October 2020 Wellhead Magazine

VOTE

ELECTION ISSUE

2020 ELECTION

VOTE

Simmons testifies during House interim study.....8

Election resources available to oil, gas industry.....19

EPA grants regulatory primacy to state agencies.....15

Trump, Biden offer differing views on energy industry.....24

OCTOBER 2020

THANK YOU, REFINERS REFINERY AD

Oklahoma’s refiners play a critical role in providing America with the fuel and petrochemicals needed to advance human progress. Those same companies play a critical role at The Petroleum Alliance, ensuring the state’s only trade association to represent all segments of the oil and natural gas industry is aligned from wellhead to finished product.

To our valuable members from the Oklahoma refining sector, thank you for supporting The Petroleum Alliance.

David D. Le Norman Chairman

TABLE OF CONTENTS

Brook A. Simmons President

11

Adria Berry Senior V.P. - Government Affairs & Public Policy

Bills sidelined by pandemic adds extra level of action for lawmakers

Natalie Kinmonth Senior V.P. - Membership & Development

17

Cody Bannister Senior V.P. Communications

Burying beetle downlisting reduces costs for energy industry

Teresa Yoder V.P. - Finance

21

Ellis Ebel Director of Operations/HR

Social, economic unrest complicate election cycle

Lauren Burnett Director of Events Bud Ground Director of Regulatory Affairs Madison Miller Committee Coordinator & Policy Analyst Annie Parks Membership & Marketing Coordinator Marcy Ayers Partners Program Consultant Valerie Flaherty Receptionist

23 Alliance PAC contributes to victorious candidates, seeks continued success

29 Well-funded environmental lobby uses lawsuits to slow Trump administration’s energy efforts

33 API ‘Industry Outlook’ points to possibility of $50 oil for 2021

This newsletter is produced by

39 Energy Index points to prolonged economic uncertainty

500 N.E. 4th St. Oklahoma City, OK 73104 405-942-2334 contact@okpetro.com www.thepetroleumalliance.com

41 Virtual Annual Meeting offers insight from industry, political experts October | 3

A

LETTER

FROM

THE

PRESIDENT

B ROO K A .

SIMMONS The election is underway. In one of the most tumultuous election years in history, citizens are casting ballots through early in-person voting and the U.S. mail.

The fiery debates will soon be behind us as the campaigns roll out their closing mailers, digital ads, and television spots. Organizers are finalizing Nov. 3 voter turnout plans. The phone banks, volunteer precinct walkers and poll monitors are ready. The campaign lawyers are standing by.

What’s required now is you.

The men and women of Oklahoma’s oil and gas industry are ordinary citizens who do extraordinary things daily to benefit this country and human progress worldwide. We are Republicans, Democrats, Independents and Libertarians who care deeply about the future of this nation, our neighbors, children, grandchildren and distant friends.

We mark our ballots knowing that as we do so, we are setting our nation’s course for both the short- and long term.

The October issue of Wellhead touches on the two men vying for the White House through the eyes of Oklahoma’s Carl Michael Smith, oil man and former Assistant Secretary for Fossil Energy within the U.S. Department of Energy.

We tally the victories of The Alliance PAC and our special Wildcatters Club through the primary runoff cycle in 2020. Expect more wins on Nov. 3.

WPA Intelligence CEO Chris Wilson, who recently gave members his frontline take on individual races and the election cycle, discusses the disruptors of 2020. Wilson is a featured panelist for our November 12 Virtual Annual Meeting.

Western Energy Alliance President Kathleen Sgamma describes how environmental groups use litigation to slow Trump Administration progress.

On that front, we have great news on the U.S. Fish & Wildlife Service’s downlisting of the burying beetle and EPA’s recognition of trusted and experienced state agencies as the administrators of federal environmental programs in Indian country.

More good (well, cautiously optimistic) news is found among economic data from API and the bottoming out of the Oklahoma Energy Index. Will the election create headwinds or tailwinds?

Oklahoma House Speaker Charles McCall is paying attention and provides a forecast of the 2021 legislative session. In interim studies and internal committee meetings, the Alliance is already at work on our own priorities.

We welcome aboard Adria Berry as Senior Vice President of Government Affairs & Public Policy. Learn more about Adria in “20 Questions.”

Now, back to the ballot one more time.

Beyond the political plots and rhetoric, spin and misinformation, promises kept and broken, and the disappointment that always comes with our imperfect system, the treasure of democracy is still you — ­­ the voter. I close with Winston Churchill: “At the bottom of all the tributes paid to democracy is the little man, walking into the little booth, with a little pencil, making a little cross on a little bit of paper – no amount of rhetoric or voluminous discussion can possibly diminish the overwhelming importance of the point.”

Read on. Be well. Vote.

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2

3

2 1 3 STATE ROUNDUP 1 | New Mexico

2 | California

Study shows major impact of oil and gas industry on New Mexico economy

California wants to wind down its gas and oil industry.

What does it mean for jobs?

A new study from the New Mexico Tax Research Institute shows that the oil and gas industry is a large contributor to the state’s economy, including paying 25 percent of all state and local taxes in 2018, the last year for which full details are available.

For tens of thousands of Californians, a job in the oil and gas industry has been a ticket to a middle-class life.

The industry paid $2.2 billion, up $465 million from 2017, to the state’s general fund. That included $822 million that went toward funding public schools, $290 million for health and human services and $240 million for public colleges and universities.

The industry has been among the few willing to employ Californians without a college degree and pay them well above average. But as the state seeks to wind down its gas and oil industry — made even clearer by Gov. Gavin Newsom’s call to scale back fracking and ban the sale of gas-powered cars in the state by 2035 — those jobs are at risk.

The study also found that the industry, through direct and indirect spending, supported more than 134,000 jobs, or 12 percent of the statewide total employment.

Those jobs accounted for nearly $7.6 billion in labor income, more than 13 percent of overall labor income in New Mexico.

“Can we immediately start talking about jobs? We can hate on oil, but the truth is our refinery jobs are really good middle class jobs,” Assemblywoman Lorena Gonzalez, D-San Diego, tweeted Sept. 24 after Newsom’s announcement. “Jobs can’t be an afterthought to any climate change legislation.”

“This report really highlights the overwhelming impact we have on the state,” Robert McEntyre, director of communications for the New Mexico Oil and Gas Association, said. “It’s much larger than what you might think just looking at direct industry employees according to numbers from the Bureau of Labor and Statistics.”

Even as the number of clean energy jobs rises in California, the quality of those positions vary wildly, from rooftop solar installers making just above minimum wage to those working in utilities making $50 an hour. Environmental and labor advocates say it’s up to the state to ensure those clean energy jobs are as good as the jobs in the oil and gas industry they will replace.

Looking at the jobs supported by the industry, mining was the largest category, with 30,010. Government was close behind at 28,901, with retail listed at 13,067.

Originally published by The Center Square

6 | thepetroleumalliance.com

The oil and gas industry directly employs 152,000 people in California, said Cathy Reheis-Boyd, president of the Western States Petroleum Association, which represents the industry in six western states, including California.

Those workers make $80,500 a year on average.

Nearly two-thirds of those workers don’t have a bachelor’s degree, according to a 2019 report from the Los Angeles County Economic Development Corporation.

“It’s one of the few industries left in California for people who are not college graduates, or for second chancers who have a criminal record,” said Rock Zierman, CEO of the California Independent Petroleum Association.

