KIOGA Stays Engaged to Help Members During COVID-19 Crisis

2020 January/FebruaryMay/June

What’s Inside?

Chairman Lett er ...... 4 WOTUS Rule ...... 8 Investigations ...... 14 KS Congressional Members 16 Edward Cross Message ...... 18 Tumultous Times ...... 20 O&G Challenges ...... 24 The Voice of the 2020 Legislative Session ..... 26 Injection of Truth ...... 30 Kansas Independent Thank You ...... 34 Petroleum Industry KIOGA in the News ...... 36

@KIOGAKansas

Since the COVID-19 crisis began, Valuation Division KIOGA Stays KIOGA has been and continues to (PVD) to ask about Engaged to Help stay engaged providing updates and the possibility of resources important for the Kansas oil adjusting the crude Members During and gas industry. oil price bulletin used COVID-19 Crisis in the 2020 Oil & Gas Crude Oil Price Bulletin Kansas Department of Revenue Appraisal Guide. The Adjusts Crude Oil Price Bulletin PVD issued the 2020 Adjusted - O&G Classiﬁ ed as In late March, KIOGA President Oil & Gas Appraisal Essential Workers - Electric Edward Cross met with the Kansas Guide on February 1, 2020 with a crude Rates - And More Department of Revenue Property Continued on Page 12 KIOGA 2020 Annual ConvenƟon Honoring TradiƟon . Building the Future August 16-18, 2020 Wichita, Kansas

In this challenging year, ﬁlled with anƟcipaƟon over uncertain acƟon towards regulaƟons and legislaƟon and uncertainty about oil prices, KIOGA invites you to aƩend our 2020 Annual convenƟon as we proudly enter our 83rd year as we focus on Honoring TradiƟon and Building the Future. Our convenƟon falls in the middle of elecƟon season. The White House, majority control of the U.S. Senate, U.S. House, Kansas Senate, and Kansas House are up in the air. Join us as we come together as an industry to discuss the ongoing challenges we face in Topeka, Washington, and across Kansas and the naƟon. The KIOGA 2020 Annual ConvenƟon will feature enlightening perspecƟves and foster inspired conversaƟon. Set your expectaƟons high and join us as we move forward together to engage our energy future! Register today by visiƟng our website at www.kioga.org or call at 316-263-7297.

2 KIOGA thanks the following KIOGA companies for their support through advertising in our Advertisers newslett er.

Advertiser pg # .Buyers Guide ...... 24 CVR Reﬁ ning ...... 39 Desk and Derrick of Wichita ...... 29 Drill Baby Drill...... 7 Officers The Kansas Independent Oil & Gas Duke Drilling Company, Inc...... 31 Association (KIOGA) believes in Evenson Auctioneers...... 30 Foley Power Solutions ...... 6 David Bleakley - Chairman seeking common ground, through Insurance Planning...... 7 common sense solutions, to the KIOGA...... 25,35 Ed Nemnich - Northwest Vice Chair challenges facing the Kansas oil and Murﬁ n Drilling Co., Inc...... 25 Charles Wilson - Southwest Vice Chair gas industry. Our bipartisan Paragon Geophysical Serv. Inc...... 15. approach provides a uniquely SOER ...... 35 Alan Banta - South Central Vice Chair powerful voice for our members at The Independent Oil & Gas Dir...... 19 the state and national level. Werth Wealth Management ...... 11 Barry Hill - East Vice Chair Wildcat Resources, Inc...... 31 Scott Fraŝzer - Treasurer Our work is critical. Your support is vital. Jeff Bloomer - Secretary

KIOGA Wichita Office 229 E. William - Suite 211 Staff Wichita, Kansas 67202-4027 316-263-7297

Edward Cross - President KIOGA Topeka Office 800 SW Jackson Street - Suite 1400 Front Cover Kelly Rains - Operations Manager Topeka, Kansas 66612-1216 Garet Dinkel 785-232-7772 Have a photograph you would like to see on the cover? Send to [email protected]

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3 C19: pandemic, trag- the pandemic curve, it edy, oil glut, price war, would not be possible layoffs, furloughs, sal- without the frontline ary cuts, cancellations, doctors, nurses, and Paycheck Protection volunteers, but it would Message from Program (PPP), oil prices also not be possible going negative, state pro- without oil and gas. As the Chairman rationing of production Independent Producers volumes, shut-in wells, of oil and gas, we should all be proud of the role David Bleakley Zoom video conferenc- fossil fuels have played 2019-2021, Chairman KIOGA ing, fi nancial hardships, and more. in helping our nation How will we remember recover. Very few non-in- Fellow KIOGA Members, the recovery? Perhaps dustry people realize we will remember bring- how many products are “March Madness” THE ing back employees, oil made from petroleum. basketball event of the year prices improving from that we all look forward to, historic lows, world KIOGA’s Work hoping that our team will economies improving, Continues - KIOGA be selected, will never again oil demand working its continues to work have the same singular mean- way back to pre-pan- hard for its members ing. For the rest of our lives, demic levels globally, even during these dif- we will forever remember turning shut-in wells ficult times. Ed Cross March Madness 2020 as the back on, and beginning has provided excellent canceled tournament that to drill new wells. We communication with signaled the beginning of the all know that recovery our members through Coronavirus/Covid-19 out- will happen, but we can- well-crafted articles and break in the US and how the not project the timeline. papers advocating for world…our world, has been However, the reality is our industry and explain- affected and changed. that the world still needs ing the diffi culties to the As members of the oil and our oil and gas and the public. By locally and gas industry, how will we products made from nationally telling our remember these disastrous both, even if the gen- story of coping with and events once this pandemic eral public has yet to surviving the pandemic has passed? We will recall acknowledge that fact. and price war, Ed has these words and phrases from As we continue to fl atten made our plight known. 4 the earliest time with consid- trim our costs as all of our eration to our members and KIOGA members have done. vendors alike. That being Provided soon will be a com- said, planning will continue plete update. for the annual meeting in To paraphrase, “We have August, and we remain opti- been knocked down, but Several newspapers across mistic that it will take place. not knocked out!” Keep up the state and the country the good work. We will get have picked up these articles. Budget & Finances through this and recover He has updated us regularly – Executive committee mem- together as we have done in on the PPP and provided bers Scott Fraizer, Barry Hill, the past. Stay strong! us with links to numerous and Andrea Krauss will con- Zoom video conferences tinue to keep a watchful eye Sincerely, and webinars to guide us on the budget and our invest- through these programs ment account during these David P. Bleakley with accountants, attorneys, tumultuous times. We will KIOGA CHAIRMAN state legislators, and con- continue to look for ways to gress members. Ed has had requests for his articles and papers from congressional members from other states and even the White House. KIOGA committees have continued to operate and do their business. The strategic Stay Strong planning committee has had numerous conference calls during this period, and we have made progress on ideas for the future that will not only breathe new life into the organization but also save us money.

Annual Meeting – We are keeping ourselves abreast of Governor Kelly’s plans for reopening Kansas and the easing of restrictions for large group gatherings. We will make a group decision as to the annual meeting at

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6 KIOGA Mark your Calendar

Event Name Date Location 8th Annual Auggie Navarro Golf Tourn. July 23, 2020 Wichita, KS

Summer NAPE August 12-13, 2020 Houston, TX

KIOGA 83rd Annual Convention August 16-18, 2020 Wichita, KS

Kansas State Fair September 11-20, 2020 Hutchinson, KS

41st Annual KS Economic Outlook Conf. October 8, 2020 Wichita, KS

2020 Kansas Water Conference November 9-10, 2020 Wichita, KS

2020 IOGCC Annual Conference November 8-10, 2020 Houston, TX

7 KIOGA Supports Changes to New WOTUS Rule

Methane Rule Update - saying it “opens the door to new and worse industry pollution. The Earth Day lawsuit was fi led in the U.S. District Court for the Northern District of California. It comes from 17 pre- dominantly Democratic-led states: California, Connecticut, Illinois, Maine, Maryland, Massachusetts, Michigan, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington and Wisconsin. The knowledge gaps and supply valuable information used to develop industry In April, the EPA finalized District of Columbia and New York regulations. This project was funded its Waters of the United States City also joined the suit. by the U.S. Department of Energy’s (WOTUS) rule as the Trump admin- Finalizing the rule has sparked an (DOE) Office of Fossil Energy and istration works to define what onslaught of litigation on all sides. in-kind contributions. waterways, wetlands and streams On the right, property rights advo- The Kansas oil and gas indus- qualify for Clean Water Act pro- cates fi led an early lawsuit claiming try joined the Michigan oil and gas tections. The revised regulation the rule is still too broad. And sev- industry, West Virginia oil and gas signifi cantly narrows the reach from eral environmental coalitions have industry, Kentucky oil and gas indus- the Obama-era rule. also fi led litigation. try, Illinois oil and gas industry, and KIOGA has helped to advance Indiana oil and gas industry to par- WOTUS Federal regulatory efforts Methane Emissions Update ticipate in the U.S. Department of including submittal of formal com- Energy (DOE) study [Quantifi cation ments and litigation since the rule The EPA announced in August of Methane Emissions from Marginal was fi rst introduced by the Obama 2019 changes from the Obama-era (Small Producing) Oil and Gas Wells administration. While additional lit- methane regulations including the (DE-FE0031702)] to quantify and igation against the revised version change of the regulated emission compare methane emissions at mar- was expected we continue to sup- from methane to volatile organic ginal and non-marginal wells. We port the changes EPA has made. compounds (VOC). KIOGA sub- believe that unbiased, representative EPA said its rule will establish mitted comments to the EPA in and appropriate results are neces- regulatory certainty for landowners November 2019 supporting the EPA sary to respond to recent and future after decades of muddled decisions proposal. proposed amendments to EPA’s from the Supreme Court. The In 2019, researchers invited par- New Source Performance Standards agency has claimed the rule adheres ticipation from Kansas oil and gas (NSPS, 40 CFR Part 60, Subpart to the limited authority provided by producers in a confidential survey OOOOa) methane emissions rules. Congress, as well as Supreme Court assessing emissions from marginal A survey of methane emissions precedent. oil and natural gas wells. Specifi cally, from marginal wells of the type Some states have launched a data was sought on methane emis- found in Michigan, Kansas, Illinois, legal attack on the Trump admin- sions from America’s marginal West Virginia, Kentucky, and Indiana istration’s Clean Water Rule, wells in order to address critical

