Low Prices, Changing Industry Sink RMOGA
The Rocky Mountain Oil & 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 & 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&P 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
Joe Fisher, Houston