What the Waxman Report Doesn’t Report
Sen. Casey asks Colo. congresswoman to help him make the case for jobs-killing anti-HF bill in Philadelphia paper – EID takes a closer look
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Energy In Depth Corrects the Record on State Disclosure
EID responds to mistaken assertions made during recent markup of Energy & Commerce Committee
WASHINGTON – The federal government mandates the disclosure of materials used in the commonly used, 60-year-old process of hydraulic fracturing – but do any of the states? Late last month during a markup in the House Energy and Commerce Committee, U.S. Rep. Diana DeGette (D-Colo.) told her colleagues on the panel that “only three states have laws requiring reporting.” But according to the Ground Water Protection Council, the actual number is significantly higher than that – and as recently as this week, growing.
Earlier today, Energy In Depth executive director Lee Fuller sent a detailed letter and accompanying packet of information on disclosure to every member of the Energy and Commerce Committee, seeking to dispel any misconceptions that may exist on what is fundamentally a basic, verifiable question. The text of that letter, along with links to the various addenda included with it, can be found below.
June 11, 2010
The Honorable Henry Waxman
Chairman, Committee on Energy and Commerce
2125 Rayburn House Office Building
Washington, DC 20515-6115
The Honorable Joe Barton
Ranking Member, Committee on Energy and Commerce
2322A Rayburn House Office Building
Washington, DC 20515-6115
Dear Chairman Waxman and Ranking Member Barton:
On May 26, the Energy and Commerce panel held a full committee markup of H.R. 5320, the Assistance, Quality, and Affordability (AQUA) Act of 2010, a bill that was reported favorably to the House by a vote of 45-1. One of the amendments brought up for consideration that afternoon, offered by U.S. Rep. Diana DeGette (D-Colo.), sought to amend the Safe Drinking Water Act (SDWA) to target the continued use of hydraulic fracturing, a key energy technology never previously regulated under SDWA, but over the past 60 years, one that has been aggressively regulated by the many states in which the technique is commonly deployed.
Although the DeGette language was ultimately withdrawn — a motion that was supported by the chairman – the debate that was spurred by the introduction of the amendment included several assertions which, upon closer scrutiny, don’t quite reflect the current reality as it relates to state involvement in the regulation and oversight of fracturing activities. I appreciate the opportunity to correct that record on behalf of the Independent Petroleum Association of America and Energy In Depth, of which I have the pleasure to serve as executive director.
Reviewing the archived video of the debate on the committee’s website, Rep. DeGette on several occasions makes reference to what she believes to be an inadequate number of states currently requiring service companies to disclose information related to the materials used in the fracturing process. In particular, she suggests that “only three states have laws requiring reporting,” and that two other states “are considering implementing those laws” as well. All told, she estimates that “only one-tenth of the states require this type of reporting,” and proceeds to use that premise as the foundation for constructing a broader argument in support of her amendment.
But those numbers don’t quite align with research jointly published last year by the Ground Water Protection Council (GWPC) and the U.S. Department of Energy. According to that report, of the 27 states in which 99.9 percent of oil and gas activity takes place:
- 25 of those states require a detailed well treatment report to be submitted to state regulatory agencies;
- 18 states require the submission of a list of materials used (water, sand, additives) in the process;
- 19 states require the volumes of those materials to be disclosed; and
- 10 states demand a list of specific additives the service company intends to use on site.
Attached for your convenience, please find a previously unpublished addendum to the GWPC report providing a detailed summary of how these states regulate hydraulic fracturing, as well as other rules in place governing every stage of the energy exploration, production and delivery process. Please note that since this addendum was compiled, a number of states – such as Colorado, Pennsylvania, and most recently Wyoming – have updated their disclosure rules to provide for even greater level of transparency in the process.
In analyzing the disclosure requirements currently in place in the individual states, it’s important also to recognize that the federal government also requires the forthright disclosure of additives used in the fracturing process in the form of Material Safety Data Sheets (MSDS), which are mandated by the Occupational Safety and Health Administration (OSHA) to be present at every well site in America where a minimum amount of chemicals are found. In states such as New York, Pennsylvania and West Virginia, these sheets and aggregations thereof can be accessed easily by navigating to the website of the appropriate state regulatory office. In other states, similar information can be obtained by submitting a simple request to the agency.