8 NMAQB a copy of the KIOGA com- stay afl oat not because oceans are ments submitted to the EPA and a rising but because pandemic and summary of the ongoing survey of economic issues are creating formi- methane emissions from marginal dable challenges. wells. Here are some facts that you probably did not hear in any “Earth Day” A Story You Likely Did Not story. Between 2005 and 2018 (the Hear on “Earth Day” most recent year available), global was taken in late 2019. More com- CO2 emissions from energy grew prehensive data on marginal oil/ “Earth Day” was April 22nd. 20%. Declines in CO2 emissions gas production sites is needed to Media and environmental activists between 2005 and 2018 were led improve the understanding of emis- attempted to generate hype around by the United States, where we fi nd sions from marginal wells and could climate change. Climate change to CO2 emissions fell 12%. Annual help shape rules promulgated by the them has become the proxy for all CO2 emissions in the U.S. declined government in the future. things scary from severe weather 8 times during this period. The The methane emissions survey is events to migrations and agriculture next largest decline was the United progressing. A desktop review of failure. Climate change is an appeal- Kingdom. The largest increase in 75,000 wells from 40,000 sites across ing boutique issue for some liberal CO2 emissions between 2005 and the U.S. has been completed. Field billionaires and some movie stars 2018 came from India (up 106%) investigations at hundreds of oil and because “saving the planet” appeals and China (up 55%). Together China gas well and facility sites in West to their vanity. But, if you are not and India accounted for 80% of the Virginia, Kentucky, Indiana, and a liberal billionaire, you’re trying to increase in global CO2 emissions. Kansas to measure methane emissions from wells and tank batteries have been completed. Measurements were taken in Kansas in December 2019. Initial preliminary results showed very few leaks and indicated no quantifi able or measurable releases of VOCs in any of the field site investigations (marginal wells or tank batteries) in any of the states visited. Additional DOE funding has been secured and plans are made to conduct a second field campaign, originally scheduled to begin in April 2020 in the Permian and Anadarko basins (including western Kansas). However, due to the COVID-19 pandemic, the second field campaign has been postponed for at least two months. The fi nal report is expected to be ready by the end of 2020. On April 8th, KIOGA received a request from the New Mexico Air Quality Bureau (NMAQB) for information on methane emissions from marginal wells. KIOGA provided the

9 KIOGA Member News

KIOGA EDUCATIONAL FOUNDATION

Our Misson Types of Support How You Can Help Testimonials

Consider making a yearly donation to KEF We are a 501 (c) (3) organization To date, the KIOGA Educational Foundation Marshall Elementary | Eureka, KS has awarded several grants, totaling over so that we can continue to help teachers 3D Printer that conducts educational programs and students with their STEM projects. & provides educational materials $4,700. The grants have been used to provide the following types of support: Contact your school, talk to the teachers relating to energy sources and and let them know about the STEM grant processes. We have implemented program. a grant program to teachers and schools across Kansas for STEM Donations can be sent directly to: KIOGA Educational Foundation (Science, Technology, Engineering 229 E. William, Suite 211 and Math) related projects. KEF will Wichita, KS 67202 “I just wanted to get back to you with some work in conjunction with Kansas [email protected] pictures and another heartfelt thank you for the Strong and KIOGA to identify grant grant money. We were able to purchase the 3D Gordon Parks Academy | Wichita, KS printer and we are working on learning how to use prospects. The grants will provide Leadership Camp it!! We have had some success and continue to funding for items such as books, learn more everyday.” FXUULFXOXPHTXLSPHQWÀHOGWULSVDQG Heller Elementary | Neodesha, KS supplies to help teachers implement Tulsa Geoscience Center Field Trip STEM Education.

“KAY camp has also helped my kids become more independent, develop better social skills and have a positive attitude. The KAY outlook inspires them to dream big and take action. It teaches them responsibility inside and outside of the classroom. ... My children and I are extremely thankful for being JLYHQWKHRSSRUWXQLW\WREHQHÀWIURPWKH.$

Please consider making KIOGA Educational Foundation as your donation in lieu of ﬂ owers. KEF is dedicated to the education of teachers and students, on the beneﬁ ts of the oil and gas industry KEF | 229 E William Suite 211 | Wichita, KS 670202 In Memory Of:

Lee Phillips Lee Phillips Oil Wichita, KS Bruce A. Reed TerraTech Energy Wichita, KS Dave Wertz Retired KCC Compliance Oﬃ cer Wichita, KS

10 We welcome the following KIOGA members to the KIOGA family. Thank You for your New Members continued support!

Name Company City & State Paul O’Neill Upright Energy Wichita, KS Robert L. Williams Jr. Pathway Petroleum, LLC Wichita, KS

Save the Date

KIOGA 83rd Annual Meeting & Expo August 16-18, 2020 Wichita, KS Find your sponsorship/ trade show information/registration at www.kioga.org

11 From Page 1 KIOGA Stays Engaged Continued

Price Bulletin and more

oil price bulletin to be used for valuing information about of Kansas. Governor Kelly’s offi ce has oil production for ad valorem taxes oilfield operations as always been appreciative of the updates of $46. Cross met with PVD Director essential functions. saying they value the information. On David Harper and other PVD offi cials to KIOGA President April 29th, Governor Kelly’s offi ce said: discuss adjusting the price bulletin used Edward Cross commu- “Thank you for sharing your insights. It in the 2020 Oil & Gas Appraisal Guide. nicated with Governor is defi nitely helpful to see this information to We talked about the current oil market Kelly’s offi ce on March understand what is happening and what the situation and the current pandemic and 23rd, prior to her issu- road ahead looks like.” how we could not have anticipated the ance of the Kansas magnitude of these events on crude Essential Functions Framework (KEFF) Electric Rates oil prices last January. Cross provided order. Governor Kelly’s office sought them a briefi ng paper on the current oil this information as they were working to KIOGA market situation saying he did not know develop their KEFF. Cross prepared and communi- where oil prices will go in the future, sent the Governor a letter that included cated with the but that oil price that day in Kansas was a Department of Homeland Security Kansas Electric $10.50/bbl and many operators will be Guidance for identifying essential work- Cooperatives, struggling to survive. ers. That guidance identifi ed petroleum Inc. (KEC) in The PVD analyzed the information drilling, extraction, production, pro- mid-March and provided and researched other sources. cessing, refining, terminal operations, urged them to consider the win/win pro- On march 20th, KIOGA received notice transporting, retail for use as end- posals that KIOGA Electric Committee from PVD Director David Harper that use fuels or feedstocks for chemical Chair Adam Beren has proposed in the said he would use his authority to amend manufacturing, onshore and offshore past. KIOGA said that under the cur- the crude oil price schedule for 2020 operations for maintenance and emer- rent market conditions caused by the and issued an amended schedule with a gency response workers as “Essential COVID-19 pandemic and the actions of crude oil price bulletin of $23. Critical Infrastructure Workers”. Saudi Arabia and Russia, many Kansas Governor Kelly’s staffers were appre- oil wells could be shut down. Shutting Essential Workers ciative of the information and used down wells would mean lots of electric the information to help form the KEFF load loss for the cooperatives and would Governor Kelly issued a statewide framework. On March 31st, KIOGA result in higher rates for all electric cus- “Stay at Home” order on Saturday received communication from Governor tomers. Electric costs are the highest (March 28th). Governor Kelly’s “Safer At Kelly’s Chief Counsel verifying that operating cost for most wells and relief Home” executive order identifi ed essen- indeed the KEFF does allow all the activ- is needed to help keep active through tial business operations so employers ities outlined in my communication. this downturn. The KEC met with all and employees can continue to operate To help our members, KIOGA pre- the state electric cooperatives and sug- and be productive. pared and distributed a form letter to gested KIOGA members make requests Prior to the our membership in late March that for electric rate relief directly with their Governor’s companies could use to let local author- co-op providing service. KEC said the announcement of ities know that oil and gas work was an co-ops are simultaneously working to a statewide “Safer exempt essential function. meet requests from many customers At Home” order, Every week or so, KIOGA President feeling fi nancial distress across our state the governor’s Edward Cross provides Kansas Governor during these unprecedented times. office asked KIOGA Kelly’s offi ce updates on the oil and gas To help our members, KIOGA pre- for guidance and industry, both nationally and for the state pared and distributed a form letter to

12 our membership in mid-March that Kansas. Key topics covered during the companies could use to communicate KIOGA Electric Committee Chair May 4th webinar included: with each electric cooperative providing Adam Beren is currently engaged service. Several KIOGA members sent with AECOM, the electric rate study • Maximizing Payroll Protection letters to their respective electric coop- fi rm contracted by the Kansas legisla- Program (PPP) loan eratives requesting electric rate relief in tive Coordinating Council. AECOM’s these critical times. portion of the electric rate study will forgiveness Several of the cooperatives address how Kansas’ electric rates affect • Tracking expenses and audit responded, but the response was the the state’s economy. AECOM’s portion requirements related to the same. The cooperatives said that while of the study is due by July 1, 2020 and PPP they are sympathetic to the current situ- will be debated in hearing during the • Properly documenting rent ation oil producers fi nd themselves, they 2021 Kansas legislative Session. expenses, utilities, mort- could not take action at this time. They gage interest, and insurance said they were still evaluating the eco- KIOGA and ABBB Host Business premiums nomic impact with regards to COVID-19 Survival Webinar • Human resources perspectives and are unable to take any rate action in oil patch that may adversely affect any of its • Navigating business interrup- membership classes. They presented tion insurance a laundry list of reasons for perpetu- • ally freezing or deferring any action that might mitigate near or long term The webinar was a success with damage to everyone. Notwithstanding KIOGA has been working diligently over 150 folks registered. the widely divergent contributions that over the last few months to deliver different ratepayers make to the fi nan- important information in a timely man- cial stability of any particular electric ner to our members. We have kept cooperative, they are seemingly willing membership abreast of relevant webi- to wait forever for that magical missing nars and conference calls and other piece of infor- updates and resources to help navigate Stay engaged mation that will through these challenging times. suddenly provide You spoke, we listened - Many with all the breaking news, the clear, risk-free, KIOGA members have exercised a webinars, and more “correct” and per- Small Business Administration (SBA) fect solution for Paycheck Protection Program (PPP) information coming from all. loan. KIOGA heard from several mem- KIOGA Kansas electric bers who expressed questions about the rates are the high- fi nal stage of the PPP loans. In an effort est in the region to get out in front of the fi nal stage (audit Get on Board the and Kansas consumers spend over $1 period details), KIOGA worked with billion per year more on electricity than the accounting fi rm of Adams, Brown, KIOGA Express Beran, & Ball (ABBB), a KIOGA member just 10 years ago. KIOGA distributed contact kioga@kioga an editorial that included this issue to based in Great Bend, to organize a webi- Kansas media in April. The editorial nar to help KIOGA members navigate was picked-up by 17 newspapers across through the fi nal stage of PPP loans.

