Do Personal Agendas Drive Federal Regulators?

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EPA OFFICIAL WANTED TO ‘CRUCIFY’ FIRMS

By Christopher M. Hopkins, The Saint Consulting Group

The alarming statements by a high-level federal regulator described below confirm a fear that many in the mining and energy industries have long harbored — that some federal regulatory staff have an agenda against mining and drilling projects, indeed against almost any project that harvests natural resources.

Our firm encountered a similar situation when checking on a client’s project with a federal agency staff person who was handling the mining application. We did not tell the staffer why we were asking about it, and the staffer did not inquire why we were asking. What we were told was that the project would be approved “over my dead body.” That was news to our client, who was being told a completely different story by the agency.

The EPA official in the story below resigned on Sunday, but is there a larger problem? Is this the attitude of countless staff people in federal and state permitting agencies? Do they bring their own political agenda to their job when it should be left at the door?

— Chris Hopkins is Senior Vice President for Aggregates and Mining at The Saint Consulting Group, email: hopkins@tscg.biz.

The Forbes article (with link and video):

EPA Official Not Only Touted ‘Crucifying’ Oil Companies, He Tried It

Confirming what many in the industry long suspected, a video surfaced Wednesday in which Al Armendariz, an official at the Environmental Protection Agency, promotes the idea of crucifying oil companies. Armendariz heads up the EPA’s Region 6 office, which is based in Dallas and responsible for oversight of Texas and surrounding states. The former professor at Southern Methodist University was appointed by President Obama in November 2009.

In a talk to colleagues about methods EPA enforcement, Armendariz can be seen saying, “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 not only has Armendariz talked about crucifying oil companies, he’s tried to do it. In 2010 his office targeted Range Resources, a Fort Worth-based driller that was among the first to discover the potential of the Marcellus Shale gas field of Pennsylvania — the biggest gas field in America and one of the biggest in the world. Armendariz’s office declared in an emergency order that Range’s drilling activity had contaminated groundwater in Parker County, Texas. Armendariz’s office insisted that Range’s hydraulic fracking activity had caused the pollution and ordered Range to remediate the water. The EPA’s case against Range was catnip for the environmental fracktivists who insist with religious zealotry that fracking is evil. Range insisted from the beginning that there was no substance to the allegations.

The Armendriz video (which appears to have been taken off YouTube late late night) was shot around the same time he was preparing the action against Range. Here’s the highlights of what he said. 

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.

 The former professor at Southern Methodist University is a diehard environmentalist, having grown up in El Paso near a copper smelter that reportedly belched arsenic-laced clouds into the air.  Texas Monthly called him one of the 25 most powerful Texans, while the Houston Chronicle said he’s “the most feared environmentalist in the state.”

Nevermind that he couldn’t prove jack against Range. For a year and a half EPA bickered over the issue, both with Range and with the Texas Railroad Commission, which regulates oil and gas drilling and did its own scientific study of Range’s wells and found no evidence that they polluted anything. In recent months a federal judge slapped the EPA, decreeing that the agency was required to actually do some scientific investigation of wells before penalizing the companies that drilled them. Finally in March the EPA withdrew its emergency order and a federal court dismissed the EPA’s case.

David Porter, a commissioner on the Texas Railroad Commission, wasn’t impressed. “Today the EPA finally made a decision based on science and fact versus playing politics with the Texas economy. The EPA’s withdrawal of the emergency order against Range Resources.

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