Comment: Redundant federal rules hurt oil-industry jobs

By 2020, the West could produce as much oil and natural gas on a daily basis as the U.S. imports from Russia, Iraq, Kuwait, Saudi Arabia, Venezuela, Algeria, Nigeria and Colombia combined, while creating new jobs, doubling investment to $58 billion annually, and providing billions in government revenue. Yet this incredible potential is threatened by the seemingly endless flood of regulation pouring out of Washington.

The latest threat to the West’s small businesses and working families comes in the form of new and redundant Interior Department regulations on hydraulic fracturing (fracking), which will add an entirely new permitting and monitoring processes to the already astonishing federal bureaucratic maze.

Since nearly every well drilled in the West requires the use of fracking technology, these duplicative new rules will make energy development on public and tribal lands even more burdensome and costly, while diverting much-needed jobs, revenue and economic activity from Western states. Fracking is already heavily regulated at the state level, and these duplicative regulations will not add commensurate environmental protection. In fact, states have successfully regulated fracking for more than 60 years, including on public lands, without any incidence of contamination of underground sources of drinking water.

What these new regulations will do is cause delays and uncertainty that will further increase energy costs and divert limited resources from investment that grows the economy and creates jobs. Currently, state and federal permitting functions have many areas of overlap, but while states take an average of 30 days to process a permit, the federal government takes 298 days. The new rules will only exacerbate that inefficiency and further disadvantage public lands states like Colorado compared to other regions of the country.

Western Energy Alliance estimates that the costs from the new regulations will be about $127.2 million annually, and could range as high as $175.7 million. Since that exceeds the $100 million threshold for a major rule, we believe the government needs to slow down and do a thorough economic analysis. Considering the potential to generate over 100,000 new jobs and billions of dollars in investment in coming years, the costs to society from further slowing oil and natural gas production on western lands should be thoroughly considered. Western energy producers are committed to continued environmental improvements and balanced use of our federal lands, but in order to continue supplying domestic energy and helping to rebuild our economy, we need a more efficient and predictable regulatory environment.

Kathleen Sgamma is the vice president of government and public affairs for Western Energy Alliance. She can be reached at 303-623-0987.


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