13 KIOGA Joins Calls for Investigations of Negative Crude Oil Prices and Crude Oil Dumping Actions

Kansas producers have been nega- KIOGA Joins Call for Anti- We greatly tively impacted by Chicago Mercantile Dumping Investigation appreciate Exchange actions to allow negative Senator Roberts’ crude oil prices and by actions taken by KIOGA condemned the reckless leadership. Saudi Arabia and Russia to unreason- actions by Saudi Arabia and Russia in ably increase their supply of crude oil at March to destabilize global energy mar- prices below market value. kets in a play for global market share. On March 11th, KIOGA joined in a call KIOGA Joins Call for Investigation for an anti-dumping action petition to of Negative Crude Oil Prices be filed with the U.S. Department of Commerce. KIOGA sent a letter to U.S. Congressman Estes and Many Kansas producers, and pro- Commerce Secretary Wilbur Ross on Congressman Watkins Urge Saudi ducers across the March 23rd saying: Crown Prince to Restore Global nation, were neg- “Saudi Arabia and Russia are Oil Market Stability - On April 8th, atively impacted taking advantage of the coronavirus Kansas Congressman Ron Estes and by trading irreg- pandemic that is sweeping the world Kansas Congressman Steve Watkins ularities on April to focus on the oil industry and to joined 46 other U.S. House members in 20, 2020. Many devastate it. These actions warrant sending a letter to the Crown Prince of producers are paid the imposition of anti-dumping and/ Saudi Arabia, Mohammad bin Salman for oil sold based or countervailing duties on crude urging him to take immediate action to on a monthly oil imported into the U.S. from these bring stability to global oil markets. We average and a neg- countries. These actions should be greatly appreciate Congressman Estes ative price greatly affects the monthly investigated to protect the U.S. domes- and Congressman Watkins leadership. average. On May 1st, KIOGA joined tic crude oil industry, U.S. energy several oil and gas groups in request- security, and the U.S. economy.” ing the Commodity Futures Trading Commission (CFTC) begin an investi- Senator Pat Roberts (R-KS) sent gation without delay of the West Texas a letter to U.S. Commerce Secretary Intermediate (WTI) crude oil futures Wilbur Ross on April 3rd urging the U.S. traded on the Chicago Mercantile Department of Commerce to investigate Exchange (CME) on April 20th. KIOGA excessive dumping of crude oil by the asked the CFTC to examine the CME’s Kingdom of Saudi Arabia and the Russia sudden change in computer models Federation. Roberts said: during a time of increased volatility, the “This deliberate decision to $40 drop in price in the last 22 minutes increase supply while off ering steeper including a $25 drop in a 3-minute span discounts during a time of decreased just before trading closed, and more. demand runs counter to market forces We urge the market to change to a daily and demands intense scrutiny. It is weighted average price to reﬂ ect trading fundamentally important that the value experienced throughout the trade Department of Commerce pursue an month. investigation into the deliberate actions of these nations to weaken America’s energy independence.”

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15 Kansas Congressional Members Engage to Help Kansas Oil & Gas Industry

KIOGA Communicates The Paycheck Protection Program (PPP) has been a topic of great interest. with White House and Key KIOGA has ﬁ elded many questions and Policymakers comments from our members. Kansas Congressman Ron Estes and Kansas Members of the Kansas delegation House Majority Leader Dan Hawkins have been taking time from their busy invited KIOGA members to join both schedules to listen to Kansas oil and gas of them along with U.S. House Small industry concerns and answer questions. Business Committee Ranking Member In addition, KIOGA has been very active Kansas Congressman Marshall Steve Chabot (R-OH) on a conference voicing the concerns of the Kansas oil Joins KIOGA Executive Committee call on April 16th to discuss the PPP and gas industry to many federal poli- in Conference Call program. Several KIOGA members par- cymakers and Trump Administration ticipated in the call. ofﬁ cials. Kansas Congressman Roger Marshall, M.D. joined the KIOGA executive com- White House Invites KIOGA to Congressional Members Send mittee on a conference call on March Weigh-in on Current State of the Letter to President Trump in 23rd to learn about Congress’ response Energy Sector Support of Oil and Gas Sector to the COVID-19 pandemic. Kansas Congressman Roger There is a lot happening at all lev- Several KIOGA members were Marshall, M.D. and Kansas els of government. We appreciated invited to participate in a conference Congressman Ron Estes joined 40 Congressman Marshall taking time from call with Secretary of the Interior David additional congressional members in his busy schedule to share his insights Bernhardt, Secretary of Energy Dan sending a letter to President Trump on and answer questions from the KIOGA Brouillette, and Director of the National April 3rd in support of the oil and gas executive committee. Economic Council, Larry Kudlow on sector. The letter addresses many of the “It is vital to hear from business April 3rd to discuss the current state important points we (KIOGA) and many owners during this difficult economic of the energy sector. KIOGA President of you have expressed to Congressman time,” said Congressman Marshall. “On Edward Cross was also invited by the Marshall and Congressman Estes. The today’s call with KIOGA, we discussed Special Assistant to President Trump letter suggests several policy strategies the most pressing needs for Kansas oil to provide a written State of the Oil & including: and gas operators. It is clear the effects Gas Industry summary for Bernhardt/ • Provide Relief to Producers of coronavirus are impacting every cor- Brouilette/Kudlow in advance of the • Address Russia and Saudi ner of the economy. I appreciate the conference call. KIOGA also shared Arabia’s Unfair Practices chance to speak with leaders at KIOGA this document with several federal pol- • Continue Utilizing the Strategic and the Kansas oil and gas industry to icymakers including the entire Kansas Petroleum Reserve (SPR) provide an update on the federal efforts Congressional delegation as well as • Maintain Liquidity and Ensure being taken in Washington to help busi- Senators Enzi, Cassidy, Daines, Young, Access to Capital nesses in Kansas.” Barrasso, Crapo, and Representative • Identify and Expedite Regulatory Brady. In addition, the document was Relief Efforts – Rolls-back EPA KIOGA Members Join Kansas shred with Kansas Governor Kelly and Obama-era methane guidelines Congressman Estes and Kansas Governor Kelly’s DC lobbyist. Governor We greatly appreciate Congressman House Majority Leader Hawkins Kelly’s DC lobbyist wanted to validate Marshall and Congressman Estes in Paycheck Protection Program KIOGA’s efforts for Kansas saying sev- leadership. Conference Call eral policymakers in DC are tracking 16 Cross developed a report titled Crude Some Democrats Want to Cut Oil Market Dynamics that provided Off Support for Oil & Gas Workers information on the potential impacts of during COVID-19 Pandemic COVID-19 and the concurrent supply Despite state and national level desig- shock created by OPEC+ and Russia. nation of oil and natural gas operations The report included a summary of as “essential” or “critical,” 40 members potential implications from oversupplied of Congress wrote that fossil fuel com- markets and the anticipated demand panies should not be able to receive what we have been saying because they destruction. KIOGA shared the report any assistance under the coronavirus repeat my information to other policy- with 17 key federal policymakers, includ- relief package passed by Congress. In makers and lobbyists often. ing the entire Kansas Congressional a letter to Treasury Secretary Steven KIOGA President Edward delegation. Several federal policy- Cross also was asked to provide sug- makers expressed appreciation for the gested actions going forward. Below information saying: “Your report is very are three brief titles of proposals that informative and easy to comprehend. were presented on April 3rd to Trump You light-ping us every couple weeks.” Administration officials Bernhardt/ Also several oil and gas groups across Brouilette/Kudlow. the nation have used KIOGA reports in Proposed Action 1: Invoke the their most recent newsletters. Defense Production Act (DPA) to Increase The Special Assistant to President Domestic Stockpiles of Crude Oil, Fuel, Trump responded back to KIOGA Mnuchin and Federal Reserve Board Raw Materials and Other Essential expressing gratitude for the information Chairman Jerome Powell, lawmakers led Supplies Solely from American Producers and invited KIOGA President Edward by Senator Ed Markey say the $2 trillion and Manufacturers for the U.S. Military, Cross to listen in on a conference call deal was ‘intended to support struggling National Guard and Critical Infrastructure in late April discussing Russian aims in families, workers, businesses, states, and Industries. the Middle East, including its long-term municipalities. … Giving that money to the Proposed Action 2: Invoke the DPA plans for military bases in the region fossil fuel industry will do nothing to stop to Establish a Standby Well Commitment and their plans to leverage Middle East the spread of the deadly virus or provide for Participating American Producers to energy supplies. relief to those in need.’” Preserve and Maintain Active and Idle U.S. Oil and Gas Production and Injection Wells Kansas Senators Tapped for On May 5th, fringe legislators con- for 120 Days in Exchange for Expedited President Trump’s Task Force tinued their aggressive campaigns to Financial Assistance on a Per Well Basis Kansas Senator Pat Roberts and take advantage of a worldwide pan- under Section 4003 of the CARES Act Jerry Moran are among the lawmakers demic to push a radical anti-fossil fuel Proposed Action 3: Establish Virtual tapped for President Trump’s COVID- agenda. Democratic Congressional Strategic Petroleum Reserves (SPR) 19 congressional task force. The Trump members Nanette Diaz (D-CA), Pramila administration invited a bipartisan crew Jayapal (D-WA), Ilhan Omar (D-MN), White House Asks for Information of lawmakers to participate in a task Jared Huffman (D-CA) and Senator Jeff on impact of current oil market force to address the central question Merkley (D-OR) unveiled a proposals situation on small producers - On of when the country should return to to would prohibit fossil fuel companies April 7th, KIOGA received commu- normal amid the ongoing coronavirus from participating in coronavirus relief nication from the Special Assistant to pandemic. packages. President Trump asking for informa- It seems these Democrats don’t tion on the impact believe that “struggling families, work- of the current oil ers, and businesses,” include oil and market situation natural gas workers and operators, yet on the small busi- you and I both know that’s the case. nesses that make up the independent oil and gas industry. KIOGA President Edward

