November 22, 2017

Is the IOGCC, Created by Congress in 1935, Now a Secret Oil and Gas Lobby?

In 1978, the DOJ told Congress IOGCC should be disbanded. It wasn’t. In 2005, the group claimed credit for the Halliburton loophole after ‘years of hard work.’
By Lisa Song, Inside Climate News, April 11, 2016

When Congress severely limited the Environmental Protection Agency’s ability to regulate hydraulic fracturing in 2005, it was a victory for a quasi-governmental organization that has been quietly working for decades to restrict federal oversight of oil and gas.

The group, the 80-year-old Interstate Oil and Gas Compact Commission, began fighting for a fracking exemption as early as 1999. Congressionally sanctioned as an interstate compact, the IOGCC characterizes itself as a government entity, which allows it to call its lobbying of lawmakers “education.” But in reality, it is led by regulators from industry-friendly oil and gas producing states, and a full third of its members come from the industry itself. The group has worked behind the scenes for decades to prevent federal regulation so stridently that in 1978, the Justice Department argued it should be disbanded because it had evolved into an advocacy organization.

That seemed particularly true when the group pushed to exempt fracking from the Safe Drinking Water Act. The IOGCC passed a resolution in 1999 advocating a bill introduced by Sen. James Inhofe (R-Okla.) and six years later, claimed credit when a similar measure finally became law at the start of George W. Bush’s second term.

“Congress passes IOGCC’s legislative fix for hydraulic fracturing,” bringing “several years of hard work by the Commission to fruition,” the IOGCC said in a 2005 newsletter. The provision—known as the Halliburton loophole after the oilfield services giant—was part of the 2005 Energy Policy Act. Along with advances in drilling and fracking technology, it helped enable the modern fracking boom that has created vast economic benefits, but also has been implicated in cases of drinking water contamination, air pollution and rising emissions of climate-changing methane.

The IOGCC was “pretty instrumental” in getting the measure passed, said Kevin Bliss, who was the IOGCC’s Washington, D.C. representative until 2010.

The loophole is just one example of the IOGCC’s influence on U.S. energy policy, according to interviews with more than two dozen energy policy experts, scientists, current and former congressional staffers, environmentalists and IOGCC members, as well as a review of hundreds of pages of documents shared by Greenpeace and DeSmogBlog.

The IOGCC’s efforts have helped keep regulation of oil and gas development mostly in the hands of states, resulting in a patchwork of laws that allows companies to pollute more in some states than in others. The dearth of federal energy regulation and inconsistent state practices have played a role in infrastructure disasters such as water contamination and most recently the Aliso Canyon natural gas leak, according to environmental and health groups.

While little known and working with a relatively modest budget of $1 million, the IOGCC has tallied an impressive winning streak of helping to keep federal oversight at bay. When members of Congress tried to close the Halliburton loophole in 2009, several states adopted resolutions to preserve it—using language directly from an IOGCC resolution. Top state regulators have testified on the IOGCC’s behalf before Congress to defend fracking’s safety. The group also resisted federal rules on underground natural gas storage, and worked with former Rep. John Boehner’s office to gather support for a bill to block fracking regulations on public lands.

What sets the IOGCC apart from trade groups, think tanks and political advocacy organizations is the IOGCC’s position as an interstate compact. Authorized by an act of Congress, it can use a loophole in the Lobbying Disclosure Act to lobby without disclosing it to the public. But it’s not enough of a government organization to be required to comply with open records laws.

“To what degree is this entity having its cake and eating it too?” said Meredith McGehee, policy director for the Campaign Legal Center, a nonpartisan nonprofit that works to reduce the impact of big money on the political system. McGehee reviewed the IOGCC at the request of ICN. “It’s treated for lobbying purposes as a governmental entity, but claiming it’s not a governmental entity for other purposes like FOI [Freedom of Information]. Then to whom is it accountable, and to what degree is there transparency?”

The IOGCC represents 30 oil-and-gas producing states (and eight others that currently don’t produce oil and gas). A third of its 495 members come from state regulatory authorities, according to the group’s 2015 member directory. Officials from Texas and Oklahoma, where regulators have historically cozy ties with industry, occupy the top three positions. Oklahoma Gov. Mary Fallin is the current IOGCC chairman. David Porter, chairman of the Texas Railroad Commission (which regulates oil and gas), is the IOGCC’s vice chairman. The second vice chairman is Michael Teague, Oklahoma’s secretary of energy and environment.

Since 2010, the Railroad Commission’s top three officials, including Porter, have collectively accepted more than $2 million in campaign contributions from the industry that they oversee. Oklahoma regulators have spent years downplaying the risk of earthquakes induced by oil and gas activity.

Another third of the IOGCC’s members work in the oil and gas industry, including Continental Resources chief executive Harold Hamm and members of the American Petroleum Institute. The remainder come primarily from law firms and consulting companies. Only three come from environmental groups.

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