Forthcoming, Review of Policy Research

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1 Agenda-Setting at the Energy-Water Nexus: Constructing and Maintaining a Policy Monopoly in US Hydraulic Fracturing Regulation Corresponding author: Dr. Jennifer Baka, Assistant Professor, Department of Geography, Pennsylvania State University, jeb525@psu.edu Other authors: Dr. Kate J. Neville, Assistant Professor, Political Science and School of the Environment, University of Toronto, Department of Political Science Sidney Smith Hall, Room St. George Street Toronto, ON M5S 3G3, , kate.neville@utoronto.ca Professor Erika Weinthal, Nicholas School of the Environment, Duke University, Box Durham, NC Circuit Drive, Environment Hall 4119 Durham, NC 27708, +1(919) erika.weinthal@duke.edu Professor Karen Bakker, Department of Geography, University of British Columbia, Vancouver Campus, 1984 West Mall, Vancouver, BC Canada V6T 1Z , karen.bakker@ubc.ca ABSTRACT Despite calls to increase federal oversight of hydraulic fracturing (HF), the US Congress has maintained a regulatory system in which environmental regulatory authority is devolved to the states. We argue that this system is characterized by a long-standing policy monopoly : a form of stability in policy agenda-setting in which a specific manner of framing and regulating a policy issue becomes hegemonic. Integrating theories on agenda-setting and environmental discourse analysis, we develop a nuanced conceptualization of policy monopoly that emphasizes the significance of regulatory history, public perceptions, industry-government relations and environmental storylines. We evaluate how a policy monopoly in US HF regulation has been constructed and maintained through a historical analysis of oil and gas regulation and a discourse analysis of 11 select congressional energy committee hearings. This research extends scholarship on agenda-setting by better illuminating the importance of political economic and geographic factors shaping regulatory agendas and outcomes. Keywords: Hydraulic fracturing, policy monopoly, agenda-setting, congressional testimony, regulation 1

2 Introduction The rapid increase in production of unconventional oil and gas through hydraulic fracturing (HF) 1 has transformed global energy markets over the last decade. Framed as a clean energy technology and spark for economic recovery, HF has simultaneously engendered controversy regarding potential groundwater impacts (Vengosh, Jackson, Warner, Darrah, & Kondash, 2014), the adequacy of regulations to protect water resources (Wiseman, 2009), and policy makers responsiveness to new regulatory challenges posed by HF (Brasier et al., 2013; Rabe & Borick, 2013). These debates have played out most fully in the US, the global epicenter of HF. This article focuses on US regulation of water use in HF. Presently, such water use is regulated at the state-level, extending a system of oil and gas regulation that dates back to the 20 th century. Concerns over the water-related impacts of HF have led to repeated calls for greater federal oversight. Some federal agencies, such as the Bureau of Land Management, have attempted to regulate select aspects of HF through rulemaking (Davis, 2016), a process in which an agency interprets and potentially extends its existing statutory authority. However, Congress has been reluctant to enact new laws. Through an empirical analysis of select congressional hearings on HF and a review of the history of US federal oil and gas regulation, this paper analyzes how the state-led regulatory system has been maintained in spite of public concern and attempts by multiple federal actors to extend statutory authority. We identify an HF-related policy monopoly : a form of stability in agenda-setting in which a particular way of framing and regulating a policy issue becomes hegemonic (Baumgartner & Jones, 2009). Our analysis draws upon recent studies that have 1 HF is a set of technologies for extracting oil and gas from low permeable rocks using vertical and/or horizontal drilling and injecting high-pressurized liquids. 2

3 examined how energy policy subsystems (that is, issue-specific policy arrangements and collectives of policy actors) have been maintained in light of mounting pressures for transformative policy change, considering party politics, core values of political audiences, and policy image management strategies (Carter & Jacobs, 2014; Fowler, Neaves, Terman, & Cosby, 2017; Mondou, Skogstad, & Houle, 2014). In contrast and as a complement to these studies, we focus on the significance of a specific venue, Congress, in maintaining the regulatory status quo. Our analysis identifies a set of discourses or storylines voiced before Congress on HF regulation, which have further sustained the regulatory status quo. Specifically, our empirical analysis identifies four storylines, many of which were advocated by industry witnesses and have links to historic regulatory debates: 1) portraying the US Environmental Protection Agency (EPA) as a biased regulator; 2) framing HF as a safe and mature technology; 3) positing economic harms from increased federal oversight; and 4) commending the existing state-led regulatory structure and offering private governance as an alternative to address regulatory gaps. Importantly, few witnesses or congressional representatives voiced counter-narratives to these dominant storylines, which, we argue, further reinforced the regulatory policy monopoly. The paper proceeds in five parts. In Section 2, we provide a brief overview of the federal government s efforts to regulate oil and gas production on private lands in the US, with emphasis on water-related issues. In Section 3, we present our theoretical framework, integrating theories of agenda-setting and environmental discourse analysis (EDA), and we present our methods in Section 4. In Section 5, in our empirical analysis of congressional hearings, we first analyze the types of participants, finding that industry witnesses were called to testify before Congress more frequently than any other stakeholder group. As congressional committee chairs have authority over if and when to call a hearing and over who is called to testify (Keller, 2009), the (im- 3