17 We’ve Been Through Tough Times Before

A message from your KIOGA President, The history of the Kansas oil and It was in the midst of Edward Cross gas industry is an American story of these oil market challenges industrious entrepreneurs who exhib- that a small but determined ited the pioneering spirit this country is group of pioneering pro- known for, of innovation, speculation, ducers formed the Kansas and perseverance. All contributed to Independent Oil & Gas the founding and development of the Association (KIOGA) in Kansas oil and gas industry, which has, 1937. E.B. Shawver became and continues to transform the world. the first KIOGA President Looking at the history of the Kansas in 1937 and was a major As we advance through these chal- oil and gas industry gives us strength force in the Kansas State lenging times, it has been impressive to and courage going forward. We have Legislature, fi ghting against me over the last few months to see how many reasons to be optimistic about taxes and regulations that KIOGA members respond to adversity our future. threatened the success of the through leadership and action. Yours is A good example from our past came emerging Kansas oil and gas a story of daring talent, of dedication to during the Great Depression. The industry. an idea even when the odds are great, Great Depression ushered in a new Over the years, indepen- and of the unshakeable belief that in era of thinking about how industries dents got smarter too. They America all things are possible. in general and oil and gas in particular learned that organization, I am lucky to be able to work on should grow and how waste could be numbers, and votes gave things I like to work on. But I am even prevented. People began to worry that them leverage in the govern- more lucky to get to work with the men too much production in a time of too lit- ment corridors of our state and women that make up this great tle demand might not only be a formula and nation. industry. for disastrous drops in prices but also an KIOGA has since grown Looking back at the challenges incentive for waste. Sounds familiar. into the lead state and Kansas independent oil and gas produc- In 1931, Alfred Landon, who grew up national advocate for Kansas ers have faced over the past 83 years in the oil business, argued that if strip- independent oil and natu- and the multitude of political barriers per well producers were forced out of ral gas producers. Today, we have overcome, ours is the ultimate business, their production would be for- KIOGA is driven and led story of blood, sweat, tears, willpower, ever lost and there might come a time by a robust membership of unity, and passion. As independents, we when it was sorely needed. He attacked nearly 4,000 members from know the oil and natural gas business is Standard Oil of Indiana, which had sev- 1,400 producers and service fraught with tremendous risk and car- eral gas stations across the state. He companies. Successfully ries extreme geological, commercial, organized a boycott of those stations advocating on behalf of and financial exposure. These very that did enough economic damage to Kansas’ independent oil and challenges have defi ned the generations get the company’s attention. Standard natural gas producers for 83 of Kansas independent oil and gas pro- agreed to buy the production from strip- years, KIOGA continues to ducers who have played and continue to per wells, the stripper wells stayed in stand as the primary voice play a vital role in meeting our nation’s production and Alfred Landon became for Kansas independent oil energy needs. governor of Kansas and a candidate for and natural gas producers. U.S. President in 1936. Today’s Kansas 18 independent producer no longer peers I was recently asked by media about our industry is on performance and out from under oil-soaked hard hats. the Kansas oil and gas industry story, continuous improvement. Our indus- They may have degrees in geology or what it means, and what is important try never stops thinking about the next petroleum engineering hanging on the to know about the Kansas oil and gas improvement, technology, or innovation wall beside diplomas for business admin- industry. I told them that the oil and gas that will improve our nation’s energy istration or finance. They can speak industry is an exciting industry where security. But most importantly, I want fl uently in the language of bankers and innovation is a constant. I want people people to know that the Kansas oil and analysts. If they don’t have the knowl- to know how hard the Kansas oil and gas industry isn’t just working hard on edge to handle legal and regulatory tasks gas industry works and how focused what we learned. We are working hard a thousand times more complex than to advance what we can do in the future. those faced in the not so distant past, he or she may have staff or access to professionals that specialize in traversing the legal and fi nancial potholes on the road to success. Kansas independent oil and gas producers have survived a past marked by frequent cycles of high and low prices and increasing public misunderstanding of their work and opposition to their activities. For the future, we can expect more of the same. But we will fi nd the right ways to survive in the future as well. Today, crude oil and natural gas market dynamics, federal and state policy issues, government regulation, and constant litigation by environmentalist opponents are fundamental challenges to independent producers. Yet, independents simply will not give up. They never have, despite the challenges, because risk-taking is a way of life. Our industry has lived through several ugly downturns before, and we know that patience, persistence, insight, and innovation pay off. I look forward to working with all of you and our part- ners across the nation to come together, take stock, and prepare for brighter days ahead.

19 Tumultous Times information in a timely manner to our of contributing to the broader supply Rapid Transition from members. solution. Unfortunately, Saudi Arabia Economic Growth to The fallout from COVID-19 and con- and Russia, the next two largest crude Decline oil producing countries in the world behind the U.S. decided to increase their Since Mid-March, our state and coun- production in March and April before try, business owners and employees, agreeing to production cuts beginning have had their world turned upside- on May 1st. down because of a virus. Saudi Arabia/Russia action was a The oil and gas industry has not play for global market share with each only been negatively impacted by the attempting to gain at the expense of the COVID-19 virus, but have also been hit other, and at the expense of the United by a concurrent global crude oil supply current crude oil supply shock continues States. And this is wrong. It is counter- shock. Demand destruction created by and activity levels in the oil patch have intuitive to market forces, and it appears COVID-19 AND the concurrent supply been in a free fall. This is very likely the to be a blatant attempt to capitalize on shock has had a profound impact on most rapid transition from economic a potential global health crisis and the KIOGA members. growth to decline ever observed. Just proper response to stop the spread of From day one, KIOGA has been earlier this year, global crude oil demand the virus. communicat- in 2020 was expected to grow by well KIOGA condemned the reckless ing with Kansas over 1 million barrels per day. U.S. crude actions by both countries to destabi- Governor Kelly oil production had continued to increase lize global energy markets in such an and her admin- to meet this rising demand, exceeding opportunistic fashion, and condemned istration as 13 million barrels per day in February their decision to attempt to punish the well as legisla- 2020. Now, global crude oil demand will only major producing country in the tive leadership, be sharply negative in 2020, falling by world that is operating in a true market state regulatory 20 million barrels per day or more, and economy. COVID-19 and energy mar- agency offi cials, federal policymakers, doing so in short order. ket dynamics continue to evolve rapidly, White House offi cials, federal regulatory The market implications are unam- and KIOGA has been and continues to agency offi cials, and others providing oil biguous – crude oil production will fall be in regular contact with state and and gas industry updates, concerns, and to adjust to crashing demand. This is federal lawmakers and regulators since insights. Whether it was how the state happening in the U.S. as drilling activity early March. defi ned “essential businesses”, negoti- slows dramatically. Operators across A substantial production cut was ating with the Kansas Department of the nation have responded quickly by agreed by the OPEC+ countries includ- Revenue to see the ad valorem tax crude laying down rigs, shutting in producing Russia on April 9th. This was an oil price bulletin adjusted downward tion, and cutting capex by as much as international dispute between two of 50%, or calling for a federal investigation 60%. Total U.S. shut-ins now total more the three largest crude oil producers of crude oil dumping by Saudi Arabia, than 1 million barrels per day and are in the world and the communicating on acute policy issues heading towards 1.5 mmb/d in late U.S. (the largest pro- like the Paycheck Protection Program May to early June. In Kansas, we could ducer) was caught in loans, filling the Strategic Petroleum see daily oil production drop to 45,000 the crossfire. Only the Reserve with domestically produced barrels per day or less by June (down Trump Administration crude oil, crude oil prices, methane from an average of about 90,000 barrels and Congress were in a emission issues, and more, KIOGA per day in 2019). There is no ques- position to exert mean- worked diligently to deliver important tion the U.S. is doing its part in terms ingful influence on

20 governmental offi cials, media, and other almost two-thirds of global oil demand oil and gas groups in April 2020. – ~66 million bpd – is under threat of signifi cant destruction from COVID-19. How we got here What can we learn from China’s In March 2020, the oil markets – led lockdown? by Saudi and OPEC - were blindsided by Russia’s refusal to cut oil production These lockdowns are uncharted Saudi Arabia and Russia. KIOGA urged with OPEC in a year when oil demand waters with little guidance on the extent the Trump Administration to work to growth was expected to decline inde- of oil demand destruction. China is advance policies which lead to stable oil pendent of the coronavirus. Russia the only example we have of a region prices at a level which supports healthy made some noise about OPEC cheating that has gone through this crisis before. and robust economic activity. We called on its commitments but abandoned its Transportation data released by the on President Trump to use the tools at three-year alliance with OPEC primar- Chinese Ministry of Transport suggests his disposal to defend American industry ily to harm U.S. oil production and gain that lockdowns cut ~55% of road trans- and jobs by correcting this imbalance. global market share at the expense of portation and ~33% of truck traffi c in We cannot allow our freedom and jobs the U.S. Larger political reasons such February 2020. to be taken from us. as U.S. sanctions on Rosneft and Nord We are grateful to Senator Pat Stream 2 also motivated Russia. How much oil demand will coro- Roberts (R-KS) for listening to our con- Unwilling to lose market share and navirus destroy? cerns about crude oil supply dynamics also to force Russia to return to negotia- and prices and directly requesting the tions, Saudi Arabia announced plans to If we assume that these reductions in U.S. Department of Commerce to inves- raise production from 9.7 million barrels road and freight traffi c hold across the tigate excessive dumping of crude oil by per day (bpd) to 12.3 million bpd starting ~30 countries with lockdowns. You can Saudi Arabia and Russia. We are also April 2020. It also doubled down on its also believe that 60% of oil use in trans- grateful to the Trump Administration for bet by offering discounts of $4 to $8 per portation is via gasoline, and the rest meeting with Saudi Arabia and Russia barrel on its production. In solidarity, diesel and jet fuel. Given these assump- urging them to rethink their hasty deci- the United Arab Emirates will increase tions, we have an estimated collective sion to raise crude oil production. supply by 0.8 million bpd. loss in oil demand of ~23%, which Those in the oil and gas industry are A third of the world’s population when applied to the ~66 million bpd of dealing with a two-punch blow to the is today living in countries that have demand in the locked down countries economy. Businesses are closing and enforced moderate to severe lockdowns translates to ~15 million bpd of demand Americans are losing their jobs. It is crit- on virtually all human activity to miti- destruction in 2Q 2020. ical that we unite to fi ght this pandemic gate the spread of COVID-19. In all, However, there are signifi cant uncer- without risking our national security. It 27 countries have imposed lockdowns tainties, e.g., will COVID-19 impact was long overdue for Russia and Saudi with nearly all of them opting for severe all countries the same way as it did in Arabia to do their part. This unprec- measures. Only three countries – Israel, China? Assumptions around the share edented health crisis has shaken the Ireland, and the Czech Republic – have of fuels in oil demand may also vary. economy and, most chosen to impose moderate lockdowns. Finally, several other factors could also importantly, led to In addition, there are a handful of coun- provide significant influence on oil the grave loss of life. tries where lockdowns have not been demand including demand elasticity at America will survive mandated but citizens in caution have depressed prices, potential for a quicker this pandemic. But voluntarily limited activity. rebound or an extended lockdown, and to fuel our recovery, impact of government stimuli. it is paramount that How much oil demand is Oil and gas operators will cut produc- American energy leads the way. impacted? tion as oil prices reach new lows - WTI The following commentary are These lockdowns are collectively is barely at $20 in early April - but the excerpts from a report titled Crude Oil impacting oil demand in an unprece- extent is uncertain. But we do know Market Dynamics that KIOGA President dented fashion. The 27 countries under that most of those supply cuts will Edward Cross developed and provided moderate to severe lockdown con- likely happen in the U.S. Many large the White House, Federal policymak- sume ~61 million barrels of oil daily. U.S. oil producers have started cutting ers, Governor Kelly, State legislators, Including other countries such as Brazil capital spending with most reductions where gangs are enforcing lockdowns, continued on Page 22 21 From Page 21 Tumultous Times Continued

