IOGCC 1997 Resolutions 7/7/15, 5:40 PM 1997 Resolutions Interstate Oil and Gas Compact Commission 1997 Spring Quarterly Meeting, Washington, D.C. 1997 Midyear Meeting, Oklahoma City, Oklahoma 1997 Fall Quarterly Meeting, San Antonio, Texas 1997 Annual Meeting, Santa Fe, New Mexico IOGCC Resolutions 1997 Spring Quarterly Meeting, Washington, D.C. March 13-14, 1997 Resolution 97.301 Concerning IOGCC Real Property Located in Oklahoma City, Oklahoma Resolution 97.302 Resolution on Oil Valuation RESOLUTION 97.301 Concerning IOGCC Real Property Located in Oklahoma City, Oklahoma Whereas, in 1954 the State of Oklahoma Legislature executed a Deed and Transfer to the Interstate Oil and Gas Compact Commission of certain real property and a building to be used as a headquarters building, located in Oklahoma City, Oklahoma; and Whereas , the building has been continuously occupied by the IOGCC since that transfer, but only a part of the large plot of land has been directly used by the IOGCC, with another part being beneficially used by the State of Oklahoma for part of the Governor's residence and some Parks Department usage in exchange for the state handling the IOGCC grounds maintenance and some upkeep; and Whereas , the State of Oklahoma is planning to construct a new Oklahoma Visitors' Center which would be partly located on land now owned by the IOGCC, but being beneficially used by the state; and Whereas , the state is willing to make the Visitors' Center and related parking available to the IOGCC; and Whereas , the improvement of the property and the use of the facilities will both enhance the IOGCC property; Now Therefore Be It Resolved That the Interstate Oil and Gas Compact Commission convened at its Quarterly Meeting in Washington, D.C. March 13, 1997, designates its executive director as the authorized person to execute needed legal instruments, including a Quit Claim Deed to the State of Oklahoma for the property needed for the Oklahoma Visitors' Center. March 1997 RESOLUTION 97.302 Resolution on Oil Valuation Whereas , on January 24, 1997 the U.S. Department of the Interior, Minerals Management Service (MMS) proposed rulemaking on establishing oil value for royalty due on Federal leases and on the sale of Federal royalty oil (62 F.R. 3742), and Whereas , a percentage of the member States of the Interstate Oil and Gas Compact Commission (IOGCC) receive a percentage of royalties affected by the rulemaking, and Whereas , it is imperative that the member States have sufficient time to determine the broad implications this rulemaking may have on oil and gas development in our States; http://web.archive.org/web/19990129004047/http://www.iogcc.oklaosf.state.ok.us/Miscfile/RESOL97.HTM Page 1 of 8 IOGCC 1997 Resolutions 7/7/15, 5:40 PM Now Therefore Be It Resolved That , the Interstate Oil and Gas Compact Commission requests that MMS grant an additional 60 day extension beyond April 28 in order for the member States to comprehensively analyze and provide a meaningful response to the proposed rule. March 1997 IOGCC Resolutions 1997 Midyear Meeting, Oklahoma City, Okla. June 8-10, 1997 Resolution 97.601 Resolution to Examine the Education and Training Needs for the Extraction of Oil and Gas Resolution 97.602 Resolution Pertaining to the National Petroleum Reserve Resolution 97.603 Resolution in Support of State Incentive Programs Resolution 97.604 Resolution on New Federal Tax Incentives RESOLUTION 97.601 Resolution to Examine the Education and Training Needs for the Extraction of Oil and Gas Whereas, the Interstate Oil and Gas Compact Commission has consistently and aggressively promoted the conservation for oil and natural gas; and Whereas, both oil and natural gas constitute approximately 65% of the nation's energy mix; and Whereas, the United States is currently importing approximately 52% of its crude oil; and Whereas, the reliance on foreign sources of energy poses a serious threat to the nation's strategic preparedness and economic well being; and Whereas, the federal government's energy policies on importation of crude oil at artificially low prices has led to a substantial erosion of the U.S. oil and gas work force, over 400,000 jobs lost since 1986; and Whereas, the changes in both the price of crude oil and the technological advances for extraction have led to an increase in the demand for domestically produced crude oil; and Whereas, the labor force to meet this increase in demand is in short supply because of the stated erosion and changes in drilling practices due to technological advancement and a broad range of compliance requirements of federal and state governments; and Whereas, the United States Legislative and Executive Branches of government have recognized the