(UPDATE) A look at the controversial Affordable Care Act on its fifth anniversary

By Mary Holloway Richard. View her attorney profile here.

Mary Richard is recognized as one of pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families. She also has significant experience in representing providers in regulatory matters.

Mary Richard is recognized as one of pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families. She also has significant experience in representing providers in regulatory matters.

(Updated 4/7/15)
President Obama has taken the occasion of the fifth anniversary of the signing of the Affordable Care Act (“ACA”) to characterize continued activities on the Hill to repeal it as renegade special interest activities. The ACA continues to be a subject of debate both in terms of its accomplishments—how many are newly covered and how much will be saved—and in terms of its public support.

While the Associated Press reported on March 23, 2015, that public support was down 5% since its passage, as one who daily writes and advises health care clients on matters related to the ACA, I can say with certainty that the depth and breadth of increased regulation spawned by the ACA are changing the nature of the system.

Those changes include responsive movement toward integrated health systems, mergers and affiliations; transition from quantity- to quality-based reimbursement; the relaxation of HIPAA standards in some respects and its tightening in others in the context of EHR transformation; and increased direct and indirect costs to employers as a result of new responsibilities.

Nearly fifty changes have been made to the ACA as of March 2, 2015, and this suggests a continuing need for providers, employers and business owners to remain informed and responsive to the moving regulatory compliance target.

On Monday, March 30 the Supreme Court rejected a new challenge to the Affordable Care Act (“ACA”)  that targeted the Independent Payment Advisory Board (“IPAB”), a 15-member government panel which has been characterized as a “death panel” because of its intended role in cutting Medicare costs.   The IPAB was to convene when the target growth rate for Medicare (3.03%) is exceeded.  However, the growth rate is 1.15% according to CMS, and so the administration has not nominated any panel members.  In declining to take up the case, the Supreme Court left undisturbed the 9th US Circuit Court of Appeals in San Francisco dismissal of the lawsuit. The proponents of the ACA are calling this a win.  Coons v. Lew, No. 14-525.   Certiorari was denied by the United States Supreme Court on March 30, 2015.

Best, worst states to be a doctor

South Carolina tops the list, Rhode Island finishes lastshutterstock_156022646

WalletHub released its list of the best and worst states for physicians based on several metrics, including wages and job opportunities.

For the report, all of the states and Washington, D.C., were rated on 12 metrics sorted into two categories:

  • Environment, or risks of the job, such as state medical board penalties, malpractice payouts, and costs of malpractice insurance; and
  • Job opportunity and competition.

Data for the report were taken from Citizen.org, Diederich Healthcare, HHS, the Missouri Economic Research & Information Center, the U.S. Bureau of Labor Statistics, and the U.S. Census Bureau.

Based on those categories, WalletHub identified the five best states for doctors as:

      1. South Carolina
      2. Minnesota
      3. Texas
      4. Mississippi
      5. Kansas

Meanwhile, the five worst states for doctors were:

      1. Rhode Island
      2. New Jersey
      3. Oregon
      4. New York
      5. Maine

View on Advisory.com.


SCOTUS reverses lower court decision, Medicaid providers can’t bring injunction against Idaho officials


United States Supreme Court Building

SCOTUS reverses a lower court decision in Armstrong v. Exceptional Child Center, Inc.:

Idaho residential care facilities sued the state for failure to implement higher reimbursement rates required by Medicaid which the Idaho legislature had not sufficiently funded.  The federal district court and the Ninth Circuit Court of Appeals sided with the facilities ruling that Idaho’s Medicaid rates were insufficient to support the federal requirements that payments had to be at such a level to provide for quality care and adequate access to services.  In Armstrong v. Exceptional Child Center Inc., the United States Supreme Court reversed the lower court ruling and held that the Supremacy Clause does not confer a private right of action and so Medicaid providers cannot sue for an injunction requiring the state to comply with the reimbursement rate provision of the federal Medicaid Act.  42 U.S.C. §1396a(a)(30)(A)


Eminent domain raises questions when used on behalf of the private sector

Jennifer Berry Photo

Jennifer Ivester Berry is an attorney with a solid reputation in guiding real estate transactions with a focus on development, financing and energy. She represents individuals, and privately-held and public companies in connection with a wide range of commercial real property matters.

Q&A from NewsOK: Phillips Murrah attorney Jennifer Ivester Berry discusses the what, when, how and why of eminent domain.

View Jennifer Ivester Berry’s attorney profile page here.

By Paula Burkes – Published: March 25, 2015
View the article at NewsOK.com here.

Q: What is eminent domain?

A: Eminent domain, condemnation, taking power — these words sound ominous and forceful, as if the party on the receiving end has no choice but to succumb to the directive of the imposing party and give up something for nothing. However, stop for a moment and remember that with most constitutionally created powers come some series of checks and balances. Eminent domain, in its most simplistic form, is the power to acquire private property for a public use, provided that the property owner receives just compensation. Some of the most recognizable uses of the eminent domain power are for the establishment of roadways, hospitals, railroads and utilities. In more recent years, the use of eminent domain for purposes of economic development has sparked a public policy debate that will no doubt continue for years to come.

Q: When can eminent domain be used?

A: The power of eminent domain originates from the state’s constitution, and the Oklahoma Legislature enacts statutes that set out the manner, purpose and through whom such power may be exercised — a system of checks and balances. For example, municipalities are granted a general power of condemnation under the state statutes, so long as the taking is for a public use and the property owner is adequately compensated. There are certain circumstances and uses that the Legislature has identified as being for the benefit of the public and thus created specific statutes covering them, for example, the removal of dilapidated buildings, the improvement of water and sewer systems, and urban renewal. The Legislature also conferred the power of eminent domain on utility companies, public enterprises and common carriers. Private individuals or companies also may utilize the power of eminent domain for agricultural, mining and sanitary purposes, as well as for establishing private roadways where access in an issue.

Q: How does eminent domain work?

A: The party seeking to condemn property will usually have attempted to negotiate with the landowner to acquire the property. That said, if a municipality or utility company is dealing with numerous parcels of land with countless owners, using the condemnation proceeding can simplify the process and avoid negotiations that may or may not be successful. Once the condemnation proceeding is filed, the court appoints three individuals (commissioners) who will examine, evaluate and inspect the property. The commissioners are instructed to return an award to the court that reflects the fair market value of the property taken, as well as any injury to any part of the property not taken. The award is payable to the landowner even if the landowner owner contests the award. If, as a result of a contest, a jury finds the fair market value of the property to be an amount in excess of 10 percent of the commissioners’ award, the landowner may be entitled to reasonable attorneys and expert fees.

Q: Why do we need eminent domain?

A: Using eminent domain to obtain property for roadways and utilities is rarely a source of contention, even if ultimate ownership of such property is by a private party. The more controversial issue is whether the government can use its eminent domain power to aid a private party. The U.S. Supreme Court has blessed the use of eminent domain as a governmental incentive for economic development. However, numerous states, including Oklahoma, have taken a more narrow view and require that the use of eminent domain power for economic development must involve the removal, elimination or prevention of blight. Proponents of this power, whether the broader or more narrow application of it, argue that without it being available as an incentive for private development, economic development would be stifled significantly. Others, however, feel that failure to value individual property rights actually dissuades potential residents and business from moving into a community and as such cripples any potential for economic growth. One thing is clear, eminent domain will continue to be used for economic development and as such continue to be a debatable issue in the private sector.


Avoiding the b-word: The many faces of financial restructuring

Clay Ketter’s guest column, Gavel to Gavel, originally published in The Journal Record  on Mar. 11, 2015.
View Clay Ketter’s attorney profile here.

Clayton D. Ketter is a litigator whose practice involves a wide range of business litigation in both federal and state court, including extensive experience in financial restructurings and bankruptcy matters.

Clayton D. Ketter is a litigator whose practice involves a wide range of business litigation in both federal and state court, including extensive experience in financial restructurings and bankruptcy matters.

The current price of crude oil is sure to make people use language that is inappropriate in polite conversation. As news of idled rigs, layoffs and credit defaults becomes a daily occurrence, the use of the b-word is sure to come up more and more. Of course, I’m referring to that nasty little 10-letter word, bankruptcy.