Rapid Transition

averaging 25% to 35%. 10. As refi nery operators start cutting the case of Saudi Arabia and Russia who U.S. producers are cutting drilling runs and utilization rates, they will cut from 11.0 million b/d. budgets but continue completing well are likely to advance turnaround This agreement is a significant vic- inventories. This could limit the supply and other maintenance activities tory for Saudi Arabia. The Saudis will impact. The last oil price crash was fol- although this will vary based on cut production in May by close to 4.0 lowed by supply cuts that exceeded 1 asset type, location, and historical million b/d from April’s levels. This is a million bpd over 15 months beginning in maintenance patterns. dramatic reduction. Russia, who refused late 2014. The U.S. oil industry will need 11. Petrochemical producers will to cut production in early March, has to deliver much deeper cuts this time – start evaluating their feedstock already lost production and will cut by probably around 2 million bpd through mix as refined product prices roughly 2.0 million b/d between end 2020 – in order to keep oil prices from decline dramatically impact- March and end June. Meanwhile Iraq falling and staying at marginal cash ing relative competitiveness of has pledged to cut almost 1.1 million costs. naphtha and ethane for produc- b/d. This is another notable victory ing olefi ns. for Saudi Arabia because Iraq has done What Implications Can Be very little in recent years in support of Drawn From Anticipated Demand What happens now? production restraint. Most of the other Destruction? contributions to this epic agreement A substantial production cut was were close to our expectations. Except Demand destruction of this order is agreed by the OPEC+ countries on April unprecedented and would trigger signif- Mexico, where the cut will be only 9th while other countries have signaled 100,000 b/d after being asked to cut by icant implications. that their production is falling. The drop 1. Oil and gas producers will inten- 400,000 b/d. in oil demand, however, is so signifi cant A key wrinkle in the agreement is sify capital cuts to cut growth. that this cut in supply will not begin to Marginal assets such as stripper that the production cut is only for two tighten the market until July or August. months - May and June. After that, they wells will be distressed. In the meantime, crude oil prices will 2. The industry will be caught up in will scale back their restraint to roughly be shaped by global stock build, the 7.7 million b/d (from the October 2018 a stampede for oil storage, which destruction in demand, OPEC+ com- is underway with base) for the rest of the year. There is pliance with new production targets, a subsequent agreement for 2021 and 3. limited access to it especially for and the point at which global supply smaller producers. early 2022. will actually be below global demand. U.S. oil production is projected to 4. Refi ners will likely intensify cuts These are all fluid developments over to crude runs and start ramping decline by 1.7 million b/d. Meanwhile the next several months. Even so prices Canadian production is falling and is down utilization should recover over the course of the 5. further as fuel demand projected to be 1.4 million b/d lower summer, fall and into the winter. Filling than February levels. Brazil has now evaporates. the Strategic Petroleum Reserve (SPR) 6. Lack of fuel demand will trigger stretched their expected reduction to in the next phase of the stimulus is likely 300,000 b/d. Others will cut production force majeures by oil refiners. the next market-shaping action of the Some refi ners are in response to lack of demand and low Trump Administration. oil prices. 7. invoking force majeures on crude Countries Agree to Massive oil purchase contracts for April. Supply Cut - The 20 Countries of What does this mean for the 8. Signifi cant changes in the product OPEC+ agreed to an historic production market? - Even with lower production mix should be expected as refi n- cut on April 9th to address the demand and even weaker oil demand, supply ers will try to shift destruction of COVID-19. They pledged will exceed demand through June, and 9. yield toward diesel where to cut production by 9.7 million b/d basically balanced in July. After July, demand destruction is expected from an October 2018 base, except in demand will exceed supply. to be lower than that for gasoline. 22 of crude from U.S. producers to put in runs as refi ned product demand the SPR. This government stocking is grinds to a crushing halt due to a form of demand that would support COVID-19 lockdowns around prices as well. the world. Downstream companies with complex refineries, Implications - A number of implica- strong linkages to export mar- tions can be drawn from these thoughts kets, mature commercial trading and the oil and gas industry may con- teams, and integrated petrochem- sider paying attention to them. ical assets will weather through The massive stock build underway 1. Oil and gas companies should these times but other refi ners will will essentially stop in July and begin prepare for an average WTI oil struggle. to reverse in August. The excess global price of $20 to $35 a barrel for 7. Midstream companies will face inventories building this year will fall 2020. Modest improvements will challenges with product exports, from a peak of about 1.6 billion barrels come in 2021 with recovery only in particular, light tight oil, which to a level under 700 million barrels. in 2022. will have to be discounted exten- 2. Global oil inventory has surged sively to find overseas buyers. Prices will recover - If all of these and any price rise will have to Support for existing and new cap- supply pledges come true or close, and wait until those inventories are ital projects will decline. Finally, if the social distancing and other mea- depleted. Further, nearly two- expect investor flight to quality sures associated with COVID-19 are thirds of U.S. shale production based on contract portfolios. eased or lifted, then oil demand will has been hedged at ~$55 a barrel 8. Shipping and logistics players recover in the face of lower supply. The for 2020 and is unlikely to fall at with tankers, terminals, prod- global market will tighten, and prices will current prices. uct storage tanks, and blending rise. There are several uncertainties in 3. U.S. oil production will fall – only capabilities may benefit in this the market that will temper the price by how much is up for debate. environment as a contango mar- recovery. The fi rst is the inventory over- Even if hedges protect U.S. shale ket drives interest and demand hang which will keep spot prices in the operators through 2020, sharp for storage. physical markets below futures for sev- cuts will come in 2021. Unlike KIOGA has been working hard to eral more weeks (contango market), and the oil price crash of 2014-16, monitor and engage state and federal thus attenuate the impact of recovering there is limited private equity measures under discussion in Topeka prices. The second is the possibility that appetite to buy distressed oper- and Washington, DC. We work hard to as prices rise late in the year, some of ators. As a result, operators that educate and inform state and/or federal the production restraint in non-OPEC are small or hold undifferenti- policymakers and government offi cials countries will diminish. The third is the ated acreage will face signifi cant on the impact proposed policies have depth and duration of demand destruc- distress. on the small businesses that make up tion this year. Even so, looking out from 4. North American natural gas the Kansas oil and gas industry so that today, WTI prices are projected to be in producers will be an unlikely ben- they are aware if proposals could prove mid to upper $30s late in the second half efi ciary of this oil price crash. As ultimately damaging to the industry, of 2020 and possibly rise to $45-$55 in light tight oil supply falls so will especially to independent oil and gas 2022. associated gas production, which producers. KIOGA is also identifying has driven over 50% of gas sup- SPR Fill - The success of the measures that might be considered by ply growth in North America in OPEC+ agreement was predicated on Kansas regulatory agencies that may recent years. This reduction in the active participation of President provide near-term cost or regulatory the growth of gas supply should Trump. Although he could not pledge relief to operators. KIOGA will stay on help Henry Hub pricing. production cuts by the U.S. private top of this rapidly evolving situation and 5. However, some of this will be oil industry, he indicated production will play an active role in developing and limited by caps on natural gas would fall signifi cantly, and essentially responding to any potential policy solu- demand growth that will come took the objections of Mexico to cut- tions that may emerge. from delays to the second wave ting production off the table. The next As always, our goal is to stand in the of LNG export projects in the U.S. market-shaping action the Trump gap for the oil and gas industry in the 6. Refiners’ have gone from opti- Administration is likely to take is a deal State of Kansas, and in particular our mistic dreams of a “golden year” with Democrats in Congress in the great independent oil and gas compa- thanks to IMO 2020 to a night- Phase 4 stimulus to appropriate $2-$3 nies, service and drilling companies, and mare scenario of cutting refi nery billion to purchase 65-75 million barrels all directly related industries. 23 Crisis brings oil, gas challenges into focus

