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Gas drilling presents Obama with historic choices

Associated Press Modified: November 17, 2012 at 6:45 pm •  Published: November 17, 2012
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Brune agreed that "you have to acknowledge that there are benefits to home-grown energy."

Critics say many states haven't been tough enough on the industry, which has objected to the idea of national drilling regulations. Some state officials oppose such proposals, too.

"Yes, we are concerned," said Patrick Henderson, energy executive for Pa. Gov. Tom Corbett. "Upwards of 10 federal agencies are seeking to put their proverbial nose under the tent with regard to oil and gas development." He added that federal intrusion "is a surefire way to impede job growth. We'll be vigilant of proposed federal rulemakings."

The U.S. Environmental Protection Agency is conducting one major national review of drilling and potential drinking water impacts, but it won't be finished until 2014.

Jack Gerard, president of the American Petroleum Institute, which lobbies for the industry in Washington, is hoping Obama's campaign rhetoric doesn't change.

"He has evolved on the oil and the gas issue, and today, he gives it a full-throated endorsement in terms of the need to produce it to create jobs, get our economy back on track," Gerard said in a postelection conference call.

Most experts agree that Obama faces four big choices about the gas boom: whether to back nationwide EPA rules; whether to keep pressuring coal-fired power plants to reduce emissions (which benefits gas as an alternative fuel); whether to allow large-scale exports of liquefied natural gas; and whether to support a national push to use compressed gas in commercial vehicles.

One expert in Texas predicted that Obama won't go to extremes.

"I don't think the administration will do anything to halt development," said Kenneth Medlock III, a professor at Rice University's Center for Energy Studies in Houston, adding that there will be "some attempts" to move regulations into federal hands.

Medlock expects Obama to keep the pressure on the coal industry, but go slowly on the natural gas export issue. The industry says exports have the potential to be highly profitable, but some members of Congress fear exports will just drive up domestic prices, depriving consumers and other industries of the benefits of cheap natural gas.

Others see an opportunity for the president to stake out a middle ground.

"A lot of the industry guys are pretty shaken by the anti-fracking movement," said Michael Shellenberger, president of the Breakthrough Institute, an Oakland nonprofit that promotes new ways to address environmental issues. "That might make them a bit more open to regulatory oversight."

Shellenberger said natural gas could also be a "big opportunity" for Obama as part of a broader campaign to address greenhouse gas emissions.

Ebinger agreed, saying that "if we really pushed tax credits to get diesel out of long-distance trucks" that could lead to massive carbon dioxide reductions. But at some point, Obama will have to make tough decisions. "I don't think the president can punt this one," he said.

Whatever Obama does, "it will definitely drive a bunch of people crazy" in the environmental community, Shellenberger said.