importance of education and training for entry into the work force as evidenced in School-To-Work and Carl Perkins Acts; and Whereas, the bridge for the work force to the extraction jobs in oil and gas has severe limitations because of a small number of institutions which provide training; and Whereas, the training provided at such institutions needs to be updated to meet the state of the art practices available to the industry; and Whereas, an increase in the domestic production of hydrocarbons will have a positive effect on the nation's economy and the balance of trade deficit; and Whereas, well trained personnel are the components which can have the greatest effect on conservation of oil and gas; And Now, Therefore, Be It Resolved, by the Interstate Oil and Gas Compact Commission at its Midyear Meeting on June 10, 1997 in Oklahoma City, Oklahoma, that the Executive Director examine the education and training needs for the extraction of oil and gas and pursue federal funds through existing educational programs or pursue new funding to adequately train and retrain personnel for the extraction of domestically produced oil and natural gas. June 1997 RESOLUTION 97.602 http://web.archive.org/web/19990129004047/http://www.iogcc.oklaosf.state.ok.us/Miscfile/RESOL97.HTM Page 2 of 8 IOGCC 1997 Resolutions 7/7/15, 5:40 PM Resolution Pertaining to the National Petroleum Reserve Whereas, in 1923, President Warren G. Harding issued an Executive Order establishing Naval Petroleum Reserve No. 4 on the North Slope of Alaska to provide a potential supply of oil for the United States Navy; and Whereas, the Reserve encompasses 23,500,000 acres, with boundaries extending due south from Icy Cape to the drainage divide of the Brooks Range, then following the divide eastward to 156 degrees west longitude, then north to the Colville River, and following the Colville River downstream to its mouth; and Whereas, between 1944 and 1976, the United States Navy drilled 45 shallow core-test holes and 43 test wells and acquired nearly 11,100 line miles of seismic refraction data, nearly 400 seismic reaction profiles, gravity data from more than 3,600 stations, and 12,000 flight line miles of aeromagnetic data; and Whereas, the Naval Petroleum Reserves Production Act of 1976, P.L. 94-258, 90 Stat. 303,42 U.S.C. 6501 et seq., redesignated Naval Petroleum Reserve No. 4 as the National Petroleum Reserve in Alaska and transferred responsibility for its administration to the Secretary of the Interior; and Whereas, between 1975 and 1982, the United States Geological Survey drilled 28 wells and acquired some 5,700 line miles of seismic survey and gravity data from more than 27,000 stations, which established several areas of oil and gas potential; and Whereas, discovery well Walakpa 1 showed a potentially economic gas reservoir, which was confirmed by Walakpa 2; and Whereas, an amendment to the Naval Petroleum Reserves Production Act made by the FY 1981 Department of the Interior Appropriations Act, P.L. 96-514, Title I, 94 Stat. 2964, directed the Secretary of the Interior to develop a fast-track oil and gas development initiative intended to lease up to 2,000,000 acres of the Reserve for oil and gas exploration; and Whereas, under the 1981 authorization, between 1982 and 1984, the Department of the Interior conducted four competitive lease sales, receiving $119,000,000 in bonus bids; and Whereas, the recently announced development of the Alpine oil and gas field in the Colville River Delta and potentially extending under the eastern extremities of the National Petroleum Reserve in Alaska has generated renewed interest in competitive oil and gas leasing in the Reserve; and Whereas, since the last lease sale in the Reserve, significant progress has been made in the areas of seismic sequence analysis, amplitude analysis, geological modeling, and directional and long-reach drilling, and information has become available to potential bidders that support the belief that the reserve could contain economic quantities of oil and gas; and Whereas, bonus bids received from competitive oil and gas lease sales in the National Petroleum Reserve in Alaska and royalties generated from oil and gas production in it would be shared equally by the United States and the State of Alaska through prior agreement; and Whereas, during the last two decades of oil production on the North Slope of Alaska, the industry has developed state-of-the-art technology that has demonstrated environmentally safe production with a minimum of adverse impact; and Whereas, exploration and development can and will be conducted in a manner consistent with the nation's ongoing commitment to the highest standards of protecting the environment; and Whereas, the