Unable to pass the bill in the previous two sessions of Congress, or secure even a single committee hearing during that time, proponents of the so-called FRAC Act re-introduced legislation earlier this week that seeks to fundamentally re-write a 37-year-old federal statute – with an eye on assigning the Environmental Protection Agency (EPA) direct authority over the regulation of hydraulic fracturing for the first time in the history of the Act, the technology, or the agency itself.
In a statement, Energy In Depth’s Lee Fuller underscored the potential impact this far-reaching, Washington-knows-best policy could have on America’s economy and job creators, as well as our nation’s energy security:
“Hydraulic fracturing is one of the most critical processes that occurs at the wellsite; it’s also among the most stringently regulated. With this technology, it’s possible that literally quadrillions of cubic feet of clean-burning natural gas can be rendered available for American consumers in the future, resources that would otherwise be too deep and diffuse to access. It’s a technology that’s been around a long time, stretching all the way back to the Truman administration. But it’s also a technology that’s never been more important to our nation’s economic and environmental future than it is today. Unfortunately, somewhere along the way, it became a victim of its own success. If hydraulic fracturing weren’t as patently effective as it is, it’s tough to imagine it’d be as strangely controversial as it has become.”
And today’s Wheeling News-Register reports this on the misguided legislation:
Lee Fuller, executive director of Energy In Depth, went further than Klaber, saying the FRAC Act is “based on fundamentally incorrect information,” noting the Safe Drinking Water Act was never used to regulate fracking. “Its backers say it’s about forcing companies to disclose the composition of the … solution that’s not water and sand, even though just about every state regulatory agency in the country will attest that such information is already available,” Fuller added.
Those responsible for regulating oil and natural gas development, and fracture stimulation technologies, are in agreement with energy producers on the facts: this 60 year old technology has never impacted groundwater, thanks in large part to the industry’s commitment to protecting the environment and the common sense state regulations and laws in place. This from Oklahoma’s News On 6 (also on EID’s YouTube page):
Chesapeake Energy’s Chairman and CEO, Aubrey McClendon, said he welcomes the study. “I think the EPA will do a good job of examining it,” McClendon stated, “and if we’re doing something wrong…somehow hurting the environment and we don’t know about it, then we want to fix what we’re doing wrong.”
But McClendon said Chesapeake has hydraulically fractured formations 14,000 times since 1989, and the record shows there isn’t anything wrong.
Larry Nichols, Devon Energy Executive Chairman, agrees. “Show us one single well where hydraulic fracturing has caused any problem,” Nichols said. “I’ve said that in testimony before Congress, and no one has yet to come up with one single well where hydraulic fracturing has caused a problem, that anyone can document with any scientific accuracy.”
The Oklahoma Corporation Commission has oversight of all drilling in the state, including fracking. Commissioner Bob Anthony believes the EPA study is a political scare tactic. “The facts are,” Anthony said in a written statement, “that hydraulic fracturing has been used in Oklahoma about 100,000 times in the last 60 years, with no documented cases of groundwater contamination.”
Nichols worries that the Obama administration’s goal, through the EPA study, is to wrest control of onshore drilling from the states. His fear is that they would then do to onshore drilling what they’ve done to offshore — “Shut it down,” he said.