The industry is among the biggest employer in Kern County, with tens of thousands hired to drill wells.

But the oil and gas jobs are everywhere in California, from those in the refineries in the Bay Area to others building oil and gas pipelines.

Those jobs are just not comparable in quality to those in the green energy sector, Zierman argued.

“Those green energy jobs just don’t pay the way oil and gas industry pay,” Zierman said. “You have a higher pay and upward mobility in the oil and gas industry than in green jobs.”

Originally published by the Sacramento Bee

3 | Pennsylvania In Pennsylvania, gas drilling is down, but production higher than it has ever been More natural gas was fracked from Pennsylvania wells in 2019 than in any previous year, although the number of new wells drilled declined, according to the state Department of Environmental Protection.

The DEP’s 2019 Oil and Gas Annual Report, released in late September, shows 6.8 trillion cubic feet of natural gas was produced last year from the state’s Marcellus and Utica shale gas formations, topping the 2018 production total of 6.2 trillion cubic feet and continuing an upward trend that has gone on for more than a decade.

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The department issued 1,705 drilling permits, 1,475 of those for “unconventional” or horizontal shale gas wells, and 230 for “conventional,” or shallower, vertical wells. In 2018, the state issued 2,149 drilling permits, 1,868 for unconventional wells and 281 for conventional wells.

The report, which also touts departmental permitting efficiencies, states that the DEP conducted 35,324 field inspections in 2019, identified 5,496 violations and collected $4.1 million in fines and penalties. Over the past decade, the DEP has collected about $43.7 million for violations at Pennsylvania oil and gas sites.

Dave Yoxtheimer, an assistant professor and extension associate at the Pennsylvania State University’s Marcellus Center for Outreach and Research, agrees that economics plays a major role in the declining number of new wells. He noted that the break-even point for gas drillers in the Marcellus and Utica shales is between $2 to $3 per million BTUs, and the Henry Hub national index price for most of 2019 was below $3 per million BTUs and has been below $2 per million BTUs for much of 2020.

Originally published by the Pittsburgh Post-Gazette

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AT THE CAPITOL

Petroleum Alliance President Brook A. Simmons speaks to members of the House Committee on County & Municipal Government during an interim study on road funding for cities and towns impacted by increased oil and natural gas activity.

ON THE ROAD

Alliance President Brook Simmons testifies during House interim study focused on funding for street repair in cities, towns in Oklahoma Oklahoma Rep. Brad Boles was clear from the start.

As chairman of the Oklahoma House Committee on County & Municipal Government, the state representative from southern Oklahoma told participants September’s interim study was not an effort to increase taxes on the oil and natural gas industry.

Instead, Boles said, it was effort to ensure that all effected parties could begin a conversation to address concern among suburban communities where oil and natural gas activity has increased in recent years.

Focused on examining options for cities and town to secure funding for roadways impacted by increased oil and natural gas activity, the interim study gave officials from those communities, the Oklahoma Municipal League and the oil and natural gas industry the opportunity to weigh in on the subject.

8 | thepetroleumalliance.com

“This is not a study to see if we can raise the gross production tax,” said Boles, R-Marlow, who runs a manufacturing company serving the oilfield. “We want to examine the current processes we have in the state … and see what options we have in getting funding back to the municipal level.”

Leading the charge for the oil and gas industry was Petroleum Alliance President Brook A. Simmons, who told study participants that oil and natural gas producers in the state could not weather the burden of further tax increases.

“Oklahoma is overly reliant on our industry for its tax receipts,” Simmons said. “Every time the law changes at any level of government, the future changes. Our members cannot afford to pay more in taxes and fees – and it

“Our members want to be good neighbors. We pay more than our fair share to roads and bridges and other state priorities. Sometimes being a good neighbor is costly.

When it becomes too costly, our members must move on. They must slow or stop investment in Oklahoma.”

Above, Petroleum Alliance President Brook A. Simmons, right, speaks with Oklahoma Rep. Brad Boles, R-Marlow, following an interim study hosted by the House Committee on County & Municipal Government. Below, OERB Executive Director Mindy Stitt speaks to lawmakers during the study.

- Brook A Simmons Alliance President

doesn’t matter if the company has 11 employees or 1,100…

“Our members want to be good neighbors. We pay more than our fair share to roads and bridges and other state priorities. Sometimes being a good neighbor is costly. When it becomes too costly, our members must move on. They must slow or stop investment in Oklahoma.”

While the study focused on the tri-city communities of Newcastle, Blanchard and Tuttle, Simmons pointed out that a portion of gross production taxes generated from production in the counties those communities call home is returned to the county for road repair and construction. For McClain County, that amounted to $2.5 million in fiscal year 2020. For Grady County, it totaled $9.3 million. In total, approximately $90 million is returned to counties across the state each year.

While that money is returned to counties, it is not shared with cities. For Tuttle Mayor Aaron McLeroy,

that is where the frustration lies. His hometown has a $200,000 per year budget for road repair but an estimated $3.5 million in repairs to make. He said this is due, in part, to traffic created by the more than 100 oil and natural gas wells located within city limits.

“If the goal here is to help cities with this tremendous financial burden, the funds are already there,” said Oklahoma Municipal League Executive Director Mike Fina. “What we’re asking from the state is to find a better way to allocate those dollars.”

The Petroleum Alliance of Oklahoma will continue to monitor the effort and ensure that members’ voices are heard.

October | 9

10 | thepetroleumalliance.com

AT THE CAPITOL

Oklahoma Speaker of the House Charles McCall, right, speaks with Lt. Gov. Matt Pinnell during the 2020 legislative session.

LEGISLATIVE DOUBLEHEADER Bills sidelined by pandemic adds extra level of action for lawmakers during 2021 legislative session

By Speaker of the House Charles McCall The 2021 legislative session will feel like a baseball doubleheader.

As in any session, legislators will file new bills for 2021 reflecting their district priorities. The doubleheader comes into play because many members will also refile bills sidelined this year by

the pandemic, which prevented most legislation from advancing due to a shortened session.

Having 2020 and 2021 priorities combined into one year means an extra level of action all in one doubleheader legislative session.

There will never be another session like 2020.

When the worldwide pandemic arrived at Oklahoma’s doorstep in March, everything everywhere changed – including at the Legislature.

I am proud the Oklahoma House of Representatives rallied together in a bipartisan manner to do our part to confront the challenge.

We moved mountains to find ways to safely work together to keep government functioning, and Continued on page 13

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AT THE CAPITOL

Continued from page 11 we succeeded. This required several priorities to be temporarily put aside in order to focus on critical efforts related to the pandemic and continuity of government.

In addition to the sidelined 2020 priorities, there are new issues the Legislature must take up in 2021.

Responsibly funding constitutionallyrequired Medicaid costs stemming from State Question 802, completing redistricting fairly and transparently, and a host of pandemic-related policy will all require major attention. House members are also very interested in simplifying state regulations, implementing pro-growth economic policy and law enforcement issues, among other items.

As always, the biggest focus will be the budget. It will have additional Oklahoma Speaker of the House Charles McCall, at podium, speaks with importance next session because of Gov. Kevin Stitt and Senate President Pro Tempore Greg Treat during a press the major state revenue downturn conference. caused by the pandemic, which every state is facing, and also depressed oil and gas prices, which directly affect Oklahoma’s state budget since energy is a major pillar of our state economy.

