Energy policy

economy and environmentFracking & energy policy

Energy policy in the United States is a two-sided coin, especially in regards to fracking and the natural gas boom.  Take public interest as the grounding principle that guides decisions made on energy policy. On one side, public interest (or national security) is equated with energy security:

  1. provide ample and affordable sources of energy to meet the demand of consumers, and
  2. produce energy domestically to avoid erratic global oil prices/supply and to create jobs.

On the other side, contenders equate national security with environmental security:

  1.  promote clean energy alternatives to fossil fuels, while
  2. protecting public health and the environment through the regulation of the energy industry.

The government attempts to strike a balance. Accessing unconventional gas deposits, which can be “fracked” for domestic consumption and export, has been offered up as a strategy to maintain this balance. In this post, changes in regulations to hydraulic fracturing and natural gas extraction will be discussed within the framework of energy policy. But first, what is meant by “energy policy” and why is it important?

Global energy policy

At the most basic level, energy policy affects everything from gas mileage standards for the cars we drive to international emissions-trading markets. “Energy policy”, across most countries, refers to a country’s relative commitment to a specific renewable energy target. 118 countries now have comprehensive, binding energy targets for increasing energy efficiency and lowering greenhouse gas emissions – but the U.S does not. Obama merely announced that he would like the U.S to use 80% “clean power” sources by 2035 through the combination of nuclear, natural gas, and carbon sequestration. We don’t have a uniform national vision – but we do have a medley of policies, made a bit hard to navigate as some of these are federal policies and some are state policies – with overlap and conflict between them. Nationally (across all states), this is what we definitely have:

subsidies for fossil fuels, subsidies for nuclear power, subsidies for wind and solar, and subsidies for insulating and retrofitting buildings. We also have energy standards for some appliances and miles per gallon standards for automobiles. (Kurt Cobb, CS Monitor).

alternative energyObama’s administration, during his first term, was influenced by other nations’ moves to increase incentives for renewable energy. Energy policy in his second term, however, has changed focus in light of the natural gas boom: to drill or not to drill? Projections cast by the Congressional Research Service suggest that the US could move from being a net importer of natural gas to a net exporter by 2020. Consequently, energy policy debates may begin to focus less on environmental imperatives than economic ones: do we use this gas strictly for domestic needs or do we export it?

State vs. federal regulations on fracking

Media outlets and various documentaries have widely deplored the fact that natural gas companies are exempt from major federal environmental regulatory laws. These laws were among the crowning jewels of the administrations that successfully passed them, and are regarded as major policy victories as the laws promote both conservation and energy production. Oil and gas, pending new regulatory debates and updates, enjoys exemptions from sections of:

  • The Clean Water Act
  • The Clean Air Act
  • Safe Drinking Water Act
  • Resource Conservation & Recovery Act
  • CERCLA/ Superfund Law
  • Planning and Community Right-to-Know Act

Combined exemptions from the first three were inscribed in Bush’s 2005 National Energy Act, which is known pejoratively as the “Halliburton Loophole.”

But what many do not understand about energy policy relevant to environmental regulatory exemptions is this: states can retain the legislative control to regulate well drilling. Indeed, states can submit regulatory plans to the federal government that – under the condition that they are as stringent as EPA policies  – can contradict federal laws. The New York state government, for instance, passed an article that requires well owners/operators to implement erosion and sedimentation controls, which remedies a specific exemption made in the Clean Water Act.

Now, five states require full data and chemical disclosure of every well drilled using, which is also supported by the Natural Gas Alliance(2). Put plainly: oil & gas regulation is in the hands of the state.

FRESHER and BREATHE, new fracking legislation

Obama energy policyThe regulatory framework has not only been altered at the state level, where efforts to close the “loophole” are in effect. Congressman Matthew Cartwright has introduced legislation (the “FRESHER” and “BREATHE” Acts) to remove the exemptions at the federal level too. Moreover, the federal government has been stepping in to reclaim some regulatory territory over the states through these ongoing efforts:

the formation of the Department of Energy’s Shale Gas Production Subcommittee; proposed rules by the EPA to regulate air emissions and waste-water from fracking operations; a study by the EPA on the impact of fracking on drinking water; and the development of potential fracking regulations by the Department of the Interior (DOI)(1)

Evidently, oil and gas policy moves in two directions, sometimes overlapping and sometimes in a tug-of-war between the industry lobby and environmental groups. Industry seeks to keep policy regulation in the state’s control while environmental groups seek uniform national standards for air, water, wildlife, and health protection. Moving the issue up the chain of command vs. moving it down. Local authorities tend to enjoy control where they can work with industry experts in maximizing their state’s economic growth and meeting the needs of their constituents.

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