A quick look around the U.S. at the overwhelmingly positive impacts that hydraulic fracturing – which is tightly and aggressively regulated by energy-producing states – continues to have, all of which would be jeopardized if the FRAC Act were to become law:
MT Gov. Brian Schweitzer, Western Governors Association chair, and fmr. Democratic Governors Association chair: “We’re increasing in Montana by thousands of jobs in drilling in what’s called the Bakken (Shale Formation) in eastern Montana,” the state’s Governor Brian Schweitzer told Fox News. “It is the richest geologic structure in all of the United States. Recent estimates are that there’s about 25 billion barrels of recoverable oil in the Bakken in North Dakota and Montana. To put that in perspective we import about 4 billion barrels a year. We use about 6 billon barrels a year. So this one structure in North Dakota and Montana could be one of the keys to energy independence in the short term.” (Fox News, 3/17/11)
Louisiana Association of Business and Industry (LABI) President Daniel Juneau: The second factor that can greatly expand economic activity in the state is for the federal government to stay out of regulating shale oil and gas drilling activities. In 2004, the EPA concluded a 5-year study that concluded that the hydraulic fracturing process used in shale drilling was safe. Now the current EPA wants to go back and revisit the issue. If the EPA outlaws hydraulic fracturing, it will be the death-knell for shale oil and gas production. There is currently a tremendous amount of economic activity going on in northwest Louisiana from shale gas drilling in the Haynesville Shale play. Across central Louisiana, there is a potential for as much as 70 billion barrels of crude oil from the Tuscaloosa Shale play. Production from these shale plays can be a real shot in the arm to jobs and investment in our state. (Bastrop Daily Enterprise Op-Ed, 3/16/11)
“Penn State study shows sales tax revenue higher in Marcellus counties”: A new Penn State University publication examines state tax collection data and specifically compares counties where there is drilling and production activity in the Marcellus shale play with that of non-Marcellus counties. … The data indicates that local spending has increased in counties with major Marcellus activity. State tax collections of the personal income tax and realty transfer tax show similar differences between Marcellus and non-Marcellus counties. (Oil & Gas Journal, 3/16/11)
“Why North Dakota Is Booming: They’re drilling for oil, attracting high tech, and keeping the tax burden moderate. Result: 3.8% unemployment.” Living on the harsh, wind-swept northern Great Plains, North Dakotans lean towards the practical in economic development. Finding themselves sitting on prodigious pools of oil—estimated by the state’s Department of Mineral Resources at least 4.3 billion barrels—they are out drilling like mad. And the state is booming. Unemployment is 3.8%, and according to a Gallup survey last month, North Dakota has the best job market in the country. Its economy “sticks out like a diamond in a bowl of cherry pits,” says Ron Wirtz, editor of the Minneapolis Fed’s newspaper, fedgazette. (Wall Street Journal Op-Ed, 3/15/11)
PA State Rep.: Marcellus Shale’s “powerful [economic] ripple effects are spreading throughout the commonwealth”: And in those once-depressed counties where clean natural gas trapped in the deep shale rock is now being reached for energy consumers through high-technology horizontal drilling and hydraulic fracturing, residents are enjoying a dramatic rebirth of jobs, business growth, and income. And, as a result, the Pennsylvania state treasury and the municipal governments in those regions are already receiving significant boosts in tax revenue … Pennsylvania natural gas is creating jobs, generating income, and boosting tax revenues. And while much of the economic activity remains concentrated in the Marcellus Shale regions, powerful ripple effects are spreading throughout the commonwealth. (The Sentinel Op-Ed, 3/12/11)
“Increased Drilling Creates Jobs”: An oil drilling boom across the American West is creating a wealth of job opportunities at a time when most segments of the economy remain sluggish. The boom is the result of new and updated technologies allowing companies to go after oil reserves that until recently were trapped in shale formations, making them too expensive and difficult to tap even five or ten years ago. “This is solid rock, so it’s not like a conventional resource where you just drill a well and the oil starts to flow,” Kathleen Sgamma, Director of Government and Public Affairs for The Western Energy Alliance, explained. “We have to crack that rock through a process that we call hydraulic fracturing where we pump high pressure water and a mixture, and sand down into the formation to crack the rock and create micro-fissures in the rock and prop it open with sand.” (Fox News, 3/17/11)
“This is an employment opportunity for the region. It’s going to provide a new workforce opportunity”: This summer, Clarion University’s Venango Campus will begin offering a natural gas technology program. “Obviously the Marcellus Shale industry is emerging in Pennsylvania and beyond, and it is going to be requiring a huge workforce,” said Christopher Reber, Executive Dean of Clarion University-Venango Campus. “There’s already been a phenomenal investment in Pennsylvania.” … “This is an employment opportunity for the region. It’s going to provide a new workforce opportunity, and certainly we’re committed to promoting economic development for the whole area,” Reber said. (WYFX-TV, 3/16/11)
ND’s Oil Boom Has “has created a $1 billion state budget surplus”: North Dakota, the state with the nation’s lowest unemployment rate, capped a decade of economic prosperity with dramatic population growth in its biggest cities. … North Dakota is enjoying an oil boom in the western part of the state, drawing workers from across the country. Williston, in oil country, grew 17.6% to 14,716. The oil windfall has created a $1 billion state budget surplus. … “We feel extremely fortunate for the position we’re in,” says North Dakota Commerce Commissioner Paul Govig. (USA Today, 3/17/11)
Hydraulic Fracturing, American Oil Production Creating Blue Collar Jobs: Increased drilling in the Niobrara Shale Formation in eastern Wyoming and Colorado is also creating job opportunities. “Currently, Noble Energy has over 60 jobs that are available in this area,” according to Stephen Flaherty, Director of Government Relations for Noble Energy. “The opportunities range from field pumpers, which just require a high school degree and no oil field service all the way up to petroleum engineers and everything in between; information technology services and accounting, just about every discipline.” (Fox News, 3/17/11)
60 Minutes Takes a Look at Critical 60 Year Old Energy Technology
“It’s an American energy renaissance”
“Shale Gas Drilling: Pros & Cons,” was the title that CBS’s Lesley Stahl went with in her 60 Minutes segment last night on natural gas development in America from shale rock formations that have been around for hundreds of millions of years. Thanks to advancements in horizontal drilling technologies coupled with the 60 year old energy stimulation process called hydraulic fracturing, natural gas is not longer “the ugly stepchild of our national energy debate.”
