API economist sees prospective federal regulatory avalanche

02 09, 2012 by Oil & Gas Journal

Growing interest in oil and gas activities by more federal departments and agencies potentially could stifle development of ample US resources, American Petroleum Institute Chief Economist John C. Felmy warned. “Eight federal agencies in all are looking at hydraulic fracturing alone, some with no timelines,” he told reporters during a Feb. 8 teleconference.

“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.”

New regulations could emerge not only from US Department of the Interior agencies with jurisdiction over federally held resources and the US Environmental Protection Agency, but also from divisions of the Departments of Defense, Transportation, and Health and Human Services, he said.

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.”

He said API will ask Congress to use its oversight authority to halt the Obama administration’s drive to particularly overregulate fracing and gas development. “Clearly, there has to be some coordination of activities,” Felmy suggested. “We’re looking for a proper level of regulation, but we’re also looking for coordination so there aren’t redundant calls for information and duplicative research that is redundant and costly.”