Most Drilling-Related Legislation Appears Dead in Texas Legislature

- Most Drilling-Related Legislation Appears Dead in Texas Legislature

Tuesday, May 24, 2011
Fort Worth Star-Telegram, Texas
by Aman Batheja

With just a week left in the legislative session, most proposed drilling-related bills appear dead but a handful still have a chance of becoming state law.

Lawmakers filed more than three dozen bills this session that would have affected natural gas drilling operations in the Barnett Shale against a backdrop of increasing concerns about how the process is affecting the environment. For the most part, only bills not opposed by industry have moved forward.

"There's not a lot out there that we're actively fighting right now," said Bill Stevens, executive vice president of the Texas Alliance of Energy Producers. "I think this has been a good session for public policy, not just for the oil and gas industry but for the state."

Gov. Rick Perry recently signed a bill allocating funding for air monitors in the Dallas-Fort Worth area. There are also other bills still in play, including one that would require drillers to disclose most of the chemicals they use in the controversial hydraulic fracturing process.

Drilling critics and environmentalists agree that, as in past sessions, industry has called the shots.

"The industry in Texas is strong," said Cyrus Reed, conservation director of the Lone Star Chapter of the Sierra Club. "They definitely have a seat at the table."

Fort Worth lawmakers

Two Fort Worth lawmakers filed more drilling bills this session than anyone else: state Rep. Lon Burnam and state Sen. Wendy Davis, both Democrats. Several of their bills proposed increasing state regulation of parts of the drilling process or giving local governments more control. Nearly all of their drilling bills, about 20 in total, never came up for votes on the House or Senate floor.

"This industry has controlled state government for over 100 years, and there's nothing to suggest that's going to change," Burnam said.

Several of Burnam's bills were the subject of committee hearings but now remain stuck in different committees. Nearly all of Davis' bills are parked in the Senate Natural Resources Committee. Committee Chairman Sen. Troy Fraser, R-Horseshoe Bay, chose not to hold hearings on more than a dozen drilling bills from Davis. That's a switch from last session, Davis said, when several of her drilling bills not only received hearings when that committee was run by a different chairman but went on to be approved by the full Senate.

When asked about Davis' bills, Fraser said his committee has focused on "the bills that we thought were good public policy that warranted hearings."

Davis said she was able to get three of her proposals added on as amendments to the House version of a bill revamping the Railroad Commission. The House and Senate have passed different versions of the bill. Lawmakers are now working to hammer out the differences, and a major sticking point is whether the agency should continue with three commissioners or switch to just one.

"What I fear is that the debate over the different versions will end up leading to no bill getting passed in time," Davis said.

Rep. Rob Orr, R-Burleson, said he supported several drilling bills proposed by fellow North Texas lawmakers but most did not gain traction this session. "I do not feel like there has been a lot of progress in improvements to the Barnett Shale," he said.

While there still are situations where residents are not happy with the drilling activity in their communities, Orr said he's heard less of an outcry this session than he did when the price of natural gas was higher and companies were in the midst of a leasing frenzy that left some communities frustrated or confused.

One measure that drew bipartisan attention was suspending or limiting a tax exemption on high-cost natural gas production. The exemption, which has encouraged production in the Barnett Shale, accounted for $7.4 billion in lost revenue to the state over the past six years, according to a state report.

Supporters of a pullback said the money could go toward education, but industry officials predict that such a move would deter drilling activity and hurt economic growth. No changes to the tax break appear likely this session.

"That's one we will continue to be vigilant on," Stevens said.

Fracking fluids

The most significant piece of drilling legislation still alive is a measure to require drilling companies to disclose the fluids they use in the controversial practice of hydraulic fracturing.

"We think it will alleviate some of the public fears that are out there right now related to our fracking process," said Debbie Hastings of the Texas Oil & Gas Association.

Reed said the fracking disclosure bill could indirectly lead to safer drilling practices.

"The hope is if you have to disclose, you will be more careful about what chemicals you're using," Reed said.

After months of negotiations with stakeholders, the measure passed the House earlier this month. Though not as strong as some environmental groups and drilling activists had hoped, it has still drawn broad support.

Copyright (c) 2011, Fort Worth Star-Telegram, Texas

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Begich Proposes Federal Coordinator for OCS

Begich Proposes Federal Coordinator for OCS

Monday, March 28, 2011
Alaska Journal of Commerce
by  Tim Bradner

Alaska U.S. Sen. Mark Begich told the Alaska Legislature he will introduce legislation establishing an Arctic outer continental shelf federal coordinator and creating a joint regional lease and permit processing office for Alaska's OCS region, modeled after the federal gas pipeline coordinator position.

The new federal coordinator would have authority to work across many agencies involved in permitting, including the U.S. Environmental Protection Agency, U.S. Army Corps of Engineers and the Interior Department.

The bill would be introduced soon, Begich spokeswoman Julie Hasquet said.

Begich spoke in Juneau in his annual address to the Legislature.

"The federal OCS coordinator would work with the state of Alaska and affected local governments to streamline development in the Chukchi and Beaufort seas, which hold such promise for future oil and gas development," Begich said.

He also urged serious discussion of which federal agency should have jurisdiction over air permitting.

Begich argued for federal air quality permit authority in the Arctic OCS region to be brought under the Department of the Interior, which now has jurisdiction over air permits in the Gulf of Mexico.

This would take away the U.S. Environmental Protection Agency's current authority for air quality permits in the Arctic OCS.

An air quality permit for Shell's proposed exploration in the Beaufort Sea is now bogged down in appeals before the Environmental Review Board, an internal EPA appeals panel.

