American Oil and Gas Reporter - September 2015 - 140

ConventionCoverage: Texas Independent Producers & Royalty Owners

Barnett Shale Still Holds
Plenty Of Potential
By Dan Holder

SAN ANTONIO-The Texas Independent Producers & Royalty Owners
Association has been one of the oil and
gas industry's advocacy groups for nearly
70 years. TIPRO Chairman Raymond
Welder says the association's record
membership count is a testament to the
value it provides members.
"Throughout its history, TIPRO has
been instrumental in creating and protecting
a business, legislative and regulatory environment in the state that supports economic growth and responsible development
of oil and natural gas," Welder said in his
comments opening TIPRO's summer conference, held Aug. 6-8 at the Hyatt Hill
Country Resort in San Antonio.
TIPRO staff and lobbyists supported
nearly 400 bills in the Texas Legislature's
2015 session affecting the oil and gas industry, said Welder, president of Welder
Exploration & Production Inc., of San
Antonio. The association's focus during
the session included jurisdictional authority
for municipalities, tax relief, transportation,
and water regulations, he detailed.
HB 40, the oil and gas pre-emption
bill, was the major issue in the 84th Legislature, Welder said. "This law, which
Governor Gregg Abbott signed May 18,
will help provide regulatory certainty to
the industry, address the growing patchwork of inconsistent local regulations-

some of which are intentionally onerous
in nature-and better define municipalities'
rights and limitations," he predicted.
In the post-HB 450 world, Welder
stated, it is more important than ever for
TIPRO members to continue working collaboratively with municipalities and residents, and exhaust all efforts in the regulatory arena before considering litigation.
"There are limitations under HB 40,
and this new law does not provide carte
blanche to the industry. If not implemented
properly and thoughtfully, the industry
could see proposed changes during the
next legislative cycle," Welder warned.
"We also can guarantee that our opposition
will use everything possible against the
industry in the coming months. We need
to be very, very careful not to give them
ammunition."
Energy Issues
The summer conference opened and
closed its technical sessions with examinations of how future challenges might
impact oil and gas operations.
In his opening presentation on the
Barnett Shale, Jud Walker, executive vice
president and chief operating office for
EnerVest Operating LLC, projected the
North Texas play still had room to run,
although questions about induced seismicity posed a threat. Seth Kleinman,
managing director and global head of
energy strategy for Citibank, laid out

possible paths energy prices might follow
in response to political outcomes.
EnerVest has almost six years of operational experience in the Barnett, Walker
said, and its biggest challenge has become
working in urban environments, with the
company drilling in Arlington, Tx.
"Ten percent of our quality acreage
lies in urban areas, but almost 100 percent
of what the company is doing right now
is in urban areas," he reported. "Urban
operations always are more difficult. For
EnerVest's drilling rig, moving into Arlington means a one-year lead time just
to get permits. There is the standard
Texas Railroad Commission permit, but
then you have to go through planning
and zoning approvals, city approvals, and
residents-close-to-drill-sites approvals."
Adding to the permit challenges is that
municipalities change their ordinances,
often with no warning, Walker said. Other
issues include water restrictions and requirements that allow crews to work only
during daylight hours, he detailed.
Walker added another major concern
EnerVest faced was dealing with social
sensitivities and how the media viewed
oil and gas operations. Producers accustomed to business-friendly governments
now see movements in towns such as
Denton, Tx., seeking to impose hydraulic
fracturing bans, he recalled.
"We are seeing an increasingly litigious
component to the general public outlook,"
Walker described. "That tells me we need
to do an increasingly better job of communicating and educating."
Induced Seismicity

TIPRO Chairman Raymond Welder,
chairman of the Texas Independent
Producers & Royalty Owners Association, describes the association's
legislative focus during TIPRO's
summer conference, held Aug. 6-8
at the Hyatt Hill Country Resort in
San Antonio. Welder said association
staff members monitored legislation
involving jurisdictional authority for
municipalities, tax relief, transportation and water.

140 THE AMERICAN OIL & GAS REPORTER

Despite public perceptions linking oil
and gas activities to induced seismic
events, Walker insisted no such connection
existed.
"Look at the western United States.
We understand plate tectonics; we know
where faults are and where faults are
going to occur," he told TIPRO. "If you
talk to any honest seismologist, we don't
understand what causes natural earthquakes throughout the Mid-Continent.
We are very much in the infancy of understanding that region."

American Oil and Gas Reporter - September 2015

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