The stigma that once surrounded a bankruptcy filing has subsided as multiple high-profile companies such as American Airlines, General Motors and the Los Angeles Dodgers have entered the bankruptcy process and emerged as stronger, more viable businesses. Despite these successes, one group that has been gradually shunning the use of the b-word is, surprisingly, bankruptcy attorneys. Yes, the people most familiar with the ins and outs of the Bankruptcy Code, rather than announce themselves as bankruptcy experts, are instead asking to be referred to as financial restructuring specialists. This is particularly true for those attorneys that focus on businesses, as opposed to individuals, facing financial difficulties.

At first glance, it would appear that a rebranding effort is the motivation for this shift. Bankruptcy may suggest failure, death, layoffs and closings. Financial restructuring, comparatively, signifies repair and rebirth of a business. Although marketing has played a part, it fails to explain the whole story. The use of the phrase “financial restructuring” reflects the reality that debtors and creditors facing financial stress have many options at their disposal, not just bankruptcy.

Workouts, divestitures, mergers and asset sales are just some of the tools that a financial restructuring professional may utilize to assist debtors and creditors in resolving financial difficulties. Options also include a bankruptcy filing, whether it be a Chapter 11 reorganization or a Chapter 7 liquidation. However, a bankruptcy filing is not always the right choice. Depending on the circumstances, it often makes sense to avoid the time and expense of a formal proceeding, and instead resolve matters out of court. The title of financial restructuring attorney reflects the fact that multiple options are available to address and repair economic trouble, not just bankruptcy.

Should crude oil prices remain depressed, we are certain to see the b-word used more frequently. However, it’s important to remember that, depending on the circumstances, a more conservative approach may be better.

NewsOK Q&A: Health care data hacking likely to require new state laws

From NewsOK / by Paula Burkes
Published: March 9, 2015
Click to see full story – Across the U.S., more state laws are likely for mandated encryption of health data

Phillips Murrah’s Joshua Edwards discusses health care data hacking

Hacking may bring more state laws, encryption of health data


Josh Edwards is a Director at Phillips Murrah law firm.

Q: How serious of a problem are health care data hacks for insurance companies, employer health plans and others in the health care industry?

A: Last month Anthem Inc., the second-largest health insurer in the U.S., announced hackers had stolen personal information, including names, dates of birth, member ID/Social Security numbers, addresses, phone numbers, email addresses and employment information of up to 80 million individuals covered under its health plans. The Anthem breach alone affects one out of every four Americans. This data can be sold on the black market and then used by identity thieves to commit financial crimes, as well as fraudulently obtain medical services and prescriptions. The FBI previously warned insurers and other companies in the health care industry that their data security systems lagged behind those of the financial and retail sectors and that they were particularly susceptible to cyberattacks given the value of such data to cybercriminals.

Q: What federal and state laws govern the security of health care data and a company’s obligations after discovery of a breach?

A: The primary federal law is the Health Insurance Portability and Accountability Act (HIPAA), which was amended in 2009 by the Health Information Technology for Economic and Clinical Health Act specifically to address electronic transmission and storage of protected health information (PHI). HIPAA governs the privacy and security of an individual’s PHI and requires certain kinds of technological safeguards to protect against unauthorized use and disclosure. In addition to HIPAA, earlier this year New Jersey passed a law requiring health insurers to encrypt all electronically-stored personally identifiable information of New Jersey residents, and it seems likely we will see similar laws passed by other states as well. HIPAA also requires a company to notify affected individuals after discovering a breach of PHI. Forty-seven states also have their own breach notification laws, each of which have their own unique content and timing requirements.

Q: How does an insurer’s data breach impact employers who use the insurer for their health plans?

A: Events such as the Anthem breach affect not only the insurer, but also companies that partner with the insurer to provide health coverage to their employees. For companies with a fully-insured health plan, the insurer will be a “covered entity” under HIPAA and have primary responsibility for protection of PHI and compliance with the breach notification requirements. However, for self-insured health plans, an insurer serving as a third-party administrator will be considered a “business associate” under HIPAA, meaning primary responsibility for protecting PHI and notifying affected individuals and government agencies would fall to the employer. Regardless, employers should have a plan to address such concerns and keep employees informed.

Q: What should insurers and employers do upon discovery of a breach of health care data?

A: After a breach, both insurers and employers should review their contracts, including any business associate agreements, to determine their relative responsibilities as well as any indemnification rights and obligations. It’s also essential for both parties to know their duties under HIPAA and state breach notification laws so that compliant and timely notifications can be crafted and delivered to affected individuals and applicable federal and state agencies. Finally, a plan should be implemented for keeping affected individuals informed of the ongoing investigation, as well as strategies for protecting against identity theft and credit monitoring options that may be available.


Overcome obstacles to profiting from expiring patents


Patent maintenance fees have led patent holders to abandon an increasing number of patents.

The recent increases in patent maintenance fees has led many patent holders to abandon an increasing number of patents because the cost of maintaining a large portfolio is becoming too high. Selling patents that are about to lapse is one option, however, doing so presents two primary concerns: lack of investment in expiring patents and litigation pricing, according to News 9.

U.S. patents must be renewed three times during their lifetime. Maintenance fees are due after the issue date of the patent every 3.5 years, 7.5 years and 11.5 years. Maintenance fees escalate at each renewal portion. Small entities are entitled to a 50 percent discount on maintenance fees and micro entities receive 75 percent off patent maintenance. These fees can be paid up to six months prior to their due date. Patents are not abandoned until a six-month grace period ends at years 4, 8 and 12 respectively. Patents can be renewed during their grace period for $160.

Most buyers will not pay a significant price for patents that are nearing their expiration date, for the same reason we are less likely to buy products in the store that are close to their “sell by” date. Also, in many circumstances, buyers may decide to enforce the patent, sometimes resulting in costs to the patent holder, making selling a patent for a lower five figure price undesirable.

To overcome transaction costs of selling patents for a low sale price, the patent holder must lower the transaction cost. This can be done by using the same negotiated patent purchase agreement for repeated transactions. Once the first transaction is completed, the patent holder and buyer can use the same patent purchase agreement for future transactions.

The second concern is primarily driven by the sale price of the patent. Most companies would be comfortable in selling the patent if the sale price of the patent significantly exceeded the cost of responding to discovery. In many respects, discovery issues in patent litigation are no different from discovery issues that arise in all other cases.

While it may not be realistic to sell a single patent nearing expiration for significant revenue, selling groups of these patents can generate significant revenues and responding to discovery for those few patents is manageable.

By selling groups of patents to the same buyer throughout the year, a patent owner can virtually eliminate the transaction costs while generating six figure annual revenue from patent assets that would otherwise soon become worthless.

Wind gets caught in political volley

Jim Roth’s Friday column, Earth Business, appears in The Journal Record.
Originally published in The Journal Record on Feb. 13, 2015.
View Jim Roth’s attorney profile here.

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Oklahoma’s cleanest and cheapest form of electricity comes from its own wind projects. Although our utilities don’t operate under a mandate, or what’s known as a renewable energy portfolio standard, like many states, we have a goal calling for 15-percent renewable energy by 2015. According to the Corporation Commission, our state enjoyed 18.42 percent of its energy from eligible renewable energy resources in 2013. That trend continues. With the American portfolio of renewable energy growing and utility portfolios further diversifying, wind energy produced 14 percent of American electricity in 2013 and early 2014. Turbine technology is improving; wind is more available to generate electricity than ever. We’re on the map as the sixth-largest state for wind power. The future of renewables here seems very promising.

Yet a few case studies address what can happen when political winds change and politicians begin to push policies choosing coal at the expense of wind development.

Investments in the Australian market for renewable energy face a very stark contrast from where the country was headed, due in large part to the changing political winds. The Australian Renewable Energy Target is a key policy established in 2001 designed to ensure that 20 percent of the country’s electricity comes from renewable resources by 2020. Since the RET legislation in 2001, pro-renewable energy activist groups across Australia have raised substantial investments and awareness for the benefits of renewable energy. However, the fate of Australia’s RET has been placed in jeopardy by political leaders.