In the House, we will be prepared root out agency waste and implement conservative fiscal policy to balance the budget. The House will not be considering tax increases because government can operate with the revenue it collects and reserves funds already set aside for times like these.

We know when oil and gas hurts, Oklahoma’s budget hurts, too. Just like oil and gas companies, the state will adjust the budget to reflect the current environment.

Another issue of interest to oil and gas, and other industries, is the U.S. Supreme Court’s recent ruling in the McGirt case, which determined an Oklahoma tribal reservation was never disestablished by Congress and still exists. Any actions taken in response to this will be federal actions.

When the 2020 election season is complete, the House will welcome several new members to this institution for the 2021 session. I expect a similar composition in the House, with a Republican supermajority of diverse backgrounds and talents alongside a Democrat minority whose experiences and ideas are respected and included. Working together, we will continue to improve Oklahoma and represent our constituents across the state.

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REGULATORY

EPA GRANTS REGULATORY PRIMACY TO STATE AGENCIES ON TRIBAL LANDS A request by Oklahoma Gov. Kevin Stitt to ensure state regulatory primacy in the wake of the U.S. Supreme Court’s McGirt v. Oklahoma ruling has been approved by the Environmental Protection Agency.

EPA Administrator Andrew Wheeler provided notice of approval on Oct. 1 in a letter to Stitt. Wheeler’s approval means agencies such as Oklahoma’s Department of Environmental Quality; Corporation Commission; Water Resources Board; and Department of Agriculture, Food & Forestry will continue to oversee application of EPA regulations statewide.

Wheeler’s letter to the state acknowledges McGirt v.

Oklahoma, in which the U.S. Supreme Court ruled in July that the Muscogee (Creek) reservation was never disestablished. The new EPA move essentially means the state of Oklahoma now has the same rights as it did before McGirt.

“On behalf of our members across every sector of the oil and natural gas industry, The Petroleum Alliance of Oklahoma greatly appreciates Administrator Wheeler and the work done by EPA Region 6 and headquarters’ staff to provide regulatory certainty for all Oklahomans,” Alliance President Brook A. Simmons said. “The Supreme Court ruling in McGirt v. Oklahoma had the potential to create a regulatory patchwork throughout the eastern half of the state. EPA approval of the Governor’s request means regulatory authority will remain at trusted and experienced state agencies – a win-win for non-Indians and tribal members alike. ” In July, Stitt officially requested that the EPA activate an Oklahoma-specific provision in the 2005 federal highway bill to give state agencies primacy on environmental regulations in Indian country.

The provision was secured by U.S Senator Jim Inhofe in response to an Oklahoma tribal government’s efforts to enact distinct air and water quality regulations. It also requires tribes to obtain a “cooperative agreement” with the state before administering water or air quality programs.

While Stitt’s request is the first of its kind for the state, it is not the first time EPA has granted the state primacy when it comes to environmental authority.

EPA delegates primary enforcement responsibility on environmental matters to states with proven and effective local regulatory bodies. Oklahoma is one of those states.

Following McGirt ruling, tribes renew tax efforts Some Oklahoma tribes may not be waiting for clarity following the McGirt v. Oklahoma ruling, continuing an effort the Seminole Nation started two years ago to collect fees and taxes from oil and natural gas producers.

In 2018, the Seminole Nation Business & Corporate Regulatory Commission issued letters to producers operating in Seminole County saying all producers within the “jurisdictional area” of the Seminole Nation would be required to obtain an operator’s permit from the tribe and remit an 8% severance fee on the gross market value of all oil and natural gas produced.

Today, with the McGirt ruling that the Muscogee (Creek) reservation was never disestablished (and potential applicability to the Seminole, Choctaw, Cherokee and Chickasaw Nations), The Alliance has learned that at least one Oklahoma-based tribe has begun sending similar “jurisdictional area” severance tax bills to operators for production of non-tribal minerals.

Members who receive such notices are asked to provide copies to Alliance President Brook A. Simmons at brook@okpetro.com.

Alliance staff and members are working with the Oklahoma congressional delegation and state officials to ensure that the Supreme Court’s decision does not hamper oil and natural gas operations.

“The state has time-tested and experienced agencies that have successfully administered EPA programs for years,” Simmons said. “By ensuring state agencies are able to continue managing air, water and land protection programs, all Oklahomans – non-Indians and tribal members alike – can have confidence in the regulatory rules in place.”

October | 15

16 | thepetroleumalliance.com

REGULATORY

Listed as an endangered species since 1989, the American burying beetle was downlisted to threatened in September.

CHANGE IN STATUS

Burying beetle downlisting reduces costs for energy industry On Sept. 3, the U.S. Fish and Wildlife Service announced it had downlisted the American burying beetle from endangered to threatened, crediting the conservation efforts of private entities throughout the beetle’s habitat range.

“The downlisting of the American burying beetle clearly illustrates the value of our partnership-driven approach to conservation,” U.S. Fish and Wildlife Service Director Aurelia Skipwith said. “By working with state agencies across the country, private landowners, zoos, tribes, the Department of Defense and other partners, we have helped preserve this unique and interesting species.”

For Oklahoma’s oil and natural gas industry, the downlisting of the beetle means a reprieve from the permitting requirements, relocation efforts and purchasing credits from Service-approved conservation banks and other mitigation efforts that increased costs for oil and natural gas development and pipeline construction in eastern Oklahoma.

A 4(d) rule attached to the change in status now allows for incidental take of burying beetles in the southern region, which includes Oklahoma. Incidental take in the northern region remains unallowable.

Petroleum Alliance Director of Regulatory Affairs Bud Ground said there will likely still be procedural forms associated with permitting processes through other agencies for projects within the range of the burying beetle. However, because incidental take will be allowable, actual species presence won’t need to be verified through surveys.

“The Petroleum Alliance of Oklahoma appreciates the Tulsa office of the U.S. Fish and Wildlife Service for including us as a partner in working on the American burying beetle these past many years,” Ground said.

“We support the downlisting of the American burying beetle from endangered to threatened and the adoption of the section 4(d) rule to provide us with additional compliance tools when working in areas where the beetle is present.”

When originally listed in 1989, the beetle was known to exist in only two locations: Oklahoma and Rhode Island. Since 2005, there have been confirmed populations in eight states including Arkansas, Kansas, Nebraska, Oklahoma, South Dakota, Rhode Island, Massachusetts and Missouri. In addition, up until 2008, surveys confirmed beetles in Texas. The populations on Nantucket Island off the coast of Massachusetts and in southwest Missouri are a result of reintroduction.

“Downlisting the American burying beetle from endangered to threatened is the right call and the first step to total delisting,” Oklahoma Senator Jim Inhofe said in a written statement. “Since it was listed over 30 years ago, the population of the ABB has made a resurgence – dramatically expanding the areas that are forced to deal with cost and red tape to work around its habitat. (U.S. Fish and Wildlife’s) action provides important regulatory relief to our farmers, ranchers, home builders, developers and energy industry that have long been plagued by the unnecessary endangered listing of this species.”

October | 17

2020 ELECTION

GET INFORMED

Free national election resources available to oil, gas industry

By Mallori Miller In the 2018 mid-term election, voter turnout in the U.S. was the highest recorded of any midterm election in the last century. Company-led initiatives to encourage employees to vote played a key role in this achievement. For these companies, “get out the vote” (GOTV) programs not only helped get more voters to the polls, but also helped to raise brand and organization awareness, strengthen relationships between employees and shareholders, and even open dialogue with elected officials.