In a Wilkes Barre Times-Leader story today, under the headline “TV report focuses on gas drilling,” Energy In Depth weighs-in on last night’s CBS segment:
Chris Tucker, of EnergyInDepth.org, an organization that promotes the benefits of natural gas drilling, said the segment was “fairly balanced,” although the show didn’t get everything right.
“I think they did a great job of telling the story of real people, everyday people, all across the country whose lives have changed for the better thanks to the development of this clean, American resource,” Tucker said.
“They didn’t quite get it right when they attempted to venture into the regulatory history of hydraulic fracturing. The reality is that fracturing technology is among the most thoroughly regulated procedures that takes place at the wellsite, which is a big reason why it’s been able to compile such a solid record of safety and performance over the past 60 years of commercial use.”
Here are key experts from the CBS segment:
On America’s Abundance
- What is increasingly evident is that shale gas is overwhelmingly abundant right here in the U.S.A. “In the last few years, we’ve discovered the equivalent of two Saudi Arabias of oil in the form of natural gas in the United States. Not one, but two,” Aubrey McClendon, the CEO of Chesapeake Energy, told “60 Minutes” correspondent Lesley Stahl. “Wait, we have twice as much natural gas in this country, is that what you’re saying, than they have oil in Saudi Arabia?” Stahl asked. “I’m trying to very clearly say exactly that,” he replied.
On the Economic Promise
- Some 10,000 wells will be drilled in northwest Louisiana, in some of the poorest communities in the country, where impoverished farmers are becoming overnight millionaires as they lease their land for drilling. “I never dreamed of money like this,” C.B. Leatherwood told Stahl. ” Leatherwood, a retired oil field worker, got a bundle to drill under his farm: $434,000. His cousin, Mike Smith, also profited: he was paid nearly $2 million.
- They actually call them “shaleionaires,” and they don’t mind putting up with the noisy, smelly drilling when the wells are built because they get a cut of the profits, which could last for years and add up to millions more. Last year, shale drilling generated almost $6 billion in Louisiana in new household earnings. As the rest of the nation plunged into a recession, the region added over 57,000 local jobs, and the Cadillac dealership in town is hopping.
On Hydraulic Fracturing
- The other technology is hydraulic fracturing or “fracking,” where millions of gallons of water, mixed with sand and chemicals, are pumped down the well at enormous pressure. “We break the rock. We fracture the rock. And that stimulates the ability of the gas to flow into the well bore, where we can flow it to the surface and sell it,” Duginski explained to Stahl.
- “But fresh water aquifers are only from the surface to about one thousand feet below the surface of the earth, okay? We are fracking wells at depths of 7, 8, 10, 12 thousand feet. Okay? So there is almost two miles of rock between where we are active and where fresh water is drawn from,” McClendon said.
However, there’s some outstanding facts that didn’t make it into last night’s segment. For instance, Sierra Club’s Michael Brune claims that natural gas production is “under-regulated,” and that “the first thing that the industry should do is disclose what chemicals are being used in fracking.” “The 2005 energy bill completely exempted the natural gas industry and fracking technology from any regulation under the Safe Drinking Water Act. It’s an outrage,” continues Mr. Brune.
