Regulation of the oil and gas industry is nothing new. State and federal agencies have had their regulatory fingers in petroleum virtually since the first barrel of oil was extracted from the ground.
The Obama Administration, however, has taken the art of regulatory oversight to new levels never witnessed before. Just a few examples are:
- The U.S. Fish and Wildlife Service has designated the lesser prairie chicken as “threatened.”
- The EPA has implemented a multi-year study of hydraulic fracturing.
- New air regulations have been established for drilling and production techniques.
- The Bureau of Land Management has new rules regarding drilling on federal lands.
- National Climate Assessment and Development Advisory Committee pro-claim climate change is here and it is bad for human life.
- EPA redefined “pollutants” under the Clean Air Act to include carbon dioxide.
- EPA has redefined “waters of the U.S.,” which makes for some big changes in current regulations. Congressman Lamar Smith (R-Texas), chairman of the House Science Committee, said, “EPA’s rule is so vague it does little more than extend an open invitation to trial lawyers and government drones.”
Overall, some 13 federal agencies have their eyes on oil and gas operations, and that doesn’t count the more than 100 regulations enacted by the Texas Railroad Commission and the Texas Commission on Environmental Quality.
The oil and gas industry is just one of many sectors of the economy that is being touched by federal regulators. Last year, the federal government issued 26,417 pages of rules in the Federal Register — a new record, according to the Competitive Enterprise Institute (CEI).
CEI does an annual review and oversight of federal regulations, and 2013 had 3,659 final rules and 2,594 proposed rules.
Of course no one can read, much less comprehend, all of these new requirements. So industry has to hire consultants, lawyers and other experts to read, decipher and educate those who are regulated about the new “dos” and “don’ts.”
CEI estimates the cost for Americans to comply with federal regulations reached $1.863 trillion in 2013, which is more than the gross domestic product of Canada.
The $1.863 trillion price tag is an extra cost of business in the U.S., which makes U.S. businesses less competitive than businesses in other countries.
The Rules Committee in the U.S. House of Representatives recently held a hearing regarding a legal action filed by the House against President Obama because of overreach by the executive branch.
One of the witnesses, The George Washington University Law School Professor of Public Interest Law Jonathan Turley, a nationally recognized legal scholar, highlighted the importance of the House taking action.
“Today’s hearing is a historic step to address the growing crisis in our constitutional system,” said Turley. “After years of eroding legislative authority, the decision of this body to take a stand and seek judicial review is a welcome change. We remain a nation of laws and have a court system designed to resolve such controversies. That is precisely where this authorization would take us, and it is where these questions should be answered.”
Professor Turley said the federal bureaucracy has grown so much he believes it has become the fourth branch of government in addition to the legislative, executive and judicial branches.
Government must understand more regulation complicates the ability of the oil and gas industry to explore, produce and refine hydrocarbons for consumers. The domestic oil and gas industry has been able to increase crude oil production significantly during the past four years in spite of government intervention, not because of government support.
Alex Mills is president of the Texas Alliance of Energy Producers. The opinions expressed are solely of the author.
For more information, visit www.texasalliance.org or call (800) 299-2998.
