Multi-state oil and gas agency conference held in Denver

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Angela K. Evans | Boulder Weekly

In the wake of the recent Colorado Supreme Court decision overturning Longmont’s ban and Fort Collins’ moratorium on fracking, as activists and environmentalists gather signatures to put initiatives on the ballot that could restrict oil and gas development, and hundreds have gathered in protest of further development throughout Colorado, a group of state and federal regulators, oil and gas industry leaders and a handful of others met in Denver this week. The Interstate Oil & Gas Compact Commission (IOGCC) held its annual business meeting May 15-17 and attendees spent three days discussing a diversity of oil and gas topics from bankruptcy to safety to aging infrastructure, financial assurances and developing technology.

With a price tag of $395 to attend, the public was all but absent.

The IOGCC is a multi-state government agency created in 1935 by Congress at a time when overproduction was driving oil prices down and regulation was lacking. It was tasked with keeping the oil and gas industry in check by encouraging state governments to share information, technology and regulatory methods. It doesn’t have any regulatory authority, but rather functions as a forum for inter-state discussion while also passing resolutions on the matters of oil and gas that are communicated to Congress on the states’ behalf.

According to an investigation by Inside Climate News, in 1978 the Department of Justice told a congressional subcommittee that the IOGCC should be dissolved, given that regulations had been implemented and prices had stabilized. Furthermore, the justice department said, the IOGCC had become more of an advocacy agency than anything else and continued congressional support could be considered inappropriate.

The IOGCC has continued, however, with Congress’ consent and any oil-producing state can join the compact. What started with six oil-producing states, including Colorado, has now expanded to include 30 states and several Canadian provinces.

The commission has two meetings each year where a variety of commissions and working groups discuss and address issues pertinent to oil and gas development.

For example, in 2009 the resolutions committee urged Congress to throw out legislation that would’ve overturned the so-called Halliburton loophole from the 2005 Energy Policy Act, which exempts hydraulic fracturing from the Safe Drinking Water Act and Environmental Protection Agency (EPA) oversight. In effect, it gives regulatory authority over fracking to the states and not the federal government. The Inside Climate News investigation also links the original 2005 legislation to the IOGCC.

More recently, the commission formed a working group on natural gas storage after the Aliso Canyon methane leak went uncontained in California earlier this year and the group convened at the Denver event this week to discuss issues and possible solutions.

Energy companies Schlumberger and XTO Energy, an ExxonMobil subsidiary, were the main sponsors of the recent IOGCC meeting. Anadarko Petroleum, Noble Energy and others also contributed. Minimal sponsorship (breakfast and coffee) was provided from other member groups such as the Environmental Defense Fund (EDF) and State of Utah School and Institutional Trust Lands Administration.

According to the Denver gathering’s attendance roster, as of May 10, there were 150 attendees, approximately 65 of which were representatives of regulating agencies such as the EPA, Federal Energy Regulatory Commission and various state regulators, including 11 representatives of the Colorado Oil and Gas Conservation Commission (COGCC). Also in attendance were representatives of oil and gas companies such as ConocoPhillips, Chevron, Anardarko, Nobel and Shell, as well as industry groups such as the Independent Oil & Gas Associations of both Kansas and West Virginia.

There were a handful of other attendees from The University of Texas, the EDF and guests of others. Boulder Weekly was the only Colorado news organization represented and no one from the general public is listed on the roster.

“To me it doesn’t raise a conflict of interest. I mean the public was invited too,” says Matt Lepore, director of COGCC and the IOGCC chair of the Legal and Regulatory Affairs Committee. “If I were an operator, if I were a regulatory person for an operator, I can’t think of a better place to quickly figure out what’s on regulators’ minds. I think that’s only good.”

Lepore later clarified that the public, including local officials, representatives and citizens, were not explicitly invited but they were not excluded if they could pay the registration fee. Regardless, he argues, “We really aren’t discussing any specific policy decision or rulemaking decision and if something here … we decided was the best thing since sliced-bread, we decided to roll with that, then there’s a rulemaking process that we always go through.”