But here are several critical facts that CBS viewers, and Mr. Brune, should be aware of:
- FACT: Hydraulic fracturing has never been regulated by the federal government or the EPA or under the Safe Drinking Water Act. This technology, however, is ably and tightly regulated by individual energy-producing states. Far from being “pushed through Congress by Dick Cheney,” the Energy Policy Act of 2005 earned the support of nearly three-quarters of the U.S. Senate (74 “yea” votes), including the top Democrat on the Energy Committee; current Interior secretary Ken Salazar, then a senator from Colorado; and a former junior senator from Illinois named Barack Obama. In the U.S. House, 75 Democrats joined 200 Republicans in supporting the final bill, including the top Democratic members on both the Energy & Commerce and Resources Committees.
- FACT: Natural gas development is regulated under the Clean Water Act, the Clean Air Act, the Safe Drinking Water Act, the Superfund law.
- FACT: Fluids used in the fracturing process – made up of more than 99.5 percent water and sand – are readily available to the public. Pursuant to federal law, these fluids must be available at every wellsite nationwide. Additionally, state regulators list these additives online, including Pennsylvania’s Dept. of Environmental Protection. Further, a host of energy companies and service providers have disclosed these additives (see Halliburton, Range Resources, Chief Oil & Gas, just to name a few).
ICYMI – ND governor to EPA: “We can regulate fracturing very well, thank you very much”
“Environmentally sound” natural gas production bringing “a lot of jobs to the area”
Gov. Hoeven tells EPA that N.D. can handle fracturing
By Rebecca Beitsch
Bismarck Tribune
May 16, 2010
Gov. John Hoeven has had a series of meetings with Environmental Protection Agency leaders as the agency moves forward with a process that could end in its regulation of an oil drilling process known as fracturing.
The EPA is now studying the effect the process has on ground and drinking water and could potentially use the authority granted in the Clean Water Act to take over the permitting process from the states.
Fracturing, or “fracking,” involves pumping water and sand at high pressures to two miles beneath the surface using a series of pipes. The microseismic stimulations from the process loosen up oil tucked into crevices of the Bakken formation. But the concern lies in both in the process’ interaction with groundwater and what happens to the wastewater once the process is completed.
The message Hoeven wants to send to the EPA is “we can regulate fracturing very well, thank you very much.”
Lynn Helms, director of the Department of Mineral Resources, said he is opposed to the potential regulations, not because they would drastically change the process, but rather because he believes drilling through fracking would have to be abandoned until the new regulations were in place.
“I don’t expect more stringent rules, but I do expect a two- to three-year stoppage in North Dakota while the rules get put in place, and that’s a lot of unemployed people,” Helms said.
Helms said fracking is environmentally sound because of all the safeguards in place.
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Life on a Drilling Rig
By Ryan Coyle
WNEP-TV
May 19, 2010
Natural gas drilling is changing the landscape of the northern tier in many ways.
At 4:30 p.m. most people are wrapping up the work day. Rick Woodbeck of Towanda is just getting started. Woodbeck is a natural gas driller with Chesapeake Energy. A roughneck, as they are called. He drills into the Marcellus shale gas deposits miles below the surface of the earth.
“I was in the Army National Guard and I came back from Iraq. Instead of going to sit behind a desk I decided to try something different and I had a friend who was on a rig. He told me about it and got me an interview. A couple weeks later I started out on a drilling rig,” Woodbeck said.
Woodbeck has been working on gas rigs for nearly three-and-a-half years and when the opportunity came to work close to home with Chesapeake, he couldn’t turn it down.
“I feel pretty good working at home. Still being able to see friends and be with my wife or family. So it’s a pretty good feeling,” the roughneck said.
“The pay is good. It’s better than probably most jobs you’re going to find in the area,” Woodbeck added. That’s one of the reasons why he is happy to see drilling coming to the northern tier.
“I believe it’s a good thing. The economy is not doing well right now. It did bring a lot of jobs to the area. Restaurants are doing better. Just the local economy is overall better,” Woodbeck said.
Not only that, he is seeing more people from the area getting these types of jobs. Six guys on his crew work the rig and four are from Pennsylvania. “There’s more jobs. I see more and more local guys on the rigs,” said Woodbeck.
