Hart Energy:
 
The year got off to a rather explosive start as far as regulatory efforts to limit hydraulic fracturing with the passage of SB 181 in Colorado. How has SB 181 and other efforts like it affected the industry?
 
Len Vermillion:
 
It certainly has been quite a year as far as policy and regulation. Just recently at Hart Energy’s DUG Midcontinent Conference, Harold Hamm said it best himself. He was in an interview with Nissa Darbonne. She asked him if there is a war on energy. He said specifically with hydraulic fracturing just watch the debates tonight. I think that really sums up how we are going with hydraulic fracturing and legislation. The big stories you mentioned, SB-181 in Colorado that kind of got the year started. I think this is overall indicative of a bigger picture of legislation. I call it legislative acrobatics where states are trying to use their legislatures to not ban hydraulic fracturing like New York has in the past but to sort of push it out and make it difficult. That is what happened in Colorado. Interestingly enough, I followed up with that story during the summer when I was at the Texas Alliance Convention in Dallas. The answer I got there was you might look at New Mexico and Pennsylvania filing the same suit. Those are all big shale producing states so that is definitely something to watch going forward. Of course, also, the campaign is coming up. Throughout 2020 fracking is going to be a big part of all of that and we'll have to keep watching it. I think the big movement is not so much from a national standpoint but the stories that have unfolded this year have really been about local areas that are trying to take control more of where people can frack and so forth.
 
Hart Energy:
 
In October, President Trump’s efforts to streamline permitting of major energy projects hit a roadblock in the courts, how has the delays in pipeline construction contributed to output?
 
Len Vermillion:
 
Output not so much. I think some people will tell you the industry is producing too much, we have actually seen it start to go the other way. But it is a problem for the industry because we have a lot of big projects that have been delayed like Keystone XL. Probably even more important are the pipelines in the northeast or in Texas that are contributing to not being able to get product to market. That is really the big issue.

FERC always seems to be looking for a quorum. This year they lost two commissioners again. Cheryl LaFleur resigned and tragically they lost Kevin McIntyre at the beginning of the year to illness. They do have James Danly who has been nominated by President Trump and he still needs Senate confirmation. That is another hold up to infrastructure and getting things approved in terms of getting things to market.
 
Hart Energy:
 
Another big topic this year centered around methane emissions, where do we stand on that issue?
 
Len Vermillion:
 
This is a really big one. From the mainstream media, most people will recognize things through The Green New Deal or even Greta Thunberg and her going around North America and talking about it. Really for people in the industry and I don’t want to get into preaching to the choir here because everybody knows this but the big issue for oil and gas as far as climate change is methane emissions and limiting it. A lot of legislative and regulatory actions aim to try and do that. What gets overlooked is industry itself has significantly cut down methane emissions over the years. They'll be some who are watching stories, does it need to be overregulated or how much it is over-regulated. That is something to watch going forward. Part of the problem with methane emissions, it goes back to getting things to market and pipelines. If there is no way to get rid of the associated gas coming from drilling so therefore flaring has become one of the prime issues for oil and gas. Really in the grand scheme of things with climate change that is the big issue for oil and gas. Fracking gets confused in the mainstream and general public as a business. It’s really a process to getting things out. It’s not drilling. That is something the industry needs to be better at making people aware of. Banning fracking is really just banning a process, not banning drilling. 


Top articles affecting policy and regulations in 2019: