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Inhofe Floor Speech: President Obama's War on Domestic Energy Production: "Crucify Them"
April 25, 2012

Posted by Katie Brown Katie_Brown@epw.senate.gov 

Inhofe Floor Speech: President Obama's War on Domestic Energy Production: "Crucify Them"

Mr. President, I rise today to address several questionable actions recently taken by the Obama Environmental Protection Agency to stop domestic energy production - particularly regarding hydraulic fracturing - and my intention is to explain to America what's really going on over at the EPA.

Today I'd like to draw attention to a little known video from 2010, which shows a top EPA official, Region VI Administrator Al Armendariz, using the vivid metaphor of crucifixion to explain EPA's enforcement tactics for oil and gas producers. 

Now this is a long quote, but it's important to quote Administrator Armendariz in full to get the complete effect of his stunning revelation.  In this video Administrator Armendariz says ,

"But as I said, oil and gas is an enforcement priority, it's one of seven, so we are going to spend a fair amount of time looking at oil and gas production. And I gave, I was in a meeting once and I gave an analogy to my staff about my philosophy of enforcement, and I think it was probably a little crude and maybe not appropriate for the meeting but I'll go ahead and tell you what I said.  It was kind of like how the Romans used to conquer little villages in the Mediterranean.  They'd go into a little Turkish town somewhere, they'd find the first five guys they saw and they would crucify them.  And then you know that town was really easy to manage for the next few years.  And so you make examples out of people who are in this case not compliant with the law. Find people who are not compliant with the law, and you hit them as hard as you can and you make examples out of them, and there is a deterrent effect there.  And, companies that are smart see that, they don't want to play that game, and they decide at that point that it's time to clean up.  And, that won't happen unless you have somebody out there making examples of people.  So you go out, you look at an industry, you find people violating the law, you go aggressively after them.  And we do have some pretty effective enforcement tools.  Compliance can get very high, very, very quickly.  That's what these companies respond to is both their public image but also financial pressure.  So you put some financial pressure on a company, you get other people in that industry to clean up very quickly.  So, that's our general philosophy."

So according to Administrator Armendariz, EPA's "general philosophy" is to "crucify" and "make examples" of domestic energy producers so that other companies will fall in line with EPA's regulatory whims.  His comments give us a rare glimpse into the Obama administration's true agenda; no matter how much President Obama may pretend to be a friend of oil and natural gas, his green team constantly betrays the truth that the Obama Administration is fully engaged in an all out war on hydraulic fracturing, and indeed all fossil fuels. 

Not long after Armendariz made this stunning admission, EPA apparently began to zero in on its first crucifixion victims.  The agency targeted US natural gas producers in Pennsylvania, Texas and Wyoming; and, in all three of these cases, before these investigations were complete, EPA made headline-grabbing statements either insinuating or proclaiming that hydraulic fracturing was the cause of water contamination. But in each case, EPA's comments were contrived - and despite their best efforts they have been unable to find any sound scientific evidence to definitively demonstrate this link. 

Of course, this administration has a propensity to make embarrassing announcements on days they hope no one will notice, so during the past two-week recess, while Congress was out of town, EPA released several late -Friday night statements reversing their earlier assertions in these cases. 

They hope they can admit they were wrong quietly, but we are not going to let them get away with that.  EPA needs to be held accountable.  The American people deserve to know exactly why EPA pushed ahead with such intensity to capture alarmist headlines, and then, when their investigations didn't pan out the way they had hoped, they were forced to reverse their claims.

These three cases are particularly important given that the Administration has proposed numerous new studies looking into hydraulic fracturing: EPA is currently in the midst of a long term study of hydraulic fracturing and any potential harms to drinking and ground water, which will ultimately be a foundation for EPA's decision on whether the administration will move forward with a barrage of federal regulations. Therefore, it is of utmost importance that the public knows exactly what has happened in these instances and that the Agency is held accountable to explain and answer for its actions.  It is also critical to ensure proper oversight of the agency as it moves forward with ongoing and future studies.   

