North America is on a course to be energy independent in 10 years, a state official said during a congressional hearing in Edmond.
Friday morning, Congress came to the University of Central Oklahoma campus for a hearing by the House Committee on Oversight and Government Reform titled “America’s Energy Future Part 1: A Review of Unnecessary and Burdensome Regulations.”
U.S. Rep. James Lankford, R-Edmond, who is running for re-election against Edmond Democrat Tom Guild and Independents Pat Martin and Robert T. Murphy, brought the committee to Edmond so members could hear directly from officials, businesses and experts from the state that’s the fifth-best oil producer and the fourth-best natural gas producer.
During Friday morning’s hearing, Issa said America has enough energy resources to be independent, but is not.
“Our committee is here today to find out why we are not,” Issa said during his opening remarks.
Former Edmond Mayor Patrice Douglas, now a Corporation Commission commissioner, said the agency has a wealth of experience regulating the oil and natural gas industry.
Oklahoma currently has about 190,000 active oil wells, Douglas said. In 2011, the commission held more than 30,000 hearings and issued more than 10,000 orders, more than 6,500 of which were related to the oil and gas industry, she said of state regulatory experience.
Furthermore, Oklahoma has been regulating the industry since the 1900s and “fracking” oil — creating fractures in rocks and rock formations by injecting fluid, allowing more oil and gas to flow out of the formation — since the 1940s, Douglas said.
“I think you can drink our water, breath our air,” she said.
Every state is different and what works in another state doesn’t work in Oklahoma, Douglas said. The federal government’s one-size-fits-all approach can be counter-productive, she said.
Oklahoma Energy Secretary Michael Ming said he would speak about the “diseased” federal regulatory culture.
Ming said he would address what appears to be an organized effort to push for federal regulations over state regulations, the overtly compromised actions of federal agencies trying to justify their existence in a world of reduced government budgets and a concerning increase in the influence and direct involvement of activists and environmental groups in federal research and regulation.
During the past seven years, America has seen a literal tsunami of new but traditional energy supplies such as getting natural gas and oil from shale formations. The U.S. is now the largest natural gas producer in the world, he said.
“Depending on the forecaster it is possible that America could be energy independent in the next 10 years,” Ming said.
Excessive regulation and the climate of uncertainty those regulations create are placing the opportunity for America’s energy independence at risk, Ming said.
Patricia Horn, vice president for governance and environmental Health and Safety at Oklahoma Gas and Electric Company, spoke about challenges from pending EPA rules.
Horn spoke about Regional Haze SO2 (sulfur dioxide) emission limits, which may force OG&E to choose whether to install costly scrubber technology on its coal plants or discontinue coal generation from units that have life left in them and move closer to a primarily all natural gas fleet for energy production.
OG&E hired consultants to provide cost estimates of installing scrubbers on four of its five coal units, Horn said. The estimated cost is more than $1 billion, she said, evoking a “Say that again?” response from Issa.
That doesn’t include the annual operating and maintenance costs of $70 million to $150 million, Horn said. A switch to natural gas would be even more expensive, she said.
Horn said the changes would translate into the largest rate increase in the company’s history and have an adverse impact on the state’s economy.
On July 7, 2011, the EPA finalized its Cross-State Air Pollution Rule, which requires 27 states to reduce power plant emissions that contribute to ozone and particulate matter pollution in other states.
On Dec. 27, 2011, the EPA published a supplemental rule that makes six additional states, including Oklahoma, subject to the Cross-State Air Pollution Rule for NOx (nitrogen dioxide) emissions during the ozone season (May 1 to Sept. 30). Under the rule, OG&E would be required to reduce those emissions from its electrical generating units within the state beginning in 2012.
The basis for OG&E’s inclusion in supplemental rule is based on air emission modeling that suggests Oklahoma sources impact a single county in Michigan that is currently in attainment within the ambient air quality standards, Horn said.
Issa said information from Friday’s hearing will be part of an energy action plan for the next president. The committee planned to meet Saturday in Fargo, N.D.
From fiscal year 2002 through FY2011 federal agencies published about 38,000 final rules in the Federal Register, according to the draft 2012 of the Office of Management and Budget’s report to Congress on the benefits and costs of federal regulations and unfunded mandates on state, local and tribal entities.
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