WellHead October 2012

The energy electionThe differing views on the nation’s oil and natural gas industry by President Barack Obama and Republican presidential candidate Mitt Romney have made this the single most important election in the history of the United States for oil and natural gas producers.

— Page 23

A Newsletter for the Oklahoma Independent Petroleum Association — October, 2012

Hamm to serve as keynote speaker 6

Building campaign adds new donors 12

Obama would ensure industry remains target 20

State Supreme Court justices evaluated 30

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WellHead is produced by the

Oklahoma IndependentPetroleum Association3555 N.W. 58th St., Ste. 400Oklahoma City, OK 73112

Phone: 405-942-2334Fax: 405-942-4636

Toll-free: 800-838-6472Internet: www.oipa.com

Chairman, Bob SullivanVice Chairman-West, Ronnie Irani

Vice Chairman-East, Pat CobbSecretary, Rick Lewis

Treasurer, Jeff McDougallWildcatter President, Randy SullivanAmbassador at Large, Philip Landers

President, Mike TerryVP Governmental Affairs, Jeff WilsonVP Regulatory Affairs, Brian Woodard

VP Business Development, Avery SmithCommunications Director, Cody Bannister

Events Director, Lauren StephensonSafety and Technology Director, Molly Sexton

Membership Coordinator, Natalie KinmonthComptroller, Sunny Allen

Offi ce Administrator, Ellis StrombergAdministrative Assistant, Kaye Stanley

Member Benefi ts Consultant, Regina Mullennix

In This Issue

Page 8Fall Conference general session speakers set

Page 11Golf Club of Oklahoma to host Fall Classic

Page 1620 Questions: James Lankford only

goes to Sonic during happy hour

Page 26CNN highlights differences

on energy between Romney, Obama

Page 38Republicans make push in 2nd District

for all-GOP delegation

2RKI among fastest-growing companies

Page 44American pain at the pump is self-infl icted

WELLHEAD | IN THE NEWS

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Oil and natural gas in the U.S.1 2 Landowners’ group blasts Cuomo over drilling delay

— Stung by the extension of the state’s review of hydraulic fracturing rules, a New York landowners’ group sharply criticized Gov. Andrew Cuomo, accusing him of “ignoring the biggest op-portunity we will see in our lifetimes.”

“Unfortunately, the governor has turned his back on the land-owners in New York and simply doesn’t care that we are strug-gling to pay the highest real property taxes in the country.” the Joint Landowners Coalition of New York said in a statement.

The group was bemoaning the fact that the Cuomo adminis-tration is jettisoning what had been a Nov. 29 deadline to decide on drilling regulations and is poised to extend the rule-making process to a date that has not been specifi ed.

The pro-drilling organization, which says it represents 77,000 landowners, said the decision would “restart the torturous public-comment period and waste even more taxpayer dollars.”

The reaction from Joint Landowners Coalition was the group’s most biting assessment of Cuomo since DEC’s drill-ing rules were circulated for comment last year. The group said the decision contradicts the message of such business-friendly Cuomo slogans as “New York Works for Business.”

“The reality is that nothing is new or recharged in New York,” the landowners’ group said. “The DEC’s recent announce-ment simply demonstrates that New York continues to be closed for business as we drain the life out of upstate New York.”

Jobs from Utica Shale extend beyond drilling — The economic push Ohio is expected to get

from the Utica Shale, an underground rock layer packed with lucrative hydrocarbons, may extend beyond drilling companies and landowners to people not even directly involved.

Truckers will be needed to move equipment, welders will be called upon to help connect gathering pipelines and general laborers will be needed to do the grunt work. Occupations that have application both in the oilfi eld and more traditional workplaces could see their wages bubble up because of a skills shortage exacerbated by the demands of a new industry.

Studies have speculated that development of the Utica will lead to the creation of anywhere from 20,000 to 200,000 new jobs. The bulk of which won’t be directly involved in drilling but instead in support services and indirect jobs, like retail and restaurants.

For people with certain skills this could be very good news, as demand may outstrip the supply of, for example, certifi ed truck drivers or electricians.

“Common sense tells us that for any high-demand skill that is in short supply wages are going to go up,” said Rich Frederick, assistant policy director on work-force development for Gov. John Kasich.

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WELLHEAD | IN THE NEWS

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Anti-fracking movie fi-nanced by oil-rich Arab

nation — A new Hollywood film starring Matt Damon presents American oil and natural gas producers as money-grubbing vil-lains purportedly poisoning rural American towns. It is therefore of particular note that it is financed in part by the royal family of the oil-rich United Arab Emirates.

While left-leaning Hollywood often targets supposed environmen-tal evildoers, Promised Land was also produced “in association with” Image Media Abu Dhabi, a subsid-iary of Abu Dhabi Media, accord-ing to the preview’s list of credits.

A spokesperson with DDA Public Relations, which runs PR for Participant Media, the com-pany that developed the film fund backing Promised Land, confirmed that AD Media is a financier. The company is wholly owned by the government of the UAE.

ND geologist says quake not related to fracking — A North Dakota geologist says an earthquake in the state’s western oil patch is not connected to hydraulic

fracturing.The quake about 11 miles southeast of Williston registered at magnitude 3.3 -

enough to be felt but not strong enough to cause damage.Geologist Fred Anderson with the state Mineral Resources Department tells The

Bismarck Tribune that the quake was consistent with historical seismic activity in the region. He says speculation that hydraulic fracturing caused it isn’t plausible.

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WELLHEAD | FALL CONFERENCE

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Hamm to serve as keynote speakerHarold Hamm, a former OIPA

chairman and current energy ad-visor to Republican presidential candidate Mitt Romney, will serve as the keynote speaker at the 2012 OIPA Fall Conference.

Hamm will take the stage dur-ing the Oct. 21 Fall Banquet. The Fall Conference is scheduled for Oct 21 and 22 at the Renaissance Hotel and Convention Center in Tulsa.

Hamm, the founder and chief executive of Continental Resourc-es, is no stranger to the OIPA, cur-rently serving on the association’s board of directors.

The youngest of 12 children, Hamm moved away from the fam-ily farm in Purcell at 16 and headed to Enid, where he worked in a gas station while finishing school. Just two years after graduating

from Enid High School, the young entrepreneur went into business for himself, taking up payments on a used tank-truck and borrow-ing $1,000 on a co-signed note to start up a one-truck oilfield service business.

In 1967, he incorporated Shelly Dean Oil Company, named after his two oldest daughters, which later became Continental Resources. Today, Continental is a crude oil-focused exploration and production company that operates in 20 states. The company holds the largest acreage positions in the Bakken, has a leading presence in the Anadarko Woodford play and is among the top 10 petroleum liquids producers in the United States.

Hamm, Continental’s chair-man and CEO, is also chairman of the boards of Hiland Holdings and

Former OIPA chairman Harold Hamm, left, pauses for a photo with Republican presidential candidate Mitt Rom-ney during a March campaign stop in North Dakota. Hamm, the founder and chief executive for Continental Resources, serves as Romney’s national energy advi-sor and will be the featured speaker at the OIPA’s 2012 Fall Conference.