So today, I've come to the Senate Floor to announce that I am launching an oversight investigation into EPA's handling of these three cases. Against the backdrop of recent events, and Administrator Armendariz's admission that EPA is out to crucify natural gas companies, it's clear that EPA did not base these three studies on sound science or engage in the proper scientific process; the agency has been using questionable authorities while usurping the rightful regulatory authority of states.  EPA clearly went through with these investigations based on preconceived conclusions with the explicit goal of tying potential environmental harms to hydraulic fracturing. 

The ultimate goal of these efforts is, of course, to strip states of their traditional authority to regulate hydraulic fracturing and seize bureaucratic control over unconventional oil and gas development across this country.  That way, the Obama administration can have more control over devastating the development of America's vast domestic resources. 

EPA Steps Back

EPA, in Texas, Wyoming, and Pennsylvania, not only stepped backed their assertions but did so with a stunning lack of transparency strategically attempting to make these announcements as quietly as possible and at times they knew Congress wouldn't be looking.  Let me just quickly highlight a few examples:

In Parker County, Texas, the Agency's major announcement - the withdrawal of their administrative order - was announced at a time they knew Congress was adjourning for the Easter recess.

In Dimock, Pennsylvania, EPA made two announcements stating that local water was safe and there was no "threat to human health and the environment." These announcements came conveniently on April 6 - which was Good Friday - and again as Congress was leaving Washington to return home for the weekend of March 16. 

In Pavillion, Wyoming , EPA not only announced their backtrack to do more testing with local interests as Congress was again wrapping up its week early in March, but in order to avoid the scrutiny from the House Science Subcommittee on Energy and Environment, they released long awaited data - 622 documents to be exact - late the night just before a congressional oversight hearing.  Despite countless requests by the State and members of Congress, EPA concealed these documents until the last minute to avoid the ire of the committee while knowing that the information could not be properly reviewed in time for legitimate oversight at the hearing.

Parker County, Texas

Parker, County Texas could be the most outrageous of the three cases and it took place in Region 6 where my home state of Oklahoma is located.

Despite Texas state regulators actively investigating the issue, EPA Region 6 issued a December 7, 2010 Emergency Administrative Order which "determined" that State and local authorities had not taken sufficient action and ordered Range Resources to provide clean drinking water to affected residents and begin taking steps to resolve the problem.  Along with this order, EPA went on a publicity barrage in an attempt to publicize its premature and unjustified conclusions.  The day of the order EPA issued a press release in which mentioned "hydraulic fracturing" four times with no context or science to implicate the process in any contamination.  The agency claimed that they had also "determined that natural gas drilling near the homes by Range Resources in Parker County, Texas, has caused to the contamination of at least two residential drinking water wells." 

Regional Administrator Al Armendariz was quoted in a press story posted online prior to him even notifying the state of Texas that EPA was their order and emails have been obtained from the day the order was released showing him gleefully sharing information with rabid anti-fracking advocates saying "we're about to make a lot of news...time to Tivo channel 8."  In subsequent interviews Armendariz made comments specifically intended to incite fear and sway public option against hydraulic fracturing citing multiple times a "danger of fire or explosion."  When state regulators were made aware of EPA's actions, they made it clear they felt the agency was proceeding prematurely to which Armendariz forwarded their reply to headquarters with a single-word message, "Stunning."   

What was "stunning" to quote Armendariz, were revelations about the way in which EPA acted in this particular case which led me to send a letter at that time to the EPA Inspector General requesting them to preserve all records of communications connected to the emergency order issued by EPA Region 6 Administrator Al Armendariz.

Subsequent to EPA's December 7, 2010 administrative order, on January 18, 2011 EPA followed through on Regional Administrator Armedariz's promise to "make examples of people" and filed a complaint in federal district court requesting penalties against Range Resources of $16,500 per day of each violation of EPA's emergency order in line with Armedariz's pursuit of fines which "can get very high, very, very quickly."

