Obama’s Parting Shots at Fossil Fuels

The Obama Administration is going out with a bang. Mindful of the changes President-elect Trump has in store for the energy sector, President Obama’s team has been busy trying to push through regulations and executive orders that make it more difficult for Trump to accomplish his agenda.

Earlier this month, and despite a request from Alaska’s congressmen that there be no further limits on oil and gas leasing off its shores, President Obama issued an executive order that created the “Northern Bering Sea Climate Resilience Area,” which removed 40,300 square miles of the Outer Continental Shelf off western Alaska from oil and gas leasing.

This week, the President announced an indefinite ban on offshore oil and gas drilling across large areas of Atlantic and Arctic waters. As the New York Times reported:

“Mr. Obama invoked an obscure provision of a 1953 law, the Outer Continental Shelf Lands Act, which he said gives him the authority to act unilaterally. While some presidents have used that law to temporarily protect smaller portions of federal waters, Mr. Obama’s declaration of a permanent drilling ban on portions of the ocean floor from Virginia to Maine and along much of Alaska’s coast is breaking new ground.”

Obama is certainly taking aggressive action, but many of these decisions will end up overturned. The rationale seems to be that it will take President Trump some time to undo these actions, which will slow the speed of fossil fuels development once he takes office.

The Environmental Protection Agency (EPA) has also been rushing through many new regulations aimed at the extraction industries. Back in 2010, Congress asked the EPA to investigate the safety of hydraulic fracturing (“fracking”). In 2015, the EPA issued its draft report for the investigation, finding that there was no evidence that fracking had “led to widespread, systemic impacts on drinking water resources in the United States.” This report was cheered by the fossil fuel industry, but generated a backlash from environmentalists who insist fracking contaminates water supplies.

Now the EPA has issued its final report — Hydraulic Fracturing for Oil and Gas: Impacts from the Hydraulic Fracturing Water Cycle on Drinking Water Resources in the United States. Environmentalists were quick to note that the EPA had deleted its previous claim as to the lack of evidence of widespread water contamination, and was now reporting that “hydraulic fracturing activities can impact drinking water resources under some circumstances.” Many news stories highlighted this apparent “reversal” by the EPA.

To clarify, the EPA did not reverse its position. What the authors did was give examples of how fracking could contaminate water. For instance they wrote that “injection of hydraulic fracturing fluids directly into groundwater resources” can cause contamination. And that disposing of fracking wastewater directly into surface water could contaminate drinking water. Yeah, no joke. I should also point out that jumping from a car traveling at 70 miles per hour could cause bodily harm. But that isn’t a valid argument for banning cars.

Further, these contamination possibilities were noted in the previous draft report, and are not disputed by anyone. Of course if you inject fracking fluids directly into an aquifer you are going to contaminate it. But we don’t actually do this, so it says nothing about the safety of fracking, nor does it demonstrate any link between fracking practices and groundwater contamination.

In fact, the EPA sought to cast doubt without actually assessing potential impacts on drinking water resources, citing “data gaps and uncertainties.” To put it another way, the EPA still didn’t report any widespread impact on water supplies, but suggested that it just hasn’t found the evidence yet.

The EPA’s final report on hydraulic fracturing wasn’t that much different from the draft report. But an earlier phrase that there was no evidence of widespread impact on water supplies was deleted (even though that conclusion was unchanged), and the report selectively used hypotheticals to show how fracking “could” contaminate water supplies.

But I think the motive here is the same as the one for putting areas off limits to drilling. This is the Obama Administration putting down one more speed bump for the oil and gas industry while it still can.   

Some of those speed bumps will be removed during Trump’s first 100 days in office. We see the midstream sector especially benefiting from the new administration. To find out who we think will benefit the most, consider subscribing to The Energy Strategist and MLP Profits.     

(Follow Robert Rapier on Twitter, LinkedIn, or Facebook.)


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