Hiland Partners and is a member of the board of Complete Production Services. He served as a founding board member of the Oklahoma Energy Resources Board, was president of the National Stripper Well Association and was the founder and chairman of Save Domestic Oil, Inc.

In 2008, he co-founded the Do-mestic Energy Producers Alliance to preserve the oil and gas markets for oil and gas produced domestically.

As Romney’s energy advisor, Hamm has helped craft an energy strategy that utilizes a technology-led production boom to end U.S. reliance on Middle Eastern oil by 2020 and boost U.S. out-put by some 5 million barrels a day.

Drawing on Hamm’s advice, Rom-ney’s “Abundance in America” policy calls for U.S. energy independence by 2020. It involves cutting regulations, letting state governments award explo-ration permits on federal lands, opening new shale and offshore territory for drill-ing, and keeping tax benefits for oil pro-ducers. Shifting permits to states could

slash the waiting period for new wells, Hamm says. North Dakota takes 10 days to permit a new well, he says, compared to 10 months for a federal permit.

“Mitt’s goal of cheap, plentiful en-ergy for the American economy offers

the American people a stark alternative to President Obama’s goal of driving prices higher,” Hamm said in a statement an-nouncing his appointment as Romney’s advisor. S


M E M B E R

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North Dakota school named after HammThe University of North Dakota announced it is naming its school of

geology after Continental Resources Inc. CEO Harold Hamm.Hamm and Continental are giving $10 million to the university’s efforts

to enhance its educational offerings in petroleum geology and related fields. University officials said it is the largest gift ever from someone who is not an alumnus of the school.

Continental Resources has been at the forefront of developing the Bak-ken Shale, an oil-bearing formation in North Dakota and nearby states.

“With the discovery of the world’s largest oil field in more than 40 years, Continental Resources and North Dakota are changing the world,” Hamm said. “The Bakken play is one of the primary fields making Ameri-can energy independence a reality, releasing us from the grip of foreign oil and serving as a model for unconventional oil production worldwide.

“Establishing the School of Geology and Geological Engineering is a vital commitment to continuing North Dakota’s national and global leader-ship in energy.”

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Fall Conference

Registration

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Experts from across the oil and natural gas industry will offer their opinions on the future of energy production at the OIPA’s 2012 Fall Conference.

The Fall Conference features two days of industry briefings, premier networking op-portunities, the induction of David House into the Wildcatters Hall of Honor and, of course, the Fall Classic golf scramble.

The event will be held Oct. 21-22 at the Renaissance Hotel and Con-vention Center in Tulsa.

“Speakers at this year’s Fall Conference will offer a wealth of knowledge,” OIPA President Mike Terry said. “From regulatory issues to natural gas demand, the topics of conversation will be wide-ranging and offer keen insight into the future of Oklahoma’s oil and natural gas industry.”

General session speakers include:n Oklahoma political

pundit Keith Gaddie offer-ing an outlook on the 2012 election.n Oklahoma Attorney

General Scott Pruitt, one of several attorneys general who sued the Environmental Pro-tection Agency, will discuss his view of federal regulations and offer an overview of state questions appearing on the November ballot.n Scott Noble of Noble

Royalties who will discuss how oil and natural gas devel-opment of federal lands could end the debt crisis.n TransCanada’s Vice

President Corey Goulet, who will discuss how the Key-stone Pipeline will impact oil markets.n Clearwater Enterprises

owner and President Tony Say covering clean water tech-nologies in the oilfield.n Representatives from

Chesapeake Energy, who will cover the future of the natural gas industry as defined by supply and demand markets.n A regulatory panel made up of Jesse

Juen, Bureau of Land Management state di-rector for New Mexico, Texas, Oklahoma and Kansas; Benjamin N. Tuggle, the regional di-rector for the U.S. Fish and Wildlife Service’s Southwest Region; and a representative from the EPA. S

Fall Conference general session speakers set

Oklahoma’s oil and natural gas industry is investing millions of dollars each year

in education. Kindergarten through college, students are discovering the world

of energy through fi eld trips, experiments, scholarships and the nation’s fi rst

energy-based curricula.

Oklahoma youth will lead America’s energy future. We believe in their potential,

and are committed to giving them the tools and support they need to achieve it.

oerb.com/advancingenergy

12OER1540_OIPA_MonthlyWellhead.indd 1 3/13/12 3:19 PM


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2012 Fall Conference SponsorsGold Sponsors

ADP Alliance Sales • Apache Corporation • Avalon Exploration, Inc. • Baker Hughes, Inc. • Bank of Oklahoma, N.A. Basic Energy Services • Bituminous Insurance Cos. • Blue Cross Blue Shield of Oklahoma • Burke-Daniels Co, Inc.

CenterPoint Energy Field Services • Chesapeake Energy Corporation • Complete Energy ServicesContinental Resources, Inc. • DCP Midstream, LP • Devon Energy Corporation • Enogex, LLC • EOG Resources, Inc.

Gallagher Benefit Services • Halliburton Energy Services • HOTCO Oilwell Fishing & Rental Tools • IHSLinn Energy, LLC • Marathon Oil Company • Newfield Exploration Mid-Continent, Inc. • ONEOK, Inc. • Samson

Select Energy Services, LLC • Sunoco Logistics Partners, LP

Silver SponsorsAquaterra Environmental Solutions, Inc. • Consolidated Oil Well Services, LLC • EnergyNet, Inc.

Gore Nitrogen Pumping Service, LLC • JMA Energy Company, LLC • KVH Industries/David Lee MarketingLW Survey Company • OERB • PlainJan’s Feedlot Service, Inc. - Weed Management • Plaster & Wald Consulting Corp.

THG Energy • Tokata Oil Recovery • Zeeco, Inc/Integrated Controls

General SponsorsCrawley Petroleum Corporation • Ward Petroleum Corporation

Item SponsorsBituminous Insurance Cos. • Complete Energy Services • Guernsey • JMA Energy Company, LLC

KVH Industries/David Lee Marketing • KWB Oil Property Management, Inc. • LW Survey CompanyMeagher Energy Advisors • Merit Energy • Munson & Co., P.C. • Panther Energy Company, LLC

Plaster & Wald Consulting Corp. • Select Energy Services, LLC

Golf Hole SponsorADP Alliance Sales • Bituminous Insurance Companies • Kingery Energy • Meagher Energy Advisors

Munson & Co., P. C. • WFD Oil Corp./Opus Resources, Inc

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2012 Fall Conference ScheduleSunday, October 219:30 a.m. - 6 p.m. Meeting Registration10 a.m. - Noon Board of Directors Meeting10 a.m. - 1 p.m. Exhibit Booth Setup1 - 6 p.m. Exhibit Booths Open1:30 - 3 p.m. General Session3 - 3:30 p.m. Break3:30 - 5 p.m. General Session5 - 6 p.m. Welcome Reception6 - 8 p.m. Fall Banquet

Monday, October 227 - 11 a.m. Meeting Registration7:30 - 8:30 a.m. Breakfast7:30 a.m. - 11:15 a.m. Exhibit Booths Open8:30 - 10 a.m. General Session10 - 10:30 a.m. Sponsor Break10:30 - 11:15 a.m. General Session1 p.m. - 6 p.m. Fall Classic Golf Scramble6 p.m. Golf Awards Dinner

Golf Club of Oklahomato host Fall Classic

The OIPA’s 2012 Fall Conference concludes with the Fall Classic golf scramble at Broken Arrow’s Golf Club of Oklahoma.