If these actions alone didn't create an appearance of impropriety and call into serious question the ability of Regional Administrator Armendariz to conduct unbiased investigations and fairly enforce the law, just 7 months prior to the Region's actions in Parker County, the Regional Administrator laid the groundwork of how he planned to reign over his region.  In a town hall meeting in Dish, Texas, Armendariz "gave an analogy" of his "philosophy of enforcement." 

This is the quote that I highlighted at the beginning of my speech.  Remember Armendariz said, "It was kind of like how the Romans used to conquer little villages in the Mediterranean.  They'd go into a little Turkish town somewhere, they'd find the first five guys they saw and they would crucify them.  And then you know that town was really easy to manage for the next few years."  Let me go back and be clear about this, this is President Obama's appointed Regional Administrator for the states of Arkansas, Louisiana, New Mexico, Texas, and Oklahoma comparing his philosophy of enforcement over the oil and gas industries to Roman crucifixions where you would just grab "the first five guys" you saw in order to ensure everyone else "was really easy to manage for the next few years."

Now, fast forward to a late Friday afternoon of March 30th of this year, just a few hours after Congress left town for the Easter recess, the Wall Street Journal reported that, "EPA told a federal judge it withdrew an administrative order that alleged Range Resources had polluted water wells in a rural Texas county west of Fort Worth. Under an agreement filed in U.S. court in Dallas, the EPA will also drop the lawsuit it filed in January 2011 against Range, and Range will end its appeal of the administrative order."  A few weeks prior to EPA's withdrawal, a judge also concluded that one of the residents involved in the investigation worked with environmental activists to create a "deceptive video" that was "calculated to alarm the public into believing the water was burning" when  it appears the resident attached a hose to the water well's gas vent -- not to a water line -- and then lit the gas from the hose's nozzle.

And remember, this is only one of three recent high-profile incidences of backtracking on behalf of the agency regarding allegations linking natural-gas drilling using hydraulic fracturing and water contamination.

Given the magnitude of this reversal, I have written a letter to EPA Administrator Lisa Jackson which I sent today asking her for a thorough explanation into the Agency's actions surrounding the Parker County Texas investigation as well as detailed questions about the science they used to justify their emergency order.  I am particularly concerned with this situation given the fact that it is under the watch of EPA Region 6 and Administrator Armendariz.  And again, keep in mind they waited until Congress was in recess hoping their admission would go unnoticed.  

Pavilion, Wyoming

Next, consider the case of Pavillion, Wyoming. Last December, EPA publicized the release of non-peer reviewed draft findings which pointed to hydraulic fracturing as the cause of groundwater contamination.

Here again, EPA stepped in over the actions of the state and made a press announcement designed to capture headlines where definitive evidence linking the act of hydraulic fracturing to water contaminations simply didn't exist.

The announcement came in December despite as late as November 9, 2011 EPA Regional Administrator James Martin saying that the results of the latest round of testing in Pavillion were not significantly different from the first two rounds of testing, which showed no link between hydraulic fracturing and contamination.  That's 3 rounds of testing which showed no contamination from hydraulic fracturing yet only a few weeks later, EPA was announcing the opposite. 

I said after speaking to Administrator Jackson that day that it was irresponsible for EPA to release such an explosive announcement without objective peer review. Given the serious flaws in EPA's process, I asked EPA Administrator Jackson to release all the data, methodologies and protocols that have been used, and she has made a commitment to do so.  Also, because this study is a new scientific inquiry and these methods will be used nationwide, I strongly believe that it should be considered a Highly Influential Scientific Study (HISA) and undergo the required objective peer review process.  Unfortunately, the EPA has refused to officially classify this study as a HISA and has only loosely committed that it will be "treated" as one, allowing EPA to pick and chose which requirements it follows. 

In another reversal by EPA in the past few weeks, EPA stepped back and agreed to take more water samples and postpone a peer review of the findings, something the State of Wyoming had been requesting from the beginning and something that should have been done prior to the political decisions to publicize unsubstantiated findings in an draft report.