Reports show that investment in large-scale renewable energy projects have plummeted over the past year. While investment in global renewable energy is up by 16 percent, Australian numbers have dropped by 88 percent. Australia Prime Minister Tony Abbott and his pro-coal agenda have created serious ambiguity in federal government’s position on renewable energy policy and investors are leery. Many investors and developers are considering either downscaling or leaving Australia altogether. The downward trajectory will undoubtedly continue for years to come. Many Australian developers are looking to invest in the United States and other global renewable energy markets. A spokesperson for General Electric, an investor in renewable energy projects in Australia, said future investment will only occur once investor confidence in the policy environment is restored.

This sounds good for America and perhaps for Oklahoma, but only if our state and country continue to welcome and nurture this growing industry. It’s arguable that similar anti-renewable efforts in some states may damage the overall contributions to America’s growing portfolio of renewable energy resources. A reversal of policies could have the same chill on investments, steering billions of dollars to neighboring states or regions, as is happening with Kansas.

In 2009, Kansas legislators passed an RPS requiring state utilities to capture 20 percent of their electricity from renewables. Legislative efforts and debates last year failed to repeal this law, but newly re-elected Gov. Sam Brownback is beginning to sound more like Abbott than a governor of a wind-rich state, with no coal industry to speak of. Recent legislation proposed by state Rep. Ken Corbet, R-Topeka, seeks to reduce the RPS to 10 percent in 2015 and repeal the RPS statute by July 1, 2016.

Let’s hope that Oklahoma’s political leaders don’t forsake our state’s clean energy promise by following the lead of Kansas or Australia, or even fostering an anti-investment environment such that our state faces the same loss or potential loss beginning to appear elsewhere. Stay tuned to this legislative session.

Online Evidence: Digital discovery during divorce

This Gavel to Gavel legal column was originally published in The Journal Record on Jan 28, 2015.
By Nicholle Jones Edwards. View her attorney profile here.

Nicholle Jones Edwards

Nicholle Jones Edwards

“Fantastic advances in the field of electronic communication constitute a greater danger to the privacy of the individual,” Supreme Court Justice Earl Warren prophetically stated in 1963.

Today, people use email, text messaging and social networking sites more than ever. Digital activities of a couple going through a divorce can become valuable evidence when determining issues such as parental fitness, financial support or the division of assets and debt. A history of social media use can be a virtual character witness – for good or ill.

It should also be no surprise that public posts on sites like Facebook, Instagram and Twitter can be examined by attorneys involved in the discovery process. However, texts and so-called private messages on social networking platforms can also be obtained by attorneys and become evidence in a divorce.

Deleting posts, messages and/or texts can also invite trouble. Procedurally, a divorce begins with a Petition for Dissolution of Marriage, which includes an Automatic Temporary Injunction.

The injunction includes the following language that specifically prohibits either party from deleting social media information, text messages or emails during the divorce process: “Intentionally or knowingly damaging or destroying the tangible property of the parties, or of either of them, specifically including but not limited to, any electronically stored materials, electronic communications, social network data, financial records, and any document that represents or embodies anything of value.”

For those inclined to delete embarrassing messages or image transmissions, the best policy is to talk to their attorney about it so preparations can be made to address the matter.

Some general guidelines for communicating digitally during a divorce: If you want to communicate in a way that is truly private, talk in person. One-on-one verbal communication in a private location is the only real private way to interact.

Be aware that many digital devices and social media sites use geographical data. When you post or tweet, be aware that you may also be publishing your location. To avoid this, turn off the geolocation option on your sites and mobile devices.

When you email, text or post messages to social networks, assume that all of those messages will be seen by the judge. Especially refrain from sending or posting anything that is motivated by frustration or anger.

SCOTUS order to stay executions doesn’t change anything

shutterstock_lethal-injectionThe Supreme Court of the United States stay order blocking three pending executions in Oklahoma, handed down Jan. 28, doesn’t actually change anything, said Phillip Murrah Director and one of the firm’s founders, Robert N. Sheets.

While there is much interest and coverage of the motion, no decision has been made that will change how death sentences are carried out – other than a mandate to remain in place for the time being.

While the occurrence is quite interesting, it is simply an order to halt executions until the highest court of the land has a chance to hear arguments and make a decision.

From The Supreme Court of the United States on Jan 28, 2015: Application (14A796) granted by the Court. Respondents’ application for stays of execution of sentences of death presented to Justice Sotomayor and by her referred to the Court is granted and it is hereby ordered that petitioners’ executions using midazolam are stayed pending final disposition of this case.

Wednesday’s order doesn’t address the death penalty. The State of Oklahoma is still able to execute condemned prisoners by any other means previously deemed constitutional, Sheets noted. The Stay also doesn’t make a determination about the controversial decision to use the drug midazolam as lethal injection agent during the execution process. It doesn’t determine anything about constituent ingredients. It doesn’t address process or propriety. It doesn’t make any kind of judgment, one way or the other.

What happened here in Oklahoma is simple – Oklahoma attorney general Scott Pruitt asked earlier this week for the stay, according to a report by The Associated Press:

“Rather than stop the executions himself, Oklahoma Attorney General Scott Pruitt took the unusual step of asking the justices for a stay. Oklahoma wants the right to resume executions if it finds a different suitable drug.  Pruitt said in a statement: “It is important that we act in order to best serve the interests of the victims of these horrific crimes and the state’s obligation to ensure justice in each and every case. The families of the victims in these three cases have waited a combined 48 years for the sentences of these heinous crimes to be carried out.”

The United State Supreme Court, defense attorneys for the condemned inmates and the Oklahoma Attorney General agreed that the state should wait on these executions until final disposition of the case. The executions are put on hold until the Court can hear Richard E. Glossip v. Kevin J. Gross.  Richard Glossip was the next inmate scheduled to be put to death

SCOTUS scrutiny: The drug and how it is administered

The Supreme Court will hear Glossip v. Gross in April and issue a decision in the summer. The focus of the case is the drug, midazolam, and whether it causes pain and suffering in the inmate. The drug is part of a drug combination used in the state’s lethal injection process. Last year, Oklahoma received worldwide attention after an execution using the same drug when terribly wrong.

During the execution process, midazolam (Midazolam Hydrochloride) is administered to the inmate, first, as a sedative. That injection, according to The New York Times, “was to be followed by injections of vecuronium bromide, a paralyzing agent that stops breathing, and then potassium chloride, which stops the heart.”

Phillips Murrah attorney, Mary Holloway Richard, a pioneer in healthcare law who has practiced in the area of clinical research and regulatory law for many years, said that the drug, itself, isn’t necessarily the problem. Rather, how and under what conditions it’s administered could be more at issue.

“To eliminate some of the mystique, this is the drug commonly known, and used, as Versed,” she clarified. “This drug is used in many venues and even for many different types of patients, including pediatric patients.”

A significant issue is raised by the exact recipe of the drug combination and the amount of Versed used, she added. “I keep seeing that it must be titrated properly.”

In other words, the dosage amount and duration of administration is very important to successful effect. Oklahoma has a three-drug protocol.

Also implicated is the manner in which the drug is administered. After the Clayton Lockett execution problems, Oklahoma released a report identifying insufficient training of those administering the drug and communication between prison and support staff, as well as a lack of contingency planning on the part of the Department of Public Safety.  The report also points to difficulties in starting the IV in Mr. Lockett.

More info: http://www.deathpenaltyinfo.org/state-lethal-injection


The Evolution of Energy Density

Jim Roth’s Friday column, Earth Business, appears in The Journal Record.
Originally published in The Journal Record on Jan 23, 2015.
View Jim Roth’s attorney profile here.

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Laying down the scientific groundwork, energy density is the amount of energy stored in a system or region of space per unit volume. For purposes of conducting measurements, it is only the useful, extractable energy that is measured.

During the 20th century, developing and developed countries observed a major technological advance and improvement in the quality of life that was fueled by fossil fuels. According to the World Bank, 100 percent of Americans have electricity, unlike nearly 1.4 billion people in the nonurban communities of Africa and Asia that lack electricity. Unfortunately, as the population growth of those communities rises, so too does the number of people without electricity. Furthermore, over the last 50 years, there has been no reduction in the energy consumption gap between developing and developed countries. As it is apparent, new ideas for access to basic energy services are apparent and necessary in order to reduce the number of nonurban communities lacking power.