4 )balance of witnesses points to the significance of industry-government relations in shaping access to decision-makers and regulatory debates. While the finding that industry has influence over environmental regulation is not a new insight, as Kraft and Kamieniecki (2007) note, systematic analyses of how this influence is exerted are underdeveloped. Accordingly, we present an analysis of industry s discursive tactics and financial contributions to influence Congress. In Section 6, we reflect on the empirical and theoretical significance of our findings by discussing the significance of congressional hearings as a data source and how our analysis advances theories of agenda-setting, as well as highlighting the political economy and geographic characteristics that have helped to maintain the policy monopoly. We explore how our study complements broader research on energy governance, which has examined US regulatory outcomes as a product of federalism (Davis & Hoffer, 2012; Leiter, 2015; Warner & Shapiro, 2013), but has not systematically analyzed congressional debates and hearings or the intersection of political economy and federal regulation. 2: Constructing a Policy Monopoly Presently, regulation of water use for HF on private lands in the US largely takes place at the state level. Some have pointed to the 2005 Energy Policy Act as a primary reason for the current shale regulatory structure (Davis & Hoffer, 2012; Warner & Shapiro, 2013). While the Act exempted HF from federal oversight under the Safe Drinking Water Act (SDWA), the contemporary regulatory framework is the outcome of a far longer history of governmentindustry relations, which has released the oil and gas industry from most federal environmental statutes (Kosnik, 2008). Documenting this history allows us to better contextualize and theorize contemporary congressional regulatory debates. 4

5 Environmental regulatory authority for US oil and gas production has a long history of being devolved to states, with a limited federal government role (Spence, 2013). A prominent justification has been that state regulators are best positioned to understand the unique geologies and social characteristics of their resource basins. Moreover, the way the US has structured property rights and mineral ownership has shaped oil and gas industry influence on regulatory institutions (Jones Luong & Weinthal, 2010). This has not uniformly benefitted industry: to address the rule of capture, whereby a single mineral rights holder had no limits on oil extraction even when this might negatively affect adjacent rights-holders (Spence, 2013), state governments have introduced regulations to control extraction and prevent waste (Libecap & Smith, 2002). For most of the 20 th century, the federal government and industry have disputed the regulatory role of the federal government. Toan (2015) documents industry distrust of the federal government owing to antitrust actions in the early 1900s that ended Standard Oil s monopoly. In the early 1920s, President Coolidge s creation of the Federal Oil Conservation Board pitted the American Petroleum Institute (API) (representing industry) against the federal government (Malavais, 1996). Following the sharp drop in oil prices in the 1930s in Texas from the glut of hot oil and the inability of state governments to control oil production, the US government sought to reform the industry and wrest control away from states by introducing federal restrictions on the interstate sale of oil beyond their quotas (Nash, 1968). This period of federal government controls was brief. By 1935, oil states had (with congressional approval) established the Interstate Oil Compact (later known as the Interstate Oil and Gas Compact Commission (IOGCC)): a forum for exchanging information and plans, standardizing legislation, and coordinating pro-rationing and conservation in production. What 5

6 ensued was a state-level regulatory policy monopoly for oil and gas that continued and solidified over the 20 th century. The exception has been federal environmental regulations that emerged in the 1970s, including the SDWA, Clean Water Act, and Clean Air Act (CAA), along with EPA oversight (discussed in the section on storylines). More recently, federal regulation has followed highly publicized environmental accidents, such as the 1990 Oil Pollution Act developed in response to the 1989 Exxon Valdez spill in Alaska (Birkland, 1998; GWPC 2009). Still, these federal regulations remain the exception rather than the rule. For instance, the US Department of Energy supported devolved regulatory authority in a 2009 study of state oil and gas regulations it funded. The report warned against national regulations as costly to the states, duplicative of state regulation, and ultimately ineffective because such regulations would be too far removed from field operations and lauded state regulation as environmentally proactive and preventive and designed to provide protection for water resources (GWPC 2009: 37). While states retain regulatory authority over HF as part of the oil and gas industry, scholars have identified gaps, overlaps and inconsistencies in both the substance of state HF laws and abilities of state regulators to monitor and enforce regulations (Rinfret, Cook, & Pautz, 2014; Wiseman, 2014), with regulatory capacities limited by the transboundary locations of shale basins and watersheds, as well as the interstate distribution of impacts resulting from extraction and waste disposal (Rabe, 2014). While some states, namely New York, Maryland and California, have enacted bans or significant restrictions on HF, laws in some of the most active HF states, such as Texas, Pennsylvania, and North Dakota, have been critiqued for their lack of transparency (Richardson, Gotlieb, Krupnick, & Wiseman, 2013). In a review of 27 state HF regulations, Richardson et al. (2013) find that variation in state regulations cannot be explained 6

