The People of America's Oil and Natural Gas Indusry

Forestalling a ‘Regulatory Avalanche’

Mark Green

Mark Green
Posted February 9, 2012

John Felmy, API’s chief economist, talked to reporters this week about a looming federal “regulatory avalanche” that could impact the production of oil and natural gas from shale – and reduce the president’s State of the Union call for increased domestic production to hot air:

“On the one hand we have President Obama saying he supports natural gas development. … Within weeks of making this statement, the administration has done just the opposite, announcing several plans to further constrain development, 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 acronyms. EPA, DOE, DOI, USDA, DOD, DOT, SEC, HHS – eight federal agencies in all – are looking at hydraulic fracturing.”

Felmy said the chilling effect on decision-making and investment isn’t dependent on concrete regulatory proposals:

“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. All this adds to a state of uncertainty and generates fear for which there is no evidence.”

Fear = potential delay, which has a tangible effect on energy development and job creation. Felmy:

“Every day that goes by that we don’t develop this resource is another day that someone doesn’t get a job.”

A couple of other takes on the Felmy briefing:

Oil & Gas Journal:

“This is a prospective regulatory avalanche. Right now, there’s no transparency or indication of prospective outcomes,” Felmy continued. “If they don’t coordinate and aren’t transparent, the results could be negative for American energy.” Felmy said API has no quantitative estimate of possible economic consequences because so many federal departments and agencies have entered the federal oil and gas regulatory picture. “We don’t know the actual inner workings, only that all these agencies are involved,” he said. “Some have had regulatory coverage for a long time. Others haven’t. Are they coordinated? Do they have timelines? That’s our main concern.”

The Oklahoman:

“We are calling on Congress to halt the administration drive toward over-regulation of hydraulic fracturing and commercial oil and natural gas production,” he said. Felmy said the industry is ready to work with the administration to ensure the U.S. becomes more energy self-sufficient as safely as possible."

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.