WASHINGTON (Reuters) - America's largest business lobby group warned the Obama administration on Tuesday against snuffing out the country's energy boom with regulations on new oil and natural gas drilling technologies.
U.S. Chamber of Commerce President Thomas Donohue said an Environmental Protection Agency (EPA) study due next year could be used to justify clamping down on drilling techniques that have sparked a surge in U.S. oil and natural gas output.
"This could short-circuit America's absolute explosion in energy opportunity that is creating millions of jobs," he told a meeting of business executives.
A major force in U.S. politics, the Chamber of Commerce is the biggest business lobbying group in the country and has been a steady critic of President Barack Obama.
In his comments, Donohue railed against the Obama administration's efforts to increase regulations on businesses and appealed to the media to get his message out that the rules were hurting the economy and "undermining freedom."
"They are costing jobs and growth in our country," he said.
White House Office of Management and Budget spokeswoman Emily Cain said the administration weighs the costs and benefits of all potential regulations and believes its regulatory approach supports economic growth "without sacrificing health, safety, and the environment."
The EPA's study, first requested by Congress in 2010, may prove pivotal in the government's regulation of hydraulic fracturing, or fracking, which involves forcing large volumes of water laced with chemicals and sand deep underground to crack rock and free oil and natural gas.
Currently, fracking is largely regulated by states, rather than the federal government. In its first major regulation on the energy boom, the EPA finalized a rule last year that targets smog-forming pollutants from fracking wells. It allows drillers to flare the gases until 2015.
Critics of fracking, including many environmentalists, worry that drilling operations near schools and homes could pollute water and air.
The United States overtook Russia as the top producer of natural gas last year and surged past Saudi Arabia this year as the world's biggest oil producer. Some companies, however, worry the EPA study could lead to added regulations that crimp America's energy bounty.
"Many believe it will be the rationalization of new federal fracking regulations before the end of this administration," Donohue said.
(Reporting by Jason Lange, additional reporting by Roberta Rampton; Editing by Paul Simao)