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Bulletin Ohio Oil and Gas Association Visit Us Online At Volume 63, Number 1, January/February 2013 Bulletin Ohio Oil and Gas Association Visit us online at www.ooga.org State Budget Debate Governor Presses Severance Tax Increase in Upcoming State Budget Debate By: Brian Hickman hio Governor John Kasich (R) has been you know what they say? We should take this and run. But then they get Opressing his desire to increase the severance their lobbyists and all these other people and they obscure the issue.” tax on Ohio oil and gas production in recent media interviews ahead of the upcoming state budget debate. In these interviews, Kasich has mentioned A key focus of the Governor’s plan has been a reduction that accepting a proposal might be a better option of the state’s 5.9% income tax. than facing a potential ballot initiative that would create a higher increase in taxes. To achieve this goal, the Governor continues to push an increase in severance taxes levied on oil and gas In recent year-end interviews with the media, production from horizontal wells. Kasich has been setting the tone for the upcoming budget debate. He made it clear that the upcoming budget covering fiscal years 2014-2015 Kasich then went on to mention that the industry might want to consider will deal with a new formula along with a system the fact that, if a severance tax increase is not agreed to, a ballot initiative of comprehensive tax reforms for the state of may be started to achieve this goal. “Nobody’s talking about an 8 percent Ohio. A key focus of the Governor’s plan has been severance tax, except for somebody that might end up putting it on the a reduction of the state’s 5.9% income tax. ballot. We’re talking about something that’s reasonable,” Kasich mentioned. To achieve this goal, the Governor continues to In another interview, Dale Butland, of the liberal-activist group push an increase in severance taxes levied on oil Innovation Ohio, stated his group has thought about gathering and gas production from horizontal wells. In his signatures for a ballot initiative. If a petition would to be started, Butland view, the state’s severance tax on oil and natural noted that the revenues would go to additional social programs and not gas resources needs to be modernized and, if the regulatory agency or an income tax rebate. increased, should not be a deterrent to Utica Shale drilling activity. “How about we tax Big Oil at the same rate that they are taxed in the state of Texas and then use the money to offset those budget cuts to “Modernizing the severance tax keeps us as schools and local governments that are causing regular taxpayers to have the lowest severance tax state in the country,” to raise their own taxes at the local level,” said Butland. mentioned Kasich at a recent press interview. “There is no danger that people are running While no signature drive has been planned as of now, the group would away. Since we’ve been talking about this, they’ve consider starting one should the legislature not take the appropriate continued to invest billions.” action and, as Butland said during the interview, “do the right thing”. Kasich added, “I think there’s an apprehension, if The debate is expected to heat up in early February. On February 4th, you put this on, are you going to drive somebody the Governor will introduce his Executive Budget – the first version of a away? Are you kidding me? I’ve done some budget bill to be deliberated by the state legislature. A budget bill must foreign travel, down to Houston, and every be approved by the state legislature by law by the beginning of the state single time I meet with the industry privately, fiscal year (or by July 1st of this year). OOGA 2013 Annual Winter Meeting – page 12 Exploring New Energy Opportunities in Ohio Together we are building for tomorrow’s energy future The Ohio Oil and Gas Association is a statewide trade association that represents over 3,000 independent crude oil and natural gas producers, along with related allied industries. For over 65 years we have represented our membership before the Ohio General Assembly, state agencies and the general public. Please contact us on any associated energy, regulatory, natural resource or environmental matter. Phone: 704.587.0444 | Fax: 740.587.0446 | Web: www.ooga.org Tom Stewart Penny Seipel Pete MacKenzie Brian Hickman Executive Vice President VP of Community Affairs VP of Operations Communications Director [email protected] [email protected] [email protected] Government Affairs Manager [email protected] Page 2 Ohio Oil & Gas Association Bulletin – www.ooga.org January/February 2013 Ohio Oil & Gas Association President’s Comments 2013 Board of Trustees Your Association Officers Joel Rudicil – President, Richfield David R. Hill – Vice President, Byesville