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North Dakota, Texas Regulators Tell Congress EPA Burdening Energy Industry

Key state regulators from North Dakota and Texas told a House committee Wednesday that the U.S. Environmental Protection Agency (EPA) has gone too far and its regulations are hurting the nation's oil and natural gas development.

During a House Energy and Power Subcommittee hearing in Washington, DC, North Dakota's Lynn Helms, who directs the state’s Department of Mineral Resources, accused EPA of exceeding its authority. He cited, among other things, the draft 2013 underground injection control guidance for wells. Texas Railroad Commission Chairman David Porter echoed Helms’ sentiments.

Helms said North Dakota's existing laws and regulations also would be "adversely impacted" by the EPA’s Clean Power Plan (CPP), rules for hydraulic fracturing and the omnibus Waters of the United States, which would hurt state efforts in wellhead gas capture and building related infrastructure.

"The underlying themes in EPA rulemaking under the Obama administration have been the consolidation of increased regulatory power in the federal government to the detriment of state authority, and the circumvention of regulatory authority granted to EPA by Congress," Porter told subcommittee members. He said EPA overreach had resulted in:

  • Minimal interaction/consultation with state regulatory authorities;
  • Underestimating or ignoring compliance costs;
  • Overestimating or exaggerating regulatory/environmental benefits;
  • Placing increased regulatory and economic burdens on operating companies, particularly smaller ones; and
  • Creating "one-size-fits-all" regulations that ignore regional differences in operating conditions and regulations.

National Association of Regulatory Utility Commissioners President Travis Kavulla said that while individual state commissions vary on their responses to recent EPA regulations, his organization has advocated "unambiguously" for states' traditional regulatory oversight regarding utility resource planning. He said the CPP "represents a marked change in how and by whom utility regulation is conducted."

While traditional environmental regulations from EPA have focused on pollutants and the best available control technologies to reduce emissions at the facility level, the CPP "focuses on the complex machine that is the North American power system," said Kavulla. He said this means EPA is now essentially planning the U.S. resource mix for power generation under the Clean Air Act.

EPA's Janet McCabe, acting assistant administrator in the Office of Air and Radiation, defended three rules she said would benefit public health and the environment: the CPP, methane emission reduction requirements and National Ambient Air Quality Standards for ozone.

She emphasized that EPA has been responding to the environmental and public health challenges that come with climate change, acting under authority granted EPA in the Clean Air Act.

"Although the CPP has been stayed by the [U.S.] Supreme Court, we are confident it will be upheld because it rests on strong scientific and legal foundations," she said.

Regarding the methane emissions rules that drew the ire of Texas and North Dakota regulators, McCabe said the added regulations "build on 2012 rules by adding requirements that industry reduce emissions of greenhouse gases using readily available and cost-effective technology, and by covering hydraulically fractured oil wells."

She told subcommittee members the final standards reflect "significant stakeholder input," including pathways for companies to demonstrate meeting the requirements under comparable state rules.

Public Citizen President Robert Weissman supported McCabe's testimony, noting there have been benefits from recent EPA rules adopted under both the Obama and Bush administrations.

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