The People of America's Oil and Natural Gas Indusry

Energy Today - March 31, 2011

Rayola Dougher

Rayola Dougher
Posted March 31, 2011

South Carolina Radio Network: States ask EPA to defer greenhouse gas regs: A group of 21 attorneys general in the U.S., including South Carolina's Alan Wilson, sent a letter to EPA Administrator Lisa Jackson asking her agency to put off a new greenhouse gas regulatory program. Wilson says a delay would allow Congress to evaluate the necessity and timing of the regulations which affect the construction of a variety of buildings. The EPA is causing state agencies to rapidly try to adjust and make themselves so that they can comply with these regulations, these over-reaching regulations that are going to control every aspects of our lives. This could even possibly have a ban on the construction of homes, of businesses, schools, churches, we're talking about over-reaching of regulations here. AP: Fallin calls for EPA to ease oil, gas regulation: Gov. Mary Fallin told oil and gas producers Tuesday that Environmental Protection Agency regulations are hurting the industry in Oklahoma and she would do everything she could to fight what many see as the agency's overbearing oversight of hydraulic fracturing of wells and regional haze. "You have my commitment . . . to do everything I can to further cement Oklahoma's position as an energy leader," the Republican governor said during a speech at an energy conference at the University of Oklahoma. Fallin told The Associated Press she's for "fair" and "reasonable" EPA regulations but fears the federal agency's current efforts will harm the oil and gas industry and the manufacturing sector in Oklahoma. She said she's working with Attorney General Scott Pruitt "to see what we need to do to let Oklahoma's voice be heard."

Council on Foreign Relations: Are Boosting U.S. Oil Supply and Cutting U.S. Oil Demand in Conflict?: Perhaps I shouldn't have been surprised to see strong pushback from some of President Obama's traditional allies to his energy security speech this morning, but I genuinely was. The main crux of the complaints I've heard is that efforts to expand domestic oil supply are fundamentally at odds with efforts to reduce U.S. oil demand. Let me explain in some detail why I think that's largely wrong. (If you want my broader take on the speech, click here.) Start with markets and prices. Opponents of increased U.S. production argue correctly that more domestic drilling won't have a big impact on oil prices a decade or two from now. (They use this to argue against the value of boosting supply.) But that completely undermines their claim that more production will meaningfully interfere with efforts to reduce demand. Same(ish) prices mean same(ish) demand. The real long-term determinant of demand will be broader global supply dynamics, domestic demand-side policy, and technological change, not U.S. production.

Questions and Observations: Why EPA's Attempt At Regulatory Overreach Would End Up Killing the Recovery: I think we all know that the recovery, such that it is, is very fragile. And, of course, the job picture remains very poor. Any GDP growth numbers we've seen over the past few months have been fueled mostly by government deficit spending. So a government that was concerned about jobs and economic growth in the private sector should be concerned with getting out of the way and ensuring that growth is allowed to go forward unimpeded. Instead, we see any number of roadblocks, such as the drilling moratorium, banking regulations and the like being imposed that are having the opposite effect. Another example of that is the EPA's attempted usurpation of powers only Congress should wield. It is a classic example of a bureaucracy now attempting to make the law instead of follow it. The EPA has chosen to interpret the 1970 Clean Air Act as a mandate for it to regulate Green House Gasses (GHG), not only in automobiles, but in stationary sources as well. In fact, as the EPA has testified, it would affect up to 6.1 million stationary sources. The Clean Air Act gave the EPA the ability to regulate air pollutants that effect health, such as soot, but not the ability to regulate GHG which are not considered to be pollutants as defined by the Clean Air Act.

Additional Resources:

The New Orleans Times-Picayune: Feds approve deepwater drilling permit for new area in the Gulf

ABOUT THE AUTHOR

Rayola Dougher is senior economist at The American Petroleum Institute (API), where she analyzes information, manages projects and develops briefing materials on energy markets and oil industry policy issues. She is the author or co-author of economic research studies covering a diverse range of topics including crude oil and petroleum product markets, gasoline taxes, energy conservation and competition in retail markets. In addition to testifying before federal and state legislators, she has participated in numerous newspaper, radio and television interviews on a wide range of issues affecting the oil industry, including crude oil and gasoline prices, industry taxes and earnings, exploration and production, and refining and marketing topics.

Prior to joining API, Rayola worked at the Institute for Energy Analysis where her research focused on carbon dioxide related issues and international energy demand and supply forecasts. Rayola holds a Masters degree in Economic Development and East Asian studies from the American University and a degree in History and Political Science from the State University of New York at Brockport.