"We need to address the two different air permitting systems in the country. There are currently two processes and two different federal agencies overseeing air permits -- one for the Gulf of Mexico and one for everyone else -- including the Arctic," Begich said in his speech. "This makes no sense. It's not fair and it puts companies with projects in the Arctic at a competitive disadvantage. We need to level the playing field. It's time to move all air permitting under the Interior Department."

Shell reacted favorably to Begich's suggestions.

"The senator clearly understands the challenges facing responsible operators, like Shell, as well as the need for a regulatory process that is predictable and accountable," company spokesman Curtis Smith said in a statement. "A federal OCS regional coordinator for Alaska could go a long way in making that happen. Shell has already spent five years and over $50 million trying to secure an air permit for our drilling rig but with no success. The Senator's effort to align Arctic air permitting under the Department of Interior, as it is in the Gulf of Mexico, is one Shell supports."

Marcellus Impact Fee Proposal In The Works

Marcellus Impact Fee Proposal In The Works

Monday, March 28, 2011

Knight Ridder/Tribune Business News

by  Brad Bumsted, The Pittsburgh Tribune-Review

 

Republican senators will introduce legislation to impose a fee on Marcellus shale drillers in a few weeks, in an effort to offset costs municipalities experience dealing with the growing natural gas industry, said a top Senate staffer.

Senate President Pro Tempore Joe Scarnati of Jefferson County, the party's highest-ranking senator in the GOP-controlled General Assembly, could be lead sponsor of the bill, said his chief counsel Andrew Crompton.

Counties where drilling occurs would benefit the most monetarily, but lawmakers likely will try to compensate contiguous municipalities, Crompton said. Those municipal boundaries could cross county lines, he said, so "contiguous counties could well get money."

Lt. Gov. Jim Cawley said yesterday a shale advisory panel he chairs will report to Gov. Tom Corbett in 120 days and include a recommendation on assessing a local impact fee to help municipalities defray costs such as road repairs and first responder units.

Corbett has said he would consider a fee to help local government finances. But the money should not go to the state, he said.

The Senate might produce a different interpretation. Scarnati "believes local needs are paramount, but knows that there needs to be a statewide portion, likely for 'Growing Greener' projects and/or hazardous site cleanup," Crompton said.

Cawley said the administration would not impose a severance tax on gas extraction, and the Marcellus Shale Advisory Commission wants evidence of damage that's occurring from drilling operations.

"We want to understand what the actual impact is," he said.

It's not clear whether the full Senate would vote on a bill before the commission concludes its work. Crompton said senators do not want to usurp the commission, but Scarnati senses urgency among local government officials and doesn't want to wait until fall to address it.

The commission will consider a range of issues, such as environmental impacts and the extent to which natural gas eventually could be used to fuel state vehicles, prisons and schools, Cawley said.

Corbett's critics have said the commission's makeup is industry-heavy. It includes drilling company executives, business representatives, six members of Corbett's cabinet, a member of the Public Utility Commission, environmentalists, local government officials and the governor's energy executive, Patrick Henderson.

"This is a very interesting group of cheerleaders," Virginia Cody of Wyoming County told the panel during its first meeting.

Joanne Fiorito, who lives near drilling sites in that county, said she moved there "to be at peace with nature."

"You have ripped my American dream apart, and I am appalled and outraged," she said. 

Increasing volume of legislation costs businesses £2bn

23 March 2011 Last updated at 06:33 GMT

By Eddie O'Gorman BBC NI business reporter

Businesses have lost out on more than £2bn in the last decade due to an increasing volume of legislation, according to business lobby group the CBI.

Nigel Smyth's comments come ahead of the Chancellor, George Osborne's first annual Budget statement on Wednesday.

Mr Smyth said additional support for growth and job creation, and less red tape, particularly relating to employment were the main preoccupations for Northern Ireland business.

Nigel Smyth of the CBI says businesses are having to deal with an increase in legislation

He said that business organisations had been lobbying hard to encourage government to reduce barriers to high-growth companies in order to create employment.

"This includes doing something to relieve the regulatory burden," he said.

"But they are also having to cope with increasing costs such as the carbon reduction commitment, which from being an incentive, has now turned into a carbon tax."

Mr Smyth said that Northern Ireland companies were competing in global markets now, and many of their competitors were not having to deal with the same level of regulation.

As a result they had a lower cost base than companies based in the UK, he said

He said: "The danger is that some of these highly successful, highly productive companies will simply move to locations where the cost base is not so high."

Dr Esmond Birnie, the chief economist for PricewaterhouseCoopers in Northern Ireland, believes that any tax increases in the Budget would have a serious effect on the local economy.

"February's unemployment is up 6.3% year-on-year," Dr Birnie said.

"That is the highest increase of all 12 UK regions, and we are forecasting that local economic growth will not exceed one per cent in 2011.

"It means that further tax increases could have a disproportionate impact on economic growth and business confidence."

On the bright side, it is thought that the 1p rise in fuel duty due on 1st April might be postponed because of the recent steep increase in oil prices, while personal tax allowances are set to go up by £1,000 to £7,475 for 2011/12.

It is estimated that this should reduce the tax liability of 23 million taxpayers by an average of £200 a year.
The Chancellor has already promised to increase personal allowances to £10,000 by 2015.

An announcement is also expected on the subject of corporation tax, or company profits.

Many economists and Northern Ireland business people have been arguing strongly that a reduction from the current rate of 28% closer to the rate of 12.5% which exists in the Republic, would do much to encourage inward investment.

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