WH official: Relations with oil sector thawing, but not 'hunky-dory'

The White House is trying to improve its icy relationship with the oil-and-gas industry, but things are far from "hunky-dory," a top energy aide to President Obama said Monday.

“The notion that we rolled out the welcome mat or have this hunky-dory relationship that we’re all holding hands and singing ‘Kumbaya’ is not exactly where we’re at today,” White House energy adviser Heather Zichal said.

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Zichal assessed the state of the relationship — and admitted to some regrets — at a natural-gas event Monday hosted by the American Petroleum Institute, the powerful oil industry trade association.

Officials should have worked harder in the early years of the administration to communicate with the industry, Zichal said.

“As an administration, we probably could have been doing a lot more outreach in the beginning and we have worked over the last few months to try and set a better dialogue and create a better working relationship because what the industry is doing is important from a job-creating perspective and it’s important from an energy security perspective,” she said.

Oil-and-gas companies have had a contentious relationship with the White House in recent years, amid a push by the administration to beef up offshore drilling safety standards and increase federal oversight of natural-gas “fracking.”

But industry officials note cautiously that communication is improving amid an aggressive push by Republicans to paint Obama as the enemy of domestic energy development.

Industry groups, for example, applauded Obama’s April executive order to coordinate federal oversight of natural-gas development. And recently proposed Interior Department rules for fracking on public land included key concessions to industry.

But Zichal, in her speech Monday, dismissed claims that the administration’s outreach is an election-year charade.

“It’s interesting from my perspective to see people read tea leaves and say that this is an election-year ploy, when in fact we were just trying to do our jobs right,” she said, noting that the administration reached out to industry in order to get valuable insight on pending oil-and-gas regulations.

“There was no way for us to finalize a regulation that made sense without actually engaging with the industry,” Zichal said.

Obama threw his support behind natural gas during this year’s State of the Union address.

“We have a supply of natural gas that can last America nearly 100 years,” Obama said in the January speech. “And my administration will take every possible action to safely develop this energy.”

But the president is walking a fine line on natural gas, touting its potential as a lower-emissions fossil fuel while also ensuring nervous green groups that the administration is taking their environmental concerns seriously.

Zichal spent much of her speech Monday praising natural gas.

“It’s hard to [over-state] how natural gas and our ability to extract more of it than ever has become a game-changer,” she said.

But she also pointed to recent efforts by the administration to increase federal oversight of hydraulic fracturing, or fracking.

“We obviously have to make sure it happens in a safe and responsible way,” she said.

Fracking involves high-pressure injections of sand, water and chemicals into the ground to gain access to valuable natural-gas supplies.

The Environmental Protection Agency recently finalized first-ever regulations aimed at reducing toxic air pollution from fracking and the Interior Department proposed rules earlier this month for fracking on public land.

Industry groups have raised fears that increased federal oversight could stunt natural-gas development, arguing that fracking is best regulated at the state level. Meanwhile, environmental groups have long warned that fracking could contaminate groundwater.

Zichal called environmental groups’ concerns “legitimate,” adding that expanded natural-gas drilling comes with risks.

“The only thing that would undermine our ability to take advantage of this resource would be a failure to demonstrate to the public that we can do this safely,” she said.

Zichal challenged various stakeholders to work together to address their concerns.

“I truly believe this is an area where we should be able to set aside the battles of the past and work together in a concerted way: industry, public health, environmental groups, Democrats and Republicans to tackle some of these key issues,” she said.