American Oil and Gas Reporter - January 2012 - 232

der the Bill Richardson administration.
ESA And EPA
The PBPA membership sees that we
have an opportunistic, adversarial, aggressive federal government that calls for
the PBPA leadership's ever-increasing
vigilance and involvement in federal issues.
A short list of federal initiatives includes
those dealing with the Endangered Species
Act and the Environmental Protection
Agency.
Regarding the ESA, PBPA is leading
the fight against an unnecessary and completely unjustified listing of the dunes sagebrush lizard. The U.S. Fish and Wildlife
service is in the process of considering
whether this species should be listed, and
PBPA-in partnership with other oil and gas
associations-has been proactive in generating credible science that refutes the
claim that species is endangered or that industry activities play a role in any claimed
impact.
Behind the dunes sagebrush lizard are
an additional 111 other proposed species
listings with habitats in Texas. Of particular concern to the Permian Basin are proposed listings of the lesser prairie chicken
and the spotted tail earless lizard. The emergence of ESA listings in the Permian
Basin has the potential to threaten a fifth of

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the nation's domestic oil production, would
cost tens of thousands of jobs and cost operators billions in lost production.
PBPA is taking the lead in developing
an economic impact study showing the effect these listings would have on our jobs,
our industry and Texas. This economic impact study will demonstrate the lost jobs,
sacrificed state revenues, missing royalty
revenues, and the reserves and industry revenues that could disappear. After completing
the template for the economic impact
study, the Texas industry will look to export
this methodology for other states' use.
As for the EPA, the agency has a
number of significant enforcement and regulatory initiatives progressing in Texas.
EPA has rejected Texas' successful air
quality programs 16 years after implementation and with no regard for the dramatic improvements in the state's air
quality. The agency is in the process of
promulgating New Source Performance
Standards for air quality that could broaden emission standards to include hydraulic fracturing operations as a mobile
source, whereas these standards historically
have applied to stationary sources.
Hydraulic fracturing also is under EPA
scrutiny by virtue of its ongoing hydraulic fracturing study. Limiting hydraulic fracturing will cripple Permian
Basin operations. All this examination and
potential regulation persists in total disregard of public assurances by the Texas
Railroad Commission that not one case of
fresh groundwater contamination has been
proven to have occurred as a result of hydraulic fracturing. Misinformation rules the
day on this issue, and all indications are
that there is an intention to heavily regulate hydraulic fracturing even in the face
of overwhelming evidence that additional regulation is not warranted.
Regulatory Justice
As PBPA chairman, it is my argument
that we need the equivalent of tort reform
at the federal regulatory level. There are
fundamental flaws in our regulatory
scheme that are being exploited by antidevelopment groups and lobbies. Elements of the necessary reforms are basic
and consistent with other areas of statutory
laws and jurisprudence.
First, an industry must be presumed innocent until proven guilty. For instance, in
the case of endangered species, a presumption exists that impacts have occurred
and the industry does not even have standing to legally challenge that finding until
after the federal listing action. By that time,
the damage has been done to future commercial activity. The burden to demonstrate
that an unreasonable impact has oc-

232 THE AMERICAN OIL & GAS REPORTER

curred-not that it might occur-must be on
the third party applying for an endangered
listing or on the federal agency attempting to impose a restriction on commercial
activity.
Second, it should be required that any
federal regulation with the potential to impact U.S. energy production be balanced
against the loss of that opportunity and the
resulting economic impact on local private
property owners and communities. Economic impact must be balanced with environmental consequences in recognition
that there exists a level of reasonable use
and activity. As it stands, federal agencies
are prohibited from taking economic impact into consideration.
Third, the financial incentive must be removed for third parties filing suit against
federal agencies with the goal of forcing additional regulation or endangered species
listings. A "loser pays" system must be considered, since there is no mechanism in
place to prevent the mass filings of frivolous suits or calls for administrative action.
Simple Choices
The situation is fairly straightforward and
this country basically has three choices.
The first is to produce the power this
country needs from domestic sources.
Given the freedom of commercial activity and investment, there is a growing consensus that the United States could achieve
energy independence in as few as 10-15
years. While our total energy picture will
include renewable and emerging technologies, the foreseeable future will require
that the bulk of that power come from the
fossil fuels of oil, natural gas and coal.
Our second choice is to continue to rely
heavily on foreign sources and governments for our energy. We have proven that
we can secure foreign sources of energy
by the use of force or the threatened use
of force. The continuing consequence
and cost of this policy is one that should
be avoided and can be avoided.
The third choice is to sit in the dark and
freeze. Simply put, if we want to avoid a
future of energy shortages, we either can
generate the energy here or secure it
overseas. Our argument is that we should
produce energy domestically, thereby creating top notch jobs and disentangling ourselves from overseas dependencies. Misguided federal policy and regulations that
inhibit the ability to produce that energy
should be avoided at all costs.
❒

Coming In February
Special Report:
Oil & Gas Shales, Part II

American Oil and Gas Reporter - January 2012

Table of Contents for the Digital Edition of American Oil and Gas Reporter - January 2012