Washington (Platts)--14Dec2012/1234 pm EST/1734 GMT

Large oil and gas operators are being threatened with new regulations due to the actions of smaller operators with less stringent hydraulic fracturing standards, a former US senator said Friday.

These smaller operators are creating environmental mishaps that are generating media scrutiny and public criticism, high profile incidents which could lead to regulation larger oil and gas firms will likely oppose, said former Senator Timothy Wirth, a Colorado Democrat and current president of the United Nations Foundation.

"You've still got a lot of marginal, mom-and-pop kind of operations that are fouling the well in lots of communities," Wirth said during a forum organized by OurEnergyPolicy.org. "I've been surprised that the big operators... are not saying to the rest of the industry 'Why don't you bring your standards up to ours?' They are not taking that leadership role, at least I have not seen that happen so far."

Wirth, who called ExxonMobil "superb operators," said the industry's major players need to begin demanding smaller operators begin matching their best practices or would likely face stricter fracking regulations by both states and the federal government.

"When you've got a mom-and-pop operation that's screwing it up in Pennsylvania, screwing it up in Ohio, screwing it up in Arkansas, that's what gets the press and there's no reason for that to happen if the industry would pull its act together," Wirth said.

During Friday's forum, General James Jones, a former national security advisor in the Obama administration, echoed Wirth's concerns about smaller operators with less strict practices.

"The market deserves to have that capacity preserved so that the wildcatters and the mom and pop operations don't actually bring the whole thing down around our ears," he said. "You could bring this whole house tumbling down without the right regulation."

Wirth pointed out the industry had yet to act on a report on fracking recommendations prepared last year for the Department of Energy by a subcommittee chaired by John Deutch, a former senior DOE and Defense Department official and the director of the Central Intelligence Agency during the Clinton administration. The report included broad recommendations for air pollution controls and water contamination safeguards.

"The big guys have got to get their shoulders into this and say 'We're going to do this over a long period of time, we've got to do it right,'" Wirth said. "So far it's been a very fragmented picture rather than a coherent one that we need as a country."

On the sidelines of the forum, James Connaughton, an executive vice president and senior policy advisor with Exelon and the former chairman of the White House Council on Environmental Quality, said he expects any future fracking regulation to vary by state, as it is now.

"It will largely and by legal design be led by each state," he said.

In addition, Connaughton said there will be a "heightened interaction" between companies, state development authorities and environmental regulators on best practices and standards.

--Brian Scheid, brian_scheid@platts.com

--Edited by Richard Rubin, richard_rubin@platts.com

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