Dimock, Pennsylvania

Dimock, Pennsylvania is the third site of EPA's recent backtracking of its publicized attempts to link hydraulic fracturing to groundwater contamination.  In this instance the Pennsylvania Department of Environmental Protection (DEP) had taken substantial actions and including working out an agreement with an oil and gas company ensuring residents clean drinking water. 

In line with the State's DEP, on Dec. 2, 2011, EPA declared that the water in Dimock was safe to drink.  Just over a month later, EPA reversed its position, announcing it would be providing drinking water to some homes while conducting further testing of local private water wells - private water wells which the Agency has no regulatory authority over.  Following the flip-flop, EPA's testing "did not show levels of contamination that could present a health concern."

What is perhaps most egregious was- to quote Pennsylvania DEP Secretary Michael Krancer - EPA's "rudimentary" understanding of the facts and history of the region's water.  Independent geologists and water consultants like Brian Oram have been puzzled by the Agency's rational for their involvement in Dimock because the substances of greatest concern by EPA are naturally occurring and commonly found in this area of Pennsylvania yet EPA has chosen this area to attack due to the presence of hydraulic fracturing. 

Background: Obama's Anti-Natural Gas Agenda

It's important to point out that these three cases are just a few examples of a larger picture of President Obama's war on natural gas production, and all fossil fuels for that matter.  Over the past year, the President has been going around the country - including his first visit as President to my home state of Oklahoma - pretending he's for an "all of the above" energy approach.  But the truth is that the Obama- EPA has been fighting domestic energy production every step of the way and natural gas is very much on the agency's chopping block.

Of course, part of this strategy is to try to convince Americans that we don't have the vast supply of natural resources that we clearly have.  Last week the U.S. Geological Survey (USGS) revealed that President Obama's favorite talking point - that we only have 2 percent of the world's proven oil - is less than honest.  The two percent that the President quotes are our proven reserves but he ignores our recoverable resources, which are some of the largest in the world.  According to information gleaned from the USGS report America has 26 percent of the world's recoverable conventional oil resources, and that doesn't begin to include our enormous oil shale, tight oil and heavy oil resources.  We also hold almost 30 percent of the world's technically recoverable conventional natural gas resources.

The benefits of developing our vast wealth of resources are obvious, so of course, with an election coming up, President Obama is keeping quiet about his true war on fossil fuels.  

But we all know that he remains fully committed to his cap-and-trade global warming green energy agenda - a plan that severely restricts domestic development of natural gas, oil, and coal to drive up the price of fossil fuels so that their favored forms of green energy can compete.  It is quite simply a war on affordable energy - and at one time, they weren't afraid to admit it. 

Remember it was Steven Chu, Secretary of Energy, who told the Wall Street Journal in 2008 that "[s]omehow we have to figure out how to boost the price of gasoline to the levels in Europe." And we all know the infamous quote from President Obama in 2008. He said that under his cap-and-trade plan, "electricity prices would necessarily skyrocket."  And the President himself has been on record supporting an increase in gas prices although according to him he would "have preferred a gradual adjustment" increasing the average families pain at the pump.

But this is not a plan that gets you reelected.  Gas prices are skyrocketing and with the utter failure of Solyndra, President Obama's dream of green energy economy is in shambles.  So you can be sure that he won't be talking about his plan to raise energy costs for every American while he's looking for votes. 

So what is the President's plan to reduce gas prices which have more than doubled since he took office?  Well a few weeks after he said "any career politician who promises some three-point plan for two-dollar gas - they're not looking for a solution.  They're just looking for your vote," the President came out with his own five-point plan.  His plan, which is aimed at cracking down on speculators is a ruse that ignores the simple fact that global oil prices are a result of supply and demand.  And don't take my word for it. 