Sponsored by Select Energy Services, the golf scramble begins at 1 p.m. Box lunches will be provided for all golfers by Consolidated Oilwell Services and Kimray will host the awards dinner immediately fol-lowing the scramble.

“The Fall Classic is a great way to meet and interact with other oil and natural gas industry professionals in an informal setting,” OIPA President Mike Terry said. “It’s a great place for networking, relaxing and just having fun on one of the nicest golf courses in Oklahoma.”

Ranked as one of the top-four courses in Oklahoma by Golf Digest, Golf Club of Oklahoma was designed by renowned golf course architect Tom Fazio, who also built Stillwater’s Karsten Creek. S

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Primary Natural Resources III, LLCis an aggressively growing explorationand production company. Our capitalpartner is Quantum Energy Partners.

We are seeking acquisitions and explorationopportunities in the Mid-Continent,Panhandle and Permian Basin areasfrom $5,000,000 to $100,000,000.

Building campaign adds new donorsby Ronnie Irani

Capital Campaign Chairman

Three more companies have added their names to the growing list of supporters of the OIPA’s capital campaign.

Patricia O’Neal donated $100,000 to support the construction of a permanent headquarters for the OIPA, and Charles Harmon pledged another $100,000 . Their September contributions were made under O’Neal Oil & Gas Co. and C.E. Harmon Oil Company, respectively.

Marathon Oil Company made a $50,000 contribution in August to the build-ing fund.

These three companies understand what the OIPA does for the oil and natural gas industry. This association is there to protect their business interests at all levels of government.

The support our members have shown in funding the construction of a permanent

$100,000-$249,999 ✪✪✪✪✪✪✪✪✪✪✪✪✪✪✪✪✪✪✪✪✪

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headquarters at Fourth and Lincoln marks a new era in the life of the state’s most prominent advocacy group for oil and natural gas produc-ers.

For more than six decades, the OIPA has lobbied at the Oklahoma state legislature, the Corporation Commission and other government bodies where our business interests

WELLHEAD | CAPITAL CAMPAIGN

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24 HR Emergency Response Environmental Consulting Waste Transportation and Disposal Industrial Waste Water Treatment Roll-Off & Bin Container Service Environmental and Safety Training Industrial Cleaning Site Remediation Tank Cleaning Vacuum Services Technical Rescue Used Oil Recycling Common Sense SolutionsCommon Sense Solutions

for your environmental needsfor your environmental needs

are at stake. And because much of the OIPA’s lobbying efforts are done at the capitol and in neighboring state offi ce buildings, our associa-tion headquarters in proximity to the capitol will give OIPA staff and members greater ac-cess to legislators and policy makers.

Although construction on our association’s new home has begun, your support is still needed. Donating today helps us ensure a strong and vibrant OIPA tomorrow, and we are asking every OIPA member to consider a pledge at a level best suited to their fi nancial capability.

Together, we will make OIPA history and leave a lasting legacy that will benefi t future generations of Oklahoma’s oil and natural gas producers. S

AT LEFT: Charles Harmon of C.E. Harmon Oil Company, center, is joined by OIPA President Mike Terry and Capital Campaign Chairman Ronnie Irani after making his $100,000 contribution to the OIPA’s efforts to construct a permanent headquarters.

BELOW: O’Neal Oil & Gas Co. head Patricia O’Neal is joined, from left, by O’Neal Oil & Gas Co. Vice President David Diment, Capital Campaign Chairman Ronnie Irani and OIPA President Mike Terry. O’Neal made a $100,000 contribution to the association’s building fund.

WELLHEAD | CAPITAL CAMPAIGN

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WELLHEAD |ELECTION 2012

Proud to represent the OIPA Discounted Employee Benefi ts Coverage Program

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James Lankford only goes to Sonic during happy hourU.S. Rep. James Lankford of Oklahoma City, a

conservative Republican, is seeking re-election to the 5th Congressional District seat he now holds. In No-vember, he’ll appear on the ballot alongside Democratic candidate Tom Guild in hopes of securing his second term in offi ce.

This month, he answers our 20 questions.

Name: James LankfordAge: 44City: Oklahoma City / Edmond - It is in dispute. I have OKC utilities and an Edmond address.Occupation: US Congress, OK5

Who’s your favorite Oklahoman, living or dead, real or fi ctional? It is usually any Oklahoman I meet when I am out of state. There is nothing quite like talking to a fellow Oklahoman when we are both away from home.

What’s the best meal you’ve eaten in Oklahoma? Any meal at home is my best meal (you would know this is true if you ever eat my bride’s cooking), besides, nothing beats a meal around your own table. If the meal is beyond home, head to Smokin’ Joe’s BBQ in Davis


for a meal that is worth a two-hour drive to raise your cholesterol level.

In one sentence, what do you actual-ly do all day in your job? Study, talk, interview, study, answer questions, campaign, study, write letters/e-mails, eat, study, make phone calls, argue, study and go to bed late frustrated so I can do it all over again.

What’s the last movie you saw at the theater? 2016. before that it was Hunger Games.

Have you ever met anyone famous? Nope.

What’s your drink? Sonic’s Route 44 vanilla Dr. Pepper. As a fi scal conser-vative, I can only buy it during happy hour.

What was your fi rst car? 1979 Datsun King Cab pickup. (Back when King Cab meant it has an extra six inches behind the seat for a tool box)

How often do you prepare your own meals? Every Sunday night, our whole family prepares our own meals. Half of my meals in Washington, D.C., are also prepared at my desk if you count peanut butter and microwave meals.

What’s your favorite medicine? Zyrtec. I can now breathe in the fall.

What was your favorite musical group when you were in junior high?Ronnie Milsap or Kenny Rogers. If they now have a theater in Branson, I probably listened to them in junior high. Did I mention the fact that boys do not have a fully developed brain in junior high?

Favorite website? Facebook.

What’s hanging on your offi ce wall?Two pieces of original art painted by an Oklahoma artist — one painting of hands shaping a bowl on the potter’s wheel, the other painting of hands using that bowl to wash the feet of the

nations. It is a reminder of the paradox of the sovereignty and servanthood of Jesus Christ.

