Montana Petroleum Association

Montana Petroleum Association
HEARD IT THROUGH THE PIPELINE

August 10, 2007

MPA ANNUAL MEETING
The MPA Annual meeting is fast approaching. Please finalize your registrations, and book your hotel rooms now. Please refer to the attached information or check out our website at www.montanapetroleum.org

Wildlife News: Sage Hen Meeting with State and Federal Agencies
As a result of the BLM decision to defer 73,000 acres from the July 31st BLM lease sale, State Director, Terland asked if a small group could meet to discuss the issue. On August 7th that group met to discuss what could be done to get the leasing of these parcels back on track. Present were, BLM, Montana Fish, Wildlife and Parks and DNRC Directors, the Board of Oil and Gas, and the MPA. MPA representatives included Dave Galt, Bruce Williams (Fidelity), Ron Santi and Jesse Martin (Nance), Linda Guthrie ( Devon), Patrick Navratil (Encore) and Cole Chandler (Klabzuba) as MPA President. The one thing that we all agreed on is that we do not want to see the sage grouse listed as an endangered species.

FWP representatives shared with us their concerns about habitat loss experienced in the West that is affecting sage grouse populations. Although they said that Montana’s sage grouse populations were healthy, increasing, and behaviorally different than grouse in Wyoming; they were nonetheless concerned about the impact on grouse from oil and gas activities. FWP wants to address sage grouse impacts on a landscape basis and work to have stipulations that have impact, and are applied to oil and gas activities on both public and private lands. FWP handed out some maps that show lek counts in eastern Montana. They are confident that the maps are current. MPA has hard copies of these maps for those that would like to see them, and is working to get electronic copies.

The group discussed the next steps in addressing this issue. They include overlaying FWP lek maps with USGS mineral data in eastern Montana, reconvening the local working groups, BLM ensuring industry data is being utilized, and participation in the wildlife forum at the MPA annual meeting.

MPA has assimilated quite a library of documents between various agencies on this issue. They are on the MPA website but require a member ID and password. If you need a member ID and password please contact Bobbie at MPA@montanapetroleum.org FWP has developed a large power point presentation that states their concerns and programmatic recommendations for oil and gas development. The presentation is available through MPA on CD, however we have attached five of the more interesting slides and recommend your review.

Climate Change Advisory Council Recommendations
Over the last two months, the MPA Climate Change Task Force has been reviewing recommendations from the Governor’s Climate Control Advisory Council (CCAC). Furthermore, the Environmental Quality Council has included climate change in its interim study plan, and the Energy and Telecommunications Interim Committee plans to study carbon sequestration.

We need to have accurate information regarding the potential impacts of the CCAC recommendations. This information can be used by MPA or other industry associations to address specific proposals or for educating the public. Any information submitted will be aggregated and no member company-specific information will be shared

Please take a close look at all of the recommendations (attached) and answer the following questions:

How much would these climate change/ CO2 recommendations affect your business or industry and change the cost factors involved?
How would any changes in cost factors affect prices to your customers? Increase or Decrease? By what percentage?
Which recommendations are realistic? Can they be achieved? If not, why not?
What facts can you provide that would counter the “climate change fixes” being put forward as solutions?
Do you have suggestions for what could be implemented?

I realize this is a short time frame, but your response by August 21, 2007 would be appreciated. This information is important to MPA, please take a minute and respond.

EPA Effluent Study on CBNG Water
The U.S. Environmental Protection Agency (EPA) has begun a detailed study on EPA’s Coalbed Methane (CBM). EPA has held several conference calls to update industry and is planning a site visit to Montana/Wyoming either the week of September 17th or the 24th. The CBM sector was identified for additional review in the final 2006 Effluent Guidelines Program Plan. Presentation slides used during the phone call were made available to all stakeholders prior to the call (see www.epa.gov/guide/plan.html, DCN 04275). The slides discuss the background, purpose, and schedule for the study. The public EPA notes of the call are attached. MPA will continue to update you as details are made available from EPA.

Automatic Temperature Correction Committee
Mr. Jack Kane, Deputy Administrator, Business Standards Division of the Montana Department of Labor sent a message on behalf of the National Conference of Weights and Measurers regarding a committee meeting to discuss the current criteria and possible changes. Please check the attached message and if you need more information please contact Dave at dave@montanapetroleum.org.

Enbridge Pipeline Open Season Time Line Extension
During the course of the Open Season, Enbridge has received a significant level of support for an expansion of the system. Enbridge has also received requests from potential committed shippers for modifications to the proposed expansion and the Transportation Services Agreement. Accordingly, Enbridge intends, within the next few weeks, to exercise its right to revise the Notice of Open Season. In order to assess and incorporate changes and give shippers an opportunity to fully evaluate them, Enbridge is hereby extending the Open Season. It will now close at Noon (CDT) on August 31, 2007.

The Notice of Open Season Extension which has been posted on their website at: www.enbridgeus.com/openseason and then click on "North Dakota Expansion".

Pease contact:

Chris Martin
Senior Manager
U.S. Crude Oil Development
Enbridge Energy Company Inc.
1100 Louisiana, Suite 3300
Houston TX 77002
Tel: (713) 821-2053
Cell: (713) 824-9517

Montana Department of Environmental Quality Non-Point Source Plan:
You may recall that the MT DEQ completed their non-point source management plan. They offered the plan for public comment last spring. MDEQ has completed their plan after reviewing submitted comments and submitted the plan to the EPA for review. The plan can be viewed at the following site: http://deq.mt.gov/wqinfo/nonpoint/2007NONPOINTPLAN/Final/NPSPlan.pdf

Meetings of Interest coming in the next 30 days:
IOGCC- Crude Oil Market. This is a meeting resulting from MPA requests to involve the IOGCC in the price differential issue that was of critical concern in the spring of 2006. The meeting is September 4-5th in Denver. Meeting info is found at: http://www.iogcc.state.ok.us/docs/meetingdocs/Rcky-Mt.pdf

Legislative Water Policy Committee meeting in Bozeman, August 16th and 17th. For more details see: http://leg.mt.gov/css/lepo/2007_2008/water_policy/default.asp

Environmental Quality Council meets in Helena, September 13th and 14th , check http://leg.mt.gov/css/lepo/2007_2008/water_policy/default.asp for details.

Energy and Telecommunications Interim Committee meets September 6th and 7th in Colstrip. See http://leg.mt.gov/css/committees/interim/2007_2008/energy_telecom/default.asp for details.

Revenue and Transportation Interim Committee meets in Helena on September 19th. See http://leg.mt.gov/css/committees/interim/2007_2008/rev_trans/default.asp for information.

Last and certainly Most importantly…the MPA Annual Meeting meets August 27th – 29th in Billings. See http://www.montanapetroleum.org/ for details.