Government And Oil Industry Need 'Regulatory Detente'

This opinion piece presents the opinions of the author.
It does not necessarily reflect the views of Rigzone.

Regulation after regulation has been thrown at the oil and gas industry by federal and state agencies since 2009. 

All 13 federal agencies that regulate a portion of the oil and gas industry have tried in some way to make it more difficult to drill, produce and refine hydrocarbons in the United States.

The Environmental Protection Agency has been the most visible in many respects with its new air emission regulations that define carbon dioxide (CO2) as a pollutant and sets emission limits. 

EPA also has initiated a study of hydraulic fracturing even though many legal scholars point out that federal law exempts hydraulic fracturing from federal regulation.  State regulatory agencies have regulated hydraulic fracturing for decades.

The new federal oversight includes such agencies as the U.S. Fish and Wildlife who enforces the Endangered Species Act; the Federal Energy Regulatory Commission which oversees natural gas rules enforcement; the Commodities Futures and Trading Commission that is trying to write new regulations on “swaps” and trading on the futures market; the Department of Interior and Bureau of Land Management that has set new drilling standards on federal lands; and on and on.

Texas has jumped into the act also with the Texas Commission on Environmental Quality implementing new air emission requirements and even using special cameras in helicopters to enforce the new limits.

The Texas Railroad Commission has issued new drilling and completion regulations, and it is proposing new rules for injection wells.  It already had initiated new requirements for inactive wells.

All of these new regulations have the industry spinning just trying to catch up with methods and resources needed to comply.

One former regulator, John Tintera, who retired from the RRC in 2012 as Executive Director and 22 years with the commission, has called for a “regulatory détente”.  Tintera, who is a geologist and consultant in Austin, says that “unconventional energy development has been politicized.  Not just in our great country, but also on the international stage.  Right or wrong, the future role of shale oil and gas must now be viewed through a political prism.”

Tintera said that political problems require political solutions. “Without political solutions, our disagreements grow into problems which lead to broader conflicts. Let's not go there,” he said.

“We need an unconventional solution to our unconventional energy debate. It is time to consider  ‘Regulatory Détente,’” he said.

Tintera explained that detente as modern political concept comes from the decades old Cold War era. It bore fruit as a Kissinger - Nixon policy that now, in hindsight, was one of the key factors that began the march to the end of the Cold War.  

“It was intended to ease tensions and lead us away from brinksmanship by recognizing we have a common geopolitical denominator that is as basic as it is important. Survival.” 

Tintera said that the oil and gas industry is immersed in a  regulatory "cold war".  “In this "war" the combatants are politicians and regulators, the weapons are statutes and rules. If we are to turn the current antagonism into a golden age of economic prosperity with abundant energy, environmental protection, and a prosperous future, we need to recognize three fundamental facts:

• Energy needs water. 
• Water needs energy.  
• We, the people, need both. 

“These are the common denominators to build our future on and avoid  mutually assured destruction through competing over-regulation or under-regulation,” he said. “The concepts of federal versus state, energy versus water, blue versus red, are counter-productive too. It is time to move beyond them.”

Tintera said: “I am an optimist. Ahead of us I see a Golden Age that will rival the Age of Enlightenment. It will have the best of the Industrial Revolution, without the pollution. We can do this. But it will take "regulatory detente". 

Alex Mills is President of the Texas Alliance of Energy Producers.