American Oil and Gas Reporter - May 2017 - 29

Energy Executive Order

Obama Rules, Policies Under Review
By Del Torkelson
WASHINGTON-The Trump administration issued an energy-focused executive
order in late March that expanded on the
new president's theme of support for
U.S. industry. Although most media accounts have focused on the order's mandate to reconsider President Obama's
Clean Power Plan-which most directly impacts U.S. power generators-oil and gas
representatives indicate Trump's EO contains key provisions that direct federal regulators to reassess significant rules, and nix
or freeze policies that have drawn fire from
their industry.
Trump's moves are best understood in the
context of the previous eight years' aggressive federal incursions, suggests Independent Petroleum Association of America Executive Vice President Lee Fuller. The scientific bases for many of the Obama administration's rules and policies affecting oil and
gas often were dubious, and the statutory authorizations and economic rationales were
even shakier, Fuller assesses.
"The process by which the Obama administration was turning out those regulations-particularly in the last two
years-really pushed the envelope, including the decision process, the pace, the quality of comment review, and the dismissal
of unwelcome data," Fuller describes.
"The new administration is saying those
decisions were not based on sound science,
were not promulgated appropriately, and
abused the regulatory process."
Western Energy Alliance President
Kathleen Sgamma has conceived one
way to demonstrate the previous administration's regulatory excesses. While
preparing to testify at a congressional hearing last autumn, she tallied the total number of pages contained in Environmental
Protection Agency and Department of Interior rule makings that targeted oil and gas
producers during 2015 and '16, stacked
62,059 pages, and then posed her 5-foot3 self alongside the paper towers. Sgamma included that photo in a paper she distributed at the hearing.
That image, she says, helps illustrate a
mere portion of the regulatory cleanup facing the Trump administration. Thus far,
Sgamma marvels, Trump has met the
challenge. "I knew we were not dealing
with a hostile administration anymore, but
I did not think it would move so quickly,"
she attests. "Not only that, but these EOs
have such depth."
For instance, she cites, the energy EO

removes the U.S. Fish & Wildlife Service's
compensatory mitigation policy. "That is
not something people know about like they
do the Clean Power Plan, but it is really
important," she reflects. "I really am impressed."
Oil And Gas Pieces
According to Fuller and Sgamma, the
items in the White House's March 28 EO
on Promoting Energy Independence and
Economic Growth with the greatest pertinence to independent oil and gas producers:
* Rescind the presidential memorandum of Nov. 3, 2015, that is the origin of
USFWS's aforementioned compensatory
mitigation policy regarding development
that impacts endangered species and includes the guiding principle that pertinent
land use yield net conservation gains;
* Rescind the Council on Environmental Quality's Aug. 5, 2016, final guidance directing federal agencies to consider greenhouse gas emissions and climate
change when performing National Environmental Policy Act reviews;
* Review EPA estimates of the social
cost of carbon, nitrogen oxide and methane
in regulatory-impact analyses, and in the
meantime, rely on previous guidance that was
issued after peer review and public comment;
* Review the hydraulic fracturing
regulations DOI finalized on June 3,
2016, for operations on federal and Indian lands;

* Review DOI's Nov. 18, 2016, rule
limiting wells' venting and flaring on
federal and Indian leases; and
* Review regulations under EPA's
June 3, 2016, New Source Performance
Standards for fugitive emissions of
methane, volatile organic compounds,
and other air pollutants at oil and gas sites.
Fuller estimates the last item may
have the most significant near-term impact,
and suggests the regulation seems emblematic of federal regulators' approach during
the Obama era. EPA's original proposal
contained an exemption for low-producing wells, Fuller notes, but that was
dropped from the final rule because an
analysis by oil and gas opponents asserted such wells emitted disproportionate volumes of methane.
"The analysis was egregiously specious
and flatly outrageous on its face, but it provided EPA a rationale to pull the exemption," he recounts. "There is a fundamental burden to judge the legitimacy of this
analysis, but EPA did not do that because
it needed to get the regulation out before
the end of the administration."
President Trump's order that EPA review its methane regulation prompted
the agency on April 19 to postpone the
rule's scheduled June 3 effective date by
90 days.
The move came a couple weeks after the
White House's request that litigation challenging the regulations be held in abeyance

Western Energy Alliance President Kathleen Sgamma stands
alongside 62,059 pages of paper
to signify the volume of federal
regulations issued by the U.S. Environmental Protection Agency
and Department of Interior in
2015 and '16 that targeted the oil
and gas industry. According to
Sgamma, many of those regulations eventually will go forward
unless the Trump administration's efforts to repeal them follows proper regulatory protocol.

MAY 2017 29



American Oil and Gas Reporter - May 2017

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