American Oil and Gas Reporter - June 2024 - 35

ConventionSec tion: Kentucky Oil & Gas Association
Kentucky Industry Positive
About Opportunities
By Del Torkelson
FRANKFORT, KY.-As he ponders
the status of the Kentucky Oil & Gas Association
and the industry it serves, Executive
Director Ryan Watts cites the example
of the 2024 Western Kentucky
Spring Meeting, held April 30 in Owensboro,
Ky.
" KOGA and the industry are certainly
strong, with people very eager to get to
work and who are active and vocal in our
association, " he describes. " The spring
meeting in the western part of the state
was one of the best-attended regional
events we have had since 2008. "
The association expects to keep building
momentum with its 2024 Annual Meeting,
scheduled for July 27 at the Campbell
House in Lexington, Ky., he says. " KOGA
is one of the best organizations in Kentucky,
and our annual meeting is a demonstration
of that, " he considers.
Watts and KOGA President Wes Cate
mention a few reasons the association
and its members are on the rise. " I think
everyone in Western Kentucky considers
that a fantastic place to do business, "
suggests Cate, who is director of business
development for NGL Supply Terminals
Co. " And there are still a lot of hydrocarbons
in the ground to develop. "
That resource, Watts observes, is the
one for which commodity prices are
strong. " The Illinois Basin is oil rich,
which I think drives some of the optimism
in that part of the state, " he says.
In Eastern Kentucky, he continues,
lackluster natural gas prices have not
quashed enthusiasm or kept operators
from finding opportunities. " A lot of
people are interested in the federal dollars
for orphan well plugging, " Watts reports.
" People also are interested in the Methane
Emissions Reduction Program dollars to
plug privately owned marginal wells.
They are not abandoned or orphaned, but
since they are not economical, or are
marginally economical, the MERP program
can help operators offload them. "
Although slumping commodity prices
can prompt operators to pause production
on wells that will turn a profit when
" Although it is still an exciting time, all the
regulatory change makes it very difficult,
especially for new operators. "
-Wes Cate
KOGA President
prices improve, Cate says companies are
mostly interested in plugging the inactive
wells that have depleted to the point they
are unlikely to become economic in most
realistic price environments. " These federal
dollars are a fantastic chance to serve as
a conduit for our members to get some
liabilities off the books, " he relates. " We
are excited about the program, because it
is a lot of money and has a direct impact
on the producer community. "
Washington Worries
Nevertheless, KOGA's leaders admit,
a sunny mood extends only so far at a
time in which Washington casts an ever
larger shadow. " People are optimistic,
but hesitant, " Watts assesses. " The federal
government makes our operating environment
very confusing. "
" Everyone worries about all the Biden
administration's new regulations, " Cate
confirms. " How do small operators ensure
compliance? I don't think small operators'
obligations are clear, including the point
at which certain requirements kick in.
Although it is still an exciting time, all
the regulatory change makes it very difficult,
especially for new operators. "
While many KOGA members express
hope that a future presidential administration
will prune regulatory overgrowth,
Watts says sudden and stark reversals illustrate
how much inconsistent policy
impairs every company's ability to plan.
The periodic shifts seem to be a product
of the growing contrast between Democrats'
and Republicans' approach to energy,
he says, and are unlikely to improve even
if voters send President Trump back to
the White House.
" This roller coaster definitely is detrimental, "
he reflects. " Companies need
some consistency in politics to plan for
the future. "
Moreover, observes KOGA Government
Affairs Chair and Past President
Bill Barr, history shows that the arrival
of new, industry-friendly policymakers
does not sweep away every onerous initiative.
" It is difficult for a Republican
administration to roll back everything
from a preceding Democratic administration, "
says Barr, who also sits on
KOGA's Board of Directors and is managing
partner of BlackRidge Resource
Partners in Lexington. " That means we
constantly move further away from Republicans'
regulatory philosophy and toward
Democrats' approach. "
Today, the move toward more stringent
regulation includes the Biden administration's
myriad rulemakings addressing
methane emissions, Watts says. " Operators
are very nervous about what the federal
government is going to require, " he reports.
" That makes our educational piece the
association's biggest driver. I know keeping
members informed about evolving regulations
is vital for other state associations
too, because state regulators will have
only about 18 months to implement their
programs for the federal rules. "
Cate shakes his head at the extent to
JUNE 2024 35
American Oil and Gas Reporter - June 2024

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