It is essential for industry associations and member companies to elevate our industry’s narrative, engage with members and employees on key policy issues, and encourage them to vote.

This month, the Independent Petroleum Association of America (IPAA) launched a new voter information portal – The NATIONAL ELECTION CENTER. It is a free resource to the Oklahoma and nationwide oil and natural gas industry.

This new resource includes state election updates, voting information including how to register, where to find your polling location, and candidates for your area; and candidate comparisons. The Center is non-partisan because voter registration and turnout is not a partisan issue. You can find it at ipaagrassroots.org/2020election-center.

According to the Business Industry Political Action Committee (BIPAC), employees consider their employers to be the single most credible source of information on issues, candidates, and elections. In fact, nearly 80% of employees polled say they want their employer to provide them with issue-based information. As industry employees learn more about how policies impact the industry, the success of their company and jobs, they are more encouraged to speak out on behalf of natural gas and oil and be involved in the political process.

IPAA’s National Election Center Program focuses on participation, not party-line politics. The goal is to make information accessible to all, and to lead those in our industry to more informed decision-making in November.

A new poll from Morning Consult, a data intelligence firm, found bipartisan support for American energy.

The poll summary reads, “New polling shows Americans recognize the value of natural gas and oil in

their lives, and most support political candidates who advocate for ongoing domestic energy production.

Democratic, Republican and independent voters all agree that natural gas and oil will remain essential to the U.S. energy mix over the next few decades, and an overwhelming majority find it important to reduce our dependence on foreign energy.”

A few significant findings: •

Overall, 82% of voters across battleground states say natural gas and oil provide value to their lives.

Additionally, nearly three-quarters (73%) of voters believe natural gas and oil will still be a significant part of America’s energy needs 20 years from now.

•

More than seven in ten voters (76%) say the coronavirus crisis has badly damaged their state’s economy. A majority of voters across battleground states believe the natural gas and oil industry will play an important role (63%) in helping the economy recover. Those in New Mexico and Texas are especially likely to say it will play a very important role.

•

Overall, nearly two-thirds of voters (64%) — including a plurality of Democrats and independents in every battleground state — would be more likely to vote for a candidate who supports policies that ensure consumers have access to natural gas and oil produced in the U.S. Majorities of voters across education lines, as well as urban, suburban, and rural.

Please feel free to share this new resource with your employees and colleagues. Again, the free National Election Center can be found at: ipaagrassroots. org/2020-election-center. ­ Mallori Miller is Vice President of Government — Relations for the Independent Petroleum Association of America

October | 19

l a i c o ts GeWITH THE

ALLIANCE

FOLLOW US ON SOCIAL MEDIA FOR MORE EXCITING INITIATIVES!

20 | thepetroleumalliance.com

@petroallianceOK

@petroallianceOK

@petroallianceOK

The Petroleum Alliance of Oklahoma

ELECTION 2020

CAMPAIGN CHAOS

Social, economic unrest complicate election cycle Chris Wilson knows a thing or two about elections.

Wilson, CEO of WPA Intelligence, has spent his career providing political candidates with the data needed to drive them to victory. During the 2016 election cycle, 87% of WPA Intelligence clients were victorious thanks to the cutting edge intelligence provided by Wilson and his team.

But 2020 if far different than 2016, thanks to a global pandemic that has stymied the nation’s economy and impacted how voters will go to the polls.

Don’t miss Chris Wilson’s follow-up conversation on the 2020 elections during the Alliance’s Virtual Annual Meeting. More details on page 41.

“If I had written a script before 2020 for a novel or movie that said what could happen over the course of an election, it would have been rejected for completely lacking credibility,” said Wilson, who participated in a Alliance Morning Fuel in September.

This year, Wilson said is the first time since 1900 voters have faced four “super-disruptors” in the same year in the United States.

Those super-disruptors are: •

Recession: Hopes of a V-shaped recovery after 51 million people claimed unemployment benefits since March due to COVID-19 shut down and we appear to be settling into a traditional, self-perpetuating recession.

•

Pandemic: As of July 15, there were 3,344,783 confirmed cases of COVID-19 and 135,053 deaths as a result in the United States.

•

Mass Protests: Following the death of George Floyd on May 25, mass protests in every major metro area occurred. Between 15 and 26 million people participated.

•

Intense Election: The United States is now as polarized as it was prior to the Civil War, and voters are engaged much earlier in the election than ever before. We have yet to see the effects of the open seat on the U.S. Supreme Court.

Wilson said while three other years have seen three super-disruptors, none until now has seen all four. That makes handicapping a national election a difficult task, but Wilson pointed to 1968 election results as a sign for possible Trump success.

That year, mass protests swept the nation and Nixon’s vow to restore law and order rang true with voters, especially those in areas of active protest. This year, with large protests in traditional swing states like Ohio, Pennsylvania and Wisconsin, history has a chance to repeat itself.

“You can very quickly draw the conclusion that we’ll see the same level of increased voter turnout, but that turnout is not reflected in polling,” Wilson said. “Polling counts people who are expected to vote. These voters aren’t counted ... These are the types of things that can turn the election for (Trump).”

October | 21

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ELECTION 2020

CONTRIBUTING TO VICTORIES Petroleum Alliance PAC contributes to victorious candidates, seeks continued success in November

It’s been a successful year so far for state political candidates supported by the Petroleum Alliance PAC. Six candidates supported by the Alliance will return to the state Capitol after primary victories or failing to draw a challenger. Another three candidates will appear on the November ballot The Alliance’s biggest success came in Senate District 43, where PAC-supported challenger Jessica Garvin unseated incumbent Paul Scott.

Scott, a two-term lawmaker from Stephens County, drew the ire of Oklahoma’s oil and natural gas industry after filing Senate Bill 1736 earlier this year. The legislation, which never made it out of committee, stated “the proximity to oil and gas extraction can adversely impact public health and safety” and would have required OCC to regulate setbacks for all new wells drilled in Oklahoma.

“Sen. Scott’s intent was clear - he wanted to stop oil and gas development in Oklahoma,” Alliance President Brook A. Simmons said. “It was an appalling piece of legislation and a dream come true for the Sierra Club and other groups which seek to shut down the backbone of Oklahoma’s economy.”

Garvin unseated Scott in the Republican primary runoff, narrowly forcing the second election after Scott won 49.9% of the primary vote. Garvin now faces Democrat Teri Reimer in November.

Other candidates supported by the Petroleum Alliance PAC include: Garry Mize - House District 31 First elected to the House in 2018, Mize handily held off Republican challenger Karmin Grider with 67% of the primary vote. With no Democratic challenger, Mize will return to his seat in the House representing Oklahoma and Logan Counties.

Marilyn Stark - House District 100 Stark will face Democratic challenger Summer

Wesley in November to retain the seat she was first elected to in 2018. Stark advanced to the general election after claiming 60% of the vote in the Republican primary.

Shelia Dills - House District 69 Dills topped Republican challenger Angela Strohm in the June primary. With no Democratic challenger, Dills returns her to the House seat she has held for one term.

Kenton Patzkowsky - House District 61 Another first-term lawmaker, Patzkowsky defeated Kenny Tapp in the Republican primary and will return to his seat with no Democratic challenger.

Jim Grego - House District 17 Grego took office in 2018 after emerging the victor from a crowded field that included five Republicans and two Democrats. This year’s election drew fewer candidates, much fewer, and Grego won re-election in the Republican primary by defeating his lone challenger for the seat.