7 by geological factors alone, a common justification made by advocates of the regulatory statusquo, and raise concern about possible state-level regulatory capture. Additionally, public concern over the potential impacts of HF has increased in recent years, which could increase pressure for the federal government to act if states are not responsive to these concerns (Rabe & Borick, 2013). However, while a few bills to increase federal oversight of HF have been introduced in Congress, none have been brought to the floor of Congress for a vote (Leiter, 2015). 3: Theoretical Framework: Agenda-Setting and Environmental Discourses Our theoretical framework integrates agenda-setting theories, drawing on multiple streams analysis (MSA) and punctuated equilibrium theory (PET), with the Foucauldian-inspired environmental discourse analysis (EDA). With limited exceptions, scholars have yet to systematically explore the connections amongst these concepts. Carter and Jacobs (2014) combine MSA and PET to study transformations in UK climate and energy policy, revealing how policy windows can remain open longer than predicted by the individual models as a result of party politics. Winkel and Leipold (2016) argue that connections between MSA and policy discourse analysis can facilitate a more theoretically consistent and analytically rigorous study of agenda-setting. What is the utility of integrating multiple theoretical approaches in our analysis? MSA and PET study processes of stability and change within the agenda-setting stage of policy-making, the component of the process in which problems become matters of public concern, while EDA examines the emergence and effects of discourses in policy development. There are distinctions between MSA and PET, which make their integration particularly rich, and the intersection of 7

8 agenda setting and narrative concern helps to reveal when and why particular ideas take hold in policy venues. MSA focuses on policy change and examines how different streams of influence problem, policy and politics converge to open windows of opportunity that policy entrepreneurs can use to facilitate change (Kingdon, 1995). In the problem stream, policymakers determine whether ideas should be a matter of public attention. Framing, the ways in which ideas are structured and presented, is a key concept of the problem stream, as it helps to influence the issue-attention cycle, the process in which sharp focus on a public debate has the ability to shape public attitudes (Downs, 1972). Potential strategies for addressing policy problems are developed in the policy stream and policymakers attempt to enact policy solutions in the politics stream. In contrast, PET evaluates the dynamic interaction between processes of stability and change within agenda-setting (Baumgartner & Jones, 2009). While influenced by MSA, PET focuses more on policy subsystem dynamics, the networks of interactions shaping policy outcomes. A key finding of PET is that policy processes are often characterized by long periods of stability, or incremental change, followed by short periods of rapid change that drastically alter how policy systems are configured. Three interrelated elements shape PET processes venue, policy images and feedback loops (Baumgartner & Jones, 2009). Venues are the institutions in which policy decisions are made that grant or restrict stakeholder access to the policy process. Policy images refer to the way in which issues are framed and understood. Feedback loops serve to enable or constrain processes of change (Baumgartner, 2006). Positive feedback loops can ultimately lead 8

9 to policy punctuations by creating momentum for rapid change to occur. Positive feedback mechanisms create windows of opportunity for new actors and ideas to enter the policy system, whereas negative feedback loops are frictions in the policy system that maintain the status quo by constraining the entry of new actors or images. In this sense, PET provides insights into the broader system of policy change while MSA provides tools for evaluating different channels of influence within the policy process. In combination, MSA and PET facilitate the study of interconnected processes of stability and change. While both MSA and PET emphasize the significance of framing in shaping agendas, neither framework systematically examines how frames/policy images are discursively constructed and maintained. In this paper, we draw upon EDA to develop a more nuanced analysis of the dynamic interplay amongst venue, coalitions, and discursive storylines in shaping a policy monopoly in US oil and gas regulation. Other literatures, such as narrative policy analysis and agenda control, consider the strategic role of narratives in shaping policy change and stability(mcbeth, Shanahan, Arnell, & Hathaway, 2007). However, we utilize EDA in our analysis because of its focus on the role of power in constructing political coalitions, narratives, and outcomes. As such, integrating EDA with MSA/PET provides a more comprehensive way to analyze interest group influence within Congress. Through this theoretical combination, we develop a more nuanced conceptualization of policy monopolies to evaluate how, despite the new environmental challenges engendered by HF, a long-standing, stable oil and gas regulatory framework has been constructed and maintained. EDA provides tools to evaluate how and when discourses emerge and how they help to shape policy outcomes. A central tenet of EDA is that discourses are socially constructed and gain meaning through the interplay of multiple, contested, interpretations (Feindt & Oels, 2005). 9

10 Environmental discourses often compete with other discursive arenas for authority, such as economic or development discourses. As such, Feindt and Oels (2005) argue that environmental discourses have both material and institutional dimensions in that they are grounded in specific cultural and institutional practices, which enables certain interpretations to gain authority over others. Hajer (1995), drawing upon Foucauldian theories of power, studies how select environmental discourses gain authority. He argues that environmental discourses emerge through the intersection of different discourse coalitions, groups of stakeholders who coalesce around different storylines. Once a discourse comes to dominate, it becomes challenging to dislodge because it becomes part of everyday reality, making alternative perspectives difficult to conceptualize. As such, environmental storylines can re-emerge in seemingly new policy debates (Forsyth, 2003). Yet, as Foucault (1972) notes, discourses are most fragile at transition points, when dominant ways of seeing the world or, in the case of our analysis, framing a policy issue are questioned. In analyzing US HF regulation, we focus on one specific outcome of interactions at the agenda-setting stage: a policy monopoly. A policy monopoly is a form of stability resulting from the interaction of venue and policy image characterized by: 1) institutional structures controlled by elite stakeholders that limit access to policy processes and 2) powerful images associated with the institution, policy issue, or interest group, which serve to elicit support or indifference (Baumgartner & Jones, 2009). However, because of fluctuations in attention cycles and competition amongst actors over how to conceptualize policy issues, policy monopolies require continued work to maintain and are inherently unstable (Baumgartner & Jones, 2009). Studying US oil and gas regulation during a time period when stakeholders questioned the fitness of the 10