In closing, one additional comment made by Rep. DeGette during the debate over her amendment last week may warrant further explanation – specifically, the assertion that “in 2005, the oil and gas industry got itself exempted from the Safe Drinking Water Act, the only industry which is exempt from that legislation.”
As senior members of the committee during that time, certainly you remember that the provision of the Energy Policy Act of 2005 dealing with hydraulic fracturing did not result in a substantive change to existing law; it merely clarified Congress’s long-standing position that hydraulic fracturing had never been – and, in fact, was never intended to be – regulated under SDWA. But that doesn’t mean other aspects of the process aren’t regulated under SDWA and a host of other federal rules and statutes. For your convenience, I’ve attached a fact sheet depicting the various forms of federal regulation (SDWA, Clean Water Act, etc.) that apply to each step of that process.
Thank you for the opportunity to address some of the misconceptions that exist regarding ongoing efforts by the states to discharge their long-held responsibilities related to the regulation of oil and natural gas. Please don’t hesitate to contact me directly should you have any additional questions, concerns or comments.
Sincerely,
Lee O. Fuller
Executive Director
Energy In Depth
cc: All members of the House Energy and Commerce Committee
Enclosures
Last week was quite a week for shale gas production enabled by hydraulic fracturing, a 60-year old tightly regulated technology used to stimulate oil and gas production in 9 out of 10 wells nationwide.
There was plenty of positive and welcomed economic news. An updated Penn State University economic impact study released last Tuesday finds that the development of the Marcellus Shale’s clean-burning natural gas reserves, through the use of fracturing, has the potential to add an additional 212,000 new jobs to the state’s employment rolls over the next decade. Energy In Depth’s executive director, Lee Fuller, said this about the study:
“The release of this report from Penn State today serves to reinforce that status in a modern context, and also make clear to those who oppose this critical work on political or ideological grounds that, at least on practical economic grounds, that opposition could lead to fewer jobs, greater dependence, and a lot less revenue for the state.”
But Appalachia isn’t the only region of the country that is booming thanks to fracturing. The Shreveport Times reports this under the headline “Haynesville Shale spares local economy”:
The huge amounts of money injected into the local economy via the Haynesville Shale activity has spared northwest Louisiana from the worst effects of the national slowdown, according to an economist whose second-year study of the industry was released Tuesday.
In the report, Dr. Loren C. Scott pointed out that the seven firms participating in his study “pumped an amazing $7 billion into the state’s economy” in just one year. That sizeable injection of new money into the state can be equated to tossing a boulder into a pond.
Scott’s study serves as tangible evidence to the “tremendous economic benefits of natural gas extraction operations in northwest Louisiana,” said Don Briggs, Louisiana Oil and Gas Association president.
And in a report yesterday from KENS 5-TV, “Texas oil and gas boom paying dividends for San Antonio,” thanks to 21st century fracture stimulation technologies. This from the region’s CBS affiliate:
A huge, underground oil and gas field is promising big results, and that’s having an economic impact on San Antonio.
“I wish I had a crystal ball.” No one knows, no one knows. They just pick up the phone and start ordering equipment,” said Chase Hooker, Director of new business development for APPCO; a company that makes equipment called Frac-Sanders.
These huge, $250,000 machines deliver a special sand mixture to a well. The “frac” sand helps force fossil fuels out of the ground. Despite making a dozen of these 25-ton machines a month, APPCO is back-ordered through 2011.
Unfortunately, some in Washington – despite this overwhelmingly positive economic news in an otherwise struggling national economy – believe that the energy-producing states should be stripped of their proven ability to effectively regulate fracturing.
Last week, Colorado Rep. Dianna DeGette, an advocate for burdensome, duplicative and potentially devastating federal regulations on American energy production, offered and withdrew an amendment at a House Energy and Commerce Committee mark-up that would have stripped energy-producing states of their ability to effectively regulate fracturing. Like her bill, the FRAC Act, Ms. DeGette’s amendment would give the federal government – for the first time ever – authority to oversee this critical and heavily regulated practice.
Thankfully the amendment was withdrawn amidst pressure from Energy In Depth, the U.S. Chamber of Commerce, the National Association of Manufacturers and scores of Democrats and Republicans on the panel.