When’s bedtime? Depends on the day and how much “homework” I have. In D.C., typically around 12:30 or 1 a.m., when the research is done or I am done. In OKC, typically 10:30 or 11 p.m.

What’s the name of your pet? Lib-erty Belle, the 80 pound Labradoodle that is the fi rst to greet me when I get home. What do you hate most about living in Oklahoma? Nothing that I hate, but I am no fan of an August day when it hits 112 degrees.

What was your fi rst job? A weekly paper route at 12 is my fi rst paid job. The fi rst job with a paycheck was Baskin Robbins at 13. Nothing builds a

Continued on next page

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Tulsa is home to progressive, energy-related companies competing in a global economy.

» Each job in oil and gas contributes $428,000 to gross product for the Tulsa 10-county area.

» One job in oil and gas supports 1.7 jobs in resource-supplying Companies

» Throughout the Tulsa-area economy, one job in oil and gas supports four additional jobs across all sectors

» Each dollar of income by an employee in oil and gas supports the earning of an additional $0.91 throughout the Tulsa area economy

» Each dollar of production (value added) in Tulsa-area oil and gas supports additionally $0.87 of gross product throughout the economy

» One year’s activity in Tulsa-area oil and gas supports total sales tax of $440 million and total property tax of $227 million

For more information, go to growmetrotulsa.com.

Elissa Baker | Project Manager | [email protected] | Tulsa Metro Chamber

Two West Second Street, Suite 150 | Tulsa, Oklahoma 74103 | 918.560.0285

EDD Oil and Gas bullet point ad 2012.indd 1 8/14/2012 5:21:09 PM

young man’s self esteem quite like walking to work wearing a brown and pink polka-dot uniform shirt.

OU or OSU? The State’s University - OSU. Coke or Pepsi? This is a trick question. Clearly the answer should be (C) None of the above. Dr. Pepper is the correct answer. Where do you go to be alone? My study at home.

What makes someone an Oklahoman? Interesting ques-tion, since most Oklahoma families are “recent” transplants from somewhere else. Even most of the native tribes were relocated to Oklahoma. Birth, connection to the state (because where ever you go, you meet “Oklahomans”), national pride (more retired veterans live in Oklahoma City than any other place in America), work ethic and a passion to make our people and our state great. Oklahomans accept new people and new ideas, as long as they maintain our freedom and help our state/nation. S

Continued from page 13

The race to replace outgoing Con-gressman John Sullivan in Oklahoma’s 1st District leads the list of Congressional races in the Sooner State.

Republican James Bridenstine, who knocked Sullivan out of office during the August primary elections, will face Demo-crat Jon Olson and Independent Craig Allen on the ballot.

Bridenstine was considered a longshot when he took on the incumbent in the primary. Now he is the presumed favorite in a heavily-Republican district in a heav-ily-Republican state against a relatively unknown Democratic opponent.

In the 2nd District, Republican Mark-wayne Mullin, Democrat Rob Wallace and Independent Michael Fulks are squaring off to replace Congressman Dan Boren, who did not seek re-election.

The state’s other Congressmen — Frank Lucas, Tom Cole and James Lank-ford — are all considered heavy favorites in their respective races for re-election.

Lucas faces Democrat Tim Murray and Independent William Sanders. Cole’s opponent is Democrat and green energy proponent Donna Bebo. Lankford has a trio of challengers in Democrat Tom Guild, Libertarian Robert Murphy and Indepen-dent Pat Martin, who is supported by the Modern Whig Party. S

1st District leadsCongressionalcompetitions


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What if?Obama’s re-election would ensure industry remains regulatory target

Under the Obama Administration, the EPA has aggressively targeted the oil and natural gas industry.

Well-documented cases in Wyo-ming, Pennsylvania and Texas have shown the federal agency has disre-garded scientific evidence in its efforts to villainize fossil fuels and slow the development of oil and natural gas. If unabated, EPA’s actions could drasti-cally curtail domestic oil and natural gas production, threaten job creation in the industry and threaten the country’s push toward energy independence.

So what if Obama is re-elected?You can be sure the EPA’s attack

on the oil and natural gas industry continues.

This administration’s Big Brother approach to energy and environmental policy seeks to fundamentally alter

the way our factories, vehicles, and homes are fueled. President Obama’s plan involves raising the price of oil, coal, and natural gas to force America to embrace energy resources that are deemed clean and green, such as wind and solar.

The EPA is the administration’s carbon dioxide-reduction enforcer. Among its weapons are complicated-sounding things like New Source Performance Standards for greenhouse gases, a Shale Gas Extraction Effluent Limitation Guideline, and a ground-level ozone standard which was proposed and later withdrawn by the White House.

EPA claims these regulations are core to its mission to protect human health and the environment. But the agency is twisting sound science in

pursuit of an agenda to divide-and-con-quer (and extinguish) oil and natural gas.

And we haven’t even mentioned hydraulic fracturing.

Hydraulic fracturing is vital to Oklahoma and the nation’s develop-ment of oil and natural gas. Yet the well completion process is under attack by environmental activists who claim that fracturing contaminates drinking water.

Those claims have never been substantiated and there has not been any documented case where hydraulic fracturing has contaminated under-ground drinking water. That fact has not stopped the EPA from moving forward with a proposed permitting

Continued on page 22


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guidance for the use of diesel fuels in hydraulic fracturing activities. And the EPA continues to expand it’s Congres-sionally-ordered study on hydraulic fracturing.

In the case of the diesel fuel guid-ance, the EPA earned the scorn of a bipartisan group of U.S. Senators from energy-producing states.

Led by Oklahoma’s own Jim Inhofe, the group criticized the EPA’s expansion of its defi nition of diesel fuels in its draft permitting guidance as an effort to gain more federal control over the hydraulic fracturing process.

“EPA’s draft guidance is yet another example of how this adminis-tration continues to move ahead using every means possible to gain more federal control over hydraulic fractur-ing,” Inhofe said. “States have been regulating the pro-cess safely and effi ciently for 60 years and those states that use the practice

the most have the economic benefi ts to show for it. EPA is clearly overreach-ing in this case. It needs to stop trying to impede domestic energy production and let states keep up the good work.”

So what happens if Mitt Romney becomes president?

In his recently-announced energy plan, Romney has said he would ap-prove the Keystone Pipeline on “day one” in offi ce.

His plan would open up oil and gas development off the Atlantic Coast, as well as the Arctic National Wildlife Refuge. And he has proposed putting states in charge of regulating oil and gas development on federal lands.

Jeff Holmstead, the EPA’s air chief under George W. Bush, said a Romney EPA would mirror the Bush adminis-tration “where there was much more of an opportunity to understand the legitimate concerns of industries and to try to strike a balance between envi-ronmental protection and trying to do it in an effi cient way.”

Most of Romney’s plans depend heavily on Congress: amending envi-ronmental laws to say that carbon di-oxide is not a pollutant and should not be regulated under the Clean Air Act — the basis for Obama administration climate-change regulations; requiring new cost considerations, specifi cally that new regulatory costs would be off-set by the repeal of older regulations; and requiring that all major regulatory actions receive congressional approval.

