Montana Petroleum Association

Montana Petroleum Association
HEARD IT THROUGH THE PIPELINE

January 22, 2008

The Montana Wildlife Federation Hosts Energy/Wildlife Symposium:
The MWF Symposium opened at 8:00 AM on January 19th to a room of about 100 attendees. Governor Schweitzer’s hour long speech covered many topics. The Governor’s speech focused on sportsman’s access issues and his accomplishments since taking office. He did make a point regarding coal bed natural gas (CBNG) development and his concern with produced water. He spoke of a project that British Petroleum (BP) is doing in south eastern British Columbia near Glacier Park. According to the Governor, BP is doing horizontal drilling for CBNG and covering 1000 acres of mineral area from one surface location. In addition, any produced water from this project will be re-injected. Governor Schweitzer asked why this could not be done in the Powder River Basin.

T.O. Smith, Energy Coordinator for the Montana Department of Fish, Wildlife and Parks, followed with a power point presentation showing the impact of energy development on wildlife in Montana. The presentation is similar to ones that he has done in the past, with the notable exception that all the pictures are from with the Bowdoin Field near Malta and the Cedar Creek Anticline near Baker. He had quite a few slides that gave an aerial view of these fields, while mine showed views on the ground. The point of his presentation was that energy development was coming to Montana, FWP is concerned about impact to wildlife, they need more funding to be able to analyze things like BLM Resource Management Plans, and the want representation on the Board of Oil and Gas Conservation.

Gene Terland (BLM State Director), Jeff Hagener (MT Fish Wildlife and Parks Director), Mary Sexton (MT Department of Natural Resources Director) headed the next panel. Their speeches covered the broad issues they each deal with and their agency mandates. Each discussed briefly the need to prevent the sage grouse from becoming an endangered species and their concern about the grouse. The following panels included presentations discussing recent research from Dr. Naugle (sage grouse-University of Montana), Scott Smith, (Mule Deer on the Pinedale from WY Game and Fish), Dr. Joel Berger, (University of MT, impacts to Antelope), Windy Davis (MT FWP impacts of sodium bicarbonate in the Tongue and Powder Rivers) and Dr. Jody Hilty from the Wildlife Conservation Society who gave a presentation on the importance of species of all types, and wildlife corridors across the globe.

The attendance slacked significantly after lunch. The remaining presentations came from the following people:

Conrad “Duke” Williams who spoke of the devastation by oil gas development of the marsh land in Louisiana.

Walt Gasson, former Wyoming Fish and Game employee and current director of the Wyoming Wildlife Federation, who told the crowd not to let the oil and gas industry cause Montana to “lose its home place”.

Dennis Buechler, a Colorado sportsman who is retired from the US Fish and Wildlife Service and active in organizing sportsmen against the oil and gas industry. He is the co-chair of the Colorado Wildlife Federation’s Issues and Advocacy Committee that worked on legislation that reorganized their Oil and Gas Conservation Commission and a wildlife protection law that requires wildlife considerations in all drilling permit decisions in Colorado. He noted that the law passed without any dissenting votes, adding that Republicans will listen to sportsmen where as they often won’t heed environmentalists.

Gary Amerine, Wyoming resident and outfitter, urged Montana sportsmen to stand up against the oil and gas industry and protect our wildlife heritage.

Roger Muggli from Miles City Montana gave a presentation about the new fish passage project completed on his property on the Tongue River, and offered his views on produced water.

The conference closed with a few more speeches from Kelly Radue and Helen Waller who spoke of finding alternative energy sources, Justice of the Peace Greg Mohr from Richland County who felt we needed to work together, and MPA Executive Director Dave Galt who stressed the need to complete critical habitat mapping and species databases, with a priority on ground truth assurances on satellite developed critical habitat maps. In the closing public comment section Fallon County Commissioner, Don Rieger spoke on behalf of the other commissioners that attended. He said that the conference was a great learning experience and that the commissioners have heard their message and would go back with their side of the story. He invited any attendees wanting a tour of the Cedar Creek area to come to Fallon County and he would show them the area including the elk that have come back into the oil fields.

An article from the Great Falls Tribune on the symposium is attached.

Montana EQC Seeks Input on Green House Gas Reduction Recommendations:
At their January meeting the Environmental Quality Council (EQC) heard a report from the Department of Environmental Quality (DEQ) on the 54 recommendations contained in the Montana Climate Change Advisory Committee’s Action Plan Final Report. Additionally the DEQ distributed a report which listed the green house gas reductions, the cost per ton of CO2 equivalent reduced, and possible legislative action to implement each of the 54 recommendations. (See attached document: Climate Change Recommendations Legislation) The recommendations are categorized into Residential/Commercial/Institutional/Industrial Sector RCII recommendations 1-13, the Energy Supply Sector ES recommendations 1-13, Transportation and Land Use TLU recommendations 1-13, Agriculture/Forestry/Waste Management AFW recommendations 1-12, and Cross-Cutting Issues CC recommendations 1-7. Public comments and EQC questions at the meeting were extensive. Some EQC members seemed to want to move forward with drafting of legislation to implement the recommendations, but public comment indicated that there were questions about the accuracy of the costs of some of the recommendations, the feasibility of some recommendations, and concern that many of the groups that would be affected by the recommendations were not at the meeting. It was also acknowledged that the EQC had not had the documents long enough for thorough review. Consequently the EQC directed its staff to post on the EQC website a template of the recommendations on which EQC members and the public can comment. The next EQC meeting is March 10-11; therefore it was suggested that the comment deadline should be March 1. MPA will notify members when the climate change recommendations template is posted. Meanwhile the recommendations can be reviewed in the Climate Change Final Report http://www.mtclimatechange.us/ewebeditpro/items/O127F14014.pdf and the costs, green house gas reductions and implementing legislation can be found in the document attached Climate Change Recommendations Legislation.