KIOGA Editorial appear- soap and plastic, contribute to comforts for political expedience. we all enjoy. 4. Health, property and liability ing in 17 newspapers We will fi nd a way to get by for now insurance costs continue to sky- across Kansas in April until we hopefully return to more rea- rocket, deductibles increase and 2020 sonable oil and gas prices. However, exclusions expand. These costs to succeed in the future, we must con- need to be reduced as they affect front and alter the pre virus dilemma of all businesses in Kansas. an industry with rising costs, fl at com- 5. All industries have seen their Kansas oil and gas operators hope for modity pricing, and normal declining property tax bills ratchet up and everyone’s good health and a speedy production. These are some of the we must fi nd solutions. end to this pandemic. Like other busi- many challenges we must overcome to Oil producers appreciate the Kansas nesses, we are doing our best to fi nd a do so: tradition of hard work, resilience, and way through this diffi cult time. Perhaps ingenuity. We have been a part of the it’s a good time to consider ways to 1. We need more manpower. Kansas story for over a century and improve our industry for a more resilient We cannot automate and need pledge to do our part to keep the Kansas and productive post Corona life. people willing to work in the oil economy thriving and growing for the First of all, it is no secret a signifi cant patch. next 100 years. We wish everyone a consequence of the pandemic has been 2. We need to fi nd a solution to the speedy and positive end to the current a collapse in oil and gas prices to levels burden of high electric rates. crisis. not seen since the 1980s. The oil post- Kansas rates are the highest in ing in Kansas is currently around $15 (vs our region and Kansas consum- $50-60) and the April natural gas index ers spend over $1 billion per is $1.07 (vs $2-$4). At present, opera- year more on electricity than just tors in Kansas are reluctantly shutting 10 years ago. With electric costs down hundreds, if not thousands of that are 30-50%+ of expenses, wells and laying off or furloughing our oil wells in rural Kansas could experienced employees. The oil service run for many years longer with industry and others in the supply chain more competitive electricity are suffering as well. Further compli- prices. Who will be left to absorb cating the situation is the mechanical the high fixed costs that bur- concern wells may not recover oil pro- den rates? Oklahoma rates can duction once shut down. be more than 50% less than in Prior to the current crisis, Kansas was Kansas. home to approximately 41,000 wells 3. The state has adequate renew- whose cumulative value contributes able energy generation to 118,000 jobs, $3.0 billion in family and careful study is required income, and $1.4 billion in state and before allowing more subsidies. local tax revenue annually. As we all Methane and CO2 emissions know, oil industry ingenuity has thank- are signifi cantly down in the U.S. fully brought our country to the holy even as oil and gas production grail of energy independence. Perhaps has dramatically increased. We we take for granted the 6,000 products must resist unduly penalizing and produced from petroleum which, like regulating the fossil fuel industry

24 CONTRACTORS AND PRODUCERS 250 N. Water, Suite 300, Wichita, KS 67202 316-267-3241 Serving the Oil and Gas Industry Since 1926

25 From Page 25

A Very Different 2020 Kansas Legislative Session Concludes

The 2020 Kansas increased costs while also defending • Facts About Induced Seismicity Legislative Session industry gains made in recent years. (January 2020) kicked off on January The KIOGA legislative agenda for the • Seismic Activity in Kansas (January 13th. After passing 2020 legislative session was one in 2020) a state budget, the which we worked to minimize legislative • Induced Seismicity & Injection Wells Legislature abruptly gaveled out for assaults on the independent oil and gas in Kansas (January 2020) first adjournment on March 19th. A industry and optimize legislative targets • Property Taxes in Kansas (January one-day veto session was held on May of opportunity. 2020) 21st and the Legislature adjourned the • And More 2020 Kansas Legislative Session. Many KIOGA Reference Material - KIOGA members participated in legis- KIOGA is proactive and prepared in lative and regulatory meetings focusing advance of the 2020 Kansas Legislative on issues important to the independent Session by developing and updating oil and gas industry. KIOGA diligently several white papers, fact sheets, bro- monitored committee hearings to cover chures, and other informational pieces in interests of the Kansas independent oil advance of the session. These include: and gas industry. And with all 165 state • Kansas Oil & Gas Industry Strategic lawmakers up for reelection in 2020 as Analysis (January 2020) – an well as an open U.S. Senate seat, there annual comprehensive report were lots of political headlines. that provides the latest information on the economic impact of KIOGA State Advocacy Strategy the Kansas oil and gas industry including statistics on Kansas oil KIOGA prepared for the 2020 Kansas and gas industry activity, taxes, KIOGA shared these white papers, legislative Session. KIOGA Chairman production, issues, challenges, fact sheets, reports, brochures, and David Bleakley and KIOGA President and opportunities; other informational pieces with key Edward Cross visited with several • State of the Oil & Gas Industry – state legislators. The reference mate- KIOGA members across the state in Dynamic Challenges Facing Kansas rial was also shared with the Kansas October 2019 in our annual listening Oil & Gas Industry (January 2020) Congressional delegation and other key tour to hear our members concerns – a white paper that summarizes federal policymakers. Many state and and receive input about state and fed- America’s energy picture today, federal policymakers have expressed eral issues. Prior to every legislative challenges faced by the small their gratitude for factual scientiﬁ c-based session KIOGA prepares a Legislative/ businesses that make up the information. All of the reference mate- Regulatory/Communication Agenda. Kansas oil and gas industry, and rial can be found on the KIOGA website KIOGA’s legislative agenda was dis- what industry is doing to address at www.kioga.org. cussed at the December 11, 2019. The those challenges; Meeting with Governor Kelly and core focus of KIOGA’s • Hydraulic Fracturing – Regulatory Key House & Senate Leadership – work at the Statehouse & Policy Considerations (January KIOGA President Edward Cross met during the 2020 leg- 2020) with Governor Kelly in January and islative session has • Hydraulic Fracturing & Drinking again in February to been on protecting Water Contamination (January provide an update the Kansas oil and 2020) on the state of the gas industry from • Climate Issues (January 2020) Kansas oil and gas

26 gas industry roughly $1.25 billion in federal aid to the and the key state under the federal Coronavirus Aid, challenges Relied and Economic Security (CARES) and oppor- Act calls for legislative oversight, not just tunities the an executive decision. Senate President industry Susan Wagle (R-Wichita) said that some faces in 2020, including the impact of of Governor Kelly’s executive orders volatile oil prices, federal legislative and “exceed existing statutes, not to mention industry and to share KIOGA’s legislative regulatory challenges, and state legisla- the discriminatory directives aimed at agenda which lays out what’s import- tive and regulatory challenges. Cross some businesses but not others.” ant to KIOGA members and where we has also met with a number of key stand on energy, tax, and legislators multiple times during the leg- Governor Kelly Proposal to regulatory issues. Cross islation session. Move the Kansas Energy Office also met with House KIOGA tracked 18 issues of interest out of KCC Rejected by Kansas Speaker Ron Ryckman to the independent oil and gas indus- House – Governor Kelly proposed to (R-Olathe) and Senate try during the 2020 Kansas Legislative move the Kansas President Susan Wagle Session and have kept membership Energy Office (R-Wichita) in January in updated through four KIOGA Federal out of the Kansas separate meetings to dis- & State Legislative Reports, thir- Corporation cuss energy issues and ty-two KIOGA President Reports, Commission lay groundwork for the fi ve KIOGA Express, and two KIOGA (KCC) and to 2020 Kansas Legislative Newsletters. the Department Session. Cross also met of Administration in her Executive with the House Minority State Legislative Action – The Reorganization Order #46 (ERO 46). Leader Tom Sawyer (D-Wichita), legislature stymied much of Governor KIOGA President Edward Cross met House Speaker Pro Tem Blaine Finch Kelly’s state with the Governor’s Chief of Staff, (R-Ottawa), House Minority Whip Jim agenda during Government Affairs Director, and Policy Gartner (D-Topeka) and Senate Vice the 2020 legis- Coordinator on February 5th and again President Jeff Longbine (R-Emporia). lative session on February 19th to discuss KIOGA con- In addition, Cross met with the Chairs having rejected cerns with the proposed energy offi ce of the House Energy Committee, House her proposal move. Appropriations Committee, House Tax to re-amortize The House Energy Committee held Committee, Senate Utilities Committee, KPERS liabili- a hearing on Governor Kelly’s ERO 46 Senate Judiciary Committee, and Senate ties, halted her on February 11th. KIOGA President Insurance & Financial Institutions plan to expand Medicaid, and rejected Edward Cross met with the House Committee. Cross discussed the state two of Governor Kelly’s Executive Energy Committee chair and several of the Kansas oil and gas industry and Reorganization orders (EROs) – one committee members on February 10th what 2020 may hold for the Kansas oil melding Children and Families, Aging and expressed KIOGA concerns with and gas industry, abandoned well legisla- and Disability services and a portion moving the Energy Office out of the tion, injection well issues, seismic issues, of Corrections into a single Kansas KCC. He also met with House and carbon capture issues, electric issues, Department of Human Services; the Senate leadership to express KIOGA’s and more. other moving the Kansas Energy Offi ce concerns. Cross told them the same from the KCC to the Department of thing he told the Governor and her State Legislative Actions Administration. staff. That KIOGA is concerned that The one-day veto session focused on the reorganization is about promoting KIOGA President Edward Cross was wide-ranging COVID-19 related bills. energy policies driven by a zero-sum invited and made The Legislature wanted to make sure game philosophy for energy that says informational pre- Kansan’s voices were heard as the State we must have less fossil fuels so that we sentations about moves forward with a plan for economic can have more of something else. There the state of the recovery. Senate Majority Leader Jim are many examples of state energy Kansas oil and Denning (R-Overland Park) said the Continued on page 28 27 From Page 27 2020 Legislative Session Continued