“I think the EPA has gotten out of control for a very simple reason: It is a tool in the hands of the president to crush the private-enterprise system,” Romney said in a December Fox News interview, charging that the current ad-ministration wants to get in the way of fossil fuel development, favoring solar and wind power.

“We need to have a federal sector that sees its job as helping the private sector thrive and grow,” he added. S



Make no mistake about it, the 2012 presidential race has become the “Energy Election.”

At few points in our nation’s history has the nation’s energy policy played such an im-portant role in selecting the country’s leader.

And the differing views on the nation’s oil and natural gas industry by President

Barack Obama and Republican presidential candidate Mitt Romney have made this the single most important election in the history of the United States for oil and natural gas producers.

Federal issues have been and will remain

23

WELLHEAD | COVER STORY


Energy ElectionPresidential candidates offer differing

views on oil and natural gas issues

by Mike TerryOIPA President

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the greatest threat to Oklahoma’s oil and natural gas renaissance if left unchecked.

From increased regulations from federal agencies to the government’s approach to the Keystone XL pipe-line, it is federal issues that have the greatest impact on our members’ daily business lives.

Our nation’s current political lead-ership has not hidden the fact that they want to end the use of crude oil and are attempting to do so by making drilling and producing oil and natural gas in the United States more time consuming and costly. President Obama has called for the repeal of tax provisions for oil and natural gas producers every year since he took offi ce. When Congress failed to support his plan, the federal agencies the White House directs began an all-out assault on Oklahoma’s most vibrant industry.

The EPA instituted new air quality regulations that require time consum-

ing and obtuse reporting requirements, and the environmental agency contin-ues to threaten increased federal regu-lation on hydraulic fracturing. The U.S. Fish and Wildlife Service has cordoned off swaths of northwest Oklahoma and virtually all of southeast Oklahoma to protect the lesser prairie chicken and the American burying beetle, a bird that is so plentiful in Kansas that there is a hunting season and a bug that was deemed endangered in 1988 but has since been found in massive colonies across the southern plains states.

President Obama’s track record and his support of renewable energy is a stark contrast to Romney’s approach to American energy production.

Crafted with the help of for-mer OIPA Chairman Harold Hamm, Romney’s energy plan would expand drilling on federal lands and off our coastlines, while easing environmental regulations on the oil and natural gas industry.

Romney would also approve the Keystone Energy pipeline from

Canada, which President Obama sus-pended over environmental concerns. And Romney says he will discontinue government investments — such as subsidies and loan guarantees — in wind and solar power that have been a hallmark of Obama’s energy policies.

Our leaders in Washington must do everything they can to utilize Amer-ica’s domestic resources, ensure our energy security, and offer American families and businesses some protec-tion against increasing fuel costs. An “all-of-the-above” energy policy that furthers oil and natural gas develop-ment in the U.S. has been touted by both parties, but the last four years has featured more missed opportunities than leadership at the federal level. This represents a failure of inside-the-beltway politics that our nation simply can’t afford.

What we need now, and what we can’t afford to delay, is a bold, decisive agenda that will increase domestic pro-duction and put an end to the federal roadblocks hampering America’s oil

25


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and natural gas industry.The American people support such

a policy in large numbers. A survey conducted in August indicated that in-creased domestic production is exactly what Americans want their energy policy to refl ect. Polling showed that a clear majority, at 71 percent, were in favor of increased access to available oil and natural gas resources, 90 per-cent believed increased development would lead to more American jobs and, perhaps most tellingly, 87 percent thought that greater energy indepen-

dence would lead to lower energy costs for consumers.

What’s more? Pursuing such a policy would be an economic boon for the United States. Last year, the oil and natural gas industry accounted for 9 percent of all U.S. jobs and in August oil and natural gas extraction payrolls grew to 197,300 employees on a sea-sonally adjusted basis.

In Oklahoma, the oil and natural gas industry accounts for $1 out of ev-ery $3 spent in the state and roughly 27 percent of taxes paid, without includ-

ing corporate income taxes, sales taxes paid by producers, property taxes, motor vehicle taxes or any of the other miscellaneous taxes and fees paid by the industry.

Unfortunately, federal policies in recent years have made it more dif-fi cult to develop our natural resources, not less. While imports are decreasing thanks to development on private land — well outside of the federal govern-ment’s reach — we still import eight million barrels of oil per day.

It’s time our national agenda matched what the American people want — energy policies that lead to suffi ciency and lower fuel costs for consumers. While our politicians seem to have caught on — both Republi-can and Democratic agendas mention reducing our reliance on imported oil — we need to move beyond words and rhetoric and on to an immediate plan of action. After all, our economy’s success and the success of Oklahoma’s oil and natural gas industry depends on it. S

Our nation’s current political leadership has not hidden the fact that they want to end the use of crude oil and are attempting to do so by making drilling and producing oil and natural gas in the United States more time consuming and costly.

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There’s no secret President Barack Obama and GOP presidential candidate Mitt Romney differ wildly on oil and natural gas issues. And as the domestic energy boom continues and the cry for more stringent regulations on the industry grows louder, whoever wins in November will face key energy issues in their first days on the job.

The folks at CNN have compiled the top energy issues the president will face in office, highlighting both Obama’s and Romney’s views on each.

DrillingIt’s likely more land and offshore areas

would be open for drilling if Mitt Romney wins the White House. He has repeatedly called for more state control (read: faster permitting) and for drilling to be allowed in waters off the East and West Coasts.

Tale of two candidatesCNN highlights differences on energy between Romney, Obama

Mitt Romney speaks at a campaign stop at KP Kauffman Co., an oil and natural gas production and drilling company in Fort Lupton, Colo.


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Obama has a mixed record on drill-ing. He’s opened some new areas in the Gulf of Mexico and issued preliminary permits to drill in the Arctic. But his administration has issued fewer permits than that of George W. Bush, largely as a result of the moratorium following the BP spill.

How much additional access would boost U.S. oil production is another mat-ter. Already, 70 percent of the nation’s oil and gas resources are available for drilling, according to the Congressional Budget Offi ce. And expanding offshore drilling would require the approval of the states as well, something states such as Florida and California -- both with big coastlines and lots of oil -- are unlikely to do.

One wildcard: ANWR, or the Alaska National Wildlife Refuge. Long sought by oil companies, a Romney win coupled with even a slight Republican edge in the Senate would be enough to open the oil-rich area, according to the Rapidan Group’s Robert McNally.

Hydraulic fracturingHydraulic fracturing is booming,

and will continue no matter who’s president.

Obama has moved to tighten federal regulations on hydraulic fracturing, and will likely continue to do so if re-elected. Romney would leave the regulations up to the states, which are tightening the rules anyway in response to pubic pressure.

