API suggests single agency coordinate federal frac rule proposals

03 02, 2012 by Oil & Gas Journal

The American Petroleum Institute urged the federal government to designate a lead agency to ensure that 10 departments and agencies that are considering regulations connected with unconventional oil and gas production don’t create conflicting or duplicative rules.

“To my knowledge, there’s not a precedent for 10 [federal] agencies looking at a single issue like this,” Kyle Isakower, API’s vice-president of regulatory and economic policy, said in a Mar. 1 teleconference with reporters.

“We are trying to ensure that they’re not stepping on each other’s toes,” he explained. “We believe there should be a lead agency looking at hydraulic fracturing and associated issues that coordinates with other agencies on this matter.”

Proposals have emerged not just from the US Environmental Protection Agency and US Department of the Interior, but also from other federal entities including the US Department of Health and Human Services, the US Pipeline and Hazardous Materials Safety Administration, and the US Securities and Exchange Commission, API has previously said.

EPA might be a good choice since most of the proposals involve environmental matters, Isakower said. “EPA should have the lead,” he asserted. “That would make the most sense.”

EPA and state regulations already apply to oil and gas operations’ air emissions, according to Isakower. “EPA is going farther now with a [New Source Performance Standard] for oil and gas,” he said. “We are working with them to make that proposed regulation as reasonable as possible, and support a good deal of what is in it.”

API’s relations with EPA aren’t always ideal, he conceded. “We’re concerned about some things we hear from EPA,” Isakower indicated. “That being said, [EPA Administrator] Lisa Jackson said yesterday that we should not be looking at the Pavillion, Wyo., investigation draft report as indicative of hydraulic fracturing nationwide. I’m going to assume there is no institutional bias.”

There’s also still real concern over the federal government’s placing additional regulations covering development of unconventional oil and gas resources on top of what states are doing already, he continued. “Even if they were relatively similar, you’d still have operators reporting to state and federal regulators,” Isakower said. “They also could be in conflict, even though they’re trying to regulate the same issues.”

He said that the benefits of shale energy development are indisputable. “When you look at regulatory overreach—and there’s a real threat of that—then you’re talking about slowing down permitting and leasing, and the resulting economic benefits of unconventional oil and gas resource development,” Isakower maintained.