application of this advanced technology in the Reserve afford the opportunity to further demonstrate that oil exploration and production are being done in an environmentally sensitive manner; and Whereas, oil production from Alaska's North Slope is declining; and Whereas, the discovery and development of commercial quantities of oil in the National Petroleum Reserve in Alaska would enhance the domestic energy security and reduce dependence on foreign oil; And Now, Therefore, Be It Resolved, by the Interstate Oil and Gas Compact Commission at its Midyear Meeting June 10, 1997 in Oklahoma City, Oklahoma, that the Secretary of the Interior be urged to take immediate action to conduct competitive oil and gas lease sales within the National Petroleum Reserve in Alaska to allow for exploration and development of oil and gas resources to support domestic energy security. June 1997 http://web.archive.org/web/19990129004047/http://www.iogcc.oklaosf.state.ok.us/Miscfile/RESOL97.HTM Page 3 of 8 IOGCC 1997 Resolutions 7/7/15, 5:40 PM RESOLUTION 97.603 Resolution in Support of State Incentive Programs Whereas, the member states of the Interstate Oil and Gas Compact Commission (IOGCC) recognize the economic and societal value of domestic oil and gas exploration and production, and further recognize the significant contributions of the industry to states and the nation; and Whereas, the member states realize significant benefits from successful incentive programs that increase production, enhance recovery efficiency or simply improve the oil and gas business climate in the state; and Whereas, the IOGCC commissioned a study of state incentive programs, "Investments in Energy Security," as a resource for state and federal policy makers; and Whereas, the report indicated the states have demonstrated leadership and creativity in the area of oil and gas incentive programs designed to assist producers in proceeding productively in their business efforts and made a number of recommendations to improve and expand state and federal incentive programs; And Now, Therefore, Be It Resolved, by the Interstate Oil and Gas Compact Commission at its Midyear Meeting on June 10, 1997 in Oklahoma City, Oklahoma, that we accept the recommendations of the "Investments in Energy Security" report; And Be It Further Resolved, that the member states pledge our commitment to evaluate implementation of these reports' recommendations to enhance state incentive programs and to work toward expanding successful incentive programs among the states and to federal entities; And Be It Further Resolved, that the Energy Resources, Research and Technology Committee will evaluate the creation of a model incentive concerning electric utility rate structures for marginal wells. June 1997 RESOLUTION 97.604 Resolution on New Federal Tax Incentives http://www.iogcc.oklaosf.state.ok.us/Miscfile/RESOL97.HTM Go DEC JAN 29 7 captures 1998tax 1999 Whereas, on May 15, 1997, 29 Jan 99 Senator - 9 Oct 99 Don Nickles and Representative Wes Watkins introduced federal legislation that would provide revisions and incentives to encourage domestic oil and gas production and exploration, and Whereas, the people of the United States of America will benefit from reduced imports of foreign oil through reductions in balance of payments deficits, a reduction in the loss of American jobs, and the strengthening of our national security, and Whereas, the elements of the proposed legislation include the following: 1. Elimination of the net income limitation on percentage depletion for oil and gas; 2. Expanding the definition for tax purposes of "tertiary recovery" to include hydro injection (which should be limited to non traditional methods of hydro injection for stripper wells intended to extend the life of the well); 3. Permitting producers the option of expensing geological and geophysical expenditures; 4. Permitting producers the option to expense delay rental payments incurred in connection with the development of domestic oil and gas; and 5. Extension of the spudding rule; and Whereas, the Interstate Oil and Gas Compact Commission represents all states in which oil and gas are produced and has a mission to promote the conservation and efficient recovery of domestic oil and natural gas resources, while protecting health, safety and the environment; And Now, Therefore, Be It Resolved That, the Interstate Oil and Gas Compact Commission at its Midyear Meeting June 10, 1997 in Oklahoma City, Oklahoma, supports the principles embodied in the National Energy Security Act of 1997, currently pending before the Congress of the United States and urges adoption of those principles. June 1997 http://web.archive.org/web/19990129004047/http://www.iogcc.oklaosf.state.ok.us/Miscfile/RESOL97.HTM