US energy group says Obama is smothering natgas with rules

08 February 2012 19:14  [Source: ICIS news]

WASHINGTON (ICIS)--US energy industry officials on Wednesday charged that policies and rules being pursued by the Obama administration could overwhelm newly abundant US energy supplies, and they called on Congress to intervene against the White House.

John Felmy, chief economist at the American Petroleum Institute (API), told a press conference that “there is a major contradiction in this administration’s energy policy – particularly when it comes to natural gas”.

“On the one hand we have President Obama saying he supports natural gas development,” Felmy said, but “on the other hand, we have his administration proceeding full speed ahead with investigations and regulations that could hamper that development.”

Felmy noted that in Obama’s annual state of the union address to Congress last month, the president cited US reserves of natural gas that could feed the nation’s energy needs for nearly a century and generate hundreds of thousands of jobs as well.

“He vowed that his administration would take ‘every possible action’ to safely develop this energy,” Felmy said.

“Yet within weeks of making this statement, the administration has done just the opposite, announcing several plans to further constrain development,” Felmy said.

He said that a range of regulatory initiatives and resource restrictions taken by the Obama administration are “reducing opportunities to produce our domestic supply of oil and natural gas and create and support these American jobs”.

“We have reached a point where our industry’s efforts to produce the natural gas the president says he wants are being overwhelmed by an avalanche of regulations,” he said.

Felmy in particular cited investigations or regulatory initiatives recently launched by as many as eight federal agencies focused on hydraulic fracturing, the technology that, along with horizontal drilling, is central to the recovery of vast new US shale gas resources.

He said that the investigations or regulatory plans are under way at the Environmental Protection Agency (EPA), Department of Energy (DOE), Department of the Interior (DOI), the Agriculture Department (USDA), Department of Defense (DOD), Department of Transportation (DOT), the Department of Health and Human Services (HHS) and the Securities and Exchange Commission (SEC).

“Some of these investigations or studies have no specific timeline, yet information continues to be shared with the press about how further studies and stricter regulation are being prepared” to deal with environmental concerns around fracking and the chemicals used in that process.

He said that fracking – which involves high-pressure injection of water and chemical additives into shale formations to free trapped natural gas – has been in wide use across the US for six decades and is already adequately regulated at state levels.

We are calling on Congress to halt the administration’s drive towards overregulation of hydraulic fracturing and commercial oil and natural gas production,” he said.

Other US manufacturing interests, including the refining and petrochemical sectors, have similarly accused the Obama administration of voicing support for fossil energy development while at the same time advancing policies to restrict oil and gas production.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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