Cantrell: Right-of-way disputes

Journal Record

Op-ed by Mike Cantrell, OEPA President

 

The Oklahoma Energy Producers Alliance supports the right of elected county commissioners to determine what is in the best interest of the residents in their respective counties when it comes to the use of the rights of way over which they have jurisdiction.

There is a dispute in Kingfisher County between horizontal oil and gas producers and the county’s commissioners regarding overlaying temporary produced water pipelines on top of the ground in the county road rights of way. The county commissioners determined that these lines constitute a safety hazard, damage both private and public property, exposing the county to potential liability, and must not be allowed.

The ability of companies to lay so-called temporary water lines in county rights of way is very beneficial to the companies needing to transport water from one location to another. But those benefits pale in comparison to the possibility of losing one Oklahoman’s life in an accident involving pipelines put on the surface of the right of ways of our county roads.

The OEPA has several members who reside or operate conventional vertical oil and gas wells in Kingfisher County. Our members are Oklahoma companies, operators, and leasehold and royalty owners concerned with protecting the rights of conventional vertical oil and gas well producers. Most of our members own their own companies and have lived and operated in Oklahoma for generations. While we vigorously support our members, we also support what is best for Oklahoma and its residents.

It’s unfortunate that heavy-handed methods and misrepresentations are being put forth by certain facets of our industry to justify the need to use the rights of way to increase profits, without counterbalancing that against the interests and protection of the county and its residents. While the Oklahoma Corporation Commission has exclusive jurisdiction over oil and gas operations, that jurisdiction typically ends at the oil and gas lease line. We make no judgment on the practice of laying pipelines in county rights of ways. However, we do support the county commissioners’ right to decide how those areas are used.

Mike Cantrell is principal of Cantrell Investments LLC and serves as president for the Oklahoma Energy Producers Alliance.

http://journalrecord.com/2018/08/27/cantrell-right-of-way-disputes/

 

Letter to Kingfisher County Commissioners

Dear Commissioners:

On behalf of the Oklahoma Energy Producers Alliance (OEPA) we want to express our support of your right, as the duly elected County Commissioners of Kingfisher County, to determine what is in the best interest of the citizens and voters of Kingfisher County. As County Commissioners you have the authority and obligation to look out for your constituents, and to be good stewards of the land and roads in Kingfisher County.

The OEPA has a number of members who reside in or who operate conventional vertical oil and gas wells in Kingfisher County. OEPA members are Oklahoma oil and gas companies, leasehold owners and royalty owners concerned with protecting the rights of conventional vertical oil and gas well producers. Many of our members own their own companies and have lived and operated in Oklahoma for generations. As the representative of conventional vertical well operators, we support what is best for Oklahoma and its citizens.

Your considered and deliberative approach to reaching your decision regarding the use of county right of way for temporary oil field pipelines is to be commended. We admire your courage in taking on the proponents of using the right of way for their own private use exactly as they want to use it, and who will stop at nothing to get their way. It is unfortunate that heavy handed methods are being used and misrepresentations are being put forth by certain facets of our industry to justify the need to use the right of way to increase profits, without counterbalancing that against the interests and protection of the County and its citizens.

This note of encouragement assumes no position on the underlying issue, merely on your right to self-determination on how the roads in Kingfisher County should be used.

If we can be of assistance in this matter, please feel free to contact us.

Sincerely,

Dewey F. Bartlett, Chairman, OEPA

Mike Cantrell, Chairman, OEPA President, OEPA

Inaugural Annual Meeting Huge Success!

The 2018 OEPA Inaugural Annual Meeting was a huge success and exceeded all expectations, according to President Mike Cantrell and Chairman Dewey Bartlett, Jr. “The response from independent producers and vendors alike was simply overwhelming”, said President Mike Cantrell. “When you start something new like this, it’s like taking the risk of drilling a dry hole, you just don’t know what you are going to get until you put the bit in the ground.”
The day-long event took place on June 1st at the Will Rogers Theater in Oklahoma City and featured speakers and panelists on a variety of topics important to small vertical well producers in Oklahoma. Speakers consisted of Corporation Commissioner Dana Murphy, Senator Greg Treat, Senator James Leewright, Representative Kyle Hilbert, Representative Kevin Wallace, Tim Baker, Tim Munson, and more. Over 15 Oklahoma legislators attended to network and learn more about our issues.
Moderator & Representative Zack Taylor said he has never seen such a crowd of small producers so attentive and packed into every session. ” It was incredible to look out into the crowd and see over 150 attendees, of which 90% were actual producers,” said Taylor. “I have never been to an oil and gas conference with this many attendees participating in each session.”
The room was also filled with exhibit booths of sponsors and vendors of the industry. Mickey Raney, Impact Energy, said, “Thank you for all the work and effort of putting the OEPA annual meeting together. It was well done and the panels and speakers were very informative. It also was held in Oklahoma and I felt like I was actually with the group that had independent producers interest in mind. We look forward to sponsoring again next year.”