Page 4 of 8 IOGCC 1997 Resolutions 7/7/15, 5:40 PM IOGCC Resolutions 1997 Fall Quarterly Meeting, San Antonio, Texas September 8-11, 1997 RESOLUTION 97.901 Pertaining to United States Court of Appeals Eleventh Circuit Decision in Case No. 95-6501 Legal Environmental Assistance Foundation vs. United States Environmental Protection Agency Whereas, Congress enacted amendments to the Safe Drinking Water Act (the Act) to facilitate delegation of regulatory authority over oil field injection activities under the Act to the states in recognition of the states' leadership in development of UIC programs prior to adoption of the Act; and Whereas, existing state UIC programs do not and never have regulated hydraulic fracturing and other primary production operations as underground injection; and Whereas, Congress' intent to follow the leadership of the states and exclude primary production operations from the UIC program is clearly expressed in §§ 1421 and 1425 of the Act; and Whereas, §§ 1421 and 1425 authorize regulation only of: underground injection of brine or other fluids which are brought to the surface in connection with oil or natural gas production or natural gas storage operations; and underground injection for secondary or tertiary production of oil or natural gas; and Whereas, the member states of IOGCC have long understood that primary production operations are not subject to the underground injection control program under the Act and concur with EPA's position in Legal Environmental Assistance Foundation, Inc. v. United States Environmental Protection Agency that the UIC regulatory program does not encompass hydraulic fracturing; and Whereas, regulation of hydraulic fracturing under the UIC program would create a costly new regulatory burden that would result in little, if any, environmental benefit; and Whereas, state oil and gas regulatory programs ensure safe, environmentally responsible operation of E & P facilities and additional burdensome requirements such as regulating hydraulic fracturing as underground injection would divert scarce resources from and disrupt ongoing, effective pollution prevention activities; and Whereas, the member states of IOGCC are desirous of supporting EPA's interpretation regarding regulation of "hydraulic fracturing" and participating upon remand or rehearing of the Eleventh Circuit U.S. Court of Appeals matter of Legal Environmental Assistance Foundation, Inc. v. United States Environmental Protection Agency; And Now, Therefore, Be It Resolved, by the Interstate Oil and Gas Compact Commission ("IOGCC") at its Fall Quarterly Business Meeting, September 8, 1997 in San Antonio, Texas, that the IOGCC wholly supports the Environmental Protection Agency's ("EPA") interpretation regarding regulation of "hydraulic fracturing" as being consistent with both statutory and regulatory definitions under the Act; and further, the IOGCC and each of its member states unanimously encourage EPA to take all necessary actions to promote and secure its statutory and regulatory interpretations, including, but not limited to, seeking rehearing of the adverse decision of the Eleventh Circuit Court of Appeals. September 1997 IOGCC Resolutions 1997 Annual Meeting, Santa Fe, New Mexico December 7-9, 1997 Resolution 97.121 In Support of State Primacy in Scientifically Based Response to Air Quality Impacts of Oil and Gas Development Resolution 97.122 Resolution to Show Solidarity of the Member States for the Proposed Federal Oil and Gas Regulatory Reform Streamlining Act Resolution 97.123 Resolution Pertaining to Mexican Tariff on Imported Natural Gas Resolution 97.124 In Support of Development of a Royalty In-Kind Program for Federal Oil and Gas Resolution 97.125 In Support of Coastal Impact Assistance http://web.archive.org/web/19990129004047/http://www.iogcc.oklaosf.state.ok.us/Miscfile/RESOL97.HTM Page 5 of 8 IOGCC 1997 Resolutions 7/7/15, 5:40 PM RESOLUTION 97.121 In Support of State Primacy in Scientifically Based Response to Air Quality Impacts of Oil and Gas Development Whereas, the Interstate Oil and Gas Compact Commission is dedicated to assuring strong state regulation of all aspects of domestic oil and gas production including environmental impacts, and; Whereas, the protection and enhancement of the quality of the airshed is critical to both environmental health and human health, and; Whereas, oil and gas exploration and production utilizing current technology is a minimal contributor to air quality degradation, and; Whereas, environmental organizations, the Environmental Protection Agency, and federal land agencies are increasingly using air quality data lacking a scientific basis to restrict development of America's