A View from Austin | Russell T. Rudy Energy LLC
Todd Morgan, President of Morgan Capitol Consulting, recently addressed a meeting of the Houston Association of Professional Landmen. Morgan is a legislative liaison, commonly known as a lobbyist, who endeavors to influence legislation on behalf of the energy industry. His remarks covered a number of topics, but his primary emphasis was on fracking, tax cuts and the crude export ban.
Morgan prefaced his remarks by saying that the states were originally the source of power in the United States and still should be. The states ceded some of their authority to the federal government at the time the U. S. Constitution was adopted. The states are also the source of power for local government entities in that they grant some authority to counties, municipalities etc.
The biggest single issue before the current session of the Texas legislature is fracking. There are bills in both the House and Senate explicitly clarifying that regulation of the oil and gas industry is the sole responsibility of the state. Under these bills, local governments would clearly have no jurisdiction over fracking and other industry practices. Morgan feels that this is already implicit in the state constitution, and consequently, the Denton fracking ban would be overturned. However, state lawmakers want to clarify the issue once and for all. He predicts ultimate passage by both houses and that Governor Abbott will sign the legislation into law.
It is felt that the Denton initiative passed due to the large number of students at the University of North Texas who supported the bill. Consequently, industry observers are watching what might happen in Lubbock (Texas Tech University), Alpine (Sul Ross University), and Bryan/College Station (Texas A & M University). However, if the proposed bills in the legislature become law, any such initiatives would be futile.
The state of Texas is running a budget surplus, and legislators want to give the citizens of the state a tax cut. While the concept is popular, the process is complicated. The House is dominated by pro-business Republicans who want to see the statewide sales tax reduced. The Senate is dominated by Tea Party Republicans who want to see property taxes reduced. Morgan feels that there is not enough money to support any meaningful reduction of both taxes, so it is a binary choice.
When asked about the repeal of the national crude export ban, Morgan said that it makes eminently good sense at all levels for virtually all parties involved. Even the Aspen Institute has issued a paper supporting lifting the ban. However, given the current climate in Washington, he feels that repeal is far from certain.
He ended his remarks by stressing the importance for all of us in the energy industry becoming informed and involved with issues at the state level.