Energy density plays a major role in the evolution and comparison of various fueling sources that may be capitalized upon for purposes of producing electricity within all communities and markets. Evaluating transportation fuels is a great means of understanding the importance of energy density as it applies to nearly all countries. Considering strictly fuel for transportation, energy density, in addition to the cost, weight and size of energy storage are also important characteristics that are considered. Some fuels that require large, heavy, or expensive storage may reduce their attractiveness from a cost and efficiency standpoint. In this circumstance, gasoline and diesel fuels have been superior to liquefied natural gas, or LNG, and compressed natural gas, or CNG, based on their larger energy densities per unit volume.

Lower prices at the pump are certainly attractive to the consumer, but so too are the reduced costs in renewable energy. At the rate that the price per barrel of Brent crude is falling, the crossover point where fossil fuels cease to be cost-competitive could occur soon, making the cost to refine crude oil into gasoline well below its marginal production cost. As a result, many have been turning to electric-powered vehicles as their primary source of transportation. However, the lower energy density per unit volume in the lithium ion batteries of these vehicles results in a limited driving range relative to gasoline-powered vehicles. Looking outside of the transportation lens, from an energy density standpoint, gasoline and diesel fuel may be the short-term answer for low-cost energy production in developing countries. However, with advancements in the development of renewables, they are the low-cost, long-term answer.

So lots of evolution and flux occurring, but one sure way to lower your costs is to lower your density if at all possible. That’s easier said than done here in America.

Healthcare cost-cutting trend ties money to results

By Mary Holloway Richard, Of Counsel

healthcare-shutterstock-02The trend toward decreasing costs in healthcare has seized upon value-based care – tying physician compensation to performance and outcome measures. These measures are also being used in contract negotiations with third party payors and healthcare plans.

Counsel for institutional and non-institutional providers are at the table providing advice about a number of important contractual terms and their ramifications including appropriate and measurable metrics for calculating bonuses and penalties and, if shared savings are at issue, how they should be split. For those who have been involved in negotiations of traditional fee-for-service contracts, this will seem like a fundamental change. It may also seem like a change that narrows the potential for disputes.

However, numerous issues will continue to be important to providers. For example:

  • Are the metrics used as incentives or penalties?
  • Are the selected benchmarks easily measurable and attainable?
  • Do they raise regulatory issues such as potentially impacting volume in an unacceptable way or spawn any other results that could be construed to be anticompetitive?

While these questions have yet to be answered by Oklahoma courts, we can look to decisions from other states and consider ourselves forewarned as to the nuances and potential pitfalls in negotiating and drafting these terms.

2015: The future for hospitals

By Mary Holloway Richard, Of Counsel

doctorIn a recent article in Modern Healthcare, Beth Kutscher identifies a rosier outlook for propriety hospitals than for not-for-profit facilities.

Some of those proprietaries are investor-owned chains, and an important part of their secret of financial health is their access to and reliance upon greater options for marketing services, economies of scale, and other cost saving programs.

Financially positive trends have come on the wings of the Affordable Care Act’s elevated patient volumes, better payor mix and declining expenses associated with bad debts. The proprietaries are concerned with stock prices and earnings and, like a family preparing for continued hard times, they actively pursue all possible ways to decrease expenses, including refinancing higher interest debt.

In largely rural states like Oklahoma, efforts to keep community hospitals alive include shopping for buyers and affiliating with stable hospital systems. However, rural hospitals owned by proprietaries, and even hospitals owned by not-for profit systems, are being taken off the block awaiting a more attractive market.

It is true that we witnessed the acquisition by Community Health Systems, one of the largest publicly-traded companies in the country, of Health Management Associates last year. But even so, CHS may now be eschewing large acquisitions and mergers in favor of other alternatives for financial stabilization.

In healthcare as in other industries, the proprietary sector offers important motivation for the not-for-profits.

Eyes on the contango play of 2015

Jim Roth’s Friday column, Earth Business, appears in The Journal Record.
Originally published in The Journal Record on Jan 16, 2015.
View Jim Roth’s attorney profile here.

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

The plummet of the price per barrel of Brent crude oil has shocked nearly every major domestic and international producer. However, in the case of some energy companies and investors, buying and selling physical barrels of oil highlight a fantastic moneymaking opportunity. In technical terms, this opportunity is referred to as contango.

A contango play exists when the current price of a commodity, in this case oil, is lower than the price for delivery of that commodity. Many traders capitalize on this opportunity by buying oil now at cheaper rates, storing it and then selling it in the future when prices increase in accordance with demand. Contango plays are generally driven by a commodity’s production surpassing its demand, ultimately creating a surplus in that commodity’s market. During a contango play, typically traders and integrated oil companies, along with shipping and storage companies, have the greatest ability to profit.

The last time the entire international market for oil fell into a contango play was during the fourth fiscal quarter of 2009, when markets were slowly re-emerging from the 2008-2009 U.S. financial crisis. According to ship brokers, during that time, traders were storing 100 million barrels at sea. Currently, there is a race for storage amongst traders, particularly at Cushing, the world’s largest commercial tank hub. According to analysts at Goldman Sachs, a big increase in storage capacity in recent years means the oil market will be able to run a surplus for quite some time, resulting in lower consumer prices.

As it relates to storage, usage of natural gas storage is increasing year after year. Storage facilities play a critical role in ensuring that excess supply of natural gas delivered during summer months is available during the winter months when demand increases. Additionally, natural gas storage serves as insurance against any unforeseen occurrences that may affect production or delivery. In addition to the aforementioned scenarios, in cases of a contango play, natural gas storage is necessary to major traders wanting to capitalize on the financial opportunity.

With levels of natural gas storage fluctuating depending on the season, the overall amount of natural gas available in storage facilities is a supply-side factor that has the potential of affecting prices. Ultimately, natural gas in storage facilities assists the market in adapting to sudden shifts in supply and demand, helping to accommodate stable production rates and helping to support pipeline operations and hub services.

Keep your eye on contango in 2015 – it’s coming to a storage facility near you.

Tips for bands: What to consider when hiring a manager

By Juston R. Givens, Director

We’ve all heard stories about the wild lifestyle of a modern musician – days on the road, nights of debauchery, money, fun and more money. But more often than not, we also hear stories of the flip side of stardom, when young bands get stifled because of poor business decisions and bad professional relationships.

small ampFor a band in its early stages, deciding on who to trust and how to make wise choices on the “business” side of show business is critical. Enter the band’s manager: the person who oversees the operations side of the effort. The manager helps assemble a team which can include the road manager, merchandise manager, publicist – and even the band’s attorney.

But how does a band know the difference between a manager who could take them places vs. one who could stall their career before it even begins?

Band managers have incredible influence on the success, direction and partnerships of the band’s business, so finding, retaining and empowering a manager is critical. Here are some issues for a band to consider when hiring a manager:

  • Who’s in charge?
    Remember, your manager works for the band, not the other way around. Even though they may have more industry experience and better contacts, ultimately decisions need to be made with the band’s best interest in mind.
  • Legal advice
    Your manager may be great at managing the operations and logistics of the band, but that doesn’t not make him an attorney. Get good legal advice about any contract your band signs to ensure there is an absolute understanding of the agreement.
  • The Yoko Rule
    When deciding on a manager, beware of bringing in relatives to fill that role (or any other important decision-making function in the band). It’s a common mistake, especially among younger artists. Pitfalls can include a lack of experience in the industry, unrealistic expectations for what the band can and can’t do, and conflicts with members of the band who aren’t related to them. Also, if a relative is your manager and doing a poor job, it’s harder to fire them. So don’t hire them in the first place.

Management agreement red flags

When signing a management agreement, a band ought to keep in mind the ramifications, short- and long-term, that document will have. It’s this moment, more than any other, when a fledgling artist can sacrifice future success because of early, naive decisions.

