American Oil and Gas Reporter - September 2022 - 50

policies were particularly entangled with
the reconciliation package that Democrats
in Congress passed on a party-line vote
and that President Biden signed in midAugust
(see story, page 34).
" If the Biden administration intends
to reduce inflation, that bill misses the
mark by mile, " Shepperd comments.
" Handled as it was, through the reconciliation
process, its provisions were not
vetted in a normal way through the committees
and open discussion. I view it as
potentially a last-ditch effort in this Congress
to get some policy initiatives in
place that will penalize oil and gas and
put an extraordinary amount of money
into 'clean energy' infrastructure. "
Robertson cites the Washington wisdom
that questions the prudence of tax increases
during a recession. However, he considers,
the resultant revenue is only part of the
problem. " So much will be appropriated
to federal agencies that then will make
determinations on how to spend it, " he relates.
" The U.S. Supreme Court's decision
in West Virginia v. EPA calls for Congress
to do more of its constitutionally-assigned
work, as opposed to passing it off to the
executive branch. Yet the bill sure looks
like giving more authorization and budget
to the executive branch to run wild without
many accompanying specifics. "
" Instead of seriously addressing problems
such as inflation, the administration
and Congress seem to be doubling down
on political posturing and retaking many
of the steps they have taken to get us to
this point, " Shepperd muses. " Making it
more difficult and expensive for us to
produce oil and gas will hardly lower
any prices, whether at the pump or anywhere
else. "
Uri's Aftermath
Among state matters that command
PBPA's attention, Robertson points to the
Lone Star State's winterization and critical
infrastructure designation requirements
that originate with the 2021 Texas Legislature's
response to Winter Storm Uri.
The Texas Railroad Commission and
the Public Utility Commission have been
crafting rules based on their statutory
marching orders, he notes, and although
the RRC already has implemented Statewide
Rule 3.65, Statewide Rule 3.66 remains in
progress. " We continue to convey industry
concerns with those rules and try to educate
folks at PUC and the RRC on the realities
of what weatherization/winterization really
means, " Robertson reports. " Those additional
costs will have an impact. "
Shepperd commends lawmakers' efforts
to address the storm's disruptive impact
on Texas' energy infrastructure and power
grid. However, he says, passing sweeping
bills in the heat of the moment may not
have been the most prudent course. " There
is no question that the storm was a fiasco, "
he confirms. " Unfortunately, hasty actions
are rarely perfect on the first try. "
Industry representatives are questioning
requirements that threaten marginal wells'
profitability by ladening them with the
same sort of precautions required of much
more prolific ones (AOGR, Aug. 2022,
pg. 42). However, the overbroad template
can be problematic in more ways than
one, Robertson comments. For example,
Permian producers may lose the option
to voluntarily shut in their operations to
sell electricity back into the grid during
the summer months.
" Under the proposed new system, in
which ostensibly every well is considered
critical, operators would be required to
stay on line, " he notes. " Not only does
that affect companies' economics, but it
also requires more electrical consumption
and limits the supply of usable electricity
in places such as homes and hospitals.
Yes, during a winter storm it is important
to ensure as much natural gas production
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50 THE AMERICAN OIL & GAS REPORTER
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American Oil and Gas Reporter - September 2022

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