The President's own Deputy Energy Secretary Dan Poneman just last month said that when it comes to gas prices "we have a very strong believe...we think that the laws of supply and demand are the right mechanisms to set the global prices."  He went on to say "and we actually feel quite good about the ability of the market to determine the right price."  And yet the Obama is doing everything in his power to limit our supply and destroy our domestic production of oil and gas. 

Gary Becker, a Nobel Prize winning economist and professor at the University of Chicago has said that supply and demand are the cause of the "vast majority of large fluctuations in oil prices: and "it is hard to believe that speculation has played a major role in causing the large swing in oil prices."

Just last week, President Obama secured endorsements from several Big Green groups including the Sierra Club, the League of Conservation Voters, Clean Water Action, and Environment America.  But it's not likely that President Obama will be touting these endorsements; he will be running as far away from Big Green as he did from Solyndra as the election approaches. 

Just how far is the run taking him? Well, the same President who came into office vowing to pass global warming cap-and-trade legislation that would kill off fossil fuels is now going around the country taking credit for the great benefits domestic fossil fuel production has brought over the past few years. He's making a deceptive attempt to take credit for domestic development; he's trying to capitalize politically on the fact that natural gas, oil and coal production has spurred strong economic growth, and importantly hundreds of thousands of good paying jobs.  The same gas, oil and coal he's been trying to destroy.

The President's budget proposal this year alone amounts to a $38.6 billion tax increase on oil and gas companies which would hit my state of Oklahoma - where 70,000 people are employed in oil and gas development - especially hard.  His proposal specifically would either modify or outright cancel the Section 199 Manufacturer's Tax Deduction (Sec. 199), Intangible Drilling Costs (IDC) expensing, Percentage Depletion, Tertiary Injectants expensing, and the Foreign tax credits provision used by major integrated oil and gas firms.  These tax provisions are in line with standard accounting principles; they are not subsidies.  Doing away with these provisions is nothing more than a tax hike that will raise gas prices, increase our dependence on foreign oil, and cost jobs.

His actions however, have not slowed his rhetoric.  In fact, President Obama has become so desperate to run from his anti-fossil fuel record that he ran all the way to Cushing, Oklahoma for a photo op of him embracing an oil and gas pipeline. Of course, he couldn't kill this pipeline like he did the Keystone XL, so why not embrace it?

This really must have been a painful photo op for him, not only because it goes against everything he stands for, but also because he knows that his far left environmental base loathes hearing him tout the virtues of fossil fuels.

So President Obama is trying to take credit for the increase in oil and gas production.  But wait, that increase is taking place on private lands where he has no control.  According to a recently released report by the nonpartisan Congressional Research Service, since 2007, "About 96% of the [oil production] increase took place on non-federal lands..."  According to the Obama Energy Information Administration (EIA) total fossil fuel sales of production from federal lands are down since 2008 and during a time of natural gas boom throughout the country, the EIA also reports that natural gas sales of production from federal lands are down 17 percent since 2008.  Finally according to PFC Energy which is a global consulting firm specializing in the oil and gas industry, 93% of shale oil and gas wells in the United States are located on private and state lands.  Hardly the federal government triumph that the President falsely attempts to take credit for. 

When you put all the pieces together, it's very clear what President Obama's election strategy is: say great things about oil, natural gas, and the virtues of domestic energy production, but under the surface, try really hard to manufacture something wrong with hydraulic fracturing.  Remember not one cubic foot of natural gas can be extracted in these tight shale formations without hydraulic fracturing.  So if you stop hydraulic fracturing, you essentially stop natural gas production in this country. 

That's why the same administration that is attempting to market itself for the election as "pro-natural gas" is also promoting the largely debunked anti-fracking movie Gasland as a key film in the State Department's American Film Showcase.  As the Obama State Department website says - quote -"The American Film Showcase builds on Secretary of State Hillary Rodham Clinton's vision of ‘smart power diplomacy." 