Kevin McDugle - House District 12 Elected in 2016, McDugle will once again return to the House after defeating lone challenger Justin Dine in the Republican primary. McDugle was a member of the House Energy & Natural Resources Committee in 2019 and 2020.

Logan Phillips - House District 24 In 2018, Republican Phillips unseated incumbent Democrat Steve Kouplen to take the District 24 House seat in the heart of Oklahoma’s Little Dixie.

Phillips faces Kouplen again in 2020 with the familiar foes facing off on the November ballot after Phillips cleared a four-person Republican primary field with 52% of the vote.

Ken Luttrell - House District 37 A member of the House Energy & Natural Resources Committee, Luttrell drew no challengers and returns to his House seat unopposed.

October | 23

A TALE O

CANDID

TRUMP, BIDEN OFFE ON AMERICA’S EN

24 | thepetroleumalliance.com

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October | 25

ELECTION 2020

Former Vice President Joe Biden, left,, President Donald Trump, right, and moderator Chris Wallace at the first 2020 presidential debate in Cleveland.

C

arl Michael Smith is no stranger to U.S. energy policy.

The former head of Oklahoma City-based Red Rock Exploration, Smith was tabbed by Gov. Frank Keating to serve as the state’s Secretary of Energy in 1995. He served in that role until 2002, when President George W. Bush appointed him to serve as his Assistant Secretary of Energy for Fossil Energy within the United States Department of Energy.

As assistant secretary, Smith served as the primary policy advisor to United States Secretary of Energy Spencer Abraham on federal coal, petroleum, and natural gas programs, overseeing nearly 1,000 scientists, engineers, technicians and administrative staff in two national laboratories, four field offices and at DOE’s headquarters in Washington, D.C. He returned to Oklahoma in 2004 and, in 2008, he was named executive director of the Interstate Oil and Gas Compact Commission, the interstate compact of 30 U.S. states that works to promote the conservation and efficient recovery of the nation’s domestic oil and natural gas resources.

Smith’s hands-on knowledge of the nation’s energy department and his work with energy-producing states during his ten years at the IOGCC gives him a unique perspective on energy policies that have been thrust into the political spotlight in recent presidential elections.

“The big problem we have is there are two generations of younger voters who are malleable to propaganda,” Smith said. “There is a campaign against hydraulic fracturing, and they’ve bought into it. They’re not pro-

“

The big problem we have is there are two generations of younger voters who are malleable to propaganda. There is a campaign against hydraulic fracturing, and they’ve bought into it. They’re not pro-renewables, they’re anti-hydrocarbon ... and that has spilled over into politics.

renewables, they’re anti-hydrocarbon ... and that has spilled over into politics.”

Smith was serving in the Department of Energy when its research laboratories were assisting George Mitchell in his drive to harness horizontal drilling and hydraulic fracturing in the Barnett Shale.

The entirety of the oil and natural gas industry

understands the impact Mitchell’s efforts had on the nation’s energy outlook. Horizontal drilling launched the shale revolution and transformed the energy future of the nation, moving from a land of energy scarcity to one of energy abundance.

But in 2008, the Obama administration made the oil and natural gas industry public enemy No. 1, putting up regulatory roadblocks, halting exploration and production on federal lands and famously saying “we must end the use of oil in our time” during a visit to Cushing’s pipeline capital of the world.

A reprieve came in 2016, when Trump took office and immediately began redirecting the efforts of federal agencies to support oil and natural gas development and opening federal lands to drilling.

In 2019, after 62 years, the United States achieved energy independence, meaning that as a nation we produced more energy than we consumed.

That year the United States produced more oil and more natural gas than either Russia or Saudi Arabia.

But now, in 2020, Trump faces a presidential candidate in Joe Biden who wants a return to the Obama era and has promised, if elected, to put the country on course for a carbon-free power sector by 2035 and net-zero emissions economywide by 2050.

One step Biden has vowed to take to accomplish that goal is to ban the use of hydraulic fracturing.

Both Biden and Vice Presidential candidate Kamala Harris have both indicated during their primary campaigns that they want to ban the technology, despite Biden reneging on that pledge whenever he visits Pennsylvania — the secondlargest natural gas-producing state in the nation due to hydraulic fracturing — or gets caught on the debate stage.

For Smith, Biden’s vow to essentially outlaw oil and natural gas production flies in the face of the long-term energy goals set by administrations past and carried out by the Department of Energy.

When the DOE’s energy technology lab helped Mitchell crack the code in the Barnett, both politicians and consumers saw the benefit.

Production from unconventional resources deemed uneconomical less than two decades ago has created not just U.S. energy independence, but also bolstered the country’s national security.

No longer beholden to countries halfway around the world to ensure the nation’s energy needs can be met has changed how U.S. leaders approach world issues.

For consumers, unlocking vast new resources of oil and natural gas has provided an abundant and affordable energy supply to power their daily lives.

“The government can’t pick winners and losers.

Consumers make the decision,” Smith said.

“Energy policy doesn’t stop at the end of a president’s term. The impact carries on way out on the horizon after we’re long gone...

“Just like we saw in the Barnett, technology solves our energy problems... Politicians are not going to solve it. Technology will solve it.”

ELECTION

VOTE FOR ENERGY The American Energy Alliance has launched its “Vote Energy 2020” campaign, giving voters the opportunity to review how their federal elected officials have voted on legislation affecting energy and environmental policy and providing a side-byside comparison of Presidential candidates Donald Trump and Joe Biden on energy issues. Below is their comparison on oil and natural gas platforms from both candidates.

DONALD TRUMP During President Trump’s first term in office, the Unites States has become the world’s preeminent energy super power. The U.S. now produces more oil and gas than any other country, runs an energy export surplus, and has reserves that can fuel us for generations. Over the full course of 2019, the U.S. exported oil to more than 40 countries, fully eliminating the long-held concern about foreign oil dependency.

Though the coronavirus pandemic battered the industry in the spring of 2020, President Trump held firm against calls to raise prices on struggling consumers by way of an import tariff. Oil prices have rebounded as economies across the globe have begun to restart and the industry is on a road to recovery.

Since Trump’s election in 2016, U.S. natural gas has become a key plank in America’s foreign policy posture, offering countries in Eastern Europe an alternative to Russia’s regional energy hegemony in the form of liquefied natural gas (LNG). Trump’s commitment to the bountiful energy reservoirs on U.S. federal lands and in federal waters means companies can plan for the long term and supply our energy needs deep into the future.

JOE BIDEN Joe Biden favors a ban on new hydraulic fracturing and a ban on oil and gas development on federal lands and in federal waters. Biden’s ban on fracking and his ban on oil drilling on federal lands and offshore areas would have devastating results on the economy, jobs, and revenues, and energy prices would skyrocket. Several states would be impacted severely and directly—Texas, New Mexico, Pennsylvania, Colorado, and Wyoming.

By his own account, Biden will sign a series of new executive orders with unprecedented reach that go well beyond the Obama-Biden administration platform on squeezing out oil and gas. Biden’s overarching goal is the complete elimination of oil and gas from our economy by 2050.