Royalty Withholding:
The Department of Revenue adopted a final rule on December 21, 2007 relating to the withholding on nonresident royalty income. The adoption notice can be viewed at: http://mt.gov/revenue/formsandresources/administrativerules/upcomingevents_proposedrulenotices/42-2-778adp-arm.doc

It will still be a couple of weeks before the final rules will be posted on the Secretary of State’s website, but if you need the rule in its entirety, please contact Dave at dave@montanapetroleum.org . MPA appreciates the acceptance of both our suggestions by the Department of Revenue.

Supplemental Air Analysis for CBNG Phased Development:
The BLM’s 2007 supplemental air analysis for the Draft supplement to the Montana Statewide Oil and Gas Environmental Impact Statement and Amendment to the Powder River and Billings Resource Management Plans is available at : http://www.blm.gov/eis/mt/milescity_seis/

The Public Comment Period for the SAQA ends March 13, 2008.

Water Policy Interim Committee:
The Water Policy Interim Committee met in Hamilton, Montana on January 15th and 16th. The interim Committee began the public process of reviewing potential draft legislation for the 2009 regular session. There was no action taken on any of the bill drafts, but they took testimony from various groups and members of the public. The bulk of these bills are aimed at problems coming from increased sub-division expansion, however any time Montana water law is changed there could be unintended consequences. These bill drafts can be viewed at the following website:

http://leg.mt.gov/css/lepo/2007_2008/water_policy/meetings/meetings.asp#meeting5

Recent Montana State Agency Employee Changes:
Dave Klemp has recently been promoted to the position of Bureau Chief of the Air Resources Management Bureau. Dave replaces Don Vidrine who retired in December. Steve Welch, Administrator of the Permitting and Compliance Division of the Department of Environmental Quality retired at the same time and his position has yet to be filled.

The Department of Natural Resources named Candice West as the new Chief Counsel, effective January 1, 2008. Candice previously worked for Attorney General Mike McGrath and did extensive work on trust lands and water law. Candice was also the staff person for the Attorney General’s seat on the Land Board.

Former Representative Kevin Furey (D-Missoula) has been hired as an energy development officer for the Energy Infrastructure and Promotion Division which was created by the Schweitzer administration in the 2007 legislature.

MPA looks forward to working with Dave, Kevin and Candice.

Articles of Interest:

Opinion piece from BLM State Director Gene Terland is attached.

Wildlife Groups and Energy Firms Debate Development. Billings Gazette January 18, 2008. The blog comments are most interesting, at least most of them. http://billingsgazette.net/articles/2008/01/18/news/state/26-developmentdebate.txt

THANK YOU TO 2008 NEW AND RENEWED MEMBERS:
Aeon Energy Corp.; Anderson & Baker Law Office; Aspen Consulting & Engineering, Inc.; Ballard Petroleum Holdings, LLC; Bear Paw Energy LLC; Bill Barrett Corporation; Bison Engineering, Inc.; Bjork Lindley Little PC; BP America, Inc.; Crowley, Haughey, Hanson, Toole & Dietrich P.L.L.P.; D&M Water Service Inc.; Davis Graham & Stubbs LLP; Decker Operating Company; Devon Energy Corporation; DLD Enterprises, LLC; Enbridge Energy Company, Inc.; Encore Operating, L.P.; Energy Laboratories, Inc.; Energy Strategies and Solutions LLC; First Interstate Bank; Fleck, Mather & Strutz, Ltd.; FX Drilling Company, Inc.; Golden Oil Company; Gough, Shanahan, Johnson & Waterman; Great Plains Resources; Hancock Enterprises; Holcim (US) Inc.; Holland & Hart LLP; Jireh Consulting Services; Joy Stevens PLLC; Klabzuba Oil & Gas; Lee Law Offices; Luff Exploration Company; Montana & Wyoming Oil Company; Montana Refining Company; NorthWestern Energy; O&G Environmental Consulting; Oilfield Consultants, Inc.; Omimex Canada Ltd.; Petro-Hunt, LLC; Pinnacle Gas Resources; Sanjel USA Inc.; Sequel Energy Ventures, LLC; Shell Oil Company; Solenex LLC; Somont Oil Company, Inc.; Spence Accounts, Inc.; T-K Production Company; WWC Engineering

If you did not receive a renewal membership packet, please contact Bobbie Gardner at the MPA office immediately by emailing mpa@montanapetroleum.org or calling 406-442-7582. Thank you.