Election analysis: Who gained an edge in fracking war?

President Barack Obama’s successful campaign against Mitt Romney may have some anti-fracking activists exhaling, but don’t expect any plans from the White House to discourage on-shore drilling in the near future.

Based on the GOP’s campaign platform, a Romney administration would have done everything within its power to keep federal drilling regulations minimal to non-existent. Obama, gearing his campaign almost exclusively to voters in the swing states, promised to encourage blue-collar jobs through an “all of the above” energy strategy that embraced shale gas development “as a priority.” With the election behind him, Obama will of course be subject to pressures within his own party to immediately broaden his focus beyond his pitch to woo swing states hopeful of mineral extraction jobs.

As I recount in Under the Surface, Obama provided plenty of encouragement for shale gas development in his first term. In 2011, he issued Blue Print for a Secure Energy Future, a plan that recognized the importance of shale gas development, including a component to support global efforts to displace oil with natural gas. Now comes the big question for his second term: Will Obama feel the political urge to federally regulate shale gas development given concerns over its impact on water and air? More specifically, will the Obama EPA provide the groundwork necessary to undo federal regulatory exemptions, known as the Haliburton Loophole, passed under the Bush/Cheney administration?

As I have written in a previous post, that process would begin with a study examining fracking cases now underway by the EPA. Even if the agency were to confirm and quantify fracking risks that are now – due to a lack of study -- mostly a collection of disparate reports, repealing the Haliburton Loophole would take an act of Congress. That is a long shot, at least within the next two years, with Republican control of the House of Representatives. But a final draft of the EPA study is due for public comment and peer review in 2014 and could become fodder for a midterm election battle.

States have regulatory control over shale gas, and New York state, which sits over promising sections of the Marcellus and Utica Shales, is worth tracking for those following shale gas politics. New York is the centerpiece for the grass roots anti-fracking movement and the only state with potentially worldclass gas reserves that has held back on issuing permits due to environmental and health concerns. It’s also led by a governor frequently cited as a potential presidential candidate in 2016.

Despite the oft-heard rhetoric that “science will decide” the future of shale gas development in the Empire State under Gov. Andrew Cuomo’s administration, politics will play a large role, and at the moment New York’s political picture is murky. Candidates for and against shale gas development running in districts over some of the most promising reserves had mixed results yesterday, likely influenced more by their campaign war chests than their positions. Two examples: Senate Deputy Majority Leader and drilling proponent Tom Libous handily defeated Democratic challenger John Orzel to keep his 52nd District Seat. In the Assembly’s 123rd District, incumbent Donna Lupado easily defeated Julie Lewis, a drilling proponent and leader of the Joint Landowners Coalition of New York. Lupardo, a senior Democrat and member of the Assembly’s Environmental Conservation Committee, favors a full scale health study of fracking risks.

Lupardo is part of a house that has been reluctant to allow drilling to proceed in New York without more assurances of its safety, but unable to get bills through the Republican-controlled Senate. Although it looks as though yesterday’s election gave Democrats control of the Senate, it’s unclear how the numbers will influence Senate leadership. There are many dynamics in play, including races that are too close to call, and the direction of a group of independently minded Democrats who have sided with the Republican majority in the past and have been duly rewarded with various perks. Albany reporter Jimmy Vielkind breaks down these and others factors that will play out in coming weeks and months in this excellent post for Capital Confidential. (It’s worth noting here that fracking issues also played into some Congressional races. In New York, two noteworthy challengers running on anti-fracking platforms lost to Republican incumbents. Dan Lamb lost to Richard Hanna in New York’s 22nd District and Nate Shinagawa lost to Tom Reed in the 23rd District.)

So what have we learned at the end of the day after the 2012 elections? The political circumstances that will determine the long-term prospects of shale gas development are still unfolding among a divided electorate and political gamesmanship.

Obama’s EPA Fracking study comes due at critical time Assessment of Bush-era policy will delve beyond rhetoric

Despite sharp differences, Romney and Obama
both pledge allegiance to domestic drilling

Last night’s presidential debate demonstrated that both candidates are big on the promise of Big Energy. Barack Obama and Mitt Romney strove to outdo one another in articulating support for on-shore drilling and mineral extraction to create jobs and reduce dependence abroad.

