First, there is no constitutional basis for federal regulation of energy production within state borders. State regulation of natural resources falls within the limited powers clause of the Constitution. Federal regulators have no basis for attempting to regulate energy producers operating within state borders.
Second, even if there were a constitutional basis, state regulators are far more knowledgeable as to the local geological conditions and business climate, and they are responsive to the local public in ways that federal regulators will never be. As the Framers of our Constitution understood, the needs and preferences of citizens vary from state to state. The citizens of New York may prefer to ban new drilling techniques in part or all of that state, no matter how costly that ban may be. Meanwhile, the people of North Dakota may decide to enrich themselves by developing their natural resources. The federal government has no right to impose "oversight" of energy production on either state.
The Obama administration is well aware of this long-standing rule, but it is attempting to take control from the states on the pretext of environmental regulation. This attempt to further concentrate power in Washington is fraught with enormous dangers for the American people. In the first place, unnecessary regulations have the effect of reducing energy exploration in the U.S. and driving exploration overseas. Any one of the oil and gas majors can just as well explore in Canada, Brazil, Angola, Russia, Australia, or dozens of other countries around the globe. If they are burdened with new regulations and taxes, they will leave the U.S. and take those millions of new jobs with them.
None of this matters to a President for whom power is more important than job creation and economic growth. Even if it costs ten million Americans their jobs (which is what it has done so far with the subpar recovery to date), Obama is obsessed with the goal of concentrating power in Washington, and specifically in his own hands.
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