Unjustified EPA Intrusion Into Fracking
by William O'Keefe
April 23, 2012
Reactions to EPA’s newly released fracking rules from the environmental community—at least, by some—have been sullen but not mutinous. And industry generally seems satisfied with the time allotted for compliance but concerned with cost. Both of these responses suggest that, for once, EPA got it right. But that could be a rush to judgment. Here are some reasons why.
Reports indicate states are sufficiently managing regulation of natural gas production within their borders. That being the case, what is the problem to be solved that justifies federal regulation? If there is not an adequate answer to that then EPA’s action, even if reasonable, is not justified.
This proposal is not a once and for all action. It is just the first step in regulating fracking. Is there reason to believe that the next steps will also be moderate? The track record of this EPA suggests otherwise. If the agency had come forward with a regulation that was patterned with other Clean Air Act regulations that it has issued, it would have been a serious blow to America’s natural gas industry. Such a proposal would have caused a major political backlash in an election year and could have set back the dash to gas.
The invisible hand of politics may have been at work to snatch control from states without causing a backlash. Cynicism is not always unjustified.
Some parts of the regulation simply codify current best practices from industry and states. So why was it necessary to issue a federal regulation to mandate what is already being done? In addition to setting standards for emissions, the agency claims that the regulatory requirements will save some producers money. The notion that a federal agency has a stronger incentive than a business to save its own money just doesn’t pass the “red face” test. Producers have an incentive to reduce methane emissions because they affect the quantity of gas produced.
Centralization of fracking is premature and potentially counterproductive. States where shale gas is being developed are adopting regulatory approaches that meet their specific circumstances. They’re acting responsibly, as evidenced by EPA adopting some of their best practices. State regulations represent experiments that produce useful information for finding the most cost-effective approaches to developing shale gas resources and protecting the environment. The future value derived by continuing to allow states to handle the natural gas regulation could now be lost. Furthermore, states already have to comply with existing air quality standards and should have the freedom to figure out the best way of doing that without the Federal Government micromanaging compliance.
While most comments by oil and gas companies on the rule were positive, the sector should be concerned about the history of regulations under the Clean Air Act. There is a long track record of environmental groups suing the agency which then enters into settlement agreements that result in more stringent regulations. Regulations are supposed to be issued under the Administrative Practices Act with public comment, not through litigation
Given the tremendous environmental progress that has been made over the past four decades, we have reached a point where it makes sense to begin moving environmental regulatory authority back to the states. Yet, the Obama Administration continues to reaffirm a commitment to command and control over federalism.
Even if most of these concerns turn out to be unjustified, EPA—in this new regulation—has set another precedent for extending its control over greenhouse gases. Since the Administration subscribes to the climate orthodoxy that using fossil energy for operating businesses, homes, and travel is leading to a climate apocalypse, which gets weaker every day, there is no logical stopping point for EPA’s reach and regulatory stringency.