11 current state-led policy monopoly to manage the potential environmental impacts of HF provides insights into how the existing regulatory regime has been constructed and maintained. Specifically, we examine the institutional characteristics of congressional energy committees, identify the different coalitions that emerged in select hearings on HF regulation, and evaluate the key storylines that resulted from the hearings to maintain the regulatory status quo. We link these storylines to previous debates in US oil and gas regulation and present data on industry contributions to the energy committees and committee chairs to more closely examine how select coalitions and storylines have amassed power. Our study helps to advance three areas of policy studies research: 1) studies of agenda-setting within energy policy (Davis & Hoffer, 2012; Mondou et al., 2014; Palmer, 2015); 2) efforts to integrate MSA and PET (Cairney & Jones, 2016; Carter & Jacobs, 2014) and apply MSA and PET to energy policy (Fowler et al., 2017); and 3) systematic analyses of how discourses and key elements of political structures, such as actors and institutions, are linked in shaping policy outcomes, which has been noted as a gap in EDA studies (Hajer & Versteeg, 2005). 4: Methods We analyzed select congressional hearings in three steps. First, we carried out a keyword search of the Federal Digital System database, an online archive of congressional hearings, to identify the universe of hearings in which HF was discussed. 2 This yielded 589 hearings between Second, following the coding methods established by Saldaña (2009), we conducted a content analysis on the hearings to identify a sample for in-depth manual, collaborative coding. We developed a list of descriptive codes, which consisted of HF keywords plus the names of 2 We used the following keywords in our initial search: hydraulic fracturing, hydrologic fracturing, fracking, fraccing, fracing, horizontal drilling, shale gas, shale oil, deep well injection, deep well drilling. 11

12 environmental regulations relevant to oil and gas oversight. 3 For each hearing, we counted the number of times that the descriptive codes appeared and divided by the number of pages to develop a normalized keyword count. We calculated the average normalized keyword count for the universe of hearings and identified the sample of hearings with normalized keyword counts at or above the average. This yielded a sample of 36 hearings. We refined our sample by selecting hearings focusing on regulatory debates concerning oil and gas production 4 on private lands, which accounted for 79% and 84% of US crude oil and natural gas production, respectively, in fiscal year 2015 (Humphries, 2016). We limited our focus to hearings held from , a five-year period during which debates over HF were most prevalent in Congress and when drilling activity was most active in the US. This approach yielded non-legislative hearings (over 3,800 pages) held from by the House and Senate energy committees, which hold primary responsibility for overseeing energy regulation in Congress. The hearings held in these committees had the first and second highest number of keyword counts across all committees in the Senate and House, respectively (Table 1). 5 Third, we conducted a discourse analysis of the 11 congressional hearings in the House and Senate energy committees in which HF regulation discussions were most prevalent. This enabled us to identify and analyze the four discursive storylines presented below. [Table 1] Congressional hearings are opportunities to observe how both advocacy and oversight work in Congress (Keller, 2009). Further, hearings are public and chronologically complete records of 3 Clean Air Act, Clean Water Act, Safe Drinking Water Act. 4 Production is one phase of the oil and gas regulatory lifecycle. The federal government has attempted to regulate other aspects of the lifecycle, such as consumption, via subsidies for certain fuel choices. 5 The House committee on Science, Space and Technology had the highest number of descriptive code counts. However, in line with the committee s mandate, the hearings dealt more with HF research rather than HF regulation and were thus beyond the scope of this study. 12

13 public debates as they unfold. Hearings are convened at the discretion of the committee Chair, who also has authority over witness lists. Accordingly, hearings are often biased in favor of a chair s position, particularly during non-legislative hearings, which are held to determine how, if at all, Congress should respond to matters of public interest (ibid). On its website, the Senate Energy and Natural Resources Committee describes itself as the most nonpartisan, or bipartisan committee in the Senate because of its regional focus (Senate Energy and Natural Resources Committee, nd). As such, the committee describes its approach to policy making as a consensual approach focused on consensus building (ibid). Historically, committee members have largely been from western US states due to the large extent of federal lands and natural resources in this region. However, committee membership broadened to include energy-poor states in the aftermath of the 1970s oil crises, when enhancing the nation s energy security became a dominant policy issue. Still, Senators from historic oil and gas states comprised over 40% of the committee during the congressional periods evaluated for this study (Table 2) and the two committee chairs during our period of analysis, Jeff Bingaman (D-New Mexico) and Ron Widen (D-Oregon), were from western states. The House Committee on Energy and Commerce is the oldest legislative committee in the House of Representatives and has the broadest jurisdiction of any congressional committee (US House Energy and Commerce Committee, nd). A central task of this committee is to regulate both interstate and international trade, of which energy policy is a key focus. The committee oversees the Department of Energy and the EPA, amongst other federal agencies. An overarching goal of the committee, as noted on its website, is ensuring economic growth. Representatives from historic oil and gas states comprised 45-56% of committee membership during the congressional periods evaluated for this study, a larger percentage, on average, than in 13

