WASHINGTON, D.C. Link – Yesterday, the House Natural Resources Committee held an oversight hearing entitled “DOI Fracturing Rule: A Recipe for Government Waste, Duplication, and Delay.”  This hearing focused on the potential impact that the Obama Administration’s proposed hydraulic fracturing regulations on federal lands would have on job creation, economic growth, and energy development in America.
 
For over 60 years, states have successfully and effectively regulated the process of hydraulic fracturing.  This process is essential to developing shale oil and natural gas.  With state regulation of hydraulic fracturing, President Obama’s former EPA Chief Lisa Jackson admitted that there has not been one instance of groundwater contamination from this process. 
 
For over two years, the House Natural Resources Committee has conducted aggressive oversight of this issue and will continue its oversight of the federal government’s overreach in issuing duplicative regulations on hydraulic fracturing on federal lands.  This is especially important now because Interior Secretary Jewell has stated that the Interior Department would be releasing its new proposed rule of hydraulic fracturing “within weeks.”
 
“States are able to carefully craft regulations to meet the unique geologic and hydrologic needs of their states.  The regulatory needs in North Dakota, versus Ohio and New Mexico, are vastly different.  Imposing a ‘one size fits all’ regulatory structure, as the Obama Administration is attempting to do, will not work.  At a time when the Department is canceling lease sales, federal dollars and resources should not be spent duplicating state regulations, especially when states already have guidelines in place that are effective and successful,” said Natural Resources Committee Chairman Doc Hastings (WA-04). 
 
Witnesses testifying before the Committee spoke from their firsthand experience with state regulation of hydraulic fracturing, how states are already effectively and safely regulating this process, and how federal regulations would be duplicative and burdensome:
 
“States have successfully regulated more than 1.2 million hydraulic fracturing (HF) operations spanning sixty years; new federal mandates are not necessary given their exemplary safety record.  State rules specifically tailored to each state’s unique geologic and hydrologic conditions better protect the environment and groundwater than a one-size-fits-all federal rule.” – Alan Olson, Montana State Senator
 
“The proposed BLM hydraulic fracturing rule would add a requirement for pre-approval of fracturing processes and chemicals.  North Dakota has worked hard to create a stable tax and regulatory environment that promotes venture capital investment.  Our oil and gas rules are reviewed at least every two years through a public comment process where every comment must be considered in writing.  This ensures that North Dakota regulations keep up with new technologies and economic conditions.”  – Lynn D. Helms, Director,  North Dakota Industrial Commission, Department of Mineral Resources
 
“The Wyoming County Commissioners Association (WCCA) has asked the BLM to defer regulation of hydraulic fracturing to states that have adequate hydraulic fracturing regulations in place, which certainly is Wyoming.  Proactive state regulations have the highest likelihood for successful protection of water resources because they are best able to respond to localized impacts and issues, as opposed to a redundant federal hydraulic fracturing rule.” – Cindy DeLancey, Executive Director, Wyoming County Commissioners Association
 
“Presently, the Department of the Interior (DOI) is planning to add regulations for hydraulic fracturing (HF) on federal lands which are redundant to state regulations, and will add even more length and bureaucracy onto a process which already takes significantly more time than on private and state lands.  The added red tape will divert investment away from energy development, job creation, and economic growth into redundant federal regulation, further disadvantaging western public lands states like New Mexico.  While states efficiently process permits in an average of thirty days, the Federal Government takes 228 days.  The proposed HF rule could add another 100 days onto permitting times.” – John A. Byrom, President and CEO, DJ Simmons, Inc.
 

From our friends at Resource Development Council for Alaska:

 

Mark your calendars!
Resource Development Council’s 38th Annual Meeting
Wednesday, June 26, 2013
Dena’ina Center, Anchorage
Doors open at 11:15 a.m., program begins at 12:00 p.m.
Featuring:
David Holt, President
Consumer Energy Alliance
Houston, Texas
and
Janet Weiss, President
BP Exploration (Alaska) Inc. 
Additionally, the May 2013 issue of RDC’s Resource Review newsletter is now available online in PDF or web version.

From the Alaska Department of Natural Resources:

 

(Anchorage, AK) – The state received nearly $4.5 million in high bids for oil and gas leases in Cook Inlet and received a bid for a geothermal lease on Augustine Island during a series of lease sales on yesterday morning.
 
Commissioner Dan Sullivan, Attorney General, Alaska, Cook Inlet Lease Sale, Geothermal, Photo by Dave HarbourThe Cook Inlet lease sale was the third largest of its kind in nominal dollars and the sixth largest in acreage leased since the state’s areawide lease sale program began in 1999.
 
“We’re very pleased to see the Cook Inlet energy renaissance continue to take hold,” said DNR Commissioner Dan Sullivan (NGP Photo). “This provides increased energy security for Alaskans and growing employment opportunities in Southcentral,” he said.
 
“Three years ago, the conventional wisdom was that Cook Inlet was a dead hydrocarbon basin. We’ve been able to turn that around with: strong legislative action to make Cook Inlet one of the most competitive places in the country to invest; a comprehensive strategy at DNR to secure timely development and attract new investors; and a strong partnership between all the stakeholders in Cook Inlet to address the key issues of gas storage, deliverability and increased energy supplies for Alaskans,” Sullivan said.
 
In the past two years, Cook Inlet has seen a dramatic increase in oil and gas investment from a variety of large and small companies. The past three Cook Inlet lease sales have been some of the best in years. This investment activity is beginning to translate into increased drill rigs, oil exploration and gas production in the Inlet. For example, Southcentral utilities were recently informed that their gas supply needs could be met through the end of 2017.
 