A very Diﬀ erent session Concludes

plans that fail because they start with a Governor’s control. adjourn on March 19th. This measure is preferred resource and work backwards. likely something we will have to work to Many such energy plans have agen- advance in the 2021 Kansas legislative da-driven framework to assess carbon KIOGA Testifies in Support of Session. risk, all leading to some kind of green KCC Abandoned Well Bills – On standard, often referred to as “sustain- February 13th, KIOGA Chairman able”. Cross told them that a rational, David Bleakley testified in support of Carbon Capture Utilization data-driven, common-sense approach bills regarding abandoned wells before & Storage (CCUS) - The Kansas to energy policy is what our state the House Appropriations Committee. Geological Survey (KGS) and oth- and nation require. We have serious The bills were brought by the Kansas ers are looking to advance CCUS concerns about establishing a political- Corporation legislation in Kansas. In December and ly-influenced, agenda-driven, energy (KCC) and January, KIOGA ofﬁ ce. We need energy policy based on propose to President science, the free market, and entrepre- combine to Edward Cross neurial spirit. The key is to avoid placing two abandoned well plugging funds, joined in unnecessary political or legal obstacles provide procedures for reimbursement conversations with KGS and other in the way of innovation and expansion. for parties who wish to plug aban- stakeholders to discuss CCUS issues. In On February 11th, the House doned/orphaned wells, and established 2018, KIOGA provided federal policy- Energy Committee passed to the full regulatory certainty into abandoned/ makers information about the challenges House the committee’s disapproval orphaned well plugging responsibility. Kansas operators have with the IRS tax of Governor Kelly’s plan to move the KCC Commissioner Dwight Keen and credits for CO2 enhanced oil recov- Energy Office (ERO 46). The House KCC Oil & Gas Conservation Division ery. The original KGS CCUS legislative Energy Committee also passed a reso- Director Ryan Hoffman introduced proposal raised several red flags for lution (HCR 6031) to disapprove ERO and testified in support of the bills. Kansas operators. The CCUS is a very 46. On February 19th, the Senate Bleakley’s proponent testimony was complicated issue with the potential for Utilities Committee held a hearing on joined by proponent testimony from lots of unintended consequences that the Governor’s plan to move the Energy Chris McGown, President of EKOGA. could affect large segments of indus- Office out of the KCC. Kansas House Proponent testimony was also sub- try in many ways. The issue has not and Senate Democrats have chided the mitted in written form from John O. been adequately vetted with all affected actions are politically motivated and Farmer, Inc. and the Kansas Farm stakeholders. KIOGA invited to KGS to designed to damage Kelly’s adminis- Bureau. Several folks, led by the Sierra provide an informational seminar at the tration. Republicans have countered Club, expressed opposition to the bills. KIOGA Midyear Meeting in Garden City that the ERO was a unilateral decision The Sierra Club changed their opposi- in April to present information about made by the Governor without adequate tion position to a neutral position after sequestration and storage aspects of stakeholder input. On March 18th, the discussing the issue with the KCC and CCUS. Unfortunately, we had to can- Kansas House killed Governor Kelly’s KIOGA. The measure passed the House cel the 2020 KIOGA Midyear Meeting executive reorganization order (ERO) Appropriations Committee in Mid- in Garden City due to the COVID-19 that would have moved the Kansas March and was scheduled for House pandemic. KGS agreed to participate in Energy ofﬁ ce out of the KCC and to the Floor debate when the COVID-19 pan- a future KIOGA meeting and said they Department of Administration under the demic caused the Legislature to abruptly would not push for legislative action this

28 Beren testifi ed before the Senate Utilities Committee on February 11th during an informational hearing on the LEI study. Beren expressed concerns KIOGA had with the report and provided ideas for ways Kansas can improve energy costs for Kansas oil and gas producers. The second part of the study will be com- JOIN! legislative session other than expanding pleted by July 1, 2020 and will look pipeline rights-of-way to include carbon at how Kansas’ electric rates affect dioxide. the state’s economy. KIOGA will be engaged in this part of the study as well. Electric Rate Study – An elec- Environmental Assaults - KIOGA tric rate study bill passed the Kansas stays keenly poised to address any Legislature in 2019 that directed the attempts by those who oppose American Legislative Coordinating Council (LCC) The Wichita Desk and Derrick is a dynamic oil and gas development to promote leg- to authorize a study of retails rates of organization that promotes the education of islation and/or regulations designed to Kansas the petroleum, energy and allied industries stop oil and gas production. The Sierra electric and advances the professional Club annually proposes a laundry list public development of its members. of oil and gas regulations that have no utilities. environmental benefi t but high associ- The Member Benefits: ated costs. This list includes carefully study • Learn from energy industry experts. thought-out restrictions on hydraulic would pro- • Network with energy industry leaders fracturing, waste management, emis- and colleagues. vide information that may assist future sions, moratoriums on injection wells, • Attend regional and national meetings. legislative and regulatory efforts in establishing an earthquake risk pool • Receive critical updates and information developing electric policy that includes fund, and other measures with the about the energy industry. regionally competitive rates and reliable goal of stopping oil and gas produc- • Enhance communication and leadership electric service. The bill requires the tion. KIOGA is prepared and ready to skills. study to be completed in two parts. The defend the oil and gas industry at every • Make friends for life! fi rst part was completed in early January opportunity. 2020 and examined the effectiveness For more information about the of current Kansas ratemaking prac- Wichita Legislature Adjourns - The and to learn about tices and examined options available Desk and Derrick Legislature offi cially adjourned on sine member eligibility, visit our Wichita Desk to the Kansas Corporation Commission die (May 21st), after which legislators and Derrick facebook page, or contact (KCC) and the Kansas Legislature to can legally receive financial contribu- affect Kansas retail electricity prices to 4IBOOPO8JTFNBO tions to their re-election campaigns. | become regionally competitive while TIBOOPO!SBZNPOEPJMDPN The Legislature will stay adjourned until providing the best practicable combi- The Wichita Desk and Derrick is a proud January 2021, unless a special session nation of price, quality, and service. affiliate of the Association of Desk And Derrick is called. Clubs, www.addc.org London Economics International (LEI) was the firm selected to complete the first part of the study. LEI released their 324-page study in early January 2020. KIOGA reviewed the full report and engaged in discussions and next steps during the 2020 legislative session. KIOGA Electric Committee Chair Adam

29 A Much Needed Injection of Truth Response editorial writ- Fortunately for the public, the facts Efforts to address seismic activity demonstrate something different. in Kansas have been ongoing by the ten by KIOGA President Injection of waste fluids from oil and Kansas Corporation Commission (KCC) Edward Cross that gas production are not the likely cause. and industries for many years. The appeared in 17 newspa- When examining data from earthquake efforts have produced results. Seismic pers across Kansas in late epicenters along with the location of activity in Kansas has dropped by 67% nearby injection wells, we start to see a from 2015-2019. February 2020 very different story. The group appointed by Governor The location of Class I injection wells Kelly and the other formed by the KCC A recent editorial from the Editorial (wells used to inject hazardous and to look into the issue of induced seis- Advisory Board titled Central Kansans non-hazardous industrial and municipal micity is very important. All industries, need answers about quakes casted wastewater) were very near the earth- including the oil and gas industry, take fact-challenged statements about the quake epicenters. The nearest Class II the issue of induced seismicity very causes of earthquakes near Hutchinson. injection wells (wells used to inject fl uid seriously and work to ensure that any Injecting fluid into rock formations associated with oil and gas production) study of induced seismicity is accurate, in or near the basement granite is were 6 miles or further away. scientifi cally-based, and limited in scope likely to increase risk for seismic activ- Moreover, Class I injection wells were to the site-specifi c features of the areas ity. However, the editorial incorrectly injecting tens of thousands of barrels in question. implied that the fl uid being injected was per day while the Class II wells were from the production of oil and gas. injecting hundreds of barrels per day.

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31 Meeting the Challenge fi nancial support to pro oil and natural KIOGA looks at a number of factors Participate in the KIOGA gas political candidates, primarily in tight when evaluating candidates. We look Legislative Contact races where funding can make a differ- beyond the candidates voting record Volunteer Program! ence. The program also targets political on the floor and watch how they vote candidates who serve in leadership roles in their committees on energy issues important for oil and gas producers. We KIOGA is making a positive differ- and/or serve on legislative committees also look at leadership roles of the can- ence and creating value for the Kansas of primary concern to the oil and gas didates and the competitiveness of the oil and gas industry. Our goal is not to industry. candidate’s campaign. Personal visits be the biggest industry association, just KIOGA members play a vital role in with candidates also help determine a the most effective; and the key to that is our government relations efforts. Our candidate’s position and understanding value-added participation. industry is sure to face signifi cant chal- of oil and gas issues. The 2021 Kansas legislative session lenges in the years ahead. Providing KIOGA supported 48 state candidates may generate fi nancial support to political candidates during the last election cycle, providing many issues who share our goals for responsible oil financial support to pro oil and natu- that will affect and natural gas development and serve ral gas candidates of which 45 were KIOGA mem- in leadership and/or on key legislative successful. KIOGA also supported can- bers. We must committees is vital. didates in leadership roles. During the support those Several anti-oil and natural gas devel- last election cycle, KIOGA’s support had legislative can- opment groups provide fi nancial support a success rate of nearly 94%. KIOGA didates who to political candidates who either sup- members and staff participate in several understand the port or are open to supporting their events for state candidates during the value provided anti-oil and natural gas ideas. We must election cycle. Our participation allows by the oil and support those candidates who listen, us the opportunity to interact with can- gas industry to the economy of Kansas. understand, and support the needs and didates and educate them on issues The core focus of KIOGA’s work at concerns of the independent oil and of importance to our industry. Many the Statehouse has been on protecting natural gas industry. Candidates who Senators and Representatives have the Kansas oil and gas industry from share our goals are often your own leg- expressed their sincere appreciation to increased costs while also defending islator, but may also be legislators from KIOGA for the financial support and industry gains made in recent years. other districts around the state. Your manner in which we assign the respon- KIOGA’s 2021 legislative goals will most specifi c legislator may or may not serve sibility to our members. likely resemble those of the past few on the key legislative committees that KIOGA will continue to work to years and focus on minimizing impacts many oil and natural gas issues come ensure the voice of the Kansas inde- of negative legislative assaults on the before. Financially supporting pro-oil pendent petroleum industry is heard. independent oil and gas industry and and natural gas legislators builds positive KIOGA’s involvement will help support optimize legislative targets of opportu- relationships and strengthens KIOGA’s elected officials and decision-makers nities. More specifi c legislative goals will government relations efforts. In addi- who share the goals for responsible oil be evaluated later this year. tion, our legislative friends espouse our and gas development to build a safer KIOGA has initiated our Legislative positions during caucuses when issues and more secure energy future. Watch Contact Volunteer Program. The and bills concerning our industry are for your opportunity to participate in program is designed to provide discussed between legislators. We must fi nancially support those legislators who this year’s Legislative Contact Volunteer are open to our concerns, wherever they Program or contact the KIOGA Wichita live in Kansas. Offi ce at 316-263-7297 to express your By making a modest financial con- wish to be included as a participant in tribution to key legislators identified the program. By working together, we by KIOGA, we can make a difference! can make a difference!