14 the Senate committee (Table 2). While the Senate was controlled by the Democrats during the entire period evaluated in this study, the House switched from Democratic to Republican control at the start of the 112 th Congress in Representatives Henry Waxman (D-California) and Fred Upton (R-Michigan) chaired the committee during our period of analysis. [Table 2] 5: Maintaining a Policy Monopoly: HF Congressional Hearing Analysis We examine the significance of participation and venue along with issue-attention cycles in congressional hearings, given the importance of the former two concepts to PET, and the latter to MSA (Baumgartner & Jones, 2009; Kingdon, 1995). As Foucauldian scholars of discourse analysis have noted, discourses are best studied during periods of debate over potential regulatory transitions, as it is during such moments that power relations and discourse coalitions emerge to challenge or maintain dominant perceptions, or in the case of this paper, dominant regulatory constructs (Feindt & Oels, 2005; Sharp & Richardson, 2001). In line with EDA, we identify the storylines that emerged from the hearings to evaluate such contestation and defense. Our key finding: the dominant state-led policy monopoly has been maintained, even with the challenges posed by the emergence of HF in the mid-2000s. Participation in Hearings Baumgartner and Jones (2009) identify participation as a key factor in policy monopolies, arguing that rules of access to policy debates are structured to discourage participation of outsiders. Our analysis confirms this argument in two ways. First, congressional committees were largely comprised of members from top oil and gas states (Table 2) and chaired by congressional representatives receiving sizeable contributions from the energy and natural 14

15 resource industry (Table 4). Second, the majority of witnesses called to testify before the congressional committees were supportive of the regulatory status quo. As such, few perspectives questioning the current regulatory landscape were presented. We classified witnesses (n=46) by stakeholder group: federal government, state government, industry, civil society, or academia. We further sub-divided the first three categories to distinguish whether federal government witnesses were from the EPA, whether state government witnesses were from an oil and gas state (see Table 2, footnote 1), and whether industry witnesses represented lobbying firms. Witnesses from industry and lobbying firms were the largest category in both chambers (n=21), accounting for nearly half of the witnesses. Witnesses from companies with the largest quantities of land leased for HF (NRDC, 2013), including ExxonMobil, XTO Energy, BP Americas, EQT Corporation, and Chesapeake Energy, were called to testify. State regulators from oil and gas states accounted for the second largest category of witnesses (n=10). Prominent witnesses included the heads of the main oil and gas regulatory agencies in Texas, Oklahoma, North Dakota, Wyoming and Pennsylvania. Governor Hickenlooper (D-Colorado) 6 testified before the Senate to reflect on Colorado s experience in drafting new HF regulations and the extent to which the state s experience could be replicated elsewhere. Collectively, these six states represent the most active HF states in the country (Richardson et al., 2013). Although the House called one witness from a non-oil and gas legacy state (North Carolina), the Senate did not call such witnesses. As such, the experiences of states relatively new to oil and gas production, considering whether to begin HF or having banned HF, were underrepresented in the hearings. 6 D=Democrat, R=Republican 15

16 Although federal government witnesses constituted the third largest category (n=8) only two witnesses from the EPA were called, although both were senior managers. Non-EPA witnesses included representatives from agencies with an interest in HF regulation, including the Department of Energy, Department of Interior, Department of Health and Human Services, Department of Commerce, and US Geological Survey. Five witnesses from academia testified but only one, Professor Mark Zoback of Stanford, was actively engaged in HF research. This may not indicate intentional underrepresentation, as academics have expressed reluctance to testify before Congress over concerns that such activity might be construed as advocacy (Keller, 2009). Only one witness from civil society testified before the Senate Committee, Frances Beinecke, then-president of the Natural Resources Defense Council, and no civil society representatives testified before the House Committee. This does suggest the general exclusion of civil society groups, who would likely be keen to participate in hearings, as advocacy is usually a key goal of such organizations. Figure 1 illustrates how the composition of witnesses by sector changed over time. While individuals from industry and oil and gas states comprised the majority of witnesses during the 111 th and 112 th Congresses, witnesses from all four sectors testified during the 113 th Congress. While this figure suggests that witness lists became more diverse over time, it does not reveal the discursive themes of the hearings or how themes varied across time and chamber, a task that we undertake in the following section. [Figure 1] Congressional Storylines 16

