Let States Regulate Energy Development

Statement

Too often, Washington ignores the complexities inherent in our vast and diverse nation and reverts to a one-size-fits-all approach in which Washington "knows" best.

Most federal agencies operate under this assumption. The Environmental Protection Agency provides a perfect example. It sets uniform standards for the effects of energy production on air and water, regardless of the characteristics of different localities. The obvious problem with this is that many of these municipalities are as dissimilar as my hometown, Bowling Green, Ohio, and San Francisco, entirely different geographically and demographically.

EPA's impulse to regulate first and ask questions later is contrary to the wishes of many states, which have spent years crafting stringent, well-tailored regulatory frameworks at the state level and desire little intrusion from Washington.

In the past decade, the combination of horizontal drilling and hydraulic fracturing -- techniques used to extract shale gas from tight pockets deep underground -- has allowed access to large volumes of natural gas that were not accessible just a few years ago.

The production boom of natural gas from shale formations has sparked a vigorous debate about how much regulation is necessary and who should oversee it -- Washington bureaucrats or state regulators who reside in the communities they regulate and have detailed knowledge of local geologic formations?

State regulators know their natural resources. They know the local geology, geography and production characteristics, making them better suited to regulate local energy producers than distant federal bureaucrats.

The fundamental question that must be asked is: Who is best suited to protect the health and safety of Ohioans -- experienced Ohio regulators and geologists, or somebody in Washington?

Today, I'll ask this question at a natural gas forum in Washington at which we will hear from esteemed energy experts and industry leaders who can help us better understand the natural gas revolution that's changing our energy landscape for the better.

At a similar forum that I co-hosted in Ohio, I posed this question to state regulators, shale oil and gas development companies and end-users.

The answer was loud and clear: Ohio has it under control, no need for Big Government to step in.

Dave Mustine, director of Jobs Ohio, a nonprofit focused on business development, said, "We have a very advanced oil and gas law that was updated in the last General Assembly. We believe we have the regulatory framework in place to provide effective oversight to this industry, protecting the environment, doing it right -- and we're very proud of that here in our state."

In 2010, the Ohio Legislature approved the most stringent oil and gas laws in the country that address every phase of shale development: site preparation, drilling and well completion, hydraulic fracturing, production, treatment and storage, waste management and disposal, plugging and restoration and orphaned well sites.

Still, Ohio's work appears to fall on deaf ears in Washington, where the EPA is spending taxpayer money to study the need for federal regulation of hydraulic fracturing, despite Administrator Lisa Jackson's recent statements that she's not "aware of any proven case where the fracking process itself has affected water."

EPA also recently announced its intention to set new regulations for shale wastewater, a process that Ohio has already perfected with numerous well-regulated and EPA-approved underground injection wells.

As the old adage goes, if it ain't broke, don't fix it. Kathryn Klaber, president of the Marcellus Shale Coalition, reiterated the point, stating, "EPA's announcement was yet another Washington solution in search of a problem."

Rick Simmers, statewide enforcement manager with Ohio Department of Natural Resources, who oversees wastewater management, says Ohio's 28-year-old state-run wastewater disposal program, composed of 180 underground injection wells, is a safe, well-managed, disposal program. The system in Ohio has been run so efficiently and effectively that drilling operations in Pennsylvania pay for wastewater disposal services in Ohio.

Still, Washington bureaucrats ignore the success of state regulatory bodies. This is especially troubling because one-size-fits-all EPA rule making could jeopardize the expected creation within the next four years of 204,500 jobs in Ohio and annual state tax revenues of $478.9 million, according to the Oil and Gas Energy Education Association.

To avoid a scenario of cavalier regulations by federal agencies, Washington should take the advice of Tom Stewart of the Ohio Oil and Gas Association and allow states "to follow the state review process," a program that has demonstrated success.

The practice brings together a variety of stakeholders -- the environmental community, state and federal regulators and industry -- who go to state governments and peer critique one another's programs, finding out what works well and what doesn't. Based on their evaluations, they recommend how to make state-specific improvements. This is the most effective way to ensure the needs of states and their citizens are accounted for.

Finally, we have to understand that when we talk about regulations, we are discussing potential threats to employment opportunities at a time when our country needs new jobs more than ever. Right now, we are seeing an influx of Americans moving to towns across America in which shale deposits have been discovered.

As a father of two, I want my kids to be proud of their home state and to find jobs that allow them to stay in Ohio. But this can only happen if the federal government allows Ohio to manage its resources and foster an environment conducive to job creation. We need more jobs than more job-killing federal regulations.

Government cannot create jobs, but government can help create an environment that attracts job creators and allows them to hire workers. We have all the tools we need to spur an economic recovery and rejuvenate our society if we can get the right regulatory environment in place.

Our forefathers meant for states to be laboratories for experimentation with the right governance. Regulation of hydraulic fracturing is the perfect example of a process better left to state governments, which have the best, firsthand knowledge of how to deal with their specific circumstances.

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