UpdateCEO Liveris of US Dow praises Obama's natural gas plan

13 April 2012 23:30  [Source: ICIS news]

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HOUSTON (ICIS)--The chief executive of US-based Dow Chemical on Friday praised a White House executive order to create a task force to monitor and regulate shale gas.

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.

The working group will be chaired by a White House domestic policy official and will include representatives from 13 federal agencies, with other federal regulatory bodies to be added later.

The 13-agency working group, said Obama, “will facilitate coordinated administration policy efforts to support safe and responsible unconventional domestic natural gas development”.

In a statement, Dow CEO Andrew Liveris said, “we are pleased with the signing of this executive order and consider it a vital step toward ensuring that federal regulation of hydraulic fracturing for shale gas is not overly burdensome and duplicative of state efforts, and addresses real risks using sound scientific data.”

Liveris added, “smart policy paves the way for business planning, and today’s announcement will help US companies to responsibly capitalise on the tremendous shale gas opportunity, which will lead to further investment on our soil and thousands of job opportunities for Americans.”

In the same statement, Dow Chemical noted that the executive order followed a list of recommendations made by the CEOs who make up the Business Roundtable.

That CEO letter made recommendations about several federal regulations, including hydraulic fracturing, Dow said.

The natural gas executive order also falls in line with other statements that Liveris has made about regulatory policy and shale gas.

During the CERAWeek energy conference this year, Liveris warned that the advent of US shale gas could go to waste if the US does not develop a sound energy policy.

In his book "Make It in America", Liveris warned about overlapping and contradicting regulations among the nation's federal agencies.

Liveris's reaction was among several made by the energy, chemical and manufacturing industry.

“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 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”.

Additional reporting by Joe Kamalick

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

By: Al Greenwood
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