17 We identified four main storylines by inductively coding key themes/discussions that took place in the 11 selected hearings. We critique and contextualize the substance of the storylines in order to evaluate how they reinforce the regulatory policy monopoly. We find that discursive framing acted to limit the problem stream, as congressional witnesses questioned the need for and costs of increased regulation and the federal regulators motivations. The lack of clear consensus over whether HF requires a new regulatory approach limits the motivation of policymakers to challenge the regulatory status quo, and limits the opportunities available for other policy entrepreneurs to enter the debate. 1. EPA as biased regulator Witnesses as well as committee members repeatedly raised concerns about the ability of the EPA to regulate HF in an unbiased manner. Both groups referred to a number of focusing events examples meant to draw attention to a policy issue within the problem stream of MSA (Kingdon, 1995) to support their claims, notably EPA investigations into potential water contamination in Texas, Pennsylvania and Wyoming. After detailing these examples during one hearing, Congressional representative Whitfield (R-Kentucky), the Chair of the House committee, characterized the EPA as an agency that seems to have gotten badly off track from its proper role as a measured, balanced and objective regulator (House-2: 4). In describing the regulatory practices of the EPA, Congressional representative Upton (R-Michigan) stated: we have seen EPA treating job-creating energy companies as if they were the enemy. We have seen new regulations that defy any credible reading of the authority delegated to the agency (ibid: 8). Extending this claim, the Chairman of the Texas Railroad Commission, Barry Smitherman, testified that the EPA has been insinuating itself into areas that have historically been the purview of the States (ibid: 17), while the Chairman of the Oklahoma Independent Petroleum 17

18 Association, Robert Sullivan, stated that the personal agendas of EPA officials impact EPA priorities and practices and result in overzealous enforcement actions (ibid: 12). Various congressional representatives and witnesses critiqued EPA regulation as a one-sizefits-all approach. Such regulation, argued Congressional representative Shimkus (R-Illinois), would inhibit the nimbleness and commitment of state regulators, whom he described as infantrymen protecting the environment (House-4: 2&102). State regulators from Colorado, Oklahoma, and Michigan testified that HF regulations have to be tailored to meet states specific geologies, a task state regulators, not the EPA, know best. Many of the critiques of the EPA regulatory abilities resemble debates concerning the CAA, the first and most expansive pollution control legislation enacted in the US, which has been enforced by the EPA since the agency s establishment in The CAA has simultaneously been cast as an example of how Congress can enact ambitious pollution control legislation as well as a poignant example of industry influence over environmental regulation (Bryner, 2007). From its initial conception, the CAA was strongly opposed by the automobile and electric power industries on the basis that the pollution limits established by the EPA were too rigid and did not consider the costs of compliance (Layzer, 2012). As such, industries advocated for and were largely successful in obtaining extensions for compliance. The electric power industry was able to successfully lobby for grandfathering provisions allowing more lax regulations for plants built before 1977, many of which were coal-fired (Ackerman, Biewald, White, Woolf, & Moomaw, 1999). Additionally, without consulting the EPA, the Nixon administration began working to amend the CAA to include a pre-emption clause to devolve regulatory authority to states that enacted regulations of equal rigor to the federal standard (Train, 2003). 18

19 As Layzer (2012) documents, the EPA in general and the CAA specifically have enjoyed, at most, tacit support from the federal government since the 1970s. The lack of strong political backing seems to be the result of perceived tensions between environmental protection and economic impacts, and is irrespective of partisan control of Congress or the executive branch. Consequently, the EPA is highly compartmentalized and operates under narrowly focused congressional authorizations related to specific legislations, with little ability to advocate for a more comprehensive framework (Landy, 1990). This internal fracturing makes it challenging for the agency to defend against claims of potential regulatory mismanagement and overreach. Such critiques arise repeatedly in discussions considering increased EPA oversight with the case of HF as the latest iteration of this ongoing debate. 2. HF as a safe, mature technology In both Senate and House committee hearings, industry actors and state representatives reiterated claims that HF is a safe and mature technology, a storyline that curtailed discussions about the potential risks of HF. Among congressional representatives, narratives of safety and maturity were used to bolster states pushback against federal interference in state-level oil and gas regulation. Various congressional representatives and witnesses highlighted that HF has been used without any major environmental incidents for decades. Senator Murkowski (R-Alaska) stated We ve been utilizing hydraulic fracking on the North Slope for decades now without incident (Senate-5: 9), and in another hearing, recalled this process has been around for... at least 40 years and then some (Senate-2: 38). Congressional representative Stearns (R-Florida) told the House committee that since the 1940s, hydraulic fracturing has helped to produce more than 7 billion barrels of oil and 600 trillion cubic feet of natural gas in the United States (House-1: 21), 19

20 and in the same hearing, Congressional representative Sullivan (R-Oklahoma) linked the long history of HF with a record of safety, stating over the past 60 years, not a single documented case of drinking water contamination has ever been credibly tied to hydraulic fracturing due to engineering or technical safeguards designed to protect groundwater. None. It has been going on for, like, 60 years (ibid: 53). Governor Hickenlooper drew on his expertise as a former geologist and emphasized how billions of federal research dollars in the 1990s has greatly advanced the safety of HF technology (Senate-5: 11). Industry actors were aligned. API President and CEO Jack Gerard explained Hydraulic fracturing has been around for 65 years. We ve drilled over 1.2 million wells with it, and as Lisa Jackson the administrator of EPA has said, here in the United States there s never been a confirmed case of groundwater contamination as a result of hydraulic fracturing (Senate-5: 91). XTO Chairman Bob Simpson emphasized the industry s experience with HF across the sector, noting it applies not only to shale gas but we also use it in virtually every well we drill. There are over a million applications, and I believe the process is safe (House-1: 47). Witnesses also underscored the safety of fluids used in HF by highlighting their edibility and relation to everyday household products. As Hickenlooper indicated, the new frack fluid (sic) is made with food additives, and somehow we all took a swig of frack fluid... and it was not terribly tasty, but again, I m still alive to... tell the story (Senate-5: 9). The edibility and low toxicity of the frac fluids was also affirmed by Professor Holditch, head of the Texas A&M petroleum engineering department, when he testified that frac fluid is comprised of food thickening agents and common household products like dishwasher liquid and Clorox (Senate-3). Most importantly, they re in very minute quantities and they re really not all that dangerous on their own (ibid: 8-9). 20

