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Monday, February 08, 2010
Oil, gas group retools approach
By Winthrop Quigley
Copyright © 2010 Albuquerque Journal Journal Staff Writer
Bob Gallagher was among the state's fiercest advocates for oil and natural gas production until he was ousted as president of the industry's biggest trade association late last month. He said he was told he had damaged the New Mexico Oil and Gas Association's image and reputation so badly he could no longer be effective.
NMOGA's board chairman, S. Leland Gould, an executive with Giant Industries, said no one person is at fault, but the association does need to improve its effectiveness and to find a way to balance the legitimate concerns of regulators, citizens and the industry.
But anyone expecting a tamer, more cautious oil and gas industry following Gallagher's nearly 10-year-long presidency had better think again.
"The focus of the organization and our mission and goals remain unchanged, and our support for them is unwavering," said Jason Sandel, a member of NMOGA's executive committee and executive vice president of Aztec Well Servicing.
"We believe very strongly we don't want to change direction," Gould said. "There have not been changes other than that we are now evaluating how to be more balanced and more effective."
Gallagher and association leaders would not discuss the dismissal, saying it was a personnel matter. The Internet rumor mill proposed Gallagher had been dismissed following pressure by Gov. Bill Richardson's administration, a claim a spokesman for the governor ridiculed.
Certainly NMOGA's leaders are not tempering their criticism of Richardson. John Byrom, a member of NMOGA's regulatory practices committee and president of D.J. Simmons Inc., a Farmington oil and gas producer, says the administration has distorted the industry's environmental record to advance regulations the governor wanted enacted, behavior he called "a travesty."
At the same time, Byrom said, "I would hope going forward our organization really looks to be forming new, more positive relationships with the regulators, the Legislature and the new (governor) we'll be getting, whoever it is, and start to get a more collaborative approach to the issues rather than having such a knock-down, drag-out, adversarial relationship."
Adversarial could be one way to describe Bob Gallagher's approach. Passionate is another. In speeches to business audiences, the 53-year-old, speaking almost too fast to be understood, would shed his jacket to reveal a shirt soaked in sweat, toss aside prepared notes to digress on a point he found interesting, crack jokes, and blast the Richardson administration for environmental rules he was convinced were destroying the state's oil and gas companies.
In one of his last interviews, Gallagher told The Associated Press that Richardson's environmental record was perfect: "He promised us heartache and he has delivered." Describing the process by which environmental regulations were written, Gallagher told the Journal last year, "They keep saying we were at the table, but we were at the kids' table. And at the kids' table you're told to be quiet, eat everything in front of you and like it."
NMOGA officials say that a post-Gallagher association will engage in more conversations with the public and regulators and will try to find more innovative solutions to the industry's problems.
Gould said industry and government should find ways beyond regulatory changes to increase New Mexico's oil and gas production. In years past the state provided $8 million in tax incentive that produced $500 million in new drilling projects, Gould said. With state revenues tanking, such incentives might help generate more taxes from the oil and gas industry, he said.
The industry looks like a monolith, but the interests of its constituents are not identical, Gould said. Drillers, refiners, large integrated companies, small independents, San Juan Basin producers and Permian Basin producers all have concerns NMOGA will have to balance, he said.
Byrom said industry and regulators should seek science-based environmental solutions and produce smart regulations instead of merely strict regulations.
"Some of us are just worn out and tired," Byrom said. "It would be nice if we could all get together and look at the problems and solve them for the good of the state. No more finger-pointing and name-calling."
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