  1. First and foremost, don’t give away the future just because you can’t imagine it (whether it has great or middling success) or that it just seems too far away. Don’t begin by handing over rights to a manager without an exchange that also has long-term benefits, such as a substantial investment or significant opportunity.
  2. Also when looking at an agreement – and this is where good legal counsel is valuable – make sure you and your band know exactly what the agreement contains and what it means. The more details the better, especially in terms of the manager’s and the band’s expectations and who has decision-making authority over specific areas. You also want to avoid open-ended contracts. Just with typical employment, your manager should have a set period to accomplish certain goals and then be evaluated on their performance.
  3. Finally, to ensure the artistic integrity of everyone in the band, make sure that when you sign a management deal, signing as a band doesn’t prevent individuals from pursuing other projects as a solo artist or upon leaving the group.

Not every band’s story has to be an E! True Hollywood story. With the right forethought in who helps the band in its journey, a band can have a long and healthy career and – possibly – a very happy ending.

In the wake of Ferguson

By Cody Cooper, Associate/Litigation  and Robert N. Sheets, Director/Litigation

shutterstock_213974782-1Guest Column in The Journal Record, Published Dec. 3, 2014

By now, everyone is familiar with the situation in Ferguson, Missouri – the tragic loss of life, conflicting eyewitness accounts, and a decision not to indict the officer. Without offering an opinion as to the outcome, this article is intended to educate about Oklahoma’s grand jury process.

It is important to remember that a grand jury does not determine guilt or innocence. Rather, it is a tool used by prosecutors to analyze evidence and determine whether probable cause exists to charge a person with a crime. This differs from the standard required at a trial, which is that the defendant be guilty beyond a reasonable doubt.

During this process, the district attorney must choose to present the evidence to either a judge or a grand jury. Usually, the prosecutor will simply file the charges for a standard preliminary hearing. In the case of Ferguson, however, the district attorney chose to use the grand jury process.

A grand jury is comprised of 12 people who review evidence presented by the prosecution to determine whether probable cause exists to file charges. It is a fairly informal process where grand jury members, prosecutors, and any witnesses are, typically, the only individuals present. Usually no judge is present, and typically the defendant does not participate. Prosecutors present evidence to support criminal allegations and make a suggestion to the grand jury.

Evidence includes presenting witnesses and documents. Typically, prosecutors act in an advocate role to persuade the grand jury to indict. At the end of the prosecutors’ presentation of evidence, the grand jury members make their decision.

The Ferguson grand jury contained several idiosyncrasies:

  • Prosecutors presented all of the evidence to the grand jury rather than only presenting evidence suggesting culpability.
  • Prosecutors apparently made no recommendation to indict the officer. Instead, they left it up to the grand jury to determine the appropriate action.
  • The defendant was allowed to testify before the grand jury. Although these methods are not improper or illegal, they certainly aren’t typical.

Ultimately, the grand jury process is afforded wide investigatory powers. That the procedure in Ferguson departed from what is considered normal practice does not mean the ultimate decision was correct or incorrect.

PM Director Bob Sheets discusses fracking ban on NPR

Phillips Murrah Director Robert N. Sheets participated in a broadcast interview with StateImpact Oklahoma / KGOU reporter Joe Wertz regarding using local referendums to ban hydraulic fracturing.

This interview was broadcast in early November, 2014 and can be seen in its entirety at the StateImpact Oklahoma website.

To listen, click on the player below:





Bob Sheets

Property Rights

In Oklahoma, local officials have the authority to regulate and restrict oil and gas activity within city limits, an ordinance that enforced a fracking ban would likely draw an immediate legal challenge, says Robert Sheets, a land-use and natural resources attorney at the Phillips Murrah law firm in Oklahoma City.

“That’s what the cities are going to have to look at: Are they taking a property right from an individual by saying, ‘You cannot drill, you cannot frack on this property.’”

The energy industry has deep roots in Oklahoma, and many of the property laws themselves were written with oil and gas interests in mind. Sheets says the justification for an outright ban would have to be steep and defendable in court, especially if royalty owners argue that fracking is necessary to produce their oil and gas property.

“You’re probably going to end up with that rational basis test,” Sheets says. “Is there a rational basis for what they’re doing?”

Bob is a commercial litigator, director and one of the firm’s founders. He represents construction and energy industry clients in a broad range of real estate, land use and business litigation matters. You can view his attorney profile page HERE.

About StateImpact: StateImpact seeks to inform and engage local communities with broadcast and online news focused on how state government decisions affect your lives.


Brown: Producing for Oklahoma

Guest article originally published in The Journal Record on Oct. 24, 2014.
Click to see Elizabeth K. Brown’s attorney profile


Elizabeth K. Brown’s practice is focused at a strategic level on serving her clients as outside counsel where she assists privately held companies in managing the many legal issues that arise in running a business.

Elizabeth K. Brown’s practice is focused at a strategic level on serving her clients as outside counsel where she assists privately held companies in managing the many legal issues that arise in running a business.

A vibrant and growing oil and natural gas industry is paying dividends for Oklahoma, the most recent example being the increased payments to the state’s General Revenue Fund from taxes on the oil and natural gas industry.

Gross collections to the General Revenue Fund increased during the third quarter, up by almost 10 percent from the previous year. A significant portion of that increase came from the state’s gross production tax on oil and natural gas production, which saw a 33.4-percent growth compared with the year before.

The General Revenue Fund is the key indicator of state government’s fiscal status and the predominant funding source for the annual state budget. Collections, reported by the Office of Management and Enterprise Services, are revenues that remain for the appropriated state budget after rebates, refunds and mandatory apportionments.

The growth of receipts from the state’s gross production tax is an important benchmark because Oklahoma’s oil and natural gas industry remains a critical component of the fiscal stability for both state and local governments. The Oklahoma Energy Resources Board’s May 2012 Oklahoma’s Oil and Natural Gas Industry Economic Impact and Jobs Report shows the industry, as a whole, accounts for approximately 25 percent of all taxes paid in the state.

The greatest single benefactor of direct apportionments of gross production tax revenues is the state’s education system. Data from the most recent OERB report released in September shows the oil and natural gas industry accounted for more than $325 million to local school districts across the state. Another $150 million was allocated to the Oklahoma Student Aid Revolving Fund, the Higher Education Capital Fund and the Common Education Technology Fund.

To put that in perspective, take the northern Oklahoma community of Alva. In the heart of the Mississippi Lime, the Class 2A school district received $3.7 million in state funding for the 2012-13 school year. Of that, $2.1 million came directly from the oil and natural gas industry.

This state’s oil and natural gas industry is producing for Oklahoma. A growing oil and natural gas industry means increased funding for Oklahoma’s students and ensures future generations can continue producing for Oklahoma.

Responding to Ebola

By Mary Holloway Richard, Of Counsel/Litigation

Guest Column in The Journal Record, Published Oct. 15, 2014

shutterstock_210544051-1Incidence of Ebola on American soil allows for review of legal underpinnings of the public health response to “catastrophic health emergencies.” This term means, for our purposes, occurrence of imminent threat of an illness or health condition that is believed to be caused by the appearance of an infectious agent that poses a high probability of a large number of deaths in the affected population or widespread exposure to the infectious or toxic agent that poses a significant risk of substantial future harm to a large number of people in the affected population (63 O.S. §6104).

The federal government’s rapid response derives its power from the Commerce Clause of the U.S. Constitution (42 U.S.C.A. §264, Section 361 of the Public Health Service Act). The secretary of the Department of Health and Human Services is authorized to take measures to prevent the spread of threat of disease from other countries to the U.S. and between states. Borders are being monitored more stringently. States and tribes have the political power to detail those within their borders in an effort to contain such a threat. Police power functions include isolation-quarantine, access to and use of private health information, closure, lockdown, curfews, and appropriation and destruction of property, including pets and other animals. Those powers are derived from the state’s right to take action against individuals for the good of the people at large.

Oklahoma State Health Department regulations provide for isolation and quarantine including proper due process for affected people (OAC 310:521-7-6). On Oct. 10, the Centers for Medicare and Medicaid Services issued a memorandum to state survey agency directors (the state Department of Health in Oklahoma) to strongly urge hospitals to fully implement recent Centers for Disease Control policies for Ebola, including hospital evaluation and preparedness checklists and algorithms to evaluate patients returning from countries affected by the disease.

