“You can’t professionalize if you don’t federalize,” former Senate Majority Leader Tom Daschle declared in 2002, just before the Senate voted to create the Transportation Security Administration.
He may as well have been talking about the Obama administration’s new executive order and rules to expand federal oversight to what is now, arguably, the most economically valuable activity in the country. The activity — hydraulic fracturing, also known as “fracking” — is responsible for the historic boom in production of domestic oil and gas.
In mid-April, President Obama issued an executive order to create an “Interagency Working Group to Support Safe and Responsible Development of Unconventional Domestic Natural Gas Resources.” The language of the executive order about “balancing” production with environmental protection may sound innocuous. “Coordinated federal oversight,” however, naturally morphs into de facto federal control without the legal, and at least justiciable, apparatus of formal regulation.
And note that the president’s order lifts up natural gas as “a cleaner source of energy than other fossil fuels.” In other words, the war to kill coal and oil will continue, but natural gas will be temporarily tolerable as a bridge to the fuels of the future like algae and spinach.
Perhaps the president did not get the memos from the Sierra Club and the U.S. Environmental Protection Agency (EPA) explaining that natural gas is no longer viewed as a kinder and gentler fuel. Methane, which makes up 70 to 90 percent of natural gas, is a greenhouse gas with more heat-trapping force than CO2. The EPA is even challenging the export of natural gas and coal from U.S. ports because of carbon concerns.
Natural gas producers would be well advised to monitor the plans of this federal task force lest the natural gas bridge becomes a draw bridge.
The natural gas industry doesn’t need federal oversight to “support” production. Soaring production over the last few years has led to a glut of natural gas approaching the limit of existing storage capacity.
The surge of activities may warrant increased regulatory oversight, but regulation of upstream production of oil and gas on private and state lands has long been the provenance of state authority. Texas has effectively regulated production since 1919. The executive order, indeed, recognizes that the states are the primary regulators except on federal and Indian trust lands, but stresses the federal role in “encouraging greater use of natural gas” and “augmenting State safeguards.”
Would the federal oversight of upstream oil and gas production be more “professional” than existing state regulation? Recently proposed EPA regulations for fracking suggest the answer is no.
Known in argot of the Clean Air Act as New Source Pollution Standards, these regulations are a historic departure from previous regulation of what were considered de minimis fugitive emissions from upstream oil and gas production. The regulatory architecture of the federal Clean Air Act was designed to address large industrial sources with discrete, relatively steady-state emission points.
To subject the diverse, temporary, variable, relatively small emission sources at a fracking site to the hard-edged limits and record-keeping designed for a refinery, EPA developed a strained rubric to aggregate the multiple but small streams of air emissions in a worst-case scenario.
Professionalism assumes at least some familiarity, if not expertise, with the activity to be regulated. The new fracking regulations, however, reveal EPA’s abject ignorance of oil and gas production and the evolving use of hydraulic fracturing and directional drilling.