OIL AND GAS:

EPA looks to build bridges at state regulators' gathering

POINT CLEAR, Ala. -- Bob Sussman is on a goodwill mission here aside the glistening Mobile Bay.

At an annual meeting of state oil and gas regulators, the U.S. EPA senior policy counsel to the administrator is working to mend fences and ease anxiety. He has his work cut out for him.

During Sussman's speech yesterday to the few hundred attendees of the Interstate Oil and Gas Compact Commission meeting, the only cheer he got was for his nod to states playing the leading role in oversight of energy development.

"The daily business of environmental protection is mainly the job of state and local governments," he said to a burst of applause.

EPA and states "had our ups and downs, but we've also made some quick progress," Sussman added later. "There's certainly room to create a better relationship, which is one of the goals which we hope we can achieve through our presence at this meeting."

The meeting comes at a time when relations between state regulators and their federal counterparts could hardly be more strained. EPA has made adversaries left and right in its effort to monitor unconventional oil and gas development -- through investigations of water contamination charges, proposed guidance for diesel use in hydraulic fracturing and an ongoing federal study of fracking's impact on groundwater.

Sussman said he understood why some state officials would be anxious about the study. It's a high-stakes effort designed to answer questions about the overall safety of fracking, and it may be key in shaping public perception once it's released in 2014. But the high level of attention on the study is all the more reason for EPA to get it right, Sussman said.

"We know through all of our experience that if we are not very careful, very thoughtful with how we do this study, we're going to get attacked," he told EnergyWire after his speech. "Above all, we want this to be a credible study, so we're working very hard on that."

Still, the agency was an easy target during the regulators' meeting.

"It's good to have the EPA in the room, isn't it, guys? Did I say that sincerely?" Mississippi Gov. Phil Bryant (R) joked after Sussman's speech.

Familiar refrain

The mere existence of the study puts many state officials on edge. To them, it represents federal meddling in what should be a state issue.

Lynn Helms, director of mineral resources in North Dakota, spoke after Sussman to tout state efforts on regulation, noting that organizations like the IOGCC provide states with an opportunity to learn from one another, without having federal interference.

That's been the familiar refrain in Alabama this week: "states first." And EPA is not the only federal antagonist in the eyes of the state regulators. Interior's Bureau of Land Management, too, has been the target of frequent criticism during the state regulators' conference.

The agency just last week released a new draft version of proposed rules for fracking on federal and tribal lands. States, especially those in the West with large swaths of federal lands, have dismissed the proposal as duplicative of existing rules.

"Regulators ... need to know when rules are important, when process is important and when you need to get out of the way," Pennsylvania oil and gas chief Scott Perry said in a separate session yesterday.

But he expressed open-mindedness about EPA's fracking study, stating that the agency had been flexible in its approach and that the study would "assuage any kind of public concern or identify potential issues that need to be looked at."

"I don't know that there is great benefit to be gained by having an uncooperative relationship" with EPA, he added. "I think EPA folks respect our staff and what they do, and vice versa."

Fresh start in Region 6

In Texas, EPA is looking to restore that type of cooperative relationship, and much of that pressure falls on Ron Curry, who leads the agency's Region 6 office in Dallas.

The former New Mexico regulator joined Sussman for the IOGCC meeting to help build bridges with state and industry officials after the disastrous end to the tenure of his predecessor, Al Armendariz -- who resigned amid controversy over his comments comparing his strategy at EPA to that of ancient Romans who would "crucify" certain lawbreakers to make an example of them.

"One of the things that I've been tasked to do is build up relationships with the states in this region so that we can try to find different pathways to resolve the problems," Curry said. That is, pathways different from litigation and trading barbs through the media.

Since he started in Dallas in late September, Curry has held a meeting with officials from all Region 6 states -- Arkansas, Louisiana, Oklahoma, Texas and New Mexico -- and has visited them to meet with leaders.

"There was suspicion," he said. "'Who's the new guy? What's he going to do?'"

Sussman said the agency has learned plenty over the past several years and is taking a "smarter" approach to regulation.

"You and your agencies have had to stretch to keep up with the dizzying changes in the industry. We've had to do the same thing at EPA," he told the group. "After four years, we are a lot smarter than we were when we started down the road of understanding unconventional oil and gas production and its importance for our agency."

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