Emerging legal issues include privacy rights, provider and volunteer liability, due process and Fourth Amendment protections for mandatory testing and screening of citizens, licensure and scope of practice issues for noninstitutional health services providers giving aid, myriad informed consent, right to refuse treatment, and social distancing and remote handling of citizens including the effect of Americans with Disabilities Act protections.

Phillips Murrah adds health services attorney

Mary Holloway Richard, Phillips Murrah attorney

Mary Holloway Richard

OKLAHOMA CITY – Mary Holloway Richard has joined Phillips Murrah’s Healthcare team as an of counsel attorney.

Richard represents both institutional and non-institutional providers of health services, as well as patients and their families. Her career has included work at hospitals, outpatient clinics, behavioral health facilities, and rehabilitation facilities and clinics.

Prior to joining Phillips Murrah, Richard served as in-house counsel for Integris Health.

Q&A with Jim Roth: More Oklahomans seek to power their own homes, businesses

By Paula Burkes, business writer for NewsOK.com.
Published in The Daily Oklahoman on Aug. 26, 2014.
View Jim Roth’s attorney profile here.

Q&A with Jim Roth: More Oklahomans seek to power their own homes, businesses

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Jim Roth is a Director and Chair of the firm’s Clean Energy Practice.

Q: What is distributed generation?
A: Distributed generation refers to generating power at the site of consumption. When a home, business or school is equipped with a rooftop solar system, its electrical demands are partially met with the energy that the solar system produces. This allows consumers to take control of powering their own homes and businesses.

Q: How are Oklahomans utilizing distributed generation?
A: Oklahomans are using distributed generation to power their lives — to turn on the lights, power the air conditioning on a hot day, charge their electronics, etc. Homes and businesses are seeking the ability to produce their own energy, be less dependent on the utility, and make a sound financial environment. Distributed generation enables you to do all three.

Q: What are the benefits to Oklahomans powering their own homes and businesses?
A: Clean, local energy reduces the burden on and inefficiencies associated with the transmission and distribution infrastructure, as compared to when electricity is produced centrally. There are also significant economic benefits, as rooftop solar creates more jobs per megawatt than any other form of energy.

Q: What impact can this have for our energy future?
A: As more consumers seek to power their own homes and businesses, we will continue to increase an energy choice that is absent in the current monopoly utility model, and decrease our dependence on polluting fuel sources from central power stations. Granting Oklahomans energy empowerment and choice will continue to pave the way for a more sustainable and cleaner energy future in the state.

Solar Energy on the Rise

As our calendar clicks along with Summer fast approaching, soon we will be seeking respite from the blazing sun and likely our 100+ degree sweltering days. Yet, with each passing year, the sun, more specifically solar energy, is becoming a growing, positive way to help keep Americans cool during those Summer afternoons.

In fact, according to the Solar Energy Industries Association (SEIA), 2013 was another record year for the U.S. solar industry. There were 4,751 MW of new photovoltaic (PV) capacity installed in 2013, representing a 41 percent increase in deployment over installation levels in 2012. That’s the most installations in any year, ever. Solar accounted for almost 30 percent of all new electricity generation capacity added in 2013, up from just 10 percent in 2012, which made solar the second largest source of new electricity generating capacity behind natural gas. And as we Oklahomans know, we are blessed with significant amounts of natural gas below our Earth’s surface, accounting for as much as 10% of America’s domestic production. Likewise, we know we are similarly blessed with significant sun exposure (aka opportunity), with an almost 70% rating for sun exposure during every waking hour, according to the National Climatic Data Center.

This “% Sun” number measures the percentage of time between sunrise and sunset that sunshine reaches the ground and our measure of 68% for Oklahoma City places us above southern cities such as: Atlanta, Dallas, and even hot Houston. Our City’s sun exposure rating is actually tied with ‘sunny San Diego’ and so we have tremendous opportunity to integrate this daily, free fuel source, into our daily energy needs.

A few statistics from the SEIA that helps convey this fast-growing trend:

  • There are now over 13,000 MW of cumulative solar electric capacity operating in the U.S., enough to power more than 2.2 million average American homes.
  • There were 140,000 new solar installations in the U.S. during 2013, bringing the total to over 445,000 Photovoltaic (PV) systems operating today.
  • The utility market led the charge again with 2,847 MW of PV and 410 MW of Concentrating Solar Power (CSP) installed in 2013, including our neighboring Capitol city of Austin, Texas where they are adding utility scale solar for their customers’ benefit.
  • Year-over-year, the national average PV installed system price declined by 15% to $2.59/W in Q4, which is becoming very competitive versus traditional fuel sources of coal and natural gas.
  • The average price of a solar panel has declined by 60 percent since the beginning of 2011 and many Americans are finding affordable value

And forecasts for this year?

Close to 6,000 MW of PV are forecasted to come online throughout 2014, which represents an incredible 26% growth over 2013’s own record installation totals. 2014 will be a record year for CSP as 840 MW are expected to be commissioned by year’s end, with more and more Utilities moving towards this now affordable, clean energy option. Together, new solar electric capacity projected to be added in 2014 will generate enough clean energy to power over 1.13 million average American homes and that includes running those air conditioners throughout August when the heat (and the cost of electricity) are typically the worst of the year.

So whether you are considering adding some smaller scale solar to your own home or business, or whether you are talking with your neighbor that happens to work for the local electric Utility, please know, as The Beatles once predicted: Here Comes The Sun.

Now more than ever.

This article first appeared in the Journal Record: http://goo.gl/5xRQ1D

The Business of Being in a Rock Band

If you were preparing to start a new business, one of your first moves would likely be to sit down with a trusted adviser and your key partners to organize and set your objectives. You might consult with a lawyer to recommend the right entity structure and draft agreements, or to help you anticipate the potential legal risks and pitfalls that you will need to avoid in the future. But, what if your startup business is a rock band that you formed in your garage and your business partners are only interested in creating music? Ignoring the business of working as a songwriter or performer in rock, country, blues, or any other genre of music could cause you to hit some very sour notes down the line.

Are you serious about creating original music and taking it on the road to share with the world? If so, it’s a good idea to start treating your band like a business so that you have a plan for resolving conflicts with other members, protecting your long-term interests, getting paid and paying your fair share of taxes.

Here are a few suggestions.

  • Start with creating a business structure and an operating agreement between band members for making management decisions, signing contracts, handling money and getting paid.
  • Don’t expect a venue owner to write you separate checks. Include terms and procedures for members to join or exit the group.
  • Decide who owns your instruments, equipment, and touring vehicle.
  • Decide which members own the rights to your band’s music and make sure that you copyright your songs.
  • Ensure that you have appropriate resources to review contracts for gigs, publishing, licensing and recording deals.

For many musicians, these issues can be headaches, but ignoring them only leads to greater problems down the road. Some bands split up before realizing their potential and others surrender their long-term profits and creative interests, never enjoying the full rewards of their success.
Let’s be honest, most musicians are built a little different, but creativity doesn’t have to be sacrificed for success. With the right planning and guidance, you can rock while you’re ready for success and avoid many of the legal problems that otherwise might start to emerge, just as your songs are climbing the charts.

Originally featured in the Journal Record.

Roth: Lack of Infrastructure Wastes Natural Gas

In Jay McInerney’s 1984 novel Bright Lights, Big City, the main character (ironically from Oklahoma) gets caught up in the hedonistic, fast-paced life in New York City. The life of parties, drugs and eventual humiliation and loss eventually forces him to escape from the dangers of these bright lights.

If you were to look upon Google Earth at a night view across America, you might be surprised to see bright lights in rural North Dakota, even brighter than Minneapolis, Oklahoma City and many other metropolitan areas. What are these bright lights? Is there danger like that depicted in the novel?

The light visible from space is the effect of massive flaring of natural gas, being discarded in the production of American oil. Is the danger worth it? You decide.

North Dakota’s oil and gas industry has experienced incredible, exponential growth recently. This pace inevitably comes with some growing pains. One serious problem facing North Dakota, and perhaps America, is the issue of natural gas flaring. Nearly 30 percent of the state’s natural gas is flared each year. Last December, North Dakota flared a staggering 36 percent of its gas.

