Energy Policy

Western Energy Alliance's Wigley discusses administration's latest moves on oil and gas development

How could the Obama administration's recent actions on fracking regulations and Arctic drilling affect investments in the oil and gas sector? During today's OnPoint, Tim Wigley, president of the Western Energy Alliance, discusses the ongoing friction between federal and state governments on how to proceed with oil and gas regulations. He also talks about his organization's lawsuit against the Bureau of Land Management on recent federal land fracking regulations.

Transcript

Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. With me today is Tim Wigley, president of the Western Energy Alliance. Tim, thanks for coming back on the show.

Tim Wigley: Thanks for having me back. I appreciate it.

Monica Trauzzi: Tim, there's growing friction between states and the federal government over who should regulate what on oil and gas production. Right now there's a patchwork of regulations from state to state. How challenging do these differing rules make it for the industry to do business?

Tim Wigley: You know, we like to sometimes call it a definite maybe. We have lots more uncertainty with the federal government than we do with state governments. States have been regulating things like fracking for years, for generations actually, and it's become a very complicated mix for the industry as they try to -- especially in markets like you have right now with crude prices being as low as what they are, of trying to have a little bit more certainty out there. And what we're seeing in this latest round of national ... research is there's very strong support by the average voter out there for having states play a bigger role, and it makes sense. They're closer to the resource. They're closer to the companies and closer to the people that are impacted by it. So it's starting to be a pretty significant trend over the last few years.

Monica Trauzzi: Earlier this year the Bureau of Land Management introduced regulations related to fracking on federal lands. Western Energy Alliance along with IPAA have filed a lawsuit against the Interior Department. Fracking on federal lands represents just about 11 percent of all U.S. fracking. Why then do those rules concern you so much if they take up a pretty small portion?

Tim Wigley: They concern us because even energy development on public lands has been overseen -- in the area of fracking has been overseen and managed by state regulatory agencies. My biggest concern is I don't look around the landscape and see a lot of things that the federal government's doing very efficiently and very cost-effectively now, when you've had for decades the states overseeing this, whether it be safety inspections or what else. We think they've been doing a good job, the public seems to support that, and I just think adding another layer of federal government bureaucracy and red tape on top of what's already been done -- I don't think it's going to be good for the industry or good for the public at large.

Monica Trauzzi: How concerned are you about safety as it relates to fracking?

Tim Wigley: Well, they like to say the reason they're doing it is because they can better enhance safety inspections, but the actual numbers show the opposite, that states have done a far better job of inspecting fracking jobs and locations than has the federal government. So again I go to the core philosophy that we have, and that is we just don't think the federal government does a very good job at this stuff to begin with; why add another layer?

Monica Trauzzi: In Oklahoma for example, though, one in six people is employed by the oil and gas industry. Oklahoma Geological Survey there has linked an increase in earthquakes to oil and gas waste disposal, so clearly not enough has been done there yet on the state level --

Tim Wigley: It's my home state --

Monica Trauzzi: Yeah.

Tim Wigley: And I appreciate you asking that question. It has been a growing concern amongst a number of people. Most of the people that I have spoken to that -- what I would consider to be experts in the geological realm -- I think it's incorrectly associated with fracking, per se. There is a concern out there and rightfully so, but as you just stated water disposal is what's -- many people are saying are causing this. They're going to have to get a handle on it, there's no question about it, because people are concerned.

Monica Trauzzi: The Obama administration moved this week to conditionally approve drilling in the Arctic. Does this point to sort of measured but favorable handling of the oil and gas industry by this administration?

Tim Wigley: Well, I would hope that's the case; I really do. It's been a rough six or 6½ years with this administration. They seem to not really care a whole lot about the oil and gas industry while they take credit for increased drilling domestically. It's really in spite of them, not because of them. But I hope this is a sign that they are understanding that not only geopolitical -- the benefits of us developing more and more energy domestically that can help us internally, nationally, but also internationally. But I hope they're also understanding that the oil and gas industry is -- take great strides every single day to do this in a responsible and safe manner, and for us to be able to not only help our own economy but also help economies that are under stress, under threat from other foreign governments. It's a good thing for the country.

Monica Trauzzi: We're seeing oil prices rise slightly recently. Is that enough to give a boost to the U.S. industry that suffered as a result of last year's market dynamics?

Tim Wigley: I don't know that I'm the perfect person to answer that only because this is the first time I've been through a downturn since I've been in the industry. But I've talked to a lot of people I trust that have been through three or four of these downturns. This one happened very rapidly, faster than most. This is the first downturn we've had since 1900 other than 2008 where the price dropped in half in just a few short months. But what it does for the industry, it makes them much more efficient. It makes them look at costs, look at internal systems. And I've always been told that when they come out of it, after the dark days, they tend to be a better industry, and I have all reason to believe that's going to be the case here.

Monica Trauzzi: In Congress there's growing interest to lift the ban on crude oil exports. Do you believe Americans are aware of the different political dynamics that are at play when we talk about crude oil exports?

Tim Wigley: I believe they're not aware, as it is in most issues that involves energy development. We dug into this in this most recent national survey. There's strong support from people to lift the ban -- it's a 1970s ban. It was put in place at a whole different time in our nation's economy and history and so forth. But I think the energy industry has a lot to do in front of them to try to educate them as to what it means to them and how it could potentially benefit them as consumers.

Monica Trauzzi: So how would you describe the momentum in Congress that exists on this?

Tim Wigley: I had the privilege to be -- to fly both to and from Denver with a U.S. senator who's not from Colorado, who was going there for a child's graduation. And that senator told me it's growing, but we as an industry need to do and continue a just very aggressive, hard-charging job of making sure that members of Congress, both the House and Senate, understand what it means and what it can do. But the public strongly supports -- 60 percent-plus support for it, so ...

Monica Trauzzi: All right, we'll end it there. Thank you for coming on the show.

Tim Wigley: Thanks for having me.

Monica Trauzzi: Nice to see you. And thanks for watching. We'll see you back here tomorrow.

[End of Audio]

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