Published May 24, 2011
One lawmaker after another chastised both the Environmental Protection Agency and Interior Department Tuesday for injecting uncertainty into energy development and slowing job growth, and nothing seemed to be off the table.
EPA Administrator Lisa Jackson and Deputy Interior Secretary David Hayes testified before the House Oversight and Government Reform Committee. The hearing – titled “Pain at the Pump” – sought answers about current policies that critics say suppress oil and gas production, leading to high prices for businesses and consumers.
"When these businesses don't know what tax regulation or what taxes are coming down the pike - that's the problem, so they hunker down, and they won't take a risk," said Rep. Ann Marie Buerkle, R-N.Y.
She and Republican Rep. Raul Labrador of Idaho said businessmen of all political persuasions think EPA regulations are discouraging job creation.
"It doesn't matter who I talk to in Idaho - whether it's Republican, Democrat, independent - they have a problem with the overzealous regulation of the EPA," charged Labrador, “It’s killing our economy.”
But administration officials say not all of the policies are detrimental. Once gasoline prices started to rise and the administration's reluctance to drill became an issue, officials boasted about oil production, and Jackson repeated that before committee members. “Last year, American oil production reached its highest level since 2003," she said.
Analysts note it takes years from permit to production, and committee chairman, Darrell Issa, R-Calif., argued the Obama administration is trying to take credit for leases issued during the Bush years.
"It takes about five years at best-case... from the beginning of the process to drilling production. So isn't all the credit for this new peak in the previous administration?” Issa asked. “You haven't been here long enough for anything you've done in the way of new leasing to have any yield."
Rep. Connie Mack, R-Fla., took aim at the administration's accusation that oil companies are just sitting on leases instead of developing them.
"Basically what you said is that everything is so rosy, and it's really the oil companies' fault. They have the potential to drill, they're just not doing it,” he said. “Absolutely no one believes that."
One Democrat said it’s not so cut and dry. Elijah Cummings, D-Md., blamed speculation for price increases and argued that producing more oil wouldn’t matter much. "Excessive oil speculation could be inflating prices by 30 percent, but increasing domestic drilling would impact prices by 1 percent and then only after a decade or more." Tuesday the Wall Street Journal reported that the Commodity Futures Trading Commission has, in fact, filed civil charges against five firms and traders. The commission alleges manipulated prices yielded at least $50 million in unlawful profits.
Jackson worked to take some of the attention off of oil production and made a push for natural gas. "Burning natural gas," she said, "creates less air pollution than burning other fossil fuels."
Natural gas is inexpensive and the U.S. has vast supplies, but it is not without controversy. Some environmental groups oppose the production technique used to bring natural gas to the surface called fracking. Fracking shoots water and chemicals into rock to free the gas, but there are charges it can pollute water sources.
"Is there any evidence that hydraulic fraction... can affect aquifers and water supplies?" Rep. Gerald Connolly, D-Va, asked.
“There’s evidence that it can certainly affect them," Jackson conceded. But as far as evidence it ever has, she said "I am not aware of any proven case where the fracking process itself has affected water, although there are investigations ongoing."
That's not exactly a clean bill of health for natural gas, and the uncertainty about it won't be removed until the EPA finishes a study on the fracking process.
The hearing went far beyond what Democrats considered legitimate questions surround EPA policies, and said Republicans are using political rhetoric to capitalize on high gas prices.