28 | thepetroleumalliance.com

LEGAL

LITIGATION CYCLE Well-funded environmental lobby uses lawsuits to slow Trump administration’s energy efforts

By Kathleen Sgamma Our industry is caught in a litigation cycle, but we’re not alone. Basically, everything the Trump Administration does gets litigated, whether it’s on immigration, health care, education, or energy. When it comes to the well pad, the environmental lobby has virtually unlimited funds to sue on every federal lease sale, final rule, or project environmental analysis.

Lawsuits tie up the administration and take resources away from efforts to advance energy dominance policies. It ties up industry resources as well, a favorite tactic for those who don’t have to produce anything or meet a payroll. Even if only a fraction of lawsuits receive a favorable ruling, the litigation has achieved the larger goal of delaying policies that move energy development forward while draining resources from industry.

Western Energy Alliance expends extensive effort and resources on litigation regarding the Bureau of Land Management’s (BLM) venting and flaring rule as well as nearly every federal lease since 2015. But it’s a drop in the bucket compared to all the litigation we could otherwise be involved in. Rules regarding the Endangered Species Act, the National Environmental Policy Act (NEPA), Migratory Bird Treaty Act, Royalty Valuation, Waters of the U.S., and others likewise face litigation. Luckily, we don’t have to go it alone. API, the U.S. Chamber, National Association of Manufacturers, American Farm Bureau and others engage in litigation we can’t be in. But even with these big guys at the table, resources can get stretched thin.

Delay is especially important as administrations change. Just a delay on important rules like the recently finalized NEPA rule would be a huge victory for our adversaries, as a Biden Administration would not defend the rule in court. While there are some industry intervenors at the table in the several lawsuits environmental groups have filed, it’s harder to defend something the government won’t defend. Judges defer to the federal government, and when the government changes its tune and no longer stands by a rule from a previous administration, that deference transfers as well.

NEPA reform has been a big priority for Western Energy Alliance since at least the late 2000s, when many of our members’ NEPA documents went over

“

Environmental groups aren’t bringing these cases in Wyoming, Texas or Oklahoma.

They’re shopping for venues more likely to have judges that sympathize with their point of view.

the five-year mark. Companies can’t even request a drilling permit before the environmental analysis is done. There are several lawsuits on the NEPA rule in the D.C. District, Western Virginia and Northern California District courts. And that’s another feature of the neverending litigation cycle. Environmental groups aren’t bringing these cases in Wyoming, Texas or Oklahoma.

They’re shopping for venues more likely to have judges that sympathize with their point of view.

To some extent, President Trump has blunted that strategy by appointing a historic 200 Supreme, Circuit and District court judges. Then again, shopping around for activist judges isn’t a guarantee either. The judge in the Virginia case recently declined to issue a preliminary injunction against the NEPA rule, and he’s a Clinton appointee. IPAA and Western Energy Alliance won a historic victory overturning the Obama federal fracking rule from an Obama-appointed judge.

The majority of judges in the federal system indeed adhere to the law and issue fair decisions, despite who appointed them. I continue to have faith that our legal strategy is sound and that we have a fair chance of success.

- Kathleen Sgamma is president of Western Energy Alliance.

October | 29

ECONOMY

OUTSIZED IMPACT Report shows significant sales tax declines in communities dependent on oil and natural gas activity

By Brook A. Simmons The impact of Oklahoma’s oil and natural gas industry is woven throughout our state’s economy.

While the gross production tax – the severance tax paid on the value of every barrel of oil and every mcf of natural gas produced in the state – is the industry’s biggest tax benchmark, the industry has an outsized impact on all other tax streams used to fund core government services, both at the state and local level.

That fact was highlighted in a recent report from economic research firm RegionTrack, which showed the decrease and, in some cases, the near demise of sales tax collections in communities across rural Oklahoma that are dependent on the oil and natural gas industry.

From July 2019 to July 2020, sales tax revenues in communities that overlie the state’s two largest oil and natural gas plays, the STACK and the SCOOP, saw significant declines. In Chickasha, the heart of the SCOOP, sales and use tax receipts fell by 7.9%. Smaller communities of Alex and Lindsay saw declines of 24.6% and 11%, respectively.

North in the STACK, El Reno city leaders are facing a 47.8% decrease in sales tax revenue. Nearby Calumet saw a shocking drop of 72.1%.

U.S. Highway 81 neighbors Kingfisher and Hennessey saw declines of 15.5% and 22.9% respectively.

And it’s not just the state’s most active areas of oil and gas production that have seen a decrease. Cushing, the pipeline crossroads of the world, saw a 17% drop in sales tax revenue. Duncan, the birthplace of energy giant Halliburton, saw a 6.8% downturn.

“

There is no state revenue stream untouched by the ebbs and flows of Oklahoma’s oil and natural gas industry.

The impact seen on sales tax revenue can be seen in all other tax revenue streams – income tax, corporate tax, ad valorem tax, motor vehicle tax. There is no state revenue stream untouched by the ebbs and flows of Oklahoma’s oil and natural gas industry.

These declines in receipts are evidence of the state’s pain. As Oklahoma’s defining industry weathers the devastating storm of increased OPEC+ oil supply and COVID-driven decrease in demand, policymakers should take note and be prepared to nurture a beatenup industry that serves as our state’s economic bedrock.

– Brook A. Simmons is president of The Petroleum Alliance of Oklahoma.

October | 31

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ECONOMY

BETTER DAYS AHEAD? API ‘Industry Outlook’ points to possibility of $50 oil for 2021

By Brook A. Simmons It has been a tumultuous year for Oklahoma’s oil and natural gas industry, but better days may soon be ahead.

The American Petroleum Institute’s recently released “Industry Outlook” offers at least one bright spot, with a rebalancing of the global oil market expected to support crude oil prices of $50 per barrel in the year ahead.

Global oil demand has historically risen and fallen with the economy. API notes that both Bloomberg and World Bank consider the global recession tied to COVID-19 to be a “one-and-done” event with worldwide economic growth estimated at 4.4%, ahead of the 3% annual average between 1979 and 2019. That economic growth will push demand for crude oil higher, thus the $50 prognostication from the national oil and natural gas industry trade association.

For all Oklahomans, that’s good news.

For the past week, crude oil markets have hovered at the $40 mark after climbing back from a low of $16 in April. If crude oil prices return to $50 for 2021, exploration for crude oil in Oklahoma becomes more palatable for the state’s energy producers, employment in the industry will begin to rebound after a year of losses and, for state budgeteers and the general public, additional tax dollars will be generated to put toward funding core government services.

For every $1 increase in crude oil prices, an additional 5 to 7 cents are collected in taxes, depending on the age of the well the production was from. In June, the most recent data available, there were 13.9 million barrels of oil produced in Oklahoma. A $10 price increase for just that month means state coffers would receive an estimated $8.3 million more in gross production tax revenue. For the year, that’s a $100 million dollar increase for a more bullish oil market.

Source: API, EIA

And those tax dollars are only one part of the equation. If increased oil prices spur increased activity in Oklahoma oilfields, the men and women who support their families by exploring for and producing Oklahoma crude oil will return to the rig, putting more dollars in the state treasury through income, sales, motor vehicle and fuel taxes while also supporting the local economies where they live and work.

Henry Wade’s 1975 book called Oklahoma “a ship of state on a sea of oil.” If API’s forecast holds true, the tides may soon rise.

– Brook A. Simmons is president of The Petroleum Alliance of Oklahoma.