But promoting this anti-fracking film is minor compared to the regulatory onslaught that this administration is waging.  For instance, the Obama-EPA just announced regulations on oil and gas development, which include rules aimed at air emissions from hydraulic fracturing sites.  Some studies estimate that this new rule could result in 47,000 direct job losses as unconventional gas well drilling would decline - and yet again, EPA is going through with this rule on the foundation of faulty data, and without any regard for the economic impacts.  I sent a letter to EPA expressing my concerns that this is just another rule put in place to unnecessarily seize more federal authority over hydraulic fracturing. 

And less than two weeks ago on Friday the 13th, the Obama Administration showed once again that it is working overtime to undermine natural gas development when the White House announced that they will create a board made up of 13 different federal agencies, with the possibility of more, to coordinate their work on hydraulic fracturing.  Of course, we all know that the more layers of government involved, the greater the likelihood that the Obama administration can stall efforts towards domestic energy development.  This working group of federal agencies was clearly not formed to give states the thumbs-up on hydraulic fracturing; it was formed specifically for the purpose of rationalizing federal control over the practice. 

Now I know something about hydraulic fracturing.  The first use of hydraulic fracturing took place in Duncan, Oklahoma in 1949 and all of this federal effort is despite the fact that states have been regulating hydraulic fracturing safely, efficiently, and effectively for 60 years where there hasn't been one confirmed case of groundwater contamination from fracked formations.  Several studies and statements - by groups including the EPA, Ground Water Protection Council, the Interstate Oil and Gas Compact Commission, the Energy Institute at the University of Texas at Austin - have been clear that that state regulations of hydraulic fracturing are sufficiently protective and that the process of hydraulic fracturing does not contaminate drinking or ground water.

Even in the Senate Environment and Public Works Committee, Senator Cardin, a Democrat very concerned with water quality, praised the work of states when he congratulated Oklahoma and Colorado for taking "aggressive action to protect the public health of their citizens."

It's clear that states are best equipped to regulate fracking, and that's why I've introduced a bill that would ensure that it stays that way.  My bill, the Fracturing Regulations are Effective in State Hands Act, provides certainty that states will continue to have the sole authority to regulate hydraulic fracturing, not the federal government.  My bill would prevent President Obama from imposing duplicative, burdensome, and unnecessary federal regulations on hydraulic fracturing which will stop natural gas development in this country and keep his administration from achieving one part of their war on affordable energy. 

Conclusion

As the Ranking Member of the Senate Committee on Environment and Public Works, and as a Senator from a leading oil and natural gas producing state, stopping the Obama administration's efforts to regulate domestic energy production out of existence has been a top priority.  It is imperative that when EPA looks to investigate, study or regulate hydraulic fracturing they use sound science and conclusions are not preconceived, but backed up with the necessary evidence to responsibly justify their actions and produce nonbiased, credible results.  Furthermore, political activism through federal agencies does a serious disservice to the American people, particularly those struggling with real health and environmental concerns.  While the Obama-EPA is running around using citizens as pawns in a concerted effort to pin any incidence of groundwater pollution to the environmental boogie man of hydraulic fracturing, they are not helping people actually discover and remedy real sources of contaminations. 

In EPA's handling of these three cases in Texas, Wyoming and Pennsylvania, I haven't seen much evidence to counter Armendariz's statement that EPA's "general philosophy" is to "crucify" and "make examples" of oil and gas companies, so this investigation is clearly needed.  It will hold this administration accountable for what really happened behind the scenes in these matters and I will continue vigilant oversight of any future studies whose findings can be used to inhibit America from using its vast natural resources. 

Now, Mr. President, two things are clearly incontrovertible.  1) The Obama Administration has done everything it possibly can to destroy domestic production of oil, gas and coal. And 2) the Obama Administration now is successfully carrying out its admitted plan to ""boost the price of gasoline to the levels in Europe" and make energy prices "necessarily skyrocket."  Fortunately for the American people, they have yet to fully achieve their goal and we have got to stop them.  With that, Mr. President, I yield the floor.

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April 2012 Speeches
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