Continuing the Dialogue with the White House

Mark Green
Posted May 14, 2012

Takeaways from White House energy and climate adviser Heather Zichal’s appearance at Monday’s hydraulic fracturing workshop in Washington, D.C., hosted by API:

Outreach – The oil and natural gas industry agrees with the Zichal and the administration that constructive dialog on energy issues is, well, constructive. Zichal:

“I give [API President and CEO] Jack [Gerard] and API and a lot of their member companies credit for this. We have worked over the last few months to try to set a better dialogue and create a better working relationship, because what the industry is doing is important from a job-creation perspective.”

Certainly, a fact-based energy discussion has wide benefits. One of the first facts to acknowledge is the role oil and natural gas play in our current energy mix (more than 62 percent of the energy we use) and the role they will play in the future (near 60 percent in 2035, according to the Energy Information Administration). Developing other energy sources and technologies is important, but any credible energy approach must include strategies to support and enhance oil and natural gas – our No. 1 and No. 2 energy sources for today and tomorrow.

Standards – Zichal acknowledged the importance of industry-developed standards:

“We know that natural gas can safely be developed, and to the credit of the industry there are many companies that are leaning into this challenge and promoting best practices for safer and more efficient production. That’s not always widely noticed or appreciated, but it’s a fact. For example, a group of major producers in the Appalachian Basin just last week announced new recommended standards and practices to promote safe and environmentally responsible energy development in that region. This kind of leadership and the underlying commitment by industry to continuously improve and adopt effective practices as technology evolves is something our administration applauds.”

We welcome this recognition on behalf of the administration by Zichal, who’s chairing the White House interagency working group that is coordinating the ongoing federal hydraulic fracturing review. For some time industry has been committed to developing standards and guidelines for hydraulic fracturing, which form the basis for many companies’ operations and upon which a number of states have crafted their regulatory regimes. Perhaps Zichal’s acknowledgement will help lessen the chance the federal government will unnecessarily duplicate what the states already are doing.

States – Related to standards, Zichal said that the administration recognizes the states are the No. 1 or lead regulator of hydraulic fracturing. Gerard, during a conference call with reporters last week:

“The states are regulating hydraulic fracturing effectively and are fully capable of handling it on a larger scale as shale development expands. … They understand the risks and challenges.  They understand the local geology and hydrology.  They have the experience.”

Exports – “As a general rule of thumb, we [the administration] are not opposed to [liquid natural gas] exports,” Zichal said. While there’s some elasticity here, perhaps the general acknowledgement that abundant U.S. natural gas may be exported – benefiting our trade balance while supporting U.S. jobs – will tamp down talk in Congress of restrictive natural gas legislation.

Of course, the true test is what the administration does. Will its actions on domestic oil and natural gas match its words? Will it help increase access to these resources and others in federal areas onshore and offshore – reversing the downward trend in natural gas production on federal lands? Will Zichal’s task force prevent the overregulation of hydraulic fracturing that could check the energy-from-shale revolution in its infancy?

Good questions. Stay tuned.