32 Voice of the Kansas Independent Petroleum Industry independent oil and natural gas industry. • Kansas Oil & Gas Industry Your KIOGA Membership Strategic Analysis is an annual Makes a Diff erence Membership in KIOGA gives you: comprehensive report that pro- A United Voice in Topeka and vides the latest information on Washington the economic impact of the • Few independent businesses have Kansas oil and gas industry the budget, time, and expertise to including statistics on Kansas oil individually tackle issues at the and gas industry activity, taxes, federal, state, and local levels of production, issues, challenges, government as well as regulatory and opportunities. issues. • KIOGA Annual Federal & The Power of Unity State Legislative/Regulatory/ Founded in 1937, the Kansas • KIOGA achieves results through Communication Agenda. Independent Oil & Gas Association a strong coalition of indepen- A Way to Build Public Understanding (KIOGA) is a nonprofit member orga- dent businesses with a common • Today, public perception contin- nization representing oil and gas purpose and goal optimizing our ues to be a major challenge facing producers in Kansas, as well as allied effectiveness on critical issues. the domestic oil and gas indus- service and supply companies. Access to Legislative and Business try. Join our efforts to fi ght the KIOGA represents the interests of Information negative public image that has the oil and gas industry at the local, • Whether you need to know how made voters and policymakers state, and federal levels of government. to comply with the latest laws unsympathetic to major problems KIOGA is committed to ensuring that and regulations or need legisla- confronting independent oil and tomorrow’s economic climate will be tive updates on pending issues, gas producers. one in which our members can grow KIOGA provides you with timely Our industry faces many challenges. and prosper. Our active presence information that can affect your Thanks to KIOGA members, voters and before the Kansas Legislature, U.S. company’s profit and growth policymakers in Kansas are learning Congress, and state and federal regula- opportunities. that the oil and gas industry is work- tory agencies means that the concerns • KIOGA Newsletter published 6 ing for them, the economy, and the of independents like you are foremost times a year that covers govern- environment. KIOGA advances in the in the minds of legislators and gov- ment relations issues and other name of the industry pausing only to ernment officials. Our cooperative industry topics important to you. acknowledge the accomplishments of partnerships and networking with • KIOGA Website at www.kioga. our members whose support makes our other state associations, the Domestic org for industry information efforts possible. To you, our gratitude. Energy Producers Alliance (DEPA), and online communication If you are not a member of KIOGA, Independent Petroleum Association of capabilities. we encourage you to join. Through America (IPAA), U.S. Global Leadership • KIOGA Express is an email KIOGA you can play a signifi cant role Coalition (USGLC), National Stripper information service that keeps in our efforts to win the political battles Well Association (NSWA), Interstate Oil members abreast of ongoing in Topeka and Washington and the pub- & Gas Compact Commission (IOGCC), and breaking oil and natural gas lic relations battle in the court of public Council for a Secure America (CSA), and industry news. opinion. Be a part of the solution. Join the Energy Education Partnership, Inc. • The American Oil & Gas us today! Your membership makes a dif- (EEPI) means the concerns of Kansas Reporter, a fast-paced monthly ference and is vital if we are to maintain Independent oil and gas producers are magazine that covers the industry our status as the “Voice of the Kansas heard in Topeka as well as Washington. from A to Z. Independent Petroleum Industry”. When addressing the benefits of • KIOGA President Reports KIOGA membership, we can begin and KIOGA Federal & State with our motto “KIOGA - Voice of Legislative Reports keep mem- the Kansas Independent Petroleum bers current with federal and Industry”. KIOGA is an everyday, state legislative, regulatory, and frontline representative of the Kansas policy issues.

33 A Big Thank You!

The Kansas independent oil David Bleakley We have learned many things and gas industry has an out- Nick Powell over the past several years. One standing talent pool that includes Tim Scheck of the most important things experts in a variety of techni- Dick Schremmer we have learned is that we can cal specialties. The diversity of Lesli Baker accomplish more than we realized thought contributes powerfully Ken White was possible. So, we advance in to the advancement of KIOGA’s Alan Banta the name of the industry pausing goals. Over the past several Adam Beren to acknowledge and recognize the years, KIOGA has achieved Dana Wreath accomplishments of the indus- nearly all of our legislative pri- Andrea Krauss try leaders named above and to orities and the 2020 Kansas Dave Murﬁ n those we may have missed or legislative session was no excep- Charlie Wilson who we are not aware. To you tion. We achieve our goals Ed Nemnich our gratitude and we say because we have the corporate Jeff Bloomer values and human capital essen- Dave Dayvault tial to the success of any major Steve Dillard enterprise. We have skilled and Emma Richmond dedicated oil and gas industry Richard Koll professionals and talented leader- Barry Hill Thank You! ship who volunteer their time and Scott Fraizer efforts. Leveraging our industry’s Mike Dixon intellectual capital and leadership Paul Simpson is a major driver of our success. Nick Hess The following KIOGA members Mark Shreve are some of the many who gave David Powell a little extra for the oil and gas Dylan Klaus This Photo by Unknown Author is licensed under CC BY-SA-NC industry during the 2020 Kansas Dan Schippers legislative session:

34 Membership in KIOGA gives you:

• A united Voice in Topeka & Washington • Access to legislative & business information • A Way to build public understanding • A stronger industry voice • Access to industry publications

Become a member today Pass the newsletter to non-members Help us grow our network in the oil and gas industry

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35 KIOGA in the News Gett ing the Message KIOGA’s public outreach efforts work • McPherson Sentinel hand-in-hand with our government • The Kansan (Newton) Out! relations programs to enhance the effec- • Ottawa Herald tiveness of KIOGA’s advocacy efforts. • Salina Journal • Wellington Daily News Since the COVID-19 crisis began, KIOGA in the News - Over the • Dodge City Globe KIOGA has been and continues to stay last couple of months, several KIOGA • Garden City Telegram engaged. One of the important ways members engaged media to talk about • Kiowa County Signal that we stay engaged is by providing oil prices, COVID-19 impacts, and more. • Pratt Tribune fact-based scientiﬁ c information to the KIOGA Chairman David Bleakley and • St. John News public through our vigorous public infor- former KIOGA Chairman Ken White • Leavenworth Times mation efforts. provided comments on the oil market • Topeka Capital-Journal There is a very real opportunity to situation for an article that appeared • Gyp Hill Premier (Medicine Lodge) create a stronger, more effective con- in the Topeka Capital-Journal. Former • Coff eyville Journal nection with the American public that KIOGA Chairmen Dick Schremmer recognizes their values and concerns and Ken White as well as KIOGA KIOGA President Edward Cross and allows them to understand better South/Central Vice Chair Alan Banta also had an editorial titled What is our the critical role that oil and gas play in provided interviews to KSN and KWCH energy future? published as an Executive America’s everyday lives. This type of 12 in Wichita on April 21st. Former Viewpoint column in the March 2020 connection is more than an opportunity. KIOGA Chairman Nick Powell and World Oil magazine. Earning the trust of the American pub- KIOGA President Edward Cross pro- lic will become an absolute necessity to vided comments on the oil market protect and enhance the many key ele- situation for an article in the April 20th ments of business success - from access Sentinel. to capital to regulatory stability, tax fair- ness, and more. Through aggressive public outreach efforts including speaking engage- ments, editorials, media interviews, and more, KIOGA KIOGA has also provided a number continues our mul- of interviews to radio, newspapers, and tidimensional public other media outlets over the last couple education effort. KIOGA Editorials – KIOGA of months providing information about KIOGA spoke at President Edward Cross released an oil prices, COVID-19 impacts, and more. 22 public forums, editorial in April on how the COVID-19/ These include KSNT (Topeka), Hays engaged in over 50 media inquiries, and oil supply crisis has brought oil and gas Post, Oakland Express, Topeka Capital- provided 13 editorials to media across challenges into focus. Cross has had 6 Journal, Kansas Farm & Ranch Radio, Kansas and the nation in 2019. KIOGA editorials published by media in 2020. Kansas Public Radio, and Great Plains continues our vigorous public informa- The editorials appeared in more than 17 Christian Radio. tion efforts in 2020. newspapers across Kansas including: • Butler County Times-Gazette Policy Issues Direct Public • Hays Daily News Information Eff orts • Hutchinson News

36 also include facts and information in every presentation on how the oil and gas industry greatly enhances quality of life for all. Fossil fuels are needed throughout the world to lift people up, which is different than a philosophy of embracing a zero-emissions world. Going forward, when it is safe and the “stay-at-home” orders are relaxed, KIOGA has several speaking engage- ments scheduled with the Dwight D. Eisenhower Excellence in Public Service Series in Independence, the Vanguard Club in Kansas City, and the U.S. Global Leadership Coalition Get on Board the KIOGA Express (USGLC) State Leaders Summit and more. Contact the Wichita office and get your oﬃ ce signed up today to start receiving up to date information. On April 24th, Fort Hays State University (FHSU) Tiger Media Network released a news article titled Falling Oil Prices: How it Affects Kansas. The article was written by Plan for Growth Going Forward FHSU graduate student Guowei Li and included comments from Dr. Yang Jiao, While improved communication is Assistant Professor of Economics at certainly one element of a stronger rela- FHSU, and KIOGA President Edward tionship with the American public, it is Cross. by no means the only change needed to Reaching Out - KIOGA made improve industry’s reputations and build presentations at 22 public forums in a higher level of trust. Success for oil 2019. During the ﬁ rst quarter of 2020, and gas companies going forward will KIOGA has made require a dramatic transition to develop www.kioga.org multiple informa- new corporate cultures, customer-fac- [email protected] tional presentations ing philosophies and everyday business before Kansas leg- practices that are aligned with the pub- 316-263-7297 islative committees lic’s desire for a more environmentally in Topeka and conscious, more consumer-oriented to the Society industry. That is a tremendous under- of Independent Professional Earth taking that will impact every function Scientists (SIPES) in Wichita. The pre- within the typical oil and gas company. sentations summarize America’s energy Surviving for another 100 years picture today, the challenges faced by will require new skills and strengths, and the small businesses that make up the an outward focus that strives to meet Kansas independent oil and gas industry, consumer needs. The winners will be and what industry is doing to address those companies that can grasp the those challenges. KIOGA presentations monumental changes under way today bring to light the facts and science about and reinvent themselves. important energy issues and topics. We

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