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Why Does the Oil Industry Prefer State Regulation?

May 22, 2013

By Center for Western Priorities

Oil and gas companies are systematically defeating proposed protections for neighborhoods, schools, air and water resources before they even have a chance to be implemented in an effort to protect their bottom-line at all costs.

After gaining unprecedented access to the Bureau of Land Management’s discussions about rules designed to protect communities, lands, and water from the impacts of fracking and drilling, a number of major concessions were made to the oil and gas industry. Still, they weren’t satisfied.

Oil and gas companies have been up in arms over attempts by local communities like Fort Collins, Colorado to regulate fracking within city boundaries. In recent elections, they spent record amounts of political cash and capital to defeat these measures, but failed. Now, they are working to have these community-supported regulations struck down in the courts. High-dollar oil and gas attorneys have successfully slowed the process and without adequate funding for proper local representation the outlook is grim.

In Colorado, oil and gas have held their fire when it comes to state regulatory bodies and policy makers. The oil and gas industry wants to be regulated at the state level, because state level oversight is notoriously weak.

Colorado state regulators have long been criticized for being too close to industry.

The Center for Western Priorities recently uncovered emails and documents after the Parachute Creek oil spill that underscored how these chummy relationships can be detrimental to Coloradans.

The documents showed that a call regarding the spill made on March 8th by a Williams’ environmental specialist was not confirmed or returned by the COGCC until March 11th, after a follow up email was sent by the same Williams employee. It wasn’t until the 15th—a full week after the initial report was filed—that the COGCC went to the site of the leak, where hydrocarbons had contaminated surrounding soil, groundwater, and Parachute Creek, a tributary to the Colorado River. The EPA was on the scene within 24 hours of notification.

Even after the spill was confirmed the COGCC and Williams spent more time carefully crafting a response for inquisitive reporters than they did alerting the public. Many in the area were left unaware or with questions, many of which went, and still are, unanswered.

So, given all of this, who is best equipped to regulate oil and gas drilling?

The question of best regulation rests in the hands of all players. Each level has a role to play. Federal regulation is vital for drilling on federal land, and for providing uniform and minimum standards. The states, despite some well-publicized deficiencies, play a major role in inspections and oversight. Local cities should have the right to zone appropriately. Just as you can’t put a cement plant or office tower on a residential street, oil and gas operators should have to respect local rules on where they can drill. Cooperative regulation may result in some legal overlap, but it is essential to ensuring our communities’ safety.