Robert Finne was talking with a friend about the Arkansas Oil and Gas Commission earlier this year when they both started wondering, “Who are these people?”
So they wrote to the commission and asked. Finne, a critic of gas drilling in the Fayetteville Shale, was surprised to learn that most of the commissioners owned oil and gas drilling companies.
“I knew the cards were stacked against us, but I had no idea how badly,” Finne said.
More than 40 percent of officials regulating oil and gas production in the top drilling states, records show, come from the industry they are charged with policing.
| Regulators with industry ties | ||
| More than 40 percent of oil and gas commissioners, board members and division heads come from the industry they regulate. For each state, the number of commissioners and state directors is followed in parentheses with the number of those who have ties to industry. Source: State records and other documents. | ||
| State | Commissioners | Staff Directors |
| Alabama | 3 (0) | 1 (0) |
| Alaska | 3 (3) | 0 (0) |
| Arkansas | 9 (7) | 1 (0) |
| California | 0 (0) | 1 (0) |
| Colorado | 9 (4) | 1 (0) |
| Florida | 0 (0) | 1 (0) |
| Illinois | 0 (0) | 1 (0) |
| Indiana | 0 (0) | 1 (0) |
| Kansas | 3 (0) | 1 (1) |
| Kentucky | 0 (0) | 1 (0) |
| Louisiana | 0 (0) | 1 (1) |
| Michigan | 0 (0) | 1 (0) |
| Mississippi | 5 (2) | 1 (0) |
| Montana | 7 (3) | 1 (0) |
| Nebraska | 3 (2) | 1 (1) |
| New Mexico | 2 (0) | 1 (0) |
| New York | 0 (0) | 1 (1) |
| North Dakota | 0 (0) | 1 (1) |
| Ohio | 5 (2) | 1 (0) |
| Oklahoma | 3 (1) | 1 (0) |
| Pennsylvania | 0 (0) | 1 (0) |
| South Dakota | 0 (0) | 0 (0) |
| Texas | 3 (0) | 1 (0) |
| Utah | 7 (5) | 1 (1) |
| Virginia | 6 (1) | 1 (0) |
| West Virginia | 0 (0) | 1 (1) |
| Wyoming | 2 (1) | 1 (1) |
| Number of regulators = 95 | ||
| Total with industry ties = 39 | ||
In recent months, commissions and agencies have taken the lead in hashing out public disclosure of hydraulic fracturing chemicals.
Arkansas was one of them. The state was among the first to order public disclosure. But activists like Finne were angered when they learned that the companies could get an exemption if the chemical was a trade secret.
The commission also handled an outbreak of earthquakes near an injection well for drilling waste, shutting down such wells in a 1,000-square-mile area. Finne met earlier this year with the commission director, Lawrence Bengal, who explained to them that the commissioners were in charge of deciding what to do about the situation. Finne said it was after that meeting that he started to wonder about the commissioners’ backgrounds.
Bengal said it is a misunderstanding to think the business interests of commission members would prevent them from enforcing the law.
“They’re implementing the law as written by the Legislature,” Bengal said in an interview. “If they were to refuse to enforce those laws, they would be in violation of those statutes.”
In Colorado, penalties have risen since 2007, when the state Legislature took away the industry’s built-in majority on the state’s Oil and Gas Conservation Commission. Still, the panel’s largest fine against an active company amounted to less than two hours’ worth of profits for the company.
The results of Colorado’s restructuring could be seen earlier this month when the executive director of the commission, Dave Neslin, negotiated with industry and environmentalists on a rule requiring public disclosure of hydraulic fracturing chemicals, Earthwork’s Baizel said.
“It gave him more latitude in what he could negotiate in terms of public health,” he said. “They probably
It is a degree of self-regulation enjoyed by few other industries, if any. And it heightens suspicion among critics of the nation’s drilling boom that companies are allowed to damage the environment with impunity.
Supporters of the industry, and the regulators themselves, say it simply makes sense to have technical experts deciding technical issues.MORE
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