Restore Oklahoma Now is withdrawing the initiative petition SQ 795

Restore Oklahoma Now is withdrawing the initiative petition SQ 795.

OEPA is in concert with RON in withdrawing this petition. OEPA has been the driving force behind this effort; with a lot of support from many others. We know many will be disappointed with this action. However, we believe it is much preferable for our Democratic form of representative government to work than to have to resort to the initiative petition process. The legislative process has worked. Teachers are getting an average of a $6,100 pay raise, which is $2,100 more than the petition drive would have gotten them at $4,000.

Having said that we, in concert with RON, are committed to supporting the 75% of the legislators that had the courage to vote for this emergency tax increase as those that are threatening to defeat them engage. We are also committed to opposing any effort to overturn this landmark legislation.

Read the press release below.

 

April 23, 2018

MEDIA RELEASE

 

Initiative Petition on Teacher Pay, GPT Withdrawn

 

Contact:  Mickey Thompson, Executive Director,  Restore Oklahoma Now  405-640-2555

Dewey F. Bartlett, Jr., Chair, Oklahoma Energy Producers Alliance  918-587-4154

 

OKLAHOMA CITY – The initiative petition seeking to pump $300+ million into public education by restoring the state’s gross production tax on new wells to seven percent has been withdrawn by organizers of the effort. The founder of Restore Oklahoma Now, Inc., said the group will focus instead on the 2018 legislative elections and participate in a broad coalition to defeat a possible veto referendum to repeal the teacher pay funding package passed last month.

“Restore Oklahoma Now was formed last summer with a single focus — to get our public school teachers a significant pay raise. We had lost faith in the Oklahoma Legislature. We thought taking the issue to voters was the only solution for our teachers,” executive director Mickey Thompson said. “We believe the presence of our initiative petition was a significant factor in the ultimate legislative compromise.

“We view HB 1010xx as a reasonable start. However, any effort in this or a future legislature to reintroduce a reduced GPT will be met with a new initiative petition, or perhaps a veto referendum, to protect funds for public education and other state services priorities,” he said.

The petition leader also said confusion and potential legal conflicts between the detailed allocation of funds in the proposed constitutional amendment and the appropriation of various tax changes contained in the legislative measures enacted last month was another concern.

Thompson added the language in State Question 795 would not have permitted schools to use those additional revenues for operational needs. “Our petition set strict parameters for how the new revenues would be allocated, 80% of it for teacher pay. We were asking voters to pass a teacher pay raise, not additional funds for classrooms,” he said. “And we couldn’t amend an initiative petition at this stage.”

He said the various organizations and individuals who pledged funds for SQ 795 believe their resources should be directed to opposing a possible veto referendum on the education funding package. “We will be at the forefront of any effort to defeat a move to renege on the school/teacher funding package,” he added.

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This additional statement provided by Dewey F. Bartlett, Jr., a Tulsa independent oilman and chair of the Oklahoma Energy Producers Alliance (OEPA), the initial organizational member of the Restore Oklahoma Now coalition:

“The Oklahoma Energy Producers Alliance has been a driving force behind the initiative petition to restore the GPT to 7% for all oil and gas production to pay our teachers. While we still think the 7% rate for all production is fair and competitive with other states, we understand that government works best through the legislative process.

“A functioning legislature requires compromise. The compromise established in HB 1010xx is a victory in the quest for moving Oklahoma’s teacher pay toward regional competitiveness, toward helping our beginning teachers make a living wage.

“In that spirit, the OEPA challenges the state’s other oil and gas organizations to join us in strong opposition to any effort, including the rumored veto referendum, to undermine the work of our legislature to begin to address our public education and teacher pay crisis.

“Yes, there is much more to be done, not only in restoring funds to public education, but in many other areas of state government, such as corrections, health services, child services, higher education and transportation.

“OEPA members come from virtually every community in Oklahoma. We are committed to working with the legislature and all stakeholders to find answers to these issues.  We believe our industry must lead. As Oklahoma-based energy producers, we will continue to stand up for our state.”

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Money for education: Senate sends historic revenue bill to governor

Oklahoma Senate passed House Bill 1010XX last night. It restores GPT to 5% for all new wells and will raise enough revenue to give our teachers a $6,000 per year raise! We are proud to be the only oil and gas association to have supported a bill that will give our Oklahoma teachers a living wage!

Read about it here

Oklahoma Supreme Court Rules in Favor of Oil, Gas Tax Initiative

Supreme Court rules unanimously In favor of SQ 795.

OEPA has spearheaded and supports this intuitive petition to pay our teachers and bring tax fairness to all producers at 7%, which is lower than any other oil and gas producing state.

Read the article here 

 

Oklahoma Energy Producers Alliance Installs Dewey Bartlett Jr. as Chair

OEPA renews call for 7% GPT, Vertical Well Protections  TULSA, Okla. – The Oklahoma Energy Producers Alliance (OEPA) elected Dewey F. Bartlett Jr. as chairman at its January board meeting. Bartlett, owner of Keener Oil Company, is a small independent producer with operations mostly in eastern Oklahoma. Bartlett, the former mayor of Tulsa, is a […]

Damage caused by horizontal fracking

This is what it looks like when a vertical well is fracked into from a horizontal frac job.