But neither increased state nor fed-eral regulations are thought to be enough to seriously reduce the number of wells that get fracked each year. Nor will they be enough to satisfy the most virulent critics, who want the practice banned altogether.

Iran SanctionsObama has taken a tough line on

Iran, imposing sanctions that have cut the country’s oil exports in half. It re-mains to be seen whether that’s enough to prevent the country from building a nuclear weapon.

Romney says he would go even fur-

ther, taking steps to cut off all of Iran’s oil exports. Such a move could send oil prices higher.

What would definitely send oil prices higher is a military strike on the country. It’s not thought that either Romney or Obama would order such an attack solely over the nuclear program, but Israel may feel like it has more free-dom to act on its own if Romney were president.

Keystone PipelineAlthough Obama didn’t approve the

Keystone expansion during his fi rst term, most suspect that was a sop to his envi-ronmental base, who oppose the pipeline largely because they don’t want Canada’s carbon-heavy oil sands developed.

But not wanting to pass up the nearby crude, analysts expect Obama would approve the Keystone project during a second term, albeit with a strict environmental review and permitting conditions.



Romney has said he would approve the pipeline his first day on the job.

SpeculatorsObama has taken steps to curb so-

called oil speculation by, among other things, reducing the number of contracts hedge funds, banks and others that don’t actually use oil, can hold on the com-modity futures exchanges.

Obama may further tighten these and other rules if reelected. It’s thought that Romney would either roll them back or not enforce them as strictly.

How much these traders influence oil prices -- if at all -- is subject to de-bate.

“Big Oil” tax breaksEach year the Obama administration

says oil industry tax breaks total about $4 billion, and each year the administrations tries to take them away.

The industry doesn’t see the tax breaks as specific to them, as many of

the provisions are available to other businesses as well. So far, enough Con-gressmen have agreed with the industry, and the tax incentives persist.

It’s thought that a second Obama administration would once again try to repeal the provisions, and once again fail. Romney isn’t expected to even propose

taking them away.There’s one major caveat: tax re-

form.“No matter which candidate wins in

November we think corporate tax chang-es are a bipartisan risk for the industry,” said Whitney Stanco at Guggenheim Securities’ Washington Research Group.


President Barack Obama speaks at the southern site of the Keystone XL pipeline during a visit to Cushing.

28


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“Between the looming fi scal cliff and the congressional efforts underway to push comprehensive tax reform, the oil and gas industry could get caught in the crosshairs.”

RenewablesNeither Obama nor Romney is

expected to continue the Energy De-partment’s loan guarantee program that funded Solyndra and a handful of other companies that went bankrupt. That program is largely over. So is the stimu-lus-era program that gave direct grants to renewable energy companies.

The primary support for technolo-gies such as wind and solar is now in the form of tax credits. Those credits expire at the end of 2012 for wind and 2016 for solar. Obama wants to continue them, but Romney does not.

It’s doubtful whether a President Romney would have enough votes to kill the credits in Congress. But he might not need them. Like the oil industry’s tax breaks, these tax credits could also be on the chopping block if Congress gets

serious on tax reform, perhaps replaced with a lower corporate tax rate for all businesses. Again, that outcome could happen under Obama or Romney.

NuclearNeither candidate is expected to do

much to spur the construction of new nuclear power plants. With natural gas so cheap, new nuclear plants are simply not cost competitive in most markets.

Romney may make a move to restart construction at Yucca Mountain, the Ne-vada ridge that was supposed to act as a permanent repository for the country’s nuclear waste.

Obama halted construction there during his fi rst term in response to con-cerns over the site’s suitability and op-position from the majority of the state’s residents -- notably Senate Majority Leader Harry Reid.

The Obama administration contin-ues to search for an alternative to Yucca Mountain. In the meantime, the nation’s nuclear waste remains stored -- some say unsafely -- right where it was gener-

ated: at nuclear power plants across the country.

Climate ChangeObama has moved fairly aggres-

sively to reduce emissions of greenhouse gases, primarily through new rules on coal-fi red power plants and higher fuel effi ciency standards for cars.

Romney claims he would roll back some of these regulations, many of which were handed down from the En-vironmental Protection Agency. But as many of the rules are court-ordered, it’s unclear just how successful he’d be.

“Congress would need to pass leg-islation that changes current regulations and laws such as the Clean Air Act,” Eurasia Group analysts wrote in a recent research note. “This would be diffi cult even if Republicans win both the House and Senate.”

Under Romney, look for a delay in or watering down of greenhouse gas regulations, but not a change in the over-all direction. S

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30

VARSITY

Oklahoma Supreme Court justices evaluatedThe Oklahoma Civil Justice

Council (OCJC) has released its inaugural evaluation of the Okla-homa Supreme Court.

The Oklahoma Civil Justice Council was formed by leading Oklahoma business organizations, including the OIPA, to inform Oklahomans about the impact of judicial decisions.

“It’s vitally important that all Oklahomans understand the impact decisions by the state Supreme Court can have on all industries, especially the oil and natural gas industry,” OIPA Presi-dent Mike Terry said.

This evaluation of the state Supreme Court analyzes cases that can have an impact on the econom-ic development and institutional life of the state and that involve liability creation and its expansion or restraint. The evaluations were conducted by the Judicial Evalu-ation Institute of Washington, D.C. and Sequoyah Information Systems. The initial Oklahoma Supreme Court study was based on 145 cases, and each judge received a rating based on their individual position in each case.

Ratings for each justice were: Justice Steven Taylor, 69 percent; Justice James Winchester, 69 percent; Justice James Edmond-son, 32 percent; Justice Yvonne Kauger, 31 percent; Justice John

Reif, 30 percent; Justice Joseph Watt, 26 percent; and Justice Tom Colbert, 21 percent.

Recently-appointed Justices Douglas Combs and Noma Gu-rich received provisional scores because they have participated in fewer cases than the other justices.

Justices Gurich, Kauger, Ed-mondson and Combs will all appear on the November ballot in nonpartisan judicial retention races, where voters may vote either to retain or not retain these judicial officers.

“In Oklahoma, judges are on retention ballots, and voters have a right to more information before casting their ballot,” said Fred Morgan, president of OCJC.

“Voters need to know that judges looking at the very same set of facts with the same rule of law to guide them often rule in differ-ing ways. Voters deserve to know if our Supreme Court judges are follow-ing the constitution and deciding cases based on the laws passed by the Legislature and signed by the governor or are they expanding liability and creating new law? This evaluation will arm Oklahoma voters with the facts.” S

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Republican challenger Mitt Romney’s clear victory in 2012’s first televised presidential debate gave a much-needed boost to the Romney campaign and shed light on both can-didates’ views of oil and natural gas development.

President Barack Obama used his time to simultaneously claim credit for America’s increase in crude oil and natural gas production and call for policies to reverse that success.

OBAMA: “On energy, Governor Romney and I, we both agree that we’ve got to boost American energy production. And oil and natural gas production are higher than they’ve been in years, but I also believe that we’ve got to look at the energy source of the future, like wind and solar and biofuels, and make those investments.”

