Texas, Louisiana oil and gas officials rehash complaints about regulation, activists, lawsuits

Despite the boom, Texas, La. oil and gas officials rehash complaints about regulation, activists, lawsuits by Nathanial Gronewold, August 21, 2014, E&E News
Lawsuits…are becoming increasing problems, even in the industry’s heartland.

While a crude oil boom that has lifted fortunes in Texas and Oklahoma continues, industry insiders said…they fear activists will use the local courts and town councils to raise the cost of business even in seemingly industry-friendly locales.

Meanwhile, the threat of lawsuits has nearly put a halt to drilling activity in southern Louisiana…. Louisiana has “the second-worst legal climate in the United States” for businesses after California, said Gifford Briggs, vice president for government affairs at the Louisiana Oil and Gas Association. The success of anti-industry efforts in the courts is “driving investment out of the state of Louisiana,” Briggs added.

These complaints were heard on the eve of the summer NAPE Expo, an oil-field prospects and property showcase that serves as a networking and deal-making opportunity for the oil and gas industry. NAPE hosts a larger such event in Houston in February and two satellite expos in Pittsburgh and Denver.

NAPE has grown along with the industry’s fortunes. Favorable market conditions and new technologies continue to bolster companies’ bottom lines. But this year, speakers from three of the most pro-oil states in the nation said they see signs that anti-drilling tactics common in parts of the Northeast and Colorado are increasingly popping up in their jurisdictions.

Aside from a lawsuit storm in Louisiana over coastal land protection, the speakers cited a recent effort in Denton, Texas, to ban hydraulic fracturing within city limits as a possible sign of things to come.

Jeremy Fitzpatrick, speaking on behalf of Oklahoma Independent Petroleum Association, acknowledged that business conditions are still overwhelmingly positive. He said Oklahoma continues to be “clearly one of the best states for oil and gas policy.” But Fitzpatrick also expressed concern that some groups are trying to capitalize on the rash of earthquakes felt in Oklahoma in an attempt to drive a wedge between the industry and communities. The U.S. Geological Survey is trying to determine whether the earthquake swarm is linked to wastewater injection wells used by companies to dispose of drilling and hydraulic fracturing waste.

Alex Mills, president of the Texas Alliance of Energy Producers, alluded to federal regulation as the main threat to the industry’s strong growth in Texas. Lee Fuller, with the Independent Petroleum Association of America, concurred, saying that the industry’s representatives in Washington, D.C., need to stay focused on possible applications of the Clean Water Act and Endangered Species Act in ways that could be damaging to future industry growth.

But Mills noted that earthquakes and suspicion that the industry might be responsible for them are a growing problem in parts of Texas, as well. He also said that his organization is growing concerned about activist demands for broader disclosure of what materials and methods are employed for the practice of hydraulic fracturing. Mills expressed frustration that despite the oil and gas industry’s setting up the FracFocus website to increase transparency, activists and skeptics of the industry continually “want more and more and more.” [Perhaps because fracfocus lets companies keep too many secrets?]

“Our opponents are out there to put us out of business,” Mills said.

Briggs said his association’s biggest concern is “local governments suing the oil and gas industry,” and that the association is planning to press Louisiana’s Legislature over the next couple of years “to bring some sensibility to these lawsuits.”

He advised his industry peers in other states to get ahead of this possible threat by becoming more active in local government politics and policymaking. “It starts at the local district judge level,” Briggs said. [Emphasis added]

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