IPAA Access - Winter 2012 - (Page 22)

◗ FEATURE: Industry Update Industry Under Fire The Continued Threat of Ideological Regulatory Challenges Though regulatory challenges are not new to the oil and natural gas industry’s list of policy issues, over the past three years the current administration and political structure in Washington have transformed a web of bureaucratic structures into what is now an open battleground. T he industry is accustomed to accusations that are often contradictory or otherwise separated from reality. Routine and desperate as these attacks may seem faced year after year, they now represent a grave and immediate challenge for the industry. On the federal level, IPAA is working against the ideological threats steadily pervading the industry’s long standing regulatory structure and is adapting accordingly. Preventing an onslaught of prohibitive federal regulations and has become a growing priority for the association, as well as a growing challenge. Fortunately, our efforts to date have been largely successful, but with much more work to be done, IPAA continues to fight for independent producers. The Defining Issue To date, the Environmental Protection Agency (EPA) has had the most aggressive federal hand on America’s independent producers, threatening to over-regulate the on a number of fronts. Hydraulic fracturing, the technology which, combined with horizontal drilling has enabled the amazing shale revolution in America, has become the environmentalist’s bull’s-eye to take down the industry—and they are using the EPA to make it happen. The EPA is still conducting a closed door study to determine the effects of hydraulic fracturing on groundwater. Though IPAA has welcomed thorough investigation into the process, knowing its long history of safety, the EPA has recently, in the case of Pavillion, seemed aggressive to find fault. It is an alarming posture, especially in light of EPA chief Lisa Jackson’s acknowledgment that there has not been one proven case of hydraulic fracturing contaminating drinking water. EPA is also vigorously being called to regulate hydraulic fracturing under the Safe Drinking Water Act (SDWA). This disregards that the states are already safely and successfully regulating hydraulic fracturing. The immediate problem of imposing this specific federal regulation is that hydraulic fracturing is outside of the scope of the SDWA. The SDWA was never intended to apply to well completion fluids when it was passed in 1974. In the 1990s, environmental groups brought their A Powerful Threat With regulatory issues, such as the manufactured debate over hydraulic fracturing leading concerns over the federal government’s involvement and potential to slow or stop American oil and natural gas production, the crawling pace of federal permitting continues to hinder American oil and natural gas production on a nearly prohibitive level. The federal government’s slow process of reopening the Gulf for exploration and production, more than a year after the Deepwater Horizon accident demonstrates that the administration can restrict American oil and natural gas production. 22 IPAA Access | Winter 2012 case to court to change the scope of the legislation to regulate the industry. The 2005 amendment, coined by environmentalists as the “Halliburton loophole” is not a loophole at all, but a clarification of the legislation, which brought the scope back to the legislation’s purpose. Undermining the point of redundancy of new federal initiatives has been the opposition’s disregard of state-based programs such as FracFocus, an online chemical registry website where production companies list their hydraulic fracturing fluids and STRONGER, the State Review of Oil and Natural Gas Environmental Regulations. IPAA actively promotes both programs, which demonstrate the success of the state regulatory regimes already in place. But the EPA has pressed on, as have the activist interests, like “GasLand” director Josh Fox, that have become obstructive in the process of finding productive answers to the public’s questions on hydraulic fracturing. For the industry’s part, there remains an open and transparent source of information through the IPAAmanaged coalition, Energy In Depth (EID). Dispelling confusion about hydraulic fracturing early in the public debate through its comprehensive online information platform and media resource outlet (www.energyindepth. org), EID outreach and capability continues to grow every day and has served as the industry’s focal point for getting the truth about hydraulic fracturing and answering the public’s questions about industry practices. The Activist Assault Sadly, the reality is that the activist http://www.energyindepth

Table of Contents for the Digital Edition of IPAA Access - Winter 2012

President’s Message
Leadership Profi les
Money Matters
IPAA’s New Look
An Industry Under Fire
Supply and Demand Committee Fall Meeting
Summer NAPE
OGIS® San Francisco
82nd IPAA Annual Meeting
New Members
Upcoming Events
Index of Advertisers

IPAA Access - Winter 2012