Romney rose to a spirited defense of the industry while still signaling future challenges on the tax front.

ROMNEY: “Energy is critical, and the president pointed out correctly that production of oil and gas in the U.S. is up. But not due to his policies. In spite of his policies. Mr. President, all of the increase in natural gas and oil has happened on private land, not on government land. On government land, your administration has cut the number of permits and licenses in half. If I’m president, I’ll double them. And also get the – the oil from offshore and

Alaska. And I’ll bring that pipeline in from Canada.”

With predictable consistency, Obama attacked IDCs and percent-age depletion. The president went so far as to interrupt Romney’s defense of independent producers’ ability to deduct ordinary and necessary business expenses and depreciate well assets as they decline.

ROMNEY: “It’s actually an ac-counting treatment, as you know, that’s been in place for a hundred years. Now...

OBAMA: “It’s time to end it.”ROMNEY: “And in one year,

you provided $90 billion in breaks to the green energy world. Now, I like green energy as well, but that’s about 50 years’ worth of what oil and gas re-ceives. And you say Exxon and Mobil.

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Actually, this $2.8 billion goes largely to small companies, to drilling opera-tors and so forth.”

Romney then tipped his hand a little on tax reform.

ROMNEY: “But you know, if we get that tax rate from 35 percent down to 25 percent, why that $2.8 billion is on the table. Of course it’s on the table. That’s probably not going to survive you get that rate down to 25 percent.”

Producers should not automati-cally assume that IDCs and percent-age depletion are 100 percent safe if Romney wins the presidency. They must continue to educate him and Con-gress and help Romney staff his White House and agency teams with people who understand the issues.

Congress repeatedly has rejected the repeal of IDCs and percentage depletion, but the calculus could be-come more difficult if a new Republi-can president opened the door to trade them for lower rates.

In the spirit of the president’s argu-ment that business owners owe their

successes to government (“You didn’t build that.”), industry opponents are more aggressively crediting Depart-ment of Energy fossil fuel research and congressionally directed appropriations for unlocking the secrets of shale oil and gas production.

It matters little how the taxpayer funds were spent, when, or by whom, the tactic advances the storyline that

government subsidies are responsible for producers’ successes and that gov-ernment must now subsidize renewable energy projects at the expense of the successful.

The shift began shortly before the President’s March visit to Cushing and is now complete. Multiple news stories


advanced this line of attack in Septem-ber. The tactic dovetails with a global initiative unveiled by climate change evangelists at the Rio de Janeiro Earth Summit in June.

A review of the official White House or Obama campaign websites is more than enough to cloud the issue for voters not paying attention from 2009 through 2011.

To help royalty owners better un-derstand the issues in play, the Royalty Owners and Producers Educational Coalition has finalized informational letters for producers to share with mineral owners.

The letters discuss IDCs and per-centage depletion, advances in drilling technology, and a side-by-side compar-ison of the major political parties’ energy platforms. OIPA can share these let-ters with producers.

The coalition provides producers some separa-tion from the information provided mineral owners. However, some produc-ers may wish to discuss the contents with in-house counsel and personalize them accordingly. OIPA recommends that produc-ers mail the informational pieces separately from royalty checks.

Obama maintains a polling advantage in most battleground states – an advantage that had stabilized prior to the first televised debate. It re-mains unclear if Romney’s debate victory will trans-late into a more successful campaign operation or not.

If Romney allows his campaign to slump in Oc-tober, Republican donors and activists will turn their attention to protecting GOP House and Senate seats. To date Democrats

have outspent Republicans in several key Senate races including Massa-chusetts, Montana, Nevada and New Mexico. While Republican opportuni-ties may be evolving in Connecticut and Maine, it is difficult to imagine a GOP Senate majority without a strong performance by Romney.

Meanwhile, there are between eight and 20 vulnerable House Repub-licans in marginal or Democrat-leaning districts. Democrats would need to win between 35 and 40 seats to capture the House.

Finally, Romney referenced an idea that may be gaining traction in Washington, D.C., where picking winners and losers among the various deductions means making enemies. Romney suggested a new cap on de-ductions.

ROMNEY: “I want to bring down the tax burden on middle-income fami-lies. And I’m going to work together with Congress to say, OK, what -- what are the various ways we could bring down deductions, for instance? One way, for instance, would be to have a single number. Make up a number, $25,000, $50,000. Anybody can have deductions up to that amount. And then that number disappears for high-income people. That’s one way one could do it. One could follow Bowles-Simpson as a model and take deduction by deduction and make differences that way. There are alternatives to accom-plish the objective I have, which is to bring down rates, broaden the base, simplify the code, and create incentives for growth.” S

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Final frontierRepublicans make push in 2nd District for all-GOP delegation

As the last Democratic stronghold in the Sooner State, Oklahoma’s 2nd Congressional Dis-trict has drawn national attention as Republicans make a push for an all-GOP D.C. delegation.

Former prosecutor Rob Wallace emerged victorious in the Democratic primary to face Re-publican Markwayne Mullin, a plumbing company owner who survived a primary runoff of his own, in the November election. Independent Michael Fulks also will be on the ballot.

Their race was made possible by incumbent Congressman Dan Boren’s decision to not seek a fifth congressional term.

Each of the representatives of the other four districts in Oklahoma and both of its senators are Republicans. In 2008, National Public Radio declared Oklahoma the reddest state in the Union after John McCain won every single county.

In the conservative swing of 2010, Boren’s winning margin in his general election dipped to 56 percent. And when he decided not to run for


39

a fifth term, six Republicans joined three Democrats seeking to replace him.

There is a sense change is coming to the 2nd District, where Democrats outnumber Republicans two to one. It is a holdout, or as Matt Pinnell, chairman of the Oklahoma Republican Party, calls it, “the final frontier.”

“I would put the odds at 70-30 that the GOP candidate will win the general,” said Kenneth Hicks, head of the History and Po-litical Science Department at Rogers State University in Claremore, in the northern part of the district. “That ‘D’ on a ballot is like the mark of Cain with Oklahoma voters these days.”

Mullin must now find enough disaf-fected Democratic voters in the vast 2nd District, which has only sent one Repub-lican congressman to Washington since the 1920s.

“History is on our side,” said Wallace campaign manager Kyle Gott, who noted that U.S. Rep. Dan Boren, who’s held the seat since 2004, comfortably won the past two elections with 70 percent and nearly 60 percent of the vote.

But the working-class district, which spans 26 counties to take in sub-urban areas east of Tulsa and portions of the Ouachita Mountains, has grown increasingly conservative in the past de-cade, enough so that President Barack Obama failed to win any county in the

district in the 2008 election.“Just because the area is heavily

laced with Democratic individuals who carry the card, that doesn’t mean they are Obama Democrats,” Mullin said in



40

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an interview .“Most people are registered Democrat because that’s the only way to get a vote here.”