October | 33

34 | thepetroleumalliance.com

ECONOMY

CAUTIOUS OPTIMISM Market recovery offers encouraging news for energy industry, consumers

By R. Dean Foreman Sometimes, through the headlines, it can be hard to see that the economy and oil markets recently have made noteworthy progress toward rebalancing and normalizing – which is encouraging news for the industry, consumers, and Oklahoma.

You don’t have to be an oil & gas trader to appreciate what’s been at stake so far through 2020 – and the significance of the recovery seen over the past couple of months as petroleum demand has remained a reliable indicator of economic activity with broad applicability.

Although global petroleum demand remains below where it was this time a year ago and appears likely to stay below 2019 levels until the latter half of 2021 per the U.S. Energy Information Administration (EIA), signs of a recovery from lows earlier this year are visible.

For example, the latest API Monthly Statistical Report (August 2020 data) showed that U.S. oil demand increased and supply decreased while Gulf Coast refineries, petrochemical plants and export terminals weathered the disruptions due to Hurricane Laura.

The demand increase was corroborated by data on daily driving and transit, which have recently exceeded their pre-COVID-19 starting points nationwide and in Oklahoma.

Turning to natural gas, the U.S. Energy Information Administration (EIA) estimates that record gas penetration into electricity generation has helped offset weakness due to the 2020 COVID-19 recession in industrial gas consumption and exports.

Consequently, relatively strong domestic natural gas demand, coupled with lower associated gas supply coming from oil-producing basins, supported prices despite storage levels (3.53 billion cubic feet for the week ended Sept. 10) being 2.0% above the top of the five-year range. By comparison, natural gas prices at Oklahoma’s trading hubs have averaged $0.21 per million Btu less than Henry Hub for Q3 2020 and through September to date, according to Bloomberg.

In general, the improvements that we’ve seen in energy markets have been consistent with economic indicators that also broadly improved from recent lows, including API’s D-E-IP™P (distillate/diesel economic indicator), the University of Michigan’s consumer sentiment index and U.S. employment metrics.

API’s D-E-IP™P(see chart below) confirmed that change of direction toward a re-acceleration in industrial production. Again, this industrial revival from a low point is good news for the economy and individual Americans working in those sectors.

The bottom line is that we see signs that markets have continued to work. It’s not an instantaneous recovery, but it appears to be a substantive one when we take stock of the progress achieved so far.

- Dean Foreman is chief economist for the American Petroleum Institute.

October | 35

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MIDSTREAM UPDATE

STUDY SHOWS NEARLY $14B THREATENED

BY PIPELINE DELAYS, CANCELLATIONS A new report by the Consumer Energy Alliance (CEA) found that delayed or canceled pipeline infrastructure projects are risking at least $13.6 billion in economic activity, more than 66,000 jobs, and roughly $280 million a year in state and local tax revenue.

The September report, “How Pipelines Can Spur Immediate Post-COVID Economic Recovery,” highlights specifically how new energy infrastructure activity could provide relief for struggling families and small businesses as well as create demand in the manufacturing and industrial sector.

The petrochemical sector has sparked more than $300 billion in new U.S. investment, with nearly 70 percent of that economic growth coming back to the United States from overseas markets.

“We’d be foolish to push these immediate

injections of private capital aside, because it will slow our economic recovery at the expense of countless families and businesses who are just trying to get back on their feet again,” CEA President David Holt said.

Pipeline infrastructure projects, however, have been long fought by anti-energy interest groups and allied policymakers across the country, with one of the most prominent impacts being felt in the Pennsylvania, New York, and New Jersey region, the CEA report found.

Activism and regulatory intransigence within the three states has helped create some of the nation’s highest energy prices across the region, risked more than $3.5 billion in economic activity and more than 17,000 mostly union jobs, and lost nearly $52 million per year in tax revenues over decades.

DOWNSTREAM UPDATE

U.S. OIL-EXPORT PROJECTS STALL AS OUTPUT SLIPS, OPPOSITION BUILDS The coronavirus pandemic has stalled a oncefurious race among energy companies to build deepwater oil export terminals off the Texas coast, amid permitting delays and rising environmental opposition.

Only three out of an initial dozen offshore U.S. Gulf Coast oil export proposals remain before federal maritime regulators. They are being slowwalked as the coronavirus slashed global fuel demand and the gusher from U.S. shale fields ebbed, said analysts.

“While these projects may be on the drawing board, they are more or less in a state of limbo given that in the current crude oil price environment, there’s more than ample export capacity already available,” said Andrew Lipow, president of consultancy Lipow Oil Associates.

U.S. oil production has declined 18% and crude

prices have tumbled 35% this year, lessening demand for new export ports. Daily U.S. crude exports slowed to 8% gain through July, down from 46% last year, according to U.S. data.

Bluewater Texas Terminal, a joint venture of oil refiner Phillips 66 and trader Trafigura, remains far from a final go-ahead by the partners. The companies are continuing to supply information for needed approvals, Phillips 66 spokesman Rich Johnson said.

Sea Port Oil Terminal, backed by Enterprise Product Partners LP and Enbridge Inc, also no longer expects to secure federal permits this year, said Enterprise spokesman Rick Rainey.

Permit reviews for Texas GulfLink deepwater port, proposed by Sentinel Midstream LLC and Freepoint Commodities LLC, also was suspended.

October | 37

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ENERGY INDEX

OKLAHOMA ENERGY INDEX POINTS TO PROLONGED ECONOMIC UNCERTAINTY The downturn in Oklahoma’s oil and natural gas industry may be reaching its end, but the Oklahoma Energy Index (OEI) raises concerns for prolonged economic uncertainty for the state and its defining industry.

With the state’s rig count holding steady, decreases in production and support employment at less than 2% and slight increases in both crude oil and natural gas prices, the contraction of the OEI and the industry as a whole has slowed. The most recent Energy Index stands at 108.8, down just 0.1% from the month prior but 42% less than one year ago.

Dr. Russel Evans said the index has contracted for 22 consecutive months, the longest negative streak in the 20 years covered by the index. Evans noted that activity levels in the state’s oil and natural gas industry are trending towards a level of activity not seen since the launch of the U.S. shale boom in the early 2000s.

“While I expect we haven’t heard the last of consolidations, debt restructurings, asset sales and layoffs, there is evidence that the current cycle is searching for a bottom,” said Evans, executive director of the Steven C. Agee Economic Research and Policy Institute. “But with nearly unprecedented uncertainty of future economic conditions and energy demand, the energy industry’s critical contributions to the state’s economy may be quiet for some time.”

Comparing pre-shale Oklahoma activity from 2000 with today’s levels shows a dramatic decrease in drilling activity. Two decades ago, there were 91 drilling rigs running in Oklahoma.

In July, the data used to calculate this month’s Energy Index, there were only 10.

Petroleum Alliance President Brook A. Simmons said the rapid decrease in drilling activity over the

past 12 months is a primary driver in the decrease in oil and natural gas industry employment but warned that more job losses are imminent as exploration and production companies reduce headcounts to match decreased exploration budgets.

“We hope we have reached the bottom of this devastating downturn regarding drilling activity,” Simmons said. “But even if we are at the bottom, there is prolonged economic uncertainty ahead of us. Drilling rigs are the best barometer for Oklahoma’s economy and state government funding. With a decrease in drilling activity for the foreseeable future, state policymakers must prepare now for an oil and natural gas industry that is unable to meet funding levels of the past.”

