August 26, 2020

To celebrate the industry’s ongoing role in the community, we like to highlight one member company’s efforts in each of our newsletter issues. Each of our companies are making considerable contributions to their neighbors and local organizations, and we couldn’t be more proud of this ongoing commitment.

The Deputy Administrator, U.S. Energy Information Administration, U.S. Department of Energy, Stephen Nalley, delivered a statement to the Energy and Natural Resources Committee of the U.S. Senate on June 16, 2020. While the assessment of the energy sector continues to evolve and more recent updates can be found in the EIA monthly and weekly update reports, we wanted to share Mr. Nalley’s high level summary of the impacts of COVID-19 on the energy sector.

As COVID-19 uncertainty spreads around the world at an exponential pace, the global community is finding out that reacting quickly to the societal and economic disruptions that the virus creates, no matter how agile a reactor you are, is not good enough and quite frankly, is simply not working.

Reliable operational technology (OT) or industrial control systems (ICS) underpin every facet of American lives. Without them, our defenses, our economy, and our national security engine would grind to a halt — especially when so many of these systems are becoming “smart” and integrated. Securing infrastructure requires a culture change that prioritizes cybersecurity at the employee and organizational levels.

This is the risk equation. The posture of a company’s risk is a product of consequence, vulnerability and threat. Many energy companies use industrial control systems and operational technology (OT). All companies use information technology (IT) — data — in their daily operations. These technologies work across the internet, which brings a heightened vulnerability factor to their risk equation.

Election Day in the U.S. is scheduled for Nov. 3, 2020, when voters in Utah will vote for president, select a new governor and make other decisions.
The last Democratic governor in Utah was Scott M. Matheson. Utah’s long string of Republican governors, dating back to January 1985, has lasted 35 years now. It is the second-longest active streak of leadership by one party in the U.S. (South Dakota has first place: Governor Harvey L. Wollman, a Democrat, left office there in 1979.)

Dear UPA members and friends,
We are now more than halfway through the year 2020. For many, myself included, I suspect this is unnerving, but also equal parts a relief as plans and goals we were striving toward have been placed on hold due to the impacts of COVID-19. Time has quickly slipped away as we jolt from one immediate challenge to the next. While disappointed in what the sum of 2020 is likely to bring, I suspect we are also relieved that hopefully the worst is behind us (and I promise I’m not trying to invoke a curse by putting those words down in writing) so that we can reset our targets moving forward.

While the summer months are typically slower for the legislature and those of us actively engaged in government affairs, this summer and the summer of 2019 have been exceptions. The summer of 2019 was spent in public meetings regarding a planned widespread tax overhaul, and engaging on how to expand the state’s tax base without tax pyramiding.

The churn of slow and steady movement through the rulemaking process continues for our producers, both with the Division of Oil, Gas and Mining (DOGM) and the Division of Air Quality (DAQ). There have also been a number of upstream legislative discussions; see the legislative update for details.

COVID-19 has resulted in the lowest U.S. petroleum consumption in history. The U.S. Energy Information Administration (EIA) has charted the previous five-year U.S. consumption range, and then the COVID induced demand drop compared from the beginning of the year, showing bottoming-out demand in March and April. EIA estimates motor gasoline consumption has declined the most, falling 40% nationally (43% in PADD 4 — the rocky mountain region, Utah, Colorado, Idaho, Montana and Wyoming), and is responsible for more than 50% of the total petroleum product demand drop.