US energy, chemical sectors wary of new White House natgas plan

13 April 2012 21:11  [Source: ICIS news]

WASHINGTON (ICIS)--US energy, chemical and manufacturing sectors on Friday welcomed a move by the White House to coordinate multiple federal regulatory initiatives aimed at shale gas production, but they were cautious and wary.

Earlier on Friday, the White House issued an executive order by President Barack Obama to establish a 13-agency task force to look into private-sector development of shale gas, especially the hydraulic fracturing drilling technique that has drawn criticism from environmentalists and some policymakers.

At least ten different federal agencies have already launched as many as 14 separate regulatory initiatives aimed at determining the environmental impact of “fracking” and whether federal regulation or restriction of the technique is needed.

Some in the US energy sector and among gas-dependent chemicals manufacturers worry that the Environmental Protection Agency (EPA) and other watchdog agencies could effectively shut down shale gas development.

“We are pleased that the White House recognises the need to coordinate the efforts of the ten federal agencies that are reviewing, studying or proposing new regulations on natural gas development and hydraulic fracturing,” said Jack Gerard, president of the American Petroleum Institute (API).

Gerard said that API had called on the White House “to rein in these uncoordinated activities” and to avoid unnecessary rulemaking and overlapping federal regulatory efforts targeting shale gas.

But while welcoming the White House plan to coordinate the multiple federal inquiries, Gerard cautioned that the federal government should leave shale gas and fracking regulation to state-level officials and avoid “applying additional layers of federal regulation from Washington”.

The American Chemistry Council (ACC) also expressed qualified support for the Obama administration’s effort, emphasising the executive order’s own observation that “states are the primary regulators of onshore oil and gas activities”.

Also citing the multiple investigations and regulatory initiatives by the ten federal agencies, the council said that “we are concerned that these rules may duplicate existing state regulations, creating additional barriers that will slow down permitting and increase production costs”.

ACC member companies and a wide range of other manufacturers have begun to benefit significantly from the newly abundant supply of shale gas.

The council said it would be “watching closely” as the new White House working group develops.

The Institute for Energy Research (IER), an oil and gas industry think tank, was more hostile to the White House plan, charging that Obama is “once again playing charades with the American public, pretending to support energy production”.

“Meanwhile, he’s creating more labyrinthine regulatory hurdles and pointless councils” to oversee private sector energy development, the institute said.

America does not need another White House council, but less intervention in the private sector and the states,” IER said.

Senator James Inhofe (Republican-Oklahoma) was even more harsh, charging that the new White House task force is only another facet of the Obama administration’s “disastrous war on fossil fuels”.

Inhofe, a long time critic of the administration’s energy and environmental policies, said that while Obama “makes disingenuous claims about how this working group is to increase natural gas production, we all know that the more layers of government involved, the greater the likelihood that he can stall efforts toward development”.

Obama, said Inhofe, “is trying to pretend he supports natural gas production, while ensuring that the federal government does everything possible to impede hydraulic fracturing”.

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


By: Joe Kamalick
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