Obama Forms Natural Gas Drilling Task Force to Coordinate Regulatory Efforts

April 13, 2012
Industry groups are cautiously optimistic, preferring that states oversee shale-drilling activities.

Several business and trade groups said Friday they're hopeful President Obama's executive order to coordinate federal agency oversight of unconventional natural gas drilling is a step toward streamlining the regulatory process for shale gas drilling.

Obama said Friday his administration will establish an interagency working group to support safe development of unconventional gas resources led by Domestic Policy Council Director Cecilia Munoz.

While trade groups welcomed the coordinated effort, many association leaders reiterated that shale-drilling regulations are best handled at the state level.

The American Petroleum Institute, which represents oil and gas companies, referred to the order as "forward progress" toward reining in overlapping federal regulatory efforts related to shale gas.

However, API President Jack Gerard said state governments already have strong regulatory systems in place.

"Adding potentially redundant federal regulation could stifle the kind of investment that has led to lower energy prices for consumers, more American jobs and increased energy security," he said

Likewise, the American Chemistry Council issued a statement welcoming the call to coordinate federal agency activities but reiterated its desire for state-level oversight.

"The full potential from shale gas will only be realized with sound state regulatory policies that allow for aggressive production in an environmentally responsible way," according to the Council statement. "A coordinated approach to regulation can certainly help. We will be watching closely as the president's initiative develops."

National Association of Manufacturers President and CEO Jay Timmons referred to the executive order as "a step toward national recognition that shale is a game changer."

While Obama's executive order recognizes that states are the primary regulators of onshore oil and natural gas activities, it emphasizes the significant role the federal government plays in regulating oil and gas activities on public lands.

API and other oil and gas industry representatives have criticized the Obama administration for rules and policies that slow production on federal lands.

The American Chemistry Council noted that nine federal agencies are currently examining shale gas issues, including the Bureau of Land Management, which will issue new rules covering production on public lands.

"We are concerned that these rules may duplicate existing state regulations, creating additional barriers that will slow down permitting and increase production costs," the Council said in its statement.

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