The meeting opened with state reports from attending representatives that, as a whole, chronicled the industry’s decline since 2014, which affects many state regulators as they rely on permitting and other fees from the industry to fund their departments. States are addressing the downturn in activity differently. Wyoming, for example, is issuing on average 500 drilling permits a month so that operators have a green light once the industry’s economy turns around. While other states are issuing 20 or fewer.

“All we have to do is wait for the price of oil and gas to go up and for environmentalists to get out of the state,” said one regulator from Arkansas. “Surmountable problems,” he concluded.

Some states aren’t faring quite as bad. In Ohio, for example, state regulators reported a 100 percent increase from 2014 numbers, with six natural gas power plants in the process with the hopes of being a net-exporter of electrical power.

In Colorado, Dave Kulmann, deputy director of the COGCC, reported that the rig count, drilling and issuing of permits are all down large percentages over 2014 and 2015. However, production is up mainly due to horizontal drilling capacity of many operations.

While the general tone of the meeting communicated an industry in economic turmoil, there was also widespread sentiment echoing the IOGCC’s belief that the industry is an American necessity and must be preserved.

“Without energy, the quality of life we enjoy today would not exist,” the IOGCC argues on its website. “That’s why the Commission works to ensure our nation’s oil and natural gas resources are conserved and maximized while protecting health, safety and the environment.” This pro-oil/pro-environment sentiment was not the only seeming contradiction.

For example, the state regulator from Nebraska, Bill Sydow, admitted in his status report to being a climate-change denier while arguing that states can’t provide basic health and safety to citizens without the oil and gas industry.

Climate change wasn’t a topic of discussion at the conference.

“I think there’s a different venue for that,” Lepore says. “If the environmental stakeholder community wants to bring their concerns, issues or agenda forward then I think they have other avenues to do so, especially in Colorado.”

The Public Outreach Committee spent two afternoons conducting “Crisis Communications Training” for regulators and industry representatives. Speakers included Bethany McCorkle from the Ohio Department of Natural Resources, Mark Bruce from the industry group Ohio Oil and Gas Energy Education Program, Todd Hartman from the Colorado Department of Natural Resources and Karen Crummy, communications director for Coloradans for Responsible Energy Development (CRED) a pro-energy group funded principally by Anadarko Petroleum and Nobel Energy.

The training focused around possible oil and gas incidents and the communications nightmare that can often ensue. Presenters advised attendees in regards to managing social media, dealing with reporters, promoting a single message and making sure no one says anything off the talking points.

“Message consistency avoids panic,” Bruce said, as he urged regulators and industry to share communication information prior to releasing anything to the public. “All we’re doing is sharing. As an industry group, I am nowhere near telling a regulator what to say, all we’re doing is sharing what we’re going to say. … I’m not asking for approval. It’s just awareness.”

Throughout the training, regulators and industry attendees raised questions about this information sharing, anticipating conflict between industry and government messaging with fears of cover-up accusations or the legalities of issuing statements that could subsequently be seen as an admission of liability.

“But what’s your top priority in an incident? It’s public health and safety, not covering your own ass,” McCorkle concluded.

Regulators also heard from industry representatives in the Public Lands Committee meeting. Kathleen Sgamma, the vice-president of government and public affairs at the Western Energy Alliance, spoke about what she considers “federal overreach” by the Obama Administration via a variety of regulations administered by a collection of diverse agencies including the EPA and Bureau of Land Management (BLM). She also addressed the growing “Keep it in the Ground” movement, specifically the protests at a BLM auction on May 12 in Lakewood.

“This movement is picking up some ground so Western Energy Alliance is planning some counter-efforts with Keep it in the Ground which we’ll be announcing later this month,” she said. “We’ve also been working with the BLM and Congress just saying, ‘Let’s get rid of this circus, let’s just have online auctions.’… Hopefully BLM is compelled even more after [the May 12 protest] to move in that direction.”

She concluded her presentation with a slide depicting the word “overreach” using Obama’s 2008 campaign logo as the first letter. “Certainly, we in the oil and gas industry are very fatigued by all the regulation coming at us,” Sgamma said.