drilled my first well in 1978 James S. Aslanides –Treasurer, Coshocton I and joined the Ohio Oil & Gas Thomas E. Stewart – Executive Vice President, Granville Association shortly thereafter. To get Trustees the Ark Springs Baptist Church #1 *W. Jonathan Airey, Columbus *Tom Booth, Massillon well drilled it took a promising lease, Dow Bowman, Sugargrove investor money, and a lot of help from Brent Breon, North Canton David E. Callahan, Harrisburg, PA an established producer, contractors and Clinton W. Cameron, Zanesville suppliers. I am grateful for all of those Benjamin W. Cart, Poland that freely offered advice and guidance Brian Chavez, Reno Brian Coblentz, Millersburg to get me started-it is why I fell in love Mark G. Conway, Wooster with this business 35 years ago. Todd Dever, Cambridge *Steven Downey, Charleston, WV Based upon the rapid expansion of John Eads, Houston, TX Barry Ferguson, Columbus our membership, you may be looking Thomas P. Giusti, Columbus to drill that first well or to provide a Frank W. Gonzalez, Canton Joel Rudicil service. My overarching objective as James R. Halloran, Chagrin Falls William Hlavin, Akron OOGA President President of OOGA is to continue the *Mark D. Jordan, New Albany unwavering mission of the Association Tony Kovacevich, North Canton *Bruce A. Levengood, Dover that was established in 1947 to “Protect, Mark S. Lytle, Wooster promote, and advance the common interests of all those involved in the Ohio crude Greg Mason, Coshocton oil and natural gas industry”. To me, the goal is to maintain a predictable and fair Timothy Mcnutt, North Canton *Jack K. Miller, Wooster regulatory and tax environment that encourages ALL producers (whether start-up John W. Miller, Canton or established) to do business in Ohio. Jeff Moore, Stow Gregory New, Beloit While adhering to strong core values and principles, OOGA has changed to match Charlotte Pierce, Powell Richard C. Poling, Somerset today’s challenges. To serve the burgeoning membership, staff has been added in Dan Pottmeyer, Zanesville the areas of management, communication, event coordination, public relations and Roy Poulson, Wooster community outreach. To assure availability and proximity to governmental officials *Scott Rotruck, Oklahoma City, OK Mark A. Sparr, Wooster and policy makers we have opened a public affairs office in Columbus across the street Ralph W. Talmage, Columbus from the state capitol. Is all of this necessary? In a word: yes. I attended a meeting last Benjamin H. Thomas, Marietta Sarah J. Tipka, Dover summer where an agency official actually opened the meeting with the statement, “we Howard J. Wenger, Dalton are from the government and are here to help”. No kidding. Lord, please help us. Honorary Trustees Continued on page 6 Leo Altier, Corning *Jeffrey J. A. Baker, Westerville William Bennett, Wooster R. Gene Brasel, Middleport Charles E. Call, Stow James H. Cameron, Zanesville Steven L. Grose, Hartville Jerry James, Marietta Alan W. Jones, Mount Gilead Jerry D. Jordan, Columbus Kirk A. Jordan, Sarasota, FL William G. Kinney, Twinsburg Edgar W. Mccauley, Newark James C. Morgan, II, The Villages, FL Jerry C. Olds, Worthington Graham R. Robb, Zanesville R. J. Schwarz, Columbus Berman J. Shafer, Palm Beach Gardens, FL Guy F. Sitler, Jr., Newark James R. Smail, Wooster E. A. Smith, Naples, Fl J. W. Straker, Zanesville John W. Straker, Jr, Zanesville John C. Wright, Sistersville, WV *Executive Committee January/February 2013 Ohio Oil & Gas Association Bulletin – www.ooga.org Page 3 Ohio Oil & Gas Association Contents 2013-2014 Committee Chairs Audit Committee Federal Policy Review Mike Eberhart U.S. EPA Releases Progress Report on Hydraulic Fracturing Study 10 [email protected] 330-453-7633 State Policy Review Commerce Committee Connie Slocum Governor Presses Severance Tax Increase in Upcoming [email protected] 614-776-1383 State Budget Debate 1 Steven Downey Balderson to Lead Senate Energy Committee 5 [email protected] 304-343-5505 House Announces Committees for 130th General Assembly 8 Contractors Committee James R. Smail Reports & Editorials [email protected] 330-264-7500 President’s Comments 3 Environmental Committee Oil & Gas Lobby Day at the Statehouse 11 Gregory Russell [email protected] 614-464-5468 Mike McCormac Retires From DOGRM 17 Exploration Committee Underground Protection Legislation Enacted, OGPUPS Working Towards Compliance 18 Larry Wickstrom [email protected] 614-301-6721 IGS Energy Subsidiary Creating CNG Fueling Corridor 19 Governmental Affairs Committee How the Fiscal Cliff Deal Will Impact You 20 James Aslanides Update on Federal and Ohio Tax Seminar, January 10, 2013 23 [email protected] 740-622-5600 Ohio Map of Utica Shale Activity 24 Legal Committee Press Releases 28 Jonathan Airey [email protected] 614-464-6346
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