Mar 25, 2015 4 min read

PITTSBURGH – The U.S. oil and gas industry may be the world’s largest producer of the fuels, but its future could be clouded by a number of approaching federal regulations that could curtail future expansion, a U.S. Chamber of Commerce executive said Wednesday.

Dan Byers, senior director for policy for the U.S. Chamber’s Institute for Twenty-First Century Energy, said one of the major threats from the Environmental Protection Agency is the impending change in ozone reduction requirements, which he said, if enacted today, would put 2,200 counties across the country out of compliance.

Byers spoke to about 125 attendees at the Northeast Oil & Gas Industry Awards Summit, which draws drillers, suppliers, attorneys and others in the industry to the daylong summit and awards banquet at the Westin Convention Center.

“The ozone rule is by far the most threatening,” said Byers, who listed several other rules he said could hinder the natural gas industry’s ability to expand production in the U.S.

While it seeks to reduce the levels of ozone, he said, “the EPA can’t identify 60 percent of the necessary reduction technologies” to achieve its goal.

He also referred to the goal of reaching 65 parts per million of ozone, saying “40 percent will be naturally occurring levels of ozone.”

Byers said the chamber’s view is that the Clean Air Act of 1970 showed that the country could have “great economic growth as air quality improved around the country.”

He added that President Obama’s Climate Action Plan calling for the reduction of greenhouse gas emissions of between 26 and 28 percent below 2005 levels by 2025 could spell more restrictions for the energy industry beyond the curtailment of coal-burning power plants, adding that reduction in power plant emissions would account for only 32 percent of the overall goal.

Byers’ remarks were followed by a sometimes heated debate among a panel of three attorneys who discussed whether the EPA should be driven in its rule-making by lawsuits filed by environmental groups.

In a discussion moderated by Kevin Sunday of the Pennsylvania Chamber of Commerce, the attorneys – former Pennsylvania Department of Environmental Protection Agency Secretary Michael Krancer, Daniel Spitzer, a partner with Hodgson Russ, and Matt Morrison, a partner with Pillsbury Winthrop Shaw Pittman – debated the trend of “sue and settle” by environmental groups that some said put the EPA in the position of adjusting its rule-making accordingly.

Krancer, who is now an attorney with the firm of Blank Rome, acknowledged that the tactic is not unconstitutional. He said environmental groups file a suit, then reach an agreement with the agency, and a court issues the settlement with a decree.

According to Krancer, the decree provides a public comment period, but it is often too late for the industry to respond.

He complained that the tactic puts judges in the position of helping to make laws instead of interpreting them.

Morrison, who held leadership positions at the EPA and Justice Department before joining his current firm, argued that sue-and-settle cases also exist at the state level and said the EPA’s relationship with environmental groups “is not quite as comfortable as it seems.”

“I see a coziness between environmental groups and the EPA,” Krancer retorted, adding that if the agency is seen talking with industry about regulatory issues, “it’s seen as talking with the enemy.”

During a question-and-answer period, an attorney in the audience asked attendees how many of them had ever submitted comments to EPA’s proposed rules.

Only a half-dozen raised their hands.

Others said that while they aren’t opposed to regulations, they wondered if favoring one rule over another creates unintended consequences.

An attendee noted that while Obama refused to sign legislation that would have green-lighted the completion of the Keystone XL pipeline for the shipment of oil, “the Bakken producers are shipping by rail. and almost every other week there’s a derailment.”

The panel agreed that prohibiting completion of the Keystone won’t stop production of oil.

“Environmental arguments are diminished because that (oil) will be produced,” said one panelist.

Despite the questions over environmental regulations, at least one speaker Wednesday showed that the industry has continued to advance to cleaner, more environmentally friendly methods in its extraction of natural gas.

Jared Oehring, director of technology for U.S. Well Services, showed video of the company’s new electric-powered fracking station that uses natural gas (replacing diesel fuel) from the well site to power turbines to run the fracking operations.

He said the system’s two turbines replace four diesel engines. The shift reduces noise and vibration by 70 percent, cuts fuel costs by 80 percent and achieves a 99 percent reduction in emissions over diesel.