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Low Prices, Changing Industry Sink RMOGA

Low Prices, Changing Industry Sink RMOGA

The Rocky Mountain Oil &amp Gas Association (RMOGA) has fallen prey to low commodity prices and industry belt-tightening just short of its 80th anniversary. The trade group plans to shut its doors permanently June 1.

"It is largely a financial decision," said RMOGA President John Morrison, a lawyer with Fleck, Mather &amp Strutz. "And as the oil and gas industry in the Rocky Mountain region has changed, both in the make-up of the players and the level of activity, it's become increasingly difficult to fund an organization like RMOGA."

The move comes amid reorganization of the American Petroleum Institute (API) and follows talk among industry players last year of combining the Natural Gas Supply Association with API. Clearly, the pressure is on to cut costs, and trade association dues-paying has become less of a priority.

API has reorganized into six industry segments: upstream, downstream, pipeline, marine transportation, natural gas, and allied industries. API also is addressing public perception of the industry and global climate change, said spokeswoman Susan Hahn. "RMOGA is considered an allied organization because API does not have a state petroleum council in that area. We have tried to coordinate and work with them, and they with us, where there were issues that were mutually beneficial for us to do that.

"Obviously it's an unfortunate loss [of RMOGA], but I don't think that API is in a position to address it in any detail."

NGSA spokeswoman Linda Schoumacher said the organization is not combining with API or anyone else. Of RMOGA, "I can certainly see that there may have been instances where we have worked with them, but I don't know of any formal process where we've collaborated with them on an issue on an ongoing basis. I think the greater impact on the industry is not the closing of RMOGA but the current economic and market situation which has made it necessary."

RMOGA membership is about 280 oil and gas players who pay dues based on a formula that considers production, refining, marketing, transportation, and processing volumes. Morrison would not disclose information about average dues, but an industry observer said annual dues for some member companies reach the "six figures."

The association has focused on issues such as improving producer access to public lands, as well as tax, royalty, environmental, refining, and marketing issues. RMOGA, founded in Casper, WY, in 1920 moved to Denver in 1975 and took over API activities in Colorado, Wyoming, Utah, and Montana when API was closing offices in those states. RMOGA currently has 14 employees in offices in Salt Lake City, UT; Denver; Casper; Billings, MT; a joint office with API in Bismarck, ND; and a contract office in Boise, ID. The association represents the oil and gas industry in Idaho, Montana, Wyoming, North and South Dakota, Nebraska, Colorado, and Utah.

The association's demise also stems from the desire of member companies who don't have activities in all the RMOGA states to participate in state-specific trade associations, Morrison said. "I think that many companies are starting to look very closely at the dues they pay to trade associations and they want to make sure duplication is eliminated." Mergers and acquisitions and the exit of some major producers from the Rockies also have thinned the ranks of RMOGA membership.

Morrison said he expects RMOGA state divisions to reorganize into some kind of stand-alone state associations. The association is active in public lands issues, "and we believe there will be some kind of public lands office organized in Denver. I think some or all of those reorganized divisions will probably purse some sort of affiliation or relationship with other trade associations that are out there."

Claire Moseley is director of RMOGA's land/E&ampP division and said she's looking at aligning herself with another association or forming a new association just to deal with public lands issues. "It depends on whether I can raise the money or not. I'm hoping to have a pretty good idea by June 1st, which is when we close our doors."

Joe Fisher, Houston

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