OGCC Secretary Update

Mick Thomas

Division Administrator – Minerals, Public Trust, and Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, November 14.

Current Items:
Interstate Oil and Gas Compact Commission Annual Meeting
Sec. Update Moving to Monthly
News Article(s) of Interest
Current Prices

Interstate Oil and Gas Compact Commission Annual Meeting
Tuesday November 3rd was the end of my two-year appointment as the chair of the Council of Regulatory Officials for the IOGCC. The CRO consists of the official representatives from all IOGCC member states. We meet twice annually to discuss how states can provide the best regulatory framework for industry, while protecting natural resources and the economy.

Special Findings of the CRO from Member States:
Overall production has stabilized after the drop off caused by the Covid-19 response. Rig counts are down ~50% nationwide. Permitting is down on average 35%. Staffing has stabilized after initial layoffs in summer 2020. Most states are currently short staffed.
Positives: Many states are taking advantage of the increased contractor labor pool to P&A orphaned wells. This keeps folks working and addresses that long-term need. Many states are evaluating a transition to a carbon free future as new laws are on the horizon from their respective legislatures.

Sec. Update Moving to Monthly
We will continue to offer secretary updates to the Commission but will be moving the frequency to monthly rather than every two weeks. If time sensitive information needs to be shared, I’ll reach out to the Commission accordingly.

News Article(s) of Interest
CAIA founder and activist Shelley Brock loses in first legislative run. Conservatives increase majority.

LOUSIANA Prolonged trend of low prices combined with potential increase in regulations results in closure of Louisiana refinery.
COMMENTARY: Limited refinery capacity was a major contributor in the high gas prices we saw 10-12 years ago. The Covid response has flipped this.
The last time a refinery was built in the U.S. was 1977. Time and cost estimates to permit and build a new refinery are ~20 years at a cost of two billion USD.
Refiners have moved to a more immediate business model. This limits the likelihood of additional refining infrastructure.

UTAH natural gas/hydrogen power plant seeks permit expansion. Potential demand for NW gas.

Current Prices
(Colors indicate spot price change since last update. Green indicates increase. Red indicates decrease.)

Utah Sweet Crude $31.82 bbl. 11/12/20
WTI $40.12 bbl. 11/13/20
Natural Gas $3.03 mmbtu. 11/11/20
NGL $5.38 mmbtu. 11/11/20