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Obama Threatens to Veto House Permitting, Fracking Bills

The Republican-led House Wednesday voted out legislation that would provide producers more certainty in the leasing process for oil and gas projects on federal lands and began debating a bill to prohibit the federal government from regulating hydraulic fracturing (fracking). The House was poised to pass that measure as well, but both are expected to be hollow victories.

The House bill on expediting drilling permits (HR 1965), which was drafted by Rep. Doug Lamborn (R-CO), cleared the chamber by a 228-192 vote, with most Republicans supporting the bill.

However, President Obama has threatened to veto the legislation, as well as two other bills -- HR 2728, which was drafted by Rep. Bill Flores (R-TX), to bar the Interior Department from enforcing federal fracking regulations in any states that already have regulations; and HR 1900, sponsored by Rep. Mike Pompeo (R-KS), to establish a set deadline for federal and state agencies to approve pipeline applications.

The bills "are going nowhere in the Senate and the president has already issued veto [threats]," said  Rep. Jim McGovern (D-MA). There are "six full days left in the session of 2013. Yet we fiddle here on bills that are going nowhere," agreed House Minority Leader Steny Hoyer (D-MD).

Lamborn’s bill would require the Interior Department to approve or reject onshore drilling permits within 60 days. Permits would be deemed approved if Interior does not meet the deadline.

"The administration strongly opposes HR 1965," because it "would reverse administration oil and gas leasing reforms that have established orderly, open, efficient and environmentally sound processes for energy development on public lands," the Office of Management and Budget (OMB) said in a statement.

The measure, which cleared the House Natural Resources Committee in late July, would reform the leasing process for onshore oil and natural gas projects on federal lands to eliminate unnecessary delays, reform the process for energy permitting, and ensure funds are available for efficient wind and solar permitting.

Specifically, the bill further would prohibit the Interior secretary from canceling or withdrawing any lease parcel after a competitive lease sale has occurred and a winning bidder has made the last payment for the parcel, and it directs the Interior Secretary to make nominated areas available for lease within 18 months after an area is designated as open under a current land use plan.

 Flores' bill seeks to thwart federal oversight of fracking. It would bar Interior from enforcing federal fracking regulations in any state that already has regulations, and to recognize states' authority to regulate this type of activity.

With respect to fracking, "states are just as competent" as regulators in Washington, DC, said Rep. Rob Bishop (R-UT). "There is no identifiable problems with what the states are doing with fracturing...Unfortunately the conventional wisdom is always only people in Washington, DC, have the broad view to make decisions for the entire nation. That is a ridiculous wisdom."

Fracking "is not what my constituents had in mind," said Rep. Jared Polis (D-CO). He noted that four of the top five communities in Colorado have imposed bans on fracking, and more are expected in the future.

State and local rules governing fracking are an important part of the equation, but there also is a need for rules at the federal level, Polis noted. Colorado is trying to update its oil and gas rules, but it hasn't done anything yet to protect homeowners. "I've been powerless to stop it [fracking]" from occurring near homes and schools.

Pompeo's bill, which cleared the House Energy and Commerce Committee in July, would establish a 12-month deadline for the Federal Energy Regulatory Commission to approve gas pipeline applications, and other federal permitting agencies would have 90 days (with a potential extension of 30 days) to complete a separate review of the project (see Daily GPI, May 13).

The clock for the other federal permitting agencies would begin to tick when the Federal Energy Regulatory Commission (FERC) issues a final environmental impact statement. If the agencies fail to meet the deadlines, the permits would be automatically approved under the bill.

"The administration recognizes the need for additional energy infrastructure and supports the timely consideration of project applications. The administration, however, strongly opposes HR 1900, which would allow the automatic approval of natural gas pipeline projects if the Federal Energy Regulatory Commission or other federal agencies do not issue the required permit, license or approval within rigid, unworkable time frames," according to a statement by the Office of Management and Budget (OMB).

"HR 1900 could create conflicts with existing statutory and regulatory requirements and practices related to agencies' programs, thereby causing confusing and increasing litigation risk. The bill's requirements could force agencies to make decisions based on incomplete information or information that may not be available within the stringent deadlines, and to deny applications that otherwise would have been approved, but for lack of sufficient review time.

"For these reasons, the bill may actually delay projects or lead to more project denials, undermining the intent of the legislation," the OMB said.

FERC has reported that since fiscal year 2009, it has completed action on 92% (504 out of 548) of all pipeline applications that it has received within one year of receipt. The small percent of decisions that took longer than one year involved complex proposals that merited additional review and consideration, the agency noted. "Further, FERC already has an existing framework to set reasonable timetables for the other federal agencies with permit, review or approval authority to act."

A change in the pipeline permitting process is needed because, notwithstanding the Energy Policy Act of 2005, it takes longer for applicants to receive permits and construct gas pipelines, said Donald Santa, president of the Interstate Natural Gas Association of America. "This bill would provide a powerful incentive for agencies to act in a timely manner."

The Pompeo bill is a "meaningful piece of legislation" because approval of new pipeline infrastructure has not kept pace with the shale revolution brought on by fracking, said Rep. Michael Burgess (R-TX).

Surprisingly, energy proponent Rep. Gene Green (R-TX) said he opposed Pompeo's bill. "I can't support this bill," he said, adding that the existing pipeline permitting process was not broken. "This bill is a solution in search of a problem."

Rep. Peter DeFazio (D-OR) called the trio of bills a "turkey." They will pass the House, but that will be the end of them, he noted.

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