The Obama administration is listening more attentively to the oil and gas industry in the past few months, the top White House official on energy said yesterday, after neglecting the relationship early in the president's term.
"We probably could have been doing a lot more outreach in the beginning," said Heather Zichal, President Obama's deputy assistant for energy and climate change. "We have worked over the last few months to try to set a better dialogue and create a better working relationship.
"It's been incredibly helpful," she added, "to have their information to inform our thinking."
Speaking to a luncheon of the American Petroleum Institute, Zichal touted the administration's support for increased domestic production, challenging the Republican charge that the boom in drilling came despite administration policies to thwart it.
She borrowed some of the language of the oil and gas lobby, stressing the importance of oil and gas for job creation and energy security. And she joined the industry in its position that state oil and gas officials, rather than federal agencies such as U.S. EPA, should serve as the "lead regulators" of drilling.
API President Jack Gerard agreed after Zichal's speech that the Obama administration has been more responsive to industry concerns.
"The administration's views are clearly moving," Gerard said. "There has been a recognition that some of the proposals they have made need to be pushed back and need to be modified because many of them were counterproductive to energy production and job creation in the country."
Gerard, though, stressed that the industry has not made concessions to win over Obama officials.
"Our position is still the same, will always be the same, because we know what it takes to produce energy," he said. "We know what it takes to produce a well protecting the environment and our people."
The best example of this closer relationship is new air pollution regulations for oil and gas drilling operations released last month. Working with industry, U.S. EPA agreed to give the industry more time to comply (E&ENews PM, April 18). The White House press secretary, Jay Carney, has cited it from the press room podium as an example of the administration bringing industry and environmental groups together.
"There's no reason that can't be a model," Zichal said.
The administration also agreed to a direct request from API, the industry's biggest trade association, to have a White House task force step in to coordinate different agencies' work on hydraulic fracturing. Zichal is heading that interagency task force.
Obama has had a difficult relationship with the oil and gas industry, which typically aligns with Republicans. In early 2010, Obama made good on a campaign pledge to open more offshore areas to drilling. But weeks later, the Deepwater Horizon drilling rig sank in the Gulf of Mexico and the administration found itself scrambling to stay ahead of the BP PLC oil spill.
Interior Secretary Ken Salazar famously talked about keeping his "boot on the neck" of BP. But when a drilling moratorium proved unpopular in Gulf states, the industry gained the upper hand on the debate, and it has prodded the administration to speed up the permitting process.
Both Zichal and Gerard were quick to note that disagreements remain. Zichal rejected the idea that the administration's close work with industry was election-year politics.
"It's probably safe to say the notion that we rolled out the welcome mat or had this hunky-dory relationship where we're all holding hands and singing Kumbaya is not exactly where we're at today," she said. "It's been very good, but it's not terribly smooth sailing, either."
Zichal said environmental groups have raised "legitimate concerns" about air, water and surface pollution caused by drilling. Industry has generally dismissed such allegations as overstated.
Gerard stressed that there are still plenty of areas of disagreement. Most prominent are the delays to federal approval of the Keystone XL pipeline and the administration's plan to require more testing and disclosure for hydraulic fracturing -- "fracking" -- on public lands.
"We continue to question why they're even doing this," Gerard said. "There is no role for this additional regulation."