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Feds discuss oil and gas industry

John Colson
Post Independent Staff
Glenwood Springs, CO Colorado

WASHINGTON, D.C. – The debate over how best to exploit the nation’s natural gas and oil reserves took center stage in a congressional committee room this week, as the House Natural Resources Committee took up debate on what is known as the CLEAR Act.

Also this week, an environmental advocacy organization, the National Resources Defense Council, released a study that disputes gas industry claims that increased federal regulation would cause serious financial harm to the industry.

The industry, according to a Colorado spokesman, continues to maintain that legislative efforts to impose increased federal oversight are not necessary and would harm the industry and, by extension, the national economy.



The debate this week at the Natural Resources Committee focuses on H.R. 3534, the “Consolidated Land, Energy, and Aquatic Resources Act of 2009.”

Introduced by Congressman Nick Rahall, D-W.Va., the bill is intended to overhaul the federal framework for managing oil and gas leasing offshore and on public lands. The committee’s hearings were scheduled for Wednesday and Thursday.



“The bill would create a new Interior Department agency to oversee oil and gas development and would scrap the existing federal royalty system,” wrote blogger Margaret Kriz Hobson on the website NationalJournal.com, seeking comment from interested parties. “It would also push oil companies to speed exploration on federal lands, rather than holding leases for prolonged periods of time.”

While environmentalists have expressed support for the bill, the industry has criticized it as failing to increase energy security for the U.S. public.

“It’s all about process, reorganization, added costs and new bureaucracy,” declared Jack Gerard, president and CEO of the American Petroleum Institute, in a response to Hobson’s blog, a view seconded by Rep. Doc Hastings, R-Wash.

While the debate of the CLEAR Act simmers in Washington, D.C., the NRDC critique of the industry’s claims concerning federal regulation has sparked a related discussion.

The critique, produced by the ECONorthwest consulting company in Oregon, disputes industry claims that proposed regulations would raise the cost of gas and oil exploration and, as a result, cost thousands of jobs in Colorado around the U.S.

A report commissioned by the American Petroleum Institute, according to ECONorthwest, concluded that “implementation of these regulations … would result in a 20.5 percent reduction of new wells drilled over a five year period and a 10 percent loss of natural gas production within five years.”

The legislation under discussion includes the CLEAR Act and the FRAC (Frac’ing Responsibility and Awareness of Chemicals) Act proposed by Rep. Diana DeGette, D-Colo., and others.

The FRAC Act would put the practice of hydraulic fracturing of oil wells under the oversight of the Safe Drinking Water Act, and require gas exploration companies to reveal exactly what chemicals are used in the practice. Frac’ing involves the high-pressure injections of large amounts of water, sand and chemicals deep into gas and oil bores, to loosen up tight rock formations deep underground and release trapped deposits of oil and gas.

While the industry maintains the practice does not pose a pollution hazard, critics have said frac’ing already has poisoned some groundwater supplies and domestic water wells.

The critique argues that industry claims about increased costs and threats to the industry’s vitality are exaggerated and misleading, and do not take into account a variety of alternatives for complying with the regulations, including ways that could reduce costs to the industry while cutting health-care-related costs to the public.

“Developing energy and protecting the environment is not an either/or scenario,” said NRDC’s Amy Mall. “We strongly believe clean solutions are readily available, economical, and sometimes even profitable for industry. The FRAC Act is a common sense approach, especially when drinking water and human health are at risk.”

Nate Strauch, a spokesman for the Colorado Oil and Gas Association, responded that jobs will be lost if there is added federal regulation of the industry.

“Any time you’re overburdening the industry with regulation, there’s no question there’ll be economic impacts,” Strauch said.

“A lost job is not a statistic to them,” he said of the 70,000 or so gas industry workers in Colorado. “It’s their livelihood.”

As for the NRDC report’s conclusion that the industry’s claims overlook a number of benefits that could come with federal regulation, such as diminished health problems for neighbors of oil and gas wells, Strauch said, “It’s a solution looking for a problem. In the case of frac’ing, you have a 60-year history where no negative health effects can be traced to frac’ing.”

Critics of the industry argue that, for most of those 60 years, oversight has been negligible at either the state or federal level, and that even now the industry is not required to release a complete list of the chemicals used in frac’ing. As a result, critics say, anyone trying to analyze water samples to detect the presence of toxic or carcinogenic chemicals is hampered by not knowing which chemicals to look for.

jcolson@postindependent.com


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