The OEI is a comprehensive measure of the state’s oil and natural gas economy established to track industry growth rates and cycles in one of the country’s most active energy-producing states. The OEI is a joint project of The Petroleum Alliance of Oklahoma and the Steven C. Agee Economic Research and Policy Institute.

October | 39

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EVENTS

ONLINE LEARNING

Register online at thepetroleumalliance.com

Virtual Annual Meeting offers insight from industry, political experts COVID-19 may have halted an in-person Annual Meeting this year, but it can’t stop the quality speakers Petroleum Alliance members have come to expect from the yearly event.

Our Virtual Annual Meeting is scheduled to begin at 9 a.m. on Nov. 12 and is free for all Alliance members. The three-hour online event will feature a wide range of presentations from industry and political experts, including: •

Alex Epstein, founder and president of the Center for Industrial Progress and author of The Moral Case for Fossil Fuels.

•

WPA Intelligence CEO Chris Wilson, who offered his forecast on the 2020 election during our recent Morning Fuel, will take a deep dive into the election outcome.

Alex Epstein

Chris Wilson

Anne Bradbury

•

Anne Bradbury, CEO of the American Exploration & Production Council, will paint a picture of what those election outcomes mean for energy policy in the U.S.

•

CEOs from the downstream, midstream and upstream sectors of Oklahoma’s oil and natural gas industry.

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EVENTS

AN INDUSTRY UNITED ... SIX FEET APART Alliance hosts ‘Parking Lot Party’ to give members the opportunity to network without the worry of COVID-19 The Petroleum Alliance hosted a Parking Lot Party Sept. 17, giving Alliance members the opportunity for some much-needed facetime with their industry peers. More than 60 Alliance members attended, enjoying food and beverages from event sponsors M&M Supply Co. and McSpadden Milner Robinson.

“Our members want to be able to interact with their peers,” Alliance Senior Vice President of Development and Membership Natalie Kinmonth said. “All the Zoom meetings in the world can’t replicate the one-on-one rapport that comes with an Alliance event.”

42 | thepetroleumalliance.com

Top left, Alliance member Bruce Chill, left, speaks with Director of Regulatory Affairs Bud Ground. Top right, Alliance Chairman David Le Norman, left, speaks with board member Ethan House. Above, M&M Supply’s Randy Trachtenberg, center, is joined by Alliance Sr. Vice President of Membership and Development Natalie Kinmonth, President Brook A. Simmons and M&M employees Toyie Hubbard and Neil Pierce. At left, Hubbard and Pierce prepare tacos to feed the attendees of the Alliance’s Parking Lot Party.

October | 43

ADRIA BERRY

SENIOR VICE PRESIDENT OF G OV E R N M E N T A F FA I R S & P U B L I C P O L I C Y AT T H E P E T R O L E U M ALLIANCE OF OKLAHOMA

Adria Berry joins The Petroleum Alliance staff this month as Senior Vice President of Government Affairs & Public Policy. In her new role, Berry will lead The Alliance’s advocacy efforts at the state legislature and in Washington, D.C. Berry most recently served as counselor to the Oklahoma Secretary of State and, prior to serving in the Stitt administration, was vice President of government affairs for the State Chamber of Oklahoma.

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Berry holds a juris doctorate in public policy and regulation from the University of Tulsa and received her bachelor’s degree in political science and government from the University of Texas at Arlington.

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Who’s your favorite Oklahoman?

Well, I love Garth Brooks, but I’d have to say that my very favorite Oklahoman is Jim Thorpe. He truly embodies the grit and tenacity that pioneering Oklahomans are known for.

If you could eat one food the rest of your life, what would it be?

Definitely chicken fried steak, but only if I can have mashed potatoes & gravy on the side.

Mountains or beach?

How about both? Lake Tahoe is my ideal vacation spot - water and mountains all in one.

Have you met anyone famous?

I had a really cool opportunity to meet George W. Bush a couple of years ago at a U.S. Chamber event. I also was able to get a signed copy of his book, Portraits of Courage.

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What’s your favorite drink?

Scotch. I like it peaty and on the rocks.

Besides that, I’m a big fan of coffee and sparkling water.

Favorite college team?

Well, I took a bit of a non-traditional route when it came to college. Instead of going straight to college after high school, I went straight into the workforce and lived on my own. By the time I was ready to start college classes, I was working full time as an office administrator for a non-profit in Dallas. Being impatient and ready to get my degree, I enrolled in a commuter school, the University of Texas at Arlington, where I could continue working full-time and taking year-round fulltime classloads. UTA is known for its baseball and basketball programs but there’s no football team, so I generally cheer for OSU since everyone in my family from my grandfather to my little brother went there (Go Pokes), but I also cheer for my husband’s alma mater - the University of Houston (Go Coogs).

In one sentence, what do you actually do all day in your job?

I am just starting out, so this is a bit of a trick question, but a big part of my job will be to work with the legislature and key government officials to advocate for positive changes to laws affecting the oil and gas industry in Oklahoma.

Favorite band in junior high?

That was such a long time ago, but I think it was probably Boyz II Men.

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Name of your pet?

Saige is our 14-year old miniature pinscher that we told a friend we’d keep an eye on for a couple of months (that was 12 years ago).

What was your first job?

When I was twelve, I babysat two very rambunctious boys everyday during the summer. But, my first tax-paying gig was when I was 15. I cleaned tanning beds and did various clerical tasks at a local tanning salon in Broken Arrow.

What was your first car?

The first car that was my very own was an ‘89 Bronco II. It was two-tone navy blue and light blue with wood panels. It had a standard transmission and a tape deck that I plugged my Discman into to listen to my Tupac CDs. Man, I loved that car.

If you could have dinner with one person, alive or dead, who would it be?

That’s a tough one, but, being a huge law nerd, I’d have to say Justice Sandra Day O’Connor. I’d love to sit down with her and listen to stories of her time on the SCOTUS.

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What is the best gift you have ever received?

I’m not a super sappy person, but anytime someone gives me a book they think I’ll like, it pulls on my heartstrings. Oh, and of course my children - best gifts ever!

What is the first thing you would do if you won the lottery?

Pay off student loans for my siblings and me so we can break free from Sallie Mae. Last movie you saw at the theater?

I don’t recall (it was probably a cartoon with my kids pre-COVID), but I can tell you about the book I’m reading - “Atomic Habits” by James Clear.

What’s your favorite app?

Probably the Podcasts app - I listen to everything from “Wait Wait Don’t Tell Me” to “What Trump Can Teach Us About Con Law.” I like to throw in some S-Town and true crime podcasts from time-to-time, also. (Second favorite app is definitely Amazon).

What was your favorite TV show as a child?

Hands down, The Cosby Show. I admired the family dynamics of the Huxtable family and thought that Claire Huxtable was the smartest, coolest woman in the world.

What’s the number one item you would save from your burning house?

I can’t even think of a material item that I’d want to save, honestly. But, if I had to say one item, I’d say the pearl necklace that my now-deceased Granny gave me on my wedding day.

What is your favorite thing about working in the oil and gas industry?

Oil and gas is the backbone of Oklahoma.

The people in this industry are hard-working and innovative and can’t be deterred from achieving greatness.

What is your favorite holiday?

I have two young daughters - Adele (8) and Zoey (5) - so Christmas is the most exciting time of the year. I love taking them to see Santa every year and spending time together decorating the house and buying gifts for loved ones. Plus, we always visit family in Houston at Christmastime and the weather is always just perfect down there at that time of year.

October | 45

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