21 While HF was indeed developed over 50 years ago, this was largely for enhancing conventional production. Recent advances have enabled its use for unconventional formations in the 2000s, which has posed new technological and environmental challenges (Wiseman, 2009). First, shale gas and tight oil exploration requires significantly more well installations to maintain production levels, compared to conventional oil and gas production (Kondash & Vengosh, 2015). Second, although the per well water usage is relatively low compared to other industrial activities, cumulative usage is high and can pose new risks to water resources, particularly regarding wastewater management (Jackson et al., 2014). Third, the composition of frac fluid is a key uncertainty in HF as industry has been able to successfully invoke trade secret exemptions to limit disclosing the components of frac fluids to regulators, even when presented with subpoenas from the EPA (Wiseman, 2011). Evidence obtained in a congressional investigation by former House Energy and Commerce committee ranking member Waxman (D-California) casts doubt on the benign nature of frac fluids as the investigation found use of chemicals that are known or possible carcinogens, regulated under the SDWA or listed as possible pollutants under the CAA (US House of Representatives, 2011). Further, framing HF as a low risk technology can be viewed as a strategic tactic to pre-empt regulatory investigations in accordance with ex post principles of risk governance that have been prevalent in the US since the 1990s (Vogel, 2012). Under this approach and in contrast to EU precautionary principle-based approaches, US regulators, including the EPA, have chosen to intervene in industrial activities only after they have been in commercial operation and once acceptable thresholds of risk have been exceeded. 3. Economic harms of increased federal regulation 21

22 Witnesses and committee members in both chambers emphasized the potential job creation, energy security, and economic recovery benefits of HF; many also issued dire warnings that increased federal regulation would jeopardize these benefits. As shale development emerged in numerous post-industrial regions of the US, policymakers had little motivation to challenge framings of HF as an economic revitalization tool. House testimonies focused on the threats increased federal regulation would pose to the US economy. Robert Sullivan, Chairman of the Oklahoma Independent Petroleum Association, testified that additional federal regulation would kill jobs, curb domestic energy production and harm America (House-2: 69). Various representatives characterized the impacts of increased federal regulation as catastrophic, a path of economic destruction, and a strategy that locks up natural resources and damages the job base (House-1). Senate testimonies raised similar concerns. Witnesses from the oil and gas industry and the chemicals and manufacturing industries two sectors heavily reliant on natural gas argued that increased federal regulation could increase natural gas prices and threaten job creation. Overly prescriptive or reactive federal regulation would end the manufacturing renaissance engendered by shale gas production and put at risk the one million new manufacturing jobs anticipated to be created by 2025, according to Ross Eisenberg, Vice President of Energy and Resources Policy for the National Association of Manufacturers (Senate-5: 22). Similarly, Andrew Liveris, Chairman and CEO of Dow Chemical, cautioned Congress to be circumspect about policies that would disrupt natural gas supply and pricing, such as policies that would ban or impose unreasonable limitations on HF (ibid: 17-18). Going further, Liveris argued that any policies that would incentivize use but discourage production of natural gas would be a recipe for higher prices (ibid: 18). Taxes on oil and gas production would have a devastating effect on 22

23 exploration and production and would result in reduced domestic energy supplies, a loss of thousands of high paying jobs, an increase in our foreign trade debt and ultimately, higher energy prices for the American consumer, according to Jeffrey Hume, Vice Chairman, Strategic Growth Initiatives, Continental Resources (Senate-6: 71). As with claims about the EPA as a biased regulator, this storyline is rooted in a long-standing debate in the US about the impact of environmental regulation on the manufacturing sector. Despite evidence that environmental regulation has not negatively impacted manufacturing competitiveness (Jaffe, Peterson, Portney, & Stavins, 1995), the storyline persists because the business lobby has historically opposed regulation perceived as strengthening the authority of government to shape or centralize business decision making (Peschek, 1987). In fact, the National Association of Manufacturers was reconstituted in the late 1970s after the passage of federal environmental regulations to strengthen its presence in DC, and to challenge regulations that the business community perceived as imposing significant economic and social costs (Layzer, 2012). The recycling of the environmental regulation as economic harm storyline illustrates how environmental narratives re-emerge at new junctures at times when the rationale underlying the narrative is challenged (Forsyth, 2003). The US shale revolution occurred in the aftermath of the 2008 recession and was often framed in the media as a means of economic recovery. These factors helped the storyline gain new traction, particularly as elected officials were reluctant to support any legislation that might threaten economic recovery. In fact, no congressional representative challenged the potential positive economic impacts of HF despite congressional research suggesting HF activity would have negligible impacts on overall job creation in the US as jobs related to shale development and manufacturing would be drawn from other sectors of 23

