Outreach to industry isn't election gimmick, White House aide says

The Obama administration is reaching out to the oil and gas industry more than it did initially to develop regulations, but it is not an election-year gimmick, a leading White House official said. It’s time to set aside past battles and show that the nation’s considerable natural gas resources can be produced efficiently and safely, Heather Zichal, the president’s deputy assistant for energy and climate change, told an American Petroleum Institute conference on hydraulic fracturing.

“When it comes to American manufacturing, which must play an essential part in our economic recovery from the recession, low and stable natural gas prices are essential,” Zichal said. “But environmental and public health organizations have raised legitimate questions. Our regulatory efforts must consider stakeholders’ concerns across the spectrum. We all realize this isn’t a zero-risk proposition if it isn’t done right.”

Zichal—who also chairs the interagency gas policy taskforce, which was formed by Obama after it became apparent that a dozen federal departments and agencies were considering proposals to regulate hydraulic fracturing—said environmental and public health organizations and industry must actively participate in the regulatory dialogue.

Asked if the White House’s outreach to the industry would continue into a second term if Obama is reelected, she responded, “The short answer is ‘yes.’ This industry produces oil and gas, which is important to our energy portfolio. We’ll be successful in finalizing regulations which make sense and are effective only if we engage in a real dialogue.”

Relations have improved since early in Obama’s term, when Zichal said agencies and departments were concentrating on finalizing several regulatory reforms, “but they are hardly warm and fuzzy.” She said, “It’s been very good lately, but not smooth sailing.”

‘They’re listening’

API Pres. Jack N. Gerard, who hosted what was API’s 14th such fracing forum for policymakers and citizen groups across the country, confirmed that an active dialogue has been taking place with the White House, but that it’s not cozy. “At least they’re listening,” he said. “But they’re not following every one of our recommendations. There are still some strong disagreements.”

One of the biggest is whether federal fracing regulations, such as the ones the US Department of the Interior and Bureau of Land Management proposed on May 4, are even necessary when many producing states already regulate operations aggressively, Gerard told reporters after the meeting. “The first thing the president’s interagency taskforce should have done, once it was formed, was to sit down and review all of the agency and departmental proposals to regulate fracing and toss out the ones which are unnecessary and irrelevant,” he suggested.

Zichal maintained that the administration recognizes that states are the most effective fracing regulators, and is trying only to produce federal regulations which complement what they’re already doing. “There’s a lot of terrific work happening at the state level, and we’re willing to provide technical support where it’s needed,” she said.

The federal government is ideally situated to play a research and development role, and the first thing the taskforce did, once it was formed, was to get the US Interior and Energy departments and the US Environmental Protection Agency to sign a memorandum of understanding to coordinate their R&D efforts, Zichal noted.

API has an ongoing dialogue with the taskforce and the agencies and departments that are involved, Gerard said. “The proof is in the policies. That’s how we judge,” he said. “If the states are doing a good job already, why is federal regulation even necessary?”

Contact Nick Snow at nicks@pennwell.com.

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