Natural-gas producers fear rules blitz
Scrutiny by EPA, CDC, Interior, others ‘unprecedented’
With the Obama administration ramping up the pressure on natural-gas drilling companies, industry leaders fear a looming wave of federal regulations could strangle what has become one of the most vibrant sectors of the economy.
At least 10 federal departments and agencies are investigating or crafting new rules to govern “fracking,” the popular gas-extraction technique that has led directly to the creation of thousands of jobs in Pennsylvania, North Dakota, Wyoming and other states.
The Environmental Protection Agency is leading the way, and later this year will release its long-awaited report on the safety of the practice. Many analysts fear the study will indict fracking as unsafe and call for crippling regulations.
In addition, Interior Secretary Kenneth L. Salazar has proposed raising royalty rates by 50 percent for companies drilling for oil and gas on public lands. The Centers for Disease Control and Prevention has called for a wide study into potential health problems associated with gas drilling. The administration’s Agriculture, Commerce, Transportation and other departments have also gotten in the mix with a variety of studies and proposed regulations.
The spider web of potential rules has some insiders fearing that, despite public statements to the contrary by President Obama and other officials, the administration is intent on slowing down the industry.
“The direction they’re headed won’t be conducive to the development of energy we know our nation will need,” said Kyle Isakower, vice president for regulatory and economic policy at the American Petroleum Institute, in a conference call with reporters on Thursday. “This appears to be unprecedented. When you see 10 agencies working on one issue, in my experience, that is not the norm. The president himself has called for federal agencies to review their regulations to try and reduce and streamline requirements from the federal government. That’s what they should be doing in this case as well.”
The administration’s policies are already having an effect. Since 2008, the number of oil and gas wells on public lands in Western states — Colorado, Montana, New Mexico, North Dakota, Utah and Wyoming — has dropped by at least 39 percent, according to API. A huge hike in royalty rates, as proposed by Mr. Salazar, would likely hamper production even further.
“It’s a basic economic principle: If you want less of something, tax or charge more for it,” Barry Russell, president and CEO of the Independent Petroleum Association of America, said in a recent statement.
While the most severe regulations could be down the road, the EPA may have already caused significant damage in the public relations arena. Last year, it released a draft study blaming fracking for water contamination in the small town of Pavilion, Wyo. The report has yet to undergo an independent, thirdparty review, as is typically the case. EPA Administrator Lisa P. Jackson and other officials have stressed that it applies only to the situation in Pavilion, and shouldn’t be used to draw conclusions about fracking in other areas of the country.
But those statements, Mr. Isakower said, do little to stop environmental groups and other fossil-fuel critics from latching onto the report and using it to demonize the gas business.
“We don’t feel that the draft report should’ve been released before it had gone through peer review,” he said. “A great many groups have used that study, touted it, for justification for why [fracking] needs to be under much greater regulation at the federal level.”
A decision by the 9th U.S. Circuit Court of Appeals in California to put several deportation cases on hold in light of Obama administration immigration directives was criticized Thursday by two senior Republican lawmakers who said the court ruling was an “overreach of its authority.”
House Judiciary Committee Chairman Lamar Smith, Texas Republican, and Senate Judiciary Committee ranking Republican Sen. Chuck Grassley of Iowa asked Attorney General Eric H. Holder Jr. and Homeland Security Secretary Janet A. Napolitano to make clear to the court that the administration will enforce immigration laws, including the deportation of removable illegal and criminal immigrants who lose their cases in the federal court of appeals.
“The Ninth Circuit’s decision to put several deportation cases on hold is an overreach of judicial authority and shows the inherent danger in this administration’s backdoor amnesty policies,” they wrote in a letter. “Instead of deciding these cases under the law of the land, the Ninth Circuit has asked the Obama administration whether it intends to grant the illegal immigrants amnesty under the prosecutorial discretion initiative announced last year.”
Mr. Smith and Mr. Grassley said the order appears to be the court’s attempt to suspend its everyday review of immigration cases because of the administration’s plans to close tens of thousands of cases for the 300,000 aliens who are in removal proceedings.
“The Ninth Circuit has acted beyond the bounds of its judicial role and is inserting itself into an area — prosecutorial discretion — reserved solely to the executive branch,” they said.
The lawmakers said that in responding to the court, the administration will be required to reveal whether it intends to “manipulate our legal system and waste taxpayer dollars, as part of its efforts to grant amnesty to illegal immigrants.”
“Your response to the Ninth Circuit’s order must clearly and unequivocally indicate that the government will enforce the immigration laws, including promptly deporting all removable aliens who lose their cases in the federal courts of appeals,” they said.
“If the administration responds to the Ninth Circuit orders by indicating that the illegal and other removable aliens will be granted relief via amnesty, then it must explain to the American people what that answer means for the integrity of our legal system and why their tax dollars are being spent on prosecutions the Obama administration has no intention of enforcing with deportation.” The lawmakers said they were “seriously concerned” the court’s order ignores the rule of law and “confounds constitutional principles.”
Last month, the 9th Circuit put five deportation cases on hold and asked the government how the illegal immigrants in those cases fit into the administration’s immigration enforcement priorities outlined in memos released in June and November.
Those memos, by U.S. Immigration and Customs E n f o r ce m e n t (ICE) Director John Morton, showed that the administration had begun to ratchet up the pressure on Congress to pass controversial immigration-reform measures by relaxing its deportation protocol. A June 17 memo said ICE agents should exercise “discretion” when deciding who can stay and who must go, while a Nov. 17 memo provided further guidance to ICE attorneys.
The memos suggested that special consideration should be given to military veterans, those who have graduated high school or are pursuing college degrees, the elderly, minors, pregnant women and those with serious health conditions. An immigrant’s “ties and contributions to the community” and his “ties to the home country and the conditions in the country” should also be weighed, according to the memos.
They also instructed agents to consider a person’s criminal history, as well as whether he is a national security threat or public safety concern, before making a decision on deportation.
“No previous administration, irrespective of political party, has chosen, en masse, to place restrictions on the type of removable aliens that may be processed (or, in this case, not processed) for removal before the immigration courts,” the lawmakers said.