Regulations make or break for some area’s key industry
TIPRO recently published an article in their Fall/Winter edition of Upstream Texas discussing environmental regulations in the United States. In particular, the author discussed how the landscape for government regulation is only getting more difficult. Regulatory compliance drains the US economy of $1.75 trillion a year, and according to the Heritage Foundation, ” the cost of complying with regulations enacted during Obama’s first three years in office exceeds by five times the cost associated with new rules promulgated during the first three years of George W. Bush’s presidency.”
Of recent concern for oil companies, the US Fish and Wildlife Service (USFWS) has recently been debating whether to classify the dunes sagebrush lizard as an endangered species. This lizard makes its home largely in West Texas. When they decided against it, “if producers came across as extraordinarily relieved…it is only because the last couple of decades have demonstrated how restrictions and activity bans on lands identified as critical habitat for threatened or endangered species can decimate an area’s key industries.”
Cases aren’t decided by facts
And while many of these activity bans do in fact protect endangered species, the USFWS has also used evidence in hearings regarding a possible endangered species that is directly contradictory or wrong, leading some to believe that feelings and not just facts directed the proceedings. Since these classifications effect commerce and thousands of people’s livelihood, a speaker at one talk we recently attended, Ronald Schindler of Pioneer Natural Resources, discussed how all they wanted to do was, “live or die by the numbers” regarding environmental compliance.
With all of these increasing regulations, the rules do not necessarily transfer to implementation and actual compliance. Every oil and gas company has to ask themselves then, do we we have access to the information that would answer questions related to our compliance with them? Particularly when non-compliance can lead to downtime, or in one case relating to Shell, “suspension of all operations until issues are settled,” the costs of not having the answers can be high.
Find out more about how your company can create a plan surrounding compliance.