American Oil and Gas Reporter - June 2017 - 35

Tennessee General Assembly
Creates Energy Policy Council
KNOXVILLE, TN.-When a bill to
create an advisory council for energy legislation and rules appeared in the 2017
Tennessee General Assembly, the Tennessee Oil & Gas Association noticed
that the prospective committee lacked a
seat reserved for an oil and gas producer,
so TOGA moved to rectify that situation.
Thanks to that intervention, the version
of HB 0438 that lawmakers approved
and the governor signed in May specified
a seat on the Tennessee Energy Policy
Council for an oil and gas industry representative, reports TOGA spokesperson
Roxanne Reiley. "It was an inadvertent
oversight during a hectic session, so we
advocated for the bill to be amended and
it was," she explains.
According to TOGA President Chuck
Laine, the bill passed easily, drawing almost no attention or controversy. Even
so, he adds, the task for the council it
creates-to make recommendations to the
governor and general assembly on how
to manage Tennessee's energy resources-
leaves plenty of room for interpretation.
"The thing that makes me uncomfortable
is that it is so wide open," he describes.
"However, the reason why something
good may come of it is because it is so
wide open."
"The legislation does not give the council much direction," Reiley concurs. "It is
going to make recommendations, but there
is no legislative mandate to accept them.
It is a double-edged sword with a lot of
potential-and potential drawbacks."
Tennessee's governor, House speaker
and Senate president are responsible for
the appointments, Laine indicates, adding
that TOGA plans to recommend association Chairman Gary Bible, president of
Cougar Dome LLC in Helenwood, Tn.,
for the oil and gas industry seat.
Severance Tax Allocation
Two more bills that TOGA followed
during the 2017 session were HB 1187
and SB 1351, Reiley indicates. The bills,
which stayed alive throughout much of
the session but fell short of passage, she
says, dealt with Tennessee's oil and gas
severance tax.
She estimates that tax brings in about
$1 million a year, two-thirds of which
goes to the state, with the remainder
going to the county of origin. "That
$750,000 is a drop in the bucket for the
state general fund-this year's budget was
$37 billion," Reiley observes. "But most
producing counties are rural and somewhat

economically depressed. Getting a greater
share of that money really could help."
Reiley says there has been a push to
reallocate all severance tax revenue to
the counties. HB 1187 and SB 1351
sought such a reallocation, but the bills'
initial language also contained a 2 percent
severance tax increase.
The legislation's initial backing came
from a Tennessee green group with which
TOGA often differs, Laine details, but
its representatives agreed to meet with
TOGA, and eventually they agreed to remove the tax increase. After that change,
he says, TOGA endorsed the effort.
"I don't know if we ever have worked
with that group like that before," he considers. "We would walk in together to
see legislators about it, and would get
some surprised looks."
Even so, Reiley says, legislators' relatively fresh memories of the tight fiscal
situation from a few years ago muted
their support for anything with a fiscal
note, even a miniscule one. "The bills
were not voted down in a hurry, but
stayed alive," she observes. "We hope
next year we can see that issue revive."
Zoning Requirements
Meanwhile, TOGA is pleased that the
legislature passed a resolution that Laine
says reiterates state law that the Department
of Environment and Conservation cannot
consider any zoning requirements when
granting Clean Air Act permits. Essentially,
he says, the resolution is a response to activists and local government efforts to frustrate the construction of a pipeline compressor station in a Nashville, Tn., suburb.
"Nashville's metro city council has
tried to circumvent the compressor station,
actually going so far as to pass an ordinance that seeks to tie zoning regulations
to a company's ability to obtain airquality permits," Laine reveals. "This
bill is a show of support for the construction. There was also a bill against the
construction, and it did not go anywhere."
Although questions centering on local
authority over oil and gas activities as
well as anti-development activists' efforts
to impair new infrastructure are increasingly commonplace throughout the country, Reiley attributes the fight against the
compressor station to a more classic "not
in my backyard" outlook.
"There is a lot of NIMBY attitude in
Davidson County," she assesses. "A
quarry in the area generated similar community push back."
r

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American Oil and Gas Reporter - June 2017

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