Outside eastern Oklahoma, many Democrats in District 2 would be considered Republicans — they are pro-life, pro-gun, blue-collar and don’t care for big government. Mullin is hoping to capitalize on those sentiments to win over the so-called Blue Dogs.

Wallace has been endorsed by some of the state’s most popular Democrats, including former Gov. Brad Henry, for-mer Attorney General Drew Edmondson and University of Oklahoma President David Boren, the incumbent’s father who also served as governor and as a U.S. senator.

“Voters are tired of the label ‘Democrat’ or ‘Republican.’ What they’re interested in is what’s right and wrong, not what’s right or left,” Wallace said in an interview.

University of Oklahoma political science professor Keith Gaddie said it is possible a Republican could put together a string of votes to capture the seat this election cycle — espe-cially with national party money that will most assuredly be pumped into the race in the coming weeks — but any victory would come with one major disclaimer.

“Here’s the thing: the Republicans can take that seat, but to hold it, the Republicans are going to have to moderate, or they’ll get beat,” Gaddie said. “You can’t take some of these straight party votes.” S


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OIPA 2012 FullpgC6x8OL.pdf 1 6/14/12 4:38 PM

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WELLHEAD | MEMBERSHIP

RKI among fastest-growing private companiesOIPA member company RKI Explo-

ration and Production LLC was recently named the second fastest-growing com-pany in central Oklahoma.

Trailing only Saratoga Roofing and Construction, RKI made it to the top of the Metro 50 list thanks to an 834 percent revenue growth.

Now seven years old, the indepen-dent oil and gas exploration and produc-tion company has focused on acquiring strategic, large-scale sites in oil- and natural gas-rich areas.

“Our total revenue for 2011 was approximately $105 million, which was more than double the amount for the prior year,” said Ronnie K. Irani, RKI’s president and CEO and the OIPA’s vice president-west. “We anticipate similar percentage growth in revenue for this year.”

In addition, Irani said, the growth in drilling activity has resulted in hir-ing of additional staff. In December

2010, RKI had 37 full-time employ-ees. Today it has 61. In September the company moved from its crowded quarters to a new office space in the Oklahoma Tower in downtown Okla-homa City.

RKI’s ongoing success is based upon two key pillars of strategic site acquisi-tions and an increased use of horizontal drilling.

“We remain focused in the Powder River Basin of Wyoming and the Perm-ian Basin of New Mexico and Texas,” Irani said. “Our existing acreage posi-tion is extensive, with over 700,000 net acres leased. It contains more drilling and reserve growth opportunity than can be realized in decades of drilling.” S

OIPA companies among Metro 50

The OIPA was well represented on the Metro 50, the Journal Record’s listing of the 50 fastest-growing private companies in central Oklahoma.

RKI Exploration and Production ranked second on the list, and five other OIPA member companies were listed as well. Other companies, and their ranking, include:n Enviro Clean Products and

Services (9)n Kimray, Inc. (19)n Chaparral Energy (32)n Basin Environmental and

Safety Technologies (48)n Flogistix (49)

Ronnie Irani

WELLHEAD | MARKETS

44

American pain at the pump is self-inflictedAmerican drivers feel less “pain at the

pump” than all but a handful of other nations – most of which are major oil producers that heavily subsidize fuel prices. That’s the conclusion of Bloomberg.com’s quarterly gasoline price ranking, and one that’s at odds with the experience of many Americans.

If filling the tank in the U.S. is as rela-tively painless as the ranking shows, why do many Americans say it hurts so much?

Visualizing Bloomberg’s data from August helps explain the “pain at the pump” (see graphic at right). Usually, the less de-veloped a nation is, the higher its pain rank. The average American can afford paying $3.75 per gallon more readily than, say, the average Indian, who makes only $4 a day and pays more than $5 per gallon.

Factoring gasoline consumption rates into the ranking presents a radically differ-ent picture of the world and confirms that Americans do feel “consumption pain.”

By this measure, the U.S. ranks sixth highest in terms of “consumption pain” despite its relatively low prices at the pump

(11th lowest) and high income (11th highest). One cause is the American penchant for cruising. Americans own fewer passenger vehicles per capita than most other developed nations but consume 35 percent more gasoline per capita than the next highest-consuming nation. In absolute terms, the U.S. con-

sumes more gasoline in aggregate than the next 20 nations combined, includ-ing China, Japan, Russia, Germany, U.K., and Brazil.

In a country that spans a continent, it takes a lot to move people and goods between coasts and heartland – but Americans also just like to drive. S

Advertiser’s IndexA&A Tank Truck .................................. 28ADP ................................................. 14Altman Surveying ............................... 10Arvine Pipe and Supply ....................... 38Basic Energy Services ........................... 7Big River Pipe .................................... 45Bituminous Insurance Companies ........... 15BlueCross BlueShield ........................... 35Blue Rock Energy Capital ..................... 32The Bramlett Agency ............................. 6Caba inc. ......................................... 34Citadel Intelligence ............................. 32Coffeyville Resources ........................... 41Collector Showcase ............................ 16Complete Energy Services ...................... 5Consolidated Oil Well Services ............ 20Continental Resources ......................... 40Danlin .............................................. 47El Dorado Drilling Co. ......................... 27Energynet.com ................................ 1,48 Enviro Clean ..................................... 17EnviroTech ......................................... 44EV Downhole ..................................... 24Fisher Production Services .................... 32Gallagher Benefit Services ................... 36Global Production Services .................... 8HOTCO ........................................... 19IHS .................................................... 3

Kimray ............................................. 31LW Environmental Services ................... 39Maschino, Hudelson & Associates ......... 37Meagher Energy Advisors .................... 33MegaFluids ....................................... 10Messer Bowers ................................. 16Nichols Energy Advisory Group ............ 28NOMAC Drilling ............................... 21OERB ................................................. 9Oil & Gas Asset Clearinghouse ............... 2ORI Environmental .............................. 13Pacer Energy Marketing ....................... 30Plaster & Wald .................................. 39Plains Marketing ................................. 38PlainJans ........................................... 26Primary Natural Resources .................... 12Shores-Sentry ..................................... 12Summit Bank ...................................... 42Summit ESP ....................................... 26Sunoco ............................................. 10Topographic ...................................... 11TRC Consultants ................................. 22Trinity Consultants ............................... 25Tulsa Chamber ................................... 18VAM Field Service .............................. 43Varsity .............................................. 30Ward Petroleum ................................. 29

Calendar of EventsOct. 21-22 — OIPA Fall Conference Renaissance Hotel and Convention Center, TulsaFor information, contact the OIPA at 405-942-2334.

Nov. 7 — Wildcatter Wednesday Luncheon Tulsa Country ClubFor information, contact the OIPA at 405-942-2334.

Dec. 5 — Wildcatter Wednesday Luncheon Quail Creek Country Club, Oklahoma CityFor information, contact the OIPA at 405-942-2334.

45

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WellHead October 2012

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