President Obama drew praise from the energy industry on Friday after issuing an executive order to amend federal oversight procedures of hydraulic fracturing — commonly known as “fracking” — which injects water, sand, and chemicals deep underground to release vast quantities of fuel. The order creates an “interagency working group” that directs 12 federal agencies to collaborate in bolstering “safe and responsible unconventional domestic natural gas development.”
Included in the group of federal collaborators are the departments of Energy, Defense, Commerce, Interior, Agriculture, Transportation, Homeland Security, and Health and Human Services, as well as the National Economic Council, Council on Environmental Quality, Office of Management and Budget, Office of Science and Technology Policy, and Environmental Protection Agency (EPA). The executive order states, in part:
While natural gas production is carried out by private firms, and states are the primary regulators of onshore oil and gas activities, the federal government has an important role to play by regulating oil and gas activities on public and Indian trust lands, encouraging greater use of natural gas in transportation, supporting research and development aimed at improving the safety of natural gas development and transportation activities, and setting sensible, cost-effective public health and environmental standards to implement federal law and augment state safeguards.
The EPA plans to issue a report later this year that focuses on the environmental safety of fracking, and many experts predict the report will undoubtedly promote new restrictions on the drilling method.
New environmental rules and ongoing pressure from federal regulators have posed serious concerns for the energy industry. Presidential contenders and congressional Republicans have castigated Obama for overlapping government regulations that have threatened to slow production. Consequently, critics contend that the President is seeking to combat such claims with Friday’s announcement.
Natural gas production has boomed in recent years, as fracking and other new techniques have granted access to wells that were difficult to reach in the past. And critics have suggested that new environmental rules could thwart a natural gas boom that has already curbed prices to 10-year lows.
“By helping to power our transportation system, greater use of natural gas can also reduce our dependence on foreign oil. And with appropriate safeguards, natural gas can provide a cleaner source of energy than other fossil fuels,” the President’s order affirms. “It is vital that we take full advantage of our natural gas resources, while giving American families and communities confidence that natural gas and cultural resources, air and water quality, and public health and safety will not be compromised.”
The President’s announcement arrives at a delicate time, as gas prices exceed $4 a gallon in many places and the 2012 presidential contest kicks into full gear. Among a slew of other criticisms, Obama has received ample complaints over his purported hostility toward the fossil fuels industry, particularly as Americans experience a rising pain at the gas pump and as Republicans exploit the seemingly anti-oil agenda of his administration.
GOP presidential contender Mitt Romney, in particular, has made the expansion of U.S. energy production a key focal point of his campaign, while assailing Obama for hindering new developments in the oil and gas sector.
With that under consideration, opponents surmise that Obama’s move is undoubtedly strategic, as fracking has become an economic driver in swing states such as Ohio and Pennsylvania. In fact, the executive order prefaces Pennsylvania’s April 24 presidential primary, where Romney has been particularly critical of the President’s energy policies.
The former Massachusetts Governor slammed Obama during a campaign swing through Pennsylvania earlier this month, calling him “an anti-energy president.” “This president has eight different agencies trying to fight their way to become regulators of the gas extraction technology known as fracking,” Romney told a crowd of supporters. “And the intent of course is to slow down the development of our own resources.”
The executive order has been met with much enthusiasm from industry leaders. “We’re pleased the White House recognizes the need to coordinate the efforts of 10 federal agencies that are reviewing, studying or proposing new regulations on natural gas development and [fracking],” asserted Jack Gerard, president of the American Petroleum Institute. “We have called on the White House to rein in these uncoordinated activities to avoid unnecessary and overlapping federal regulatory efforts and are pleased to see forward progress.”
Kathryn Klaber, president of the Marcellus Shale Coalition, echoed Gerard, asserting, “We remain eager to provide real-time, on-the-ground insight in an effort to ensure that common-sense regulations are in place, which is essential to leveraging the countless benefits of America’s natural gas resources.”
However, Gerard added that the industry believes state regulation is adequate for fracking techniques, and that new federal regulations will only “stifle the kind of investment that has led to lower energy prices for consumers, more American jobs, and increased energy security.” States are already administering regulations on fracking, and federal meddling only confuses the process and places a damper on new oil and gas development.
Moreover, it is unclear whether the President’s order will ease the burden of looming federal regulations. While the maneuver may appear favorable — as federal meddling of fracking activities remains a fragmented disaster — the belief that rallying executive agencies together to effectively cut the endless roll of red tape is a rather ambitious notion.
One other note: Obama is notorious for brushing off suggestions from his hand-picked working groups. With that in mind, critics say it’s hard to imagine that the President’s executive order is anything more than a ploy to gain traction for his November reelection effort.