The well in this video is the Singer Oil Koetter 1-35. It’s located in 35- 17N-10W of Blaine County Oklahoma. Casing and tubing were shut in, and the pressure blew stuffing box rubbers out. Pride Energy was fracking their Red Land 1H & 2H wells from more than 600 feet away. The Corporation Commission was called to inspect the cleanup. They also filed a well impact form. This is fracing water coming out.

The well in this video was 660 feet away from the horizontal frac. The Corporation Commission has a rule that they have to stay 600 feet away, but they routinely wave that rule. Some horizontal frac jobs are within 50 feet of vertical wells.

This is not good for the environment. This is not good for small operators. This violation of property rights and harm to the environment is not good for Oklahoma.

When the long lateral bill was passed, Representative Weldon Watson said on the house floor that the damage in this video doesn’t happen. The big oil companies at that time said this doesn’t happen. It happens almost every day! In fact, we have access to data that shows 1,000 wells have been hit in Kingfisher Co. alone, and this well was in Blaine County.

Oklahoma started off as outlaw territory. Our state has had an unfortunate history of lawlessness, bribery, and “wild-west behavior“. Unfortunately, this is where we are in the regulatory arena. It is not the Corporation Commission‘s fault; at least not entirely. They don’t have enough resources to count all the wells, much less regulate them.
Big oil companies continue to have much more influence in Oklahoma than any other state. In other words, they get what they want. That is not good for the industry in the long run. The public eventually discovers the game and often times puts a drastic end to it. We need professional and honest regulation. That’s why we at the Oklahoma Energy Producers Alliance have filed a bill to allow the Corporation Commission to self-fund by assessing a small fee on oil and gas. This will allow them to hire the staff they need and free up 8million to go towards our Oklahoma budget problems.

 

Improperly Plugged Well

If a picture is worth 1,000 words, then this video is worth 10,000 words. This video was filmed close to an old unplugged or improperly plugged hole in Seminole Co., Okla. It was taken 2.5 years ago by an oil field worker on location who said five other wells were hit at the same time. If you listen closely you can hear the frac job over a mile away.

We need a new regulatory regime for horizontal drilling and fracking to protect Oklahoma’s most valuable resource – our drinking water.

Damage to Vertical Well in McClain County

This video shows the damage that was done to a vertical well by a horizontal frac job in McClain County. In this case, the frac fluid migrated up through the tubing and went into the oil tanks of the vertical operator overflowing them. This is becoming a weekly, if not a daily, occurrence.

Why? And how does it get solved?

The problem begins with the rule-making process at the Oklahoma Corporation Commission. Rules determine what and how drilling gets permitted.

The rules have not been changed to address the challenges that come with horizontal drilling. Rule changes take several months and the hearings are dominated by the big horizontal companies. Both OIPA and OKOGA work with big oil companies and testify on their behalf. Almost every attorney that practices with OIPA and OKOGA represents the horizontal drillers and are very adept and experienced at getting their clients what they want.

The judicial process at the Oklahoma Corporation Commission:

The first step is to go before an Administrative Law Judge(ALJ). The ALJ almost always rules in favor of the company wanting to drill and in one case told a protester, “Why do you keep protesting when you know we are always going to let them drill?” The appeal of that decision is the Appellant ALJ, with almost always the same results.

The final step of appeal is before the three Commissioners.

One resolution would be to take every protest before the elected Commissioners. All three are honorable public servants and will almost always do the right thing. This resolution cost upwards of $100,000 to protest before the elected Commissioners. Most small producers stop before they get there.

Oklahoma is the most pro-development oil and gas state. That is a good thing, but only to a point. Almost any company that wants to drill a well can get a permit to do so regardless of the potential harm to vertical well operators, and sadly even at the expense of the environment. The OCC routinely issues permits for these horizontal wells knowing (sometimes even with the horizontal well owner testifying that they will hit the vertical well). Most times horizontal drillers lie at the hearing and say that they will not impact vertical wells and then tell the vertical well operators to shut their wells in, knowing full well they are going to hit them.

Our regulatory body has the responsibility to prevent waste and protect rights. They also have the mandate to prevent oil and gas pollution. Granted they are understaffed. Permitting drilling activity gets almost all of the attention. That needs to change.

OEPA is sponsoring legislation to allow the OCC to self-fund. For 2.4 cents a barrel of oil and the BTU equivalent for natural gas. This would allow the Corporation Commission to fund the staff positions they need to keep up. It would also free up 8 million dollars for the legislature to use to solve the budget problems.We ask the other two petroleum associations to drop their opposition to this bill. Surely all of us that drill for and produce in this state should want a well funded professional regulatory body. The public should demand it!

Video property of Oklahoma News on Youtube. Find official video here.