Why is there so much flaring in North Dakota? Growth of North Dakota’s oil and gas industry has been so rapid that infrastructure has been unable to keep pace with production. The state lacks the adequate pipelines and infrastructure to get much of its gas to market. Also, oil prices are relatively high while natural gas prices are historically low, so most oil and gas producers are more concerned with oil infrastructure. Finally, North Dakota has pretty lax standards for flaring. Oil and gas producers in North Dakota can flare natural gas for one year without having to pay royalties or taxes on the gas. After a year, companies can ask for an extension if it would be difficult to connect to a gas pipeline.

Such widespread flaring has serious environmental and economic consequences. North Dakota’s flared gas releases about 6 million tons of carbon dioxide into the atmosphere each year, about the equivalent of three midsized coal plants. Flaring also has a serious economic impact. North Dakota energy analysts estimate that the state is flaring about $1 million worth of natural gas per day.

The amount of gas North Dakota flares is unprecedented in the U.S. Texas flares less than 1 percent of its gas. Statistics on flaring in Oklahoma are not as readily available, but the state has much better gas infrastructure. This enables companies to get gas to the market rather than flare it, thus improving their bottom line and all of our skies. Further, the Oklahoma Corporation Commission has recently taken proactive steps to modernize its rules to address flaring.

North Dakota is finally taking some steps to slow down flaring. Oil companies have set up a task force to find ways to lower the amount of flaring. The North Dakota Industrial Commission, which is responsible for regulating the oil and gas industry, recently adopted several changes aimed at reducing flaring to 5 percent by 2020. Importantly, the commission will now require all companies receiving drilling permits to have gas capture plans. The commission also made clear that it would carefully review each gas capture plan and reject those that were not viable.

It is in everyone’s best interest for us to develop our abundant natural gas resources prudently. Wasting this precious resource is no longer an option – not for landowners, oil companies, or Mother Earth.

Roth: Oil and Gas Companies Help Regulate Methane

Colorado has become the first state to regulate methane emissions from its oil and gas industry. More interestingly, it’s the first one to do so with the help of the oil and gas industry.

As most Americans know by now, natural gas is a cleaner-burning domestic resource that is helping our country reduce its industrial and power plant pollutions. It is helping in many other ways, as well. Yet, aspects of natural gas deserve some care.

Natural gas is made primarily of methane. Gas leaks can lead to methane emission. Methane is the second-most-prevalent greenhouse gas in the U.S. This is problematic because methane’s effect on climate change is more than 20 times greater than carbon dioxide. While methane has a shorter lifetime in the atmosphere than carbon dioxide, it’s 84 times stronger than carbon dioxide at trapping heat in the atmosphere over the first 20 years after emission.

Colorado’s new collaborative regulation requires oil and gas companies to follow stricter methane leak detection standards. Oil and gas companies in Colorado must find and fix methane leaks from tanks and pipes. Oil and gas companies must also install leak control technology that will capture 95 percent of volatile organic compounds, or VOCs, including methane. These steps will help greatly.

It’s estimated that the new regulation will reduce more than 100,000 tons of methane each year and 90,000 tons of smog-creating VOCs. This reduction is equivalent to removing all Colorado cars and trucks from the road for a year. That’s a lot.

Notably, this regulation was supported by three of Colorado’s largest oil and gas producers – Anadarko Petroleum, Noble Energy and Encna. These companies worked with the Environmental Defense Fund to draft the rules. While acknowledging that Colorado’s new rules were strict, Noble Vice President Ted Brown said he thought the rules were smart, and that they ensure that oil and gas is developed in the safest possible way for communities and the environment.

Natural gas is a vital resource that allows us to significantly reduce greenhouse gas emissions by replacing coal power plants with natural gas plants. Natural gas power plants emit about half as much carbon dioxide as coal power plants, less than a third as much nitrogen oxide, and only 1 percent as much sulfur oxides as coal plants. Coal remains the single greatest cause of greenhouse gas effects and we need natural gas to help curb the negative effects.

Colorado has set an innovative example for how to practice environmental responsibility while at the same time fostering a strong oil and gas industry, showing that the two are not mutually exclusive. More states could follow Colorado’s example. Focusing on reducing methane leaks will make natural gas production more efficient and more environmentally responsible, thus increasing its already sizable environmental advantages over coal. For gas-producing states like Colorado, Oklahoma, New Mexico, Texas, Louisiana, Arkansas and beyond, the path seems worthwhile.

Complicated issues like methane emissions will continue to call for sensible, balanced approaches to move us toward a cleaner energy future. No country is better at facing such challenges, and the best approaches happen when industry and environmentalists work together and help lead the way.

Roth: Oklahoma’s Renewable Energy Potential

Energy has always been an essential industry to our state. Not only is Oklahoma an industry leader in oil and gas, our state is also at the forefront of the renewable-energy industry.

The primary source of renewable energy in Oklahoma is wind, as we have enjoyed continuing growth lately. Oklahoma’s wind energy sector has seen a meteoric rise most recently. In 2002, Oklahoma had virtually no installed wind power capacity. Now our state has the sixth-largest installed wind capacity in the nation, with 3,134 megawatts.

The U.S. wind industry has experienced rapid growth recently, as well. In 2012, wind power constituted 43 percent of all electricity capacity additions, passing natural gas as the leading source of new capacity despite historically low natural gas prices. The United States trails only China in installed wind capacity, with 60 gigawatts.

In addition to wind energy, our state also utilizes many of our plentiful lakes and rivers to produce hydroelectric power. In 2012, Oklahoma had 805 megawatts of installed hydroelectric capacity. Three of Oklahoma’s largest lakes, Grand Lake, Lake Eufaula, and Lake Texoma, produce electricity through hydroelectric dams. The U.S. produces about 10 percent of the world’s hydropower, with a total capacity of 78,241 megawatts.

Oklahoma is also a leading state in geothermal energy, which involves using the earth’s temperature to heat and cool buildings. Oklahoma State University’s campus is home to the International Ground Source Heat Pump Association, which is a leader in geothermal research and development. The U.S. currently leads the world in geothermal energy, with 3,386 megawatts of installed capacity. Geothermal can be used for electricity generation, but in Oklahoma its main application is for heating and cooling buildings. Most Oklahoma utility companies offer heat pump rebates to encourage the use of geothermal.

Despite Oklahoma’s growth in renewable energy, we still have tremendous untapped potential, particularly with solar energy. In 2012, Oklahoma produced about 300 kilowatts of electricity from solar photovoltaic energy, but we have the potential for much more solar production. Maps of solar resources in the U.S. show that Oklahoma has above-average potential for solar energy, especially western Oklahoma. Thus, the door is open for Oklahoma to become a leader in yet another energy sector.

Oklahoma is helping push the U.S. to the front of renewable-energy development, creating a cleaner, more sustainable future for all, while bringing jobs, secondary income to some farms and real savings to many Oklahoma families’ households.

Roth: The Costs of Carbon Pollution

With increasingly erratic weather, massive snowstorms, more than 40,000 flights canceled in January and hundreds of millions of dollars spent in response, preparation and loss of productivity, some could rightly argue that we Americans are already paying the price of carbon.

A growing movement among policymakers to address costs at the actual source of pollution is a step toward relieving America from the risk of climate-based catastrophes.

Power plants are the largest stationary source of carbon pollution in the United States, accounting for nearly a third of greenhouse gas emissions. Last year, President Barack Obama introduced his Climate Action Plan. One of its main goals is the reduction of carbon emissions, which are widely known to cause climate change and erratic, damaging weather.

The U.S. Environmental Protection Agency recently proposed a rule that would set pollution emission standards for new fossil fuel-fired electric power plants. It sets emission standards for natural gas combined-cycle units and coal-fired units. As they are currently designed, natural gas units don’t need additional technology to meet the emission standard because they burn cleaner coal.

Coal-fired units, however, would all be required to use carbon capture and storage, or CCS, technology to lower emissions. Only one coal-fired unit in the U.S. is currently using CCS. The EPA’s proposed standard for coal-fired units is 1,100 pounds of carbon dioxide emissions per megawatt-hour of electricity. A typical coal plant that doesn’t use CCS technology releases at least 1,800 pounds of carbon dioxide emissions per megawatt-hour.