So how would the prospects of shale gas exploration and development actually fare under Romney compared to Obama? The most immediate and tangible test is an EPA review now underway on the impact of hydraulic fracturing on groundwater. The study, commissioned by Congress in 2010, is reassessing a finding by the George W. Bush administration that high volume hydraulic fracturing is harmless. It’s a claim that Bush and vice president Dick Cheney used to justify exempting the industry from the Clean Drinking Water Act in a provision infamously labeled by critics as the Haliburton Loophole. If that exemption is repealed, it will essentially bring fracking – the impetus of domestic petroleum boom -- under federal regulation.

 EPA technicians collect samples in Dimock.
PHOTO JAMES PITARRESI 

The timing is critical. A preliminary report has been promised for “late 2012,” but there is little reason to expect it – and its potentially boat-rocking ramifications - prior to election day. In the meantime, Obama has been a champion of on-shore drilling and high volume hydraulic fracturing for four years while his EPA has treaded lightly in places where concerns about pollution have gotten national attention. One of those places is Dimock, Pennsylvania. After six months of testing earlier this year, the EPA concluded that levels of pollution in five of the wells – roughly 8 percent -- were high enough to pose health risks. But because the drilling companies had offered residents treatment systems to mitigate risks of consuming the contaminants, including arsenic, barium, manganese, and methane, the agency ended its investigation with a statement that “no further action” was required. (The Centers for Disease Control is reviewing the EPA results and is planning to issue its own report at a time to be determines, although no press statements have been released and information is unavailable on the CDC website.)

Based on presidential campaign rhetoric, drilling proponents have plenty to be encouraged about, while good news is scant for those counting on the federal government to get tough on drilling-related pollution. In last night’s debate, as in the past, Obama talked about the abundance of shale gas reserves and related economic promise that he characterized as a “priority” in an “all of the above” energy strategy that also gives nods to the prospects of power from ethanol, solar, and wind. He hit the obligatory themes of jobs and opportunity associated with the petroleum and coal industres with no mention of their risks or limitations. He touted pipeline construction under his tenure “--enough to wrap around the world--” while passing on a chance offered by Romney to elaborate on his decision – celebrated among environmentalists -- to put the brakes on the controversial Keystone pipeline to import oil from Canada.

Obama’s approach, of course, was intended to disarm Romney’s efforts – and that of the Tea Party right -- to paint the president as a liberal obstructionist pandering to tree-hugging interests. Clearly determined to slam the door on that attack, Obama steered clear of any mention of risks associated with fossil fuel extraction, global warming, or other issues central to his environmentally-minded voting block.

That’s because this is now a contest for the undecided mainstream, and in the heat of this particular debate, it was clear that both candidates judged the country’s economic issues to be weighing more heavily on voters minds than environmental concerns. The spoken and unspoken message from both sides: as long as energy – from any source-- is produced domestically, it’s good. Policies that discourage domestic energy production are bad. (When Romney attacked Obama for unfriendly coal policy, Obama accused Romney of vowing to shut down a coal-fired power plant when he was governor of Massachusetts. Drilling on federal land was also cast in the positive.) But how will the reality differ from the rhetoric? While Romney and Obama were in a race to embrace the petroleum industry on national TV– their policies will undoubtedly be influenced by their EPA chiefs.

Romney has painted the federal government as an enemy of the people, and he is fond of pointing to the EPA as a prime example. The agency is not interested in the health and welfare of the people, according to Romney’s rhetoric. Its main objective is to obstruct American Enterprise wherever possible. (Or in his words during one primary: a “tool in the hands of the president to crush the private enterprise system, to crush our ability to have energy.”) It would be hard to imagine that the EPA study on fracking would stand a chance of completion under a Romney presidency.

If Obama is elected, you can expect the EPA to finish its work, which will carry the stamp of peer review and be the most rigorous federal review of fracking to date. If the EPA finds that fracking does carry significant threats to groundwater, the question remains whether Obama will reign in attempts to close the Haliburton Loophole, or establish any type of federal oversight for the shale gas industry. Obama, while liberal on social policies, has been more conservative on environmental policy. Is there any reason to expect him to change in a second term? A lot depends on the pressure he faces from Congress, and the state of the economy.