24 the economy (CBO, 2014). The same report estimated that HF could increase US GDP by about 1% by However, it is unclear how, if at all, GDP gains would benefit shale and manufacturing workers given the insignificant impacts on net job creation. 4. Private governance as alternative Senate hearings were focused on examining the correct interplay between federal and state regulations. Although states claimed jurisdiction, some recognized gaps in existing regulation. However, rather than allowing for federal involvement, a key theme in the Senate hearings was whether private governance schemes could fill the regulatory gaps. This narrative was emphasized via clear statements by industry representatives about their expert knowledge and by Senators and witnesses about existing close relationships between states and industry. These, too, reinforced the image of state governments and industry as insiders, and contributed to the positive policy image of states as regulators. In five of the six coded Senate hearings, Senators repeatedly indicated that states have always taken the lead in regulating environmental impacts of oil and gas development and that Congress should not interfere with state primacy. Senators and witnesses highlighted Colorado s HF regulatory processes as an example of best practices for other states. In describing the development of Colorado s fluid disclosure law, Hickenlooper emphasized the state s work with environmental NGOs and oil and gas companies to construct comprehensive and rigorous regulation (Senate-5: 10). 24

25 Industry s preference for state regulation was most starkly emphasized during a House hearing on the impacts of the 2010 ExxonMobil-XTO merger (House-1). 7 The merger documents contained a clause that would allow ExxonMobil to legally void the deal if Congress passed any law that would make HF illegal or commercially impracticable. During the hearing, committee members questioned former ExxonMobil Chairman, Rex Tillerson, and XTO Energy Chairman Simpson, on the interpretation of this clause. In one exchange with Congressional representative Barton (R-Texas), Tillerson confirmed that the merger would go through, if, as Congressional representative Barton suggested, [the Committee] can prevent the Congress or the EPA from mucking around in hydraulic fracturing (ibid: 43). Tillerson further indicated that the clause was an explicit recognition of the risks posed by the government s enormous propensity to regulate (ibid: 39). Simpson stated that XTO has always adapted to each individual state s rules and regulations. We [XTO] believe that that has been a successful program and that the environment and related industry issues are regulated satisfactorily... for both us and the consumers and the citizens through state regulations (ibid: 45). These comments furthered the developing storyline of state capacity and suitability. Various witnesses also called for increased utilization of private governance schemes, notably the Ground Water Protection Council (GWPC), State Review of Oil and Natural Gas Operations (STRONGER), and the US national HF chemical disclosure registry FracFocus. 8 Increasing funding for STRONGER was one of the main recommendations from the Secretary of 7 The deal, valued at $36 billion, facilitated ExxonMobil s access to shale resources as XTO Energy, a company that specializes in HF, was at that time the largest natural gas producer in the US (ExxonMobil K Annual Report, available at: 8 The GWPC is a non-profit organization comprised of state ground water regulatory agencies established to promote best management practices in ground water protection and regulation. The GWPC and the IOGCC manage FracFocus. STRONGER is a multi-stakeholder organization established in 1999 with funding from the EPA and the IOGCC that conducts voluntary audits of state environmental regulations related to oil and gas exploration and production. 25

26 Energy Advisory Board (SEAB) 9 Shale Gas Subcommittee s study of measures to reduce the environmental impacts of shale gas production (SEAB 2011). The Senate Committee held a hearing with SEAB subcommittee members after the release of their report in 2011 to more closely examine their recommendations (Senate-2). Witnesses repeatedly called for increasing funding for the GWPC and STRONGER to minimize potential regulatory gaps across the states. Private governance initiatives, such as STRONGER and the voluntary standards developed by the API and the American Gas Association industry associations, could play key roles by facilitating best practices, according to SEAB witnesses. Additionally, witness Kathleen McGinty, former Secretary of the Pennsylvania Department of Environmental Protection, emphasized that industry needs to be at the table in shaping regulations and standards because of its expertise (ibid: 28). As such, the SEAB subcommittee report recommended establishing a new shale gas industry association to facilitate best practices throughout the sector (SEAB 2011). During the hearing, Committee members asked SEAB members about the balance between federal and state regulatory authority. Various witnesses, notably Daniel Yergin, Professor Holditch, and Professor Zoback, echoed a theme from the House testimonies that states should have primary regulatory authority because of their unique geologies, proximity to communities, and history of successful regulation. Imposing additional federal regulations would be akin to imposing a superstructure on top of a superstructure that would make investment more difficult, according to Yergin (Senate-2: 26). The private governance storyline parallels trends for increased environmental self-regulation in the oil and gas industry. Other industries, such as chemical manufacturers, have engaged in 9 SEAB is a multi-stakeholder advisory board established by the US Department of Energy to provide advice and recommendations to the Secretary of Energy. 26