The success seen so far in Cook Inlet with this combination of legislative action, DNR effort, and stakeholders working together is a clear indication of what can be achieved on the North Slope to turn around its production decline, Sullivan said.
 
The Division of Oil and Gas opened the lease sale bids at the Dena’ina Civic and Convention Center in downtown Anchorage. Until the bids are adjudicated, lease sale results provided below will remain preliminary.
 
Cook Inlet areawide oil and gas lease sale
  • 32 bids were received from seven bidding groups on 28 tracts, encompassing approximately 145,739 acres.
  • Bidders included Hilcorp Alaska, Cook Inlet Energy, and NordAq Energy. Hilcorp was the most active bidder, winning 19 of the 28 tracts in the lease sale.
Augustine Island geothermal lease sale
  • A single bid was received for one of the 26 tracts offered. The bidder was Nicholas van Wyck.
  • This was the state’s first geothermal lease sale on Augustine Island. The division’s last geothermal lease sale was in 2008 on Mount Spurr.
Alaska Peninsula areawide oil and gas lease sale
  • Similar to the past five years, tracts in this lease sale did not receive any bids.
Division Director Bill Barron (NGP Photo, yesterday, below) provided the following observations about the lease sale results:
 
“In the past two years, we’ve seen record lease sales for the Inlet and new players moving in. But obtaining a lease is just the first step. We are very pleased that a number of leaseholders in the Inlet are busy this year exploring and securing their land positions, evaluating their exploration results, and working over properties they’ve obtained from other companies.”
 
Barron said that he was also pleased to see one of Cook Inlet’s new entrants – Hilcorp – stepping into exploration for the first time in Alaska.
 
Regarding the Augustine Island lease sale, Barron added, “Geothermal energy is still a fairly new and unexplored resource in Alaska. The resources are clearly there and we hope to see a successful project in Southcentral.”

 

Today’s Consumer Energy Alliance Links:

Forbes: Whoever Said The (Shale) World Was Sane? – Following up on last week’s piece detailing the reasons why the Shale oil and natural gas boom has taken place in Texas, but not in other states like California and New York, we’ve seen quite a bit of interesting, related news pieces over the last several days. On Monday, the Wall Street Journal published a very informative op/ed in its Review & Outlook section, titled “A Tale of Two Oil States”, which made more detailed comparisons between the economic performance between Texas and California, and the ways in which each state’s policy decisions related to shale development have affected that performance.
 
Wall Street Journal (Press Release): Texas Welcomes Obama As It Prepares To Celebrate STEM Education – Governor Perry granted a proclamation recognizing May 6 – 12, 2013 as the first ever "Celebration of STEM Education Week in Texas (CSEWT)." STEM-related companies, organizations and institutions of higher education have united to work on this project, including Texas A&M University, University of Houston, Chevron, Shell Oil, Weiss Energy Hall, Houston Museum of Natural Science, Consumer Energy Alliance, Region IV and XX, Harmony Public Schools, Educate Texas, Work Force Solutions, Texas Tribune, KRIV-TV Fox 26 and EMAS among others.
 
New York Times: Foes Suggest a Tradeoff if Pipeline Is Approved – President Obama’s first major environmental decision of his second term could be to approve the Keystone XL pipeline, profoundly disappointing environmental advocates who have made the project a symbolic test of the president’s seriousness on climate change. But could some kind of deal be in the offing — a major climate policy announcement on, for example, power plant regulation or renewable energy incentives — to ease the sting of the pipeline approval?
 
Washington Post: Environmentalists seize on Biden’s Keystone XL remarks to launch new attack – Environmentalists have seized on a comment Vice President Biden made while working a rope line in Columbia, S.C., on Friday, in which he told an activist he is “in the minority” within the administration when it comes to opposing the Keystone XL pipeline. Elaine Cooper, who serves on the executive committee of the Sierra Club’s South Caroline chapter, said in an interview Wednesday that Biden shared his thoughts with her during Rep. James Clyburn’s (D-S.C.) annual fish fry.
 
FOX News: EPA Chief Gives State Dept. Keystone Review A ‘C’ Grade – The head of the U.S. Environmental Protection Agency on Wednesday gave the U.S. State Department’s review of the proposed Keystone XL pipeline a ‘C’ grade, but said there is "ample time and ability" to upgrade the analysis. The comments by Bob Perciasepe, the agency’s acting administrator, to the House Appropriations Committee brought into focus concerns the EPA has already raised about the State Department’s environmental review of the project.
 
Bloomberg (Editorial): U.S. Should Export Natural Gas, Not Coal – President Barack Obama’s suggestion last weekend that he may favor greater U.S. exports of liquefied natural gas is a welcome sign. More exports would spur more domestic production and help balance U.S. trade. LNG exports could also help counter the unsettling increase in American exports of coal to Europe. In 2012, the U.S. sent about 66.4 million short tons (60.2 million metric tons) of coal across the Atlantic, 23 percent more than the year before. Exporting coal works against the progress the U.S. has made in lowering its own greenhouse-gas emissions by replacing coal power with cleaner-burning natural gas.
 

Associated Press: Scary day for natural gas before inventories report – Today’s U.S. natural gas storage report is the most important of the year as it may support last week’s data that sent prices down by the most in nine months, according to Schork Group Inc. “This is going to be a scary day,” Stephen Schork, president of Schork Group, an energy advisory company based in Villanova, Pennsylvania, said in an e-mailed report. “For a second week in row, the template looks to favor another solid injection report.”