oil and gas reserves, and; Whereas, the majority of the member states of the IOGCC have primacy in the implementation of the provisions of the Clean Air Act of 1970, as amended; Now, Therefore, Be It Resolved, by the Interstate Oil and Gas Compact Commission at its Annual Meeting, December 9, in Santa Fe, New Mexico, that the Administrator of the Environmental Protection Agency, the Secretary of the Interior and the Secretary of Agriculture be urged to direct the appropriate agencies under their jurisdiction to respect and defer to the primacy of the states in administering air quality standards; And Be It Further Resolved, that the above-mentioned Administrator and Secretaries be requested to require that such agencies, when directed by law to develop minimal standards, require only those air quality standards which are scientifically based and developed in close consultation and cooperation with each state. December 1997 RESOLUTION 97.122 Resolution to Show Solidarity of the Member States for the Proposed Federal Oil and Gas Regulatory Reform Streamlining Act Whereas, the Clinton Administration introduced the Re-invention of Government II (REGO II) initiative in March 1995; and Whereas the U.S. Bureau of Land Management (BLM) has been directed to work with the oil and gas producing states to implement a plan to transfer certain inspection and enforcement (I&E) activities from BLM to the states, and; Whereas the states have had viable regulatory programs in effect for many decades, that were enforced on all lands within their borders before 1982 when BLM began regulating the I&E activities in question on lands with Federally owned mineral estates; and Whereas it has been the position of the IOGCC since its formation by the states and chartering by Congress that the federal government defer to the states in matters of oil and gas inspection and enforcement; and Whereas, between July 1996 and August 1997, meetings intended to facilitate negotiations were held between BLM representatives and state representatives through the IOGCC including meetings with over nine individual states between July and November, 1996; over eight meetings between BLM and IOGCC, including meetings in Indianapolis, Las Vegas, Washington DC, Phoenix, Omaha, Denver, Oklahoma City, and Salt Lake City; over eight Public Lands and Royalty seminars with industry and regulatory representatives in October and November, 1996, including Casper, Salt Lake City, Billings, Lansing, Roswell, New Orleans, Jackson, Houston, Dallas and Austin; over six public field meetings between BLM and IOGCC in March and April, 1997; and numerous telephone conferences and correspondences; and Whereas, BLM made a proposal to the states under which the I&E activities would be delegated with BLM oversight as specified in the Federal Oil and Gas Royalty Management Act (FOGRMA); and Whereas, the states through the IOGCC, offered a counter proposal which called for the BLM and the states to re-engineer their oil and gas regulatory programs, through identification of duplication of effort, overlapping regulations and inefficient implementation techniques; to optimize the effectiveness and efficiency of state and federal programs; and to reduce the regulatory burden on operators; and Whereas, in October, 1996, after several congressional hearings focused on the transfer of oil and gas regulatory responsibilities from the BLM to state agencies, a bipartisan letter from Representatives Calvert and Abercrombie directed that substantive negotiations occur between BLM and the states, or in the alternative, legislative options would be initiated; and Whereas, after over two years of repeated attempts to bring about a voluntary transfer of regulatory authority to the states, with no positive http://web.archive.org/web/19990129004047/http://www.iogcc.oklaosf.state.ok.us/Miscfile/RESOL97.HTM Page 6 of 8 IOGCC 1997 Resolutions 7/7/15, 5:40 PM responsive efforts by BLM, no other alternative appears to exist at this time other than the legislative initiative; and Whereas, the IOGCC has caused to be drafted legislation entitled "An Act to Improve the Administration of Oil and Gas Leases on Federal Lands, and For Other Purposes," and has distributed copies to all Governors and Official Representatives and which has been hand delivered to key members of Congress; and to the BLM, Now, Therefore, Be It Resolved That the member states of the Interstate Oil and Gas Compact Commission, convened at its Annual Meeting in Santa Fe, New Mexico, December 9, 1997, hereby endorse and support the major components of "An Act to Improve the Administration of Oil and Gas Leases on Federal Lands, and For Other Purposes," the goals of which are to defer to the states