Watching Government: Outlooks in four states

Jan. 17, 2011

Nick Snow
Washington Editor

State oil and gas associations headed into the 2011 legislative season cautiously optimistic as Republicans took control or increased majorities in several houses and senates. They also expect governors and lawmakers to grapple with budget questions as revenue growth remains elusive.

But when OGJ asked four state association executives how they planned to proceed, they sounded strikingly like their national counterparts despite facing sometimes different situations.

"The industry and the businesses which support it supply very good jobs for many people in California," said Catherine Reheis-Boyd, president of the Western States Petroleum Association in Sacramento.

She noted that Democrat Jerry Brown, who is back as governor after 28 years, expressed support for a green economy as long as it didn't imperil existing businesses.

"If he's serious, we'll have a lot to talk about," she said, adding, "We need to encourage [exploration and production] and refining abilities to produce cleaner fuels."

She also expects WSPA to begin serious outreach in the state's assembly, and hopes to get support from moderate Democrats there.

Republicans gained ground in the legislatures of Pennsylvania, Kansas, and Montana, but state association leaders there aren't resting easy.

Louis D'Amico, president of the Pennsylvania Independent Oil & Gas Association in Wexford, noted that Republican Tom Corbett clearly appears less likely to raise taxes as governor than his predecessor. Republicans also took control of the House and increased their majority in the Senate, he said.

Talk of a fee

"However, there's been a lot of media campaigning for a severance tax," D'Amico said, adding, "Although the governor-elect has said he's against it, there's been talk of some sort of fee."

Edward P. Cross, president of the Kansas Independent Oil & Gas Association in Topeka, said the group built good relations with new Gov. Sam Brownback when he was a US senator. "There probably will be some spending cuts when the budget is released. Our industry wants any tax question addressed fairly. We don't want to be singled out," Cross said.

David A. Galt, executive director of the Montana State Petroleum Association in Helena, sounded the most optimistic. "There's an overwhelming majority of new state representatives who have put support of natural resource-based industries at the top of their agendas," he explained.

While the state was one of the few to finish 2010 with a positive balance, Galt expects lawmakers to look closely at budgets and spending. "I think we just have to be thoughtful in our submissions," he said. "A lot of members are trying to find ways to make Montana as active in oil and gas as North Dakota, and we'll try to find ways to help them."

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