The main debate centers on whether it’s feasible to require that new coal units implement CCS. The EPA argues that the technology is market-ready and feasible. Another coal unit is being built with CCS technology. The coal industry argues that implementing these proposed emission standards would effectively ban the construction of new coal plants because CCS is unproven and expensive.

The coal industry has a point that CCS is unproven. We don’t know much about the effectiveness or cost. That may be a big gamble for utility customers, as a coal unit typically has a 60-year life on your bills.

However, carbon pollution has many serious consequences. Setting a standard for power plants is an effective way to lower carbon emissions at the source. Carbon pollution leads to rising global temperatures and sea levels, disruptive weather patterns, damages to the world’s agricultural production and changes in ecosystems. It creates serious threats to public health, like increasingly frequent and severe weather disasters, heavier smog, respiratory diseases and an increased range of ticks and mosquitoes, which can carry diseases.

A problem as daunting as carbon pollution will require bold, creative action. The costs associated with the EPA’s proposed carbon emission standard are substantial. However, the costs of carbon pollution could be immeasurable.

There’s no magic method for reducing carbon emissions, but the EPA’s proposed carbon emission standard is a step that should be taken to start preserving our environment and economy for future generations. We are already beginning to pay for pollution in storm cleanups, rising insurance rates, crop failures, food prices, economic productivity and health care costs.

Some may suggest that we shouldn’t do anything to control our destinies, when emerging economies like China are reluctant to act. I ask them: When did America choose to follow, rather than lead?

Roth: Farm Bill Addresses Climate Change

The federal government has started taking some necessary steps toward addressing climate change.

Congress included some important measures in the recently passed farm bill that will help address some environmental issues. For one, the farm bill has a provision requiring farmers to meet a minimum standard of environmental protection to be qualified for federal crop insurance on sensitive land like wetlands.

Farmers who own sensitive land and want to obtain crop insurance on that land must implement an approved soil conservation plan on highly erodible land that is currently producing crops and was cropped before 1985.

Another provision in the farm bill takes program benefits away from farmers who fill or drain wetlands or expand existing drainage on farmed wetlands. All of these provisions will encourage best practices in terms of conservation and ensure that farmers are managing their land in a sustainable manner.

Another measure that President Barack Obama announced to address climate change is the establishment of seven regional climate hubs throughout the country, including one in El Reno.

The purpose of these climate hubs is to assist farmers and rural communities in responding to climate change, including drought, invasive pests, fires and floods.

These measures are important because climate change could have a severe impact on the U.S. agriculture industry, which contributes about $200 billion to the economy every year.

More extreme temperatures can prevent the growth of many crops. An unfortunate example of this occurred in 2008, when the Mississippi River flooded right before harvest. This resulted in an estimated loss of $8 billion for farmers. The government estimates that the U.S. economy lost $50 billion due to drought from 2011 to 2013, and much of the losses were from the agriculture industry.

As climate change continues, the increasing extremity of weather will have plenty of serious consequences, both environmental and economic. For example, this past January, much of the country experienced extremely cold temperatures. Several industries of the U.S. economy were negatively affected by the weather, including the U.S. auto industry, where Ford, GM and Toyota cited weather as having a negative impact on their sales. Job creation was less than anticipated in January, and many economists cited the miserable weather as a large factor.

With increasingly severe weather year after year, it has become imperative for America to start addressing climate change. The measures in the farm bill and President Obama’s establishment of climate hubs will be a nice, albeit small step forward to help farmers implement the most sustainable practices.

Continuing to implement incremental policies that address climate change will benefit farmers, the agriculture industry, the economy as a whole, and the environment. The farm bill and the establishment of climate hubs are a step in the right direction.

Roth: Canadian Ports Incentivize Energy Efficient Ships

Oh, Canada! Our neighbors to the north are creatively incentivizing their industries to be profitable and environmental. Here’s how.

Two major Canadian ports are offering financial incentives to ship owners whose vessels have low overall emission of greenhouse gases and relative energy efficiency compared to ships of similar size and type. The Canadian west coast ports are using an A-to-G rating system for greenhouse gas emission. The system was developed by RightShip and the Carbon War Room. As you might expect, vessels are rated from A, being the most efficient, to G, being the least efficient.

Port Metro Vancouver’s Eco-Action Program and Prince Rupert Port Authority’s Green Wave program are among the first in the world to offer rewards to the most efficient vessels that enter their ports.

The International Maritime Organization, or IMO, acknowledged that greenhouse gas emissions attributable to international shipping are a tricky thing, mainly because the emissions can’t necessarily be attributed to one particular country. As shipping becomes more pronounced in light of growing international trade, efforts to encourage energy efficiency can be a bit complicated.

In 2009, IMO released an assessment of the level of greenhouse gases emitted by ships internationally: 879 million tons, or about 2.7 percent, of the global man-made emissions of carbon dioxide in 2007. Efforts are underway to update this study in light of the global economic crisis in 2008, as well as the related fast pace of recovery in international trade since then.

The source? Exhaust gases, which make up the primary source of greenhouse gas emissions from ships and of carbon dioxide.

Consider this: The energy consumption of a bulk ship carrier is equal to that of 113 semi trucks, or 4,160 compact cars. Interestingly, in the United States, the American Clean Skies Foundation recently commissioned a study examined the effect of converting from diesel to natural gas in shipping.

There are obvious hurdles to achieving this objective, mainly one of infrastructure, which could be a costly investment. But, utilization of natural gas by America’s shipping industry would not only provide greater fuel flexibility, according to the American Clean Skies Foundation, but the reduction in nitric oxide and greenhouse gas emissions would be substantial.

Given the fact that natural gas is an affordable commodity and a sure bet, maybe one day the shipping industry will get a financial incentive both for being energy efficient and for using a cleaner, cheaper source of energy while helping to clean the air around the world.

Now that’s another reason why the U.S. and Canada can continue to maintain the longest-running peaceful border in the world.

I’ve had the good luck of 11 summer fishing trips to north-central Ontario and I have witnessed firsthand the magnificence that Canada is rightly working to preserve. Our national beauty is worthy of similar incentives and protections.

Roth: Toxic substances need new regulation

On Jan. 9, some residents in West Virginia near the Elk River began complaining of a strange licorice-like odor. Just 1.5 miles downstream from a water-treatment center on Elk River, a chemical called 4-methylcyclohexane methanol, or MCHM, had started leaking through a 1-inch hole in a steel storage tank. Although the investigation is in the early stages, it appears the responders to the neighbors’ call discovered the spill and alerted the unknowing operator. There are now battles over testing and efforts to determine what exactly has leaked and the possible risks to the water sources.

The chemical MCHM is utilized in coal-processing plants to help remove fine particles of coal from surrounding rock in a process commonly referred to as froth flotation. The Etowah River Terminal, where the chemical was being stored, is a liquid bulk storage distribution facility that serves the Port of Charleston, W.Va. There, Freedom Industries, which within one week of the spill filed for bankruptcy protection, operates 13 bulk tanks with a liquid storage capacity of 4 million gallons.

It is estimated that there are more than 84,000 industrial chemicals that are used in the United States and our regulators know very little about most of them. The last major congressional act passed on this subject was the Toxic Substance Control Act of 1976. It is widely criticized as being ineffective. A total of 62,000 industrial chemicals, including MCHM, have been grandfathered by the Toxic Substance Control Act of 1976. This means that MCHM has never been tested by federal regulators. In fact, none of those 62,000 industrial chemicals that were grandfathered have to be tested. Also, current regulations as a result of the act require little testing for new industrial compounds. This lack of regulation is now at the heart of the post-spill debate. What was leaked? What are its risks? What should the public know about its water quality?

In essence, a chemical that we know very little about just started leaking into a major source of water supply. Now, nine West Virginia counties are telling their citizens: “Don’t drink the water.” Industry reports about the chemical itself are mixed. At the very least, this has led to some confusion about how to clean up and treat folks who have been exposed to the MCHM in varying degrees of toxicity. The reality is that the public safeguards should be in place for transparency before and after such occurrences.

Perhaps Congress will lower some of its own toxicity to actually revisit a law designed to protect all of us from toxic chemicals across America. One can hope, right?