on matters of oil and gas regulation which will improve program efficiencies, reduce costs to both state and federal government, maintain uniformly high performance standards, and reduce regulatory burdens on the oil and gas operating community. December 1997 RESOLUTION 97.123 Resolution Pertaining to Mexican Tariff on Imported Natural Gas Whereas, The parties to the North American Free Trade Agreement -- Mexico, Canada and the United States -- are in the process of deciding whether to accelerate tariff reductions or provide for early tariff elimination among the three nations; and Whereas, Mexico, Canada and the United States have demonstrated a commitment to, and have made substantial progress toward, an integrated North American natural gas market; and Whereas, The Mexican import duty discourages competitive access to the Mexican natural gas market by United States producers at a time when gas demand in Mexico is expected to increase; and Whereas; Continuation of the Mexican import duty disadvantages Mexican consumers who would otherwise have access to lower cost gas supplies from the United States if those supplies are necessary to meet increased demand; And Now, Therefore, Be It Resolved, by the Interstate Oil and Gas Compact Commission ("IOGCC") at its Annual Meeting, December 9, 1997 in Santa Fe, New Mexico, that the IOGCC urges the governments of Mexico, Canada and the United States to agree to immediately eliminate the duty on natural gas. December 1997 RESOLUTION 97.124 In Support of Development of a Royalty In-Kind Program for Federal Oil and Gas Whereas, the Interstate Oil and Gas Compact Commission supports its member states in their effort to maximize the net return on the state's share of federal mineral royalties, and Whereas, growing sophistication in the marketing of oil and gas production have led to royalty valuation uncertainty in many complex and/or non arms' length transactions, and Whereas, these uncertainties have resulted in costly litigation and have negatively impacted the positive relationships that have long existed between producers and producing states, and Whereas, proposed index based valuation methods will not function equitably under all marketing conditions, and Whereas, a properly designed federal royalty in-kind program could eliminate valuation disputes, significantly decrease federal administrative costs and provide an opportunity for enhanced value from the marketing of royalty oil: Now, Therefore, Be It Resolved, by the Interstate Oil and Gas Compact Commission at its Annual Meeting on December 9 in Santa Fe, New Mexico, that we support efforts by members of Congress, the oil and gas industry and our member states to develop a comprehensive, national, flexible federal royalty in-kind program for oil and gas; And Be It Further Resolved, that any program so developed shall provide for each producing state, at its sole option, to assume those marketing and administrative functions which are designated to the federal government; And Be It Further Resolved, that the IOGCC requests that Congress, the Minerals Management Service and the oil and gas industry fully http://web.archive.org/web/19990129004047/http://www.iogcc.oklaosf.state.ok.us/Miscfile/RESOL97.HTM Page 7 of 8 IOGCC 1997 Resolutions 7/7/15, 5:40 PM involve IOGCC and affected member states in the development of any federal royalty in-kind program. December 1997 RESOLUTION 97.125 In Support of Coastal Impact Assistance Whereas, the Interstate Oil and Gas Compact Commission supports the principle of assisting coastal communities in addressing the infrastructure, environmental and socio-economic impacts of offshore oil and gas development and operations, and in investing a portion of non-renewable offshore oil and gas resources in renewable coastal resources, out of a fair portion of revenues from production of oil and gas from the Outer Continental Shelf, and Whereas, the Outer Continental Shelf Policy Committee of the Minerals Management Service (MMS) United States Department of the Interior, at its meeting in Galveston, Texas on October 29, 1997, approved and adopted a plan to implement such coastal impact assistance, and urged the Secretary of the Interior to take timely action to implement the plan as adopted, Now, therefore be it resolved, that the Interstate Oil and Gas Compact Commission hereby approves and supports the coastal impact assistance plan as adopted by the Outer Continental Shelf Policy Committee of the MMS and urges the adoption of appropriate laws to implement such plan. December 1997 Return to IOGCC Reference Information Return to IOGCC Home Page http://web.archive.org/web/19990129004047/http://www.iogcc.oklaosf.state.ok.us/Miscfile/RESOL97.HTM Page 8 of 8