Site Visit: Small Businesses in Oil and Gas Sector Voice Challenges to Regulatory Compliance
By Patrick Delehanty, Acting Director of Economic Research
The Office of Advocacy stopped in Cadiz, Ohio on August 2nd for a roundtable for small businesses in the oil and gas sector on its recent visit to Ohio and Kentucky which also included roundtables in Lexington, Cincinnati, and Cleveland.
As the voice of small business within the federal government, Advocacy is holding regulatory reform roundtables to seek input from small businesses on federal regulations that are burdensome and ineffective in pursuit of small business reforms to recommend to federal regulators. In Cadiz, Advocacy received the special opportunity of visiting a natural gas processing plant of MarkWest Energy Partners to learn more about the oil and natural gas supply chain, and sit down with small business partners to hear about their regulatory challenges.
Our meeting began with a tour of the midstream plant where gas is shipped in via pipeline, processed, and delivered downstream. MarkWest educated Advocacy on the operations at the Cadiz plant and the role the plant of 24 employees plays in their integrated process. After the tour, Advocacy met with small independent oil and gas producers and small contractor service providers to hear their concerns about the regulatory environment.
Small businesses had an overall concern that federal regulations have become too complicated and complex to understand and familiarize without outside help, and emphasized the importance for regulators to communicate in clear, plain language to cut down on the time required to read and understand regulatory actions. Additionally, small business stressed the need for tailored regulations for small firms and operations that steer away from a ‘one-size-fits-all’ approach. Regulations under the Clean Air Act and Endangered Species Act had caused one independent producer to sell two-thirds of his wells with no plans to re-enter the market. Advocacy also heard how a new pipeline safety rule will have unintended consequences and could likely impose costly inspections and about the need for federally-funded studies to be sound and unbiased.
The small business roundtable participants appreciated Advocacy coming to see them to attend to their issues instead of the other way around. Advocacy will be busy working on making sure agencies consider the challenges they heard at the roundtable.
As the third state to discover oil and natural gas production, Ohio has been producing oil and natural gas since 1814, and the industry expects better days ahead. With 65,000 wells in Ohio, small businesses in the state are poised to experience continued economic growth, making it especially important to not stifle this growth with burdensome regulations.
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