A wave of oil and gas mandates is ahead
Administration aims to make its mark as its time runs low
WASHINGTON — A wave of federal regulation is set to hit the oil and gas industry in coming years, but the crests of the coming mandates are visible now, as administration officials race to draft and finalize proposals before President Barack Obama leaves office.
The measures range from minor to major, with some specifically targeting oil and gas activities and others affecting the sector because they apply economywide. In all cases, the government’s long regulatory timeline — with initial drafts and final rules subjected to public comment and interagency reviews — means work is underway now with an eye on finishing the job in 2016 or 2017.
Even if regulators don’t impose new rules on climate change, air pollution and offshore drilling by the time a new president is installed in January 2017, they can lay down markers and create momentum for the measures. Actions now can sometimes lock in a future administration, no matter who succeeds Obama in the White House.
“The agencies are all in hyperdrive to either get rules across the finish line or have them well positioned in the regulatory queue so that their path forward past Jan. 20, 2017, is clearly established,” Tesoro lobbyist Stephen Brown said.
The narrow window remaining before Obama’s second term expires and election-year concerns that slow down an interagency review process have helped encourage a flurry of Interior Department proposals aimed at boosting the safety of drilling from the Arctic Ocean to the Gulf of Mexico.
In April, the Bureau of Safety and Environmental Enforcement unveiled proposed requirements for companies to better control offshore wells, including specific mandates for emergency devices known as blowout preventers. The draft had been years
in the making, first conceived in the months after BP’s failed Macondo well exploded in the Gulf in 2010.
Separately, in February, the Interior Department’s safety bureau and its Bureau of Ocean Energy Management unveiled a proposal to set the first- ever Arctic- specific standards for oil and gas drilling in the remote region.
And in March, the Interior Department’s Bureau of Land Management made final a long- awaited rule for drilling and hydraulic fracturing wells on public lands, roughly five years after a first draft was proposed. A federal court has at least temporarily blocked enforcement of the hydraulic fracturing rule, which is being challenged by oil industry trade groups.
The ocean energy bureau is also working to finish a fiveyear plan for selling oil and gas leases on the United States’ outer continental shelf from 2017 to 2022 — locking that in place before Obama leaves office, even though the current program doesn’t expire until August 2017.
The Obama administration’s draft leasing plan, unveiled earlier this year, pencils in one possible sale of mid- and southAtlantic acreage, but rules out auctions in the Pacific Ocean and eastern Gulf of Mexico waters. Oil industry leaders say more acreage should be for sale.
Although a new administration could try to undo any Obama- era offshore leasing plan, it would be onerous and time- consuming, given the volume of environmental reviews and public comment periods required to develop a new leasing program or even add auctions. Bush efforts overturned
Former President George W. Bush tried to put his imprint on offshore oil and gas development long beyond his White House tenure. During his final days in office, his Interior Department released a draft five- year offshore leasing plan that would span 2010 to 2015 and replace its own 2007- 2012 program. But unlike a rule that can be difficult to unravel, the draft- proposed leasing program didn’t stick. The Obama administration later rejected that effort.
Michael McKenna, an energy lobbyist and Republican strategist, said many of the proposed rules under Obama will do little to thwart domestic oil and gas development, even if they increase costs.
“Politically, the administration is trying to grab as much land as possible and make it as difficult as possible for the next administration to unwind the mess,” McKenna said.
Obama administration agencies now are writing rules to combat climate change and limit air pollution. Those would help cement the president’s environmental legacy. They also could give U. S. negotiators concrete evidence of how the country is curbing greenhouse gas emissions heading into climate talks in Paris this December.
“This administration has clearly made a judgment that it wants to be known as an administration that really got the climate initiatives underway,” said Lee Fuller, the Independent Petroleum Association of America’s vice president of government relations. “All of these are part of their broader climate agenda.”
That includes moves by the Bureau of Land Management and the Environmental Protection Agency to clamp down on methane, a potent greenhouse gas that is the major component of natural gas. Venting and flaring
The bureau is drafting limits on how much natural gas energy companies can vent and flare from wells on public lands. And the White House’s Office of Management and Budget is studying EPA’s proposed regulations to limit oil and gas industry methane emission.
A host of other regulations are on the horizon at EPA, including new ambient air standards for ozone and a clean power plant rule that curbs greenhouse gas emissions from the electricity sector. Court settlements have driven some of the EPA’s regulatory agenda.
In other cases, regulators are trying to finish work on initiatives launched in Obama’s first term but stalled by the 2012 election and by fears of throttling the nation’s surging domestic oil and gas development.
There’s a personal factor driving some of the work. Political appointees know they have a limited time on the job. And even career staff not tied to a single administration can be eager to finish years- long regulatory initiatives before a new president with an uncertain set of priorities is sworn in.
“The next administration, regardless of political orientation, will either spend an inordinate amount of time defending these rule makings in federal court or getting creative in trying to unwind them,” said Brown, the Tesoro lobbyist. “And if they try the latter, they will run right into the environmental ( groups) ready to litigate.” jennifer. dlouhy@ chron. com twitter. com/ jendlouhyhc
“This administration has clearly made a judgment that it wants to be known as an administration that really got the climate initiatives underway. All of these are part of their broader climate
agenda.” Lee Fuller, Independent Petroleum Association
of America