which are the hallmarks of quality regulations. Instead important issues like climate change were politicized and potential opportunities for research, like CO2 Sequestration, were directed away from our state despite Texas’ overwhelming experience with CO2 in EOR projects.

We now have a new administration in DC that is working overtime trying to repair or replace the over reaching regulations that were put in place over the previous 8 years. They are being opposed by the entrenched anti-oil and gas interests of the prior administration

Specifics are important in testimony, so please let me list some opportunities that can help the O&G Industry:

  • NPDES delegation and
  • SPCC delegation to the RRC

Both of these federal regulations are part of the Clean Water Act. If delegated to the RRC for Texas oil fields, NPDES could allow a greater re-use of produced water, and SPCC would eliminate duplicative federal regulations and allow the State inspectors to oversee spill response prevention, as many of our state regulations already require.

 

Conclusion

The Alliance believes there isn’t a single energy issue that Texans of good faith can’t solve. The Alliance would like to go on the record of supporting the current Federal Administration efforts to right the wrongs and repair the misguided federal regulations of the past 8 years. The Texas Legislature has given us a platform to stand on, the words of SCR 26,  and we urge our State regulators and elected leaders to seek every federal delegation possible, and the funding that must goes with it, and bring it home to Texas.