EID’s Fuller wrote this in a letter to members of the committee leading up to the hearing:
The fact is, hydraulic fracturing has been ably and aggressively regulated by the states almost since the moment of its invention, with regulators compiling an impressive record of enforcement and oversight during that time. It’s a record that continues to be acknowledged by regulators and lawmakers on the federal level as well, most recently by EPA’s director of drinking water protection, who told a reporter in February that there existed “no evidence” that “states aren’t doing a good job already” when it comes to regulating fracturing activities.
But it’s not just America’s energy producers and job-creators speaking out about fracturing’s long and clear record of effectiveness and safety. Major newspapers are speaking out, too. Today’s Investor’s Businesses Daily writes this in an editorial:
Environmentalists, aided and abetted by Democratic Sen. Bob Casey of Pennsylvania, now want to stop us from unlocking our vast reserves of natural gas locked up in shale using a technique called hydraulic fracturing or “fracking.” The technique involves injecting liquids under pressure, 95% of which is water, into the shale rock to release the trapped gas.
Casey has introduced legislation to remove fracking’s long-standing exemption in the Safe Drinking Water Act that allows energy companies to use the process. He claims the process endangers America’s drinking water, though fracking is done thousands of feet below the groundwater table and there’s never been a case of groundwater contamination caused by fracking.
“This 60-year-old technique has been responsible for 7 billion barrels of oil and 600 trillion cubic feet of natural gas,” according to Sen. James Inhofe, ranking member of the Environment and Public Works Committee. “In hydraulic fracturing’s 60-year-history, there has not been a single documented case of contamination.”
ICYMI – Rep. DeGette Withdraws Potentially Destructive Amendment Targeting Hydraulic Fracturing
Chairman Waxman: “I would ask that you withdraw the amendment at this time … Now is not the right time for this change.”
Energy In Depth
“A proposed amendment to rewrite the Safe Drinking Water Act that may be considered by the House Energy and Commerce Committee today could have “serious consequences” for hydraulic fracturing, a key technology used for decades to extract natural gas from shale formations, Energy In Depth executive director Lee Fuller warned in a letter to chairman Henry Waxman, D-CA, and ranking member Joe Barton, R-TX. … “As it relates to the composition of fluids commonly used in the fracturing process today, it’s important to note that greater than 99.5 percent of the mixture is comprised of water and playground sand,” Fuller said in the letter.” (Washington Examiner, 5/25/10)
“The oil and gas industry opposes DeGette’s legislation. In a letter sent to lawmakers Tuesday, Lee O. Fuller, VP of government affairs for the Independent Petroleum Association of America, argues that fracturing is safe and has been sufficiently monitored by state-level regulators such as the Texas Railroad Commission: The fact is, hydraulic fracturing has been ably and aggressively regulated by the states almost since the moment of its invention, with regulators compiling an impressive record of enforcement and oversight during that time.” (Dallas Morning News, 5/25/10)
“States would have to sacrifice other functions to generate the information,” Fuller wrote. “Of course, if they choose not to do that, states would have to give up their regulatory responsibilities under [the Safe Drinking Water Act] and turn those functions over to EPA. Not only would this burden EPA — since it is not staffed with the capabilities to undertake daily regulatory responsibilities — but it would also lead to duplicative regulations.” (E&E News, 5/25/10)
“It’s a record that continues to be acknowledged by regulators and lawmakers on the federal level as well, most recently by EPA’s director of drinking water protection, who told a reporter in February that there existed “no evidence” that “states aren’t doing a good job already” when it comes to regulating fracturing activities.” (Letter, 5/25/10)
U.S. Chamber of Commerce
“For the past 60 years, hydraulic fracturing has been safely and effectively regulated by the states. Oil and gas companies already provide full chemical disclosure in accordance with all applicable federal and state laws and regulations. In contrast to the assertions on which this amendment is premised, these materials are well known to state regulators and information about them are generally available to members of the public by request to the state.
“More importantly, Rep. DeGette’s amendment could reduce oil and gas production in the United States. … The loss of these new and innovative products would mean greatly reduced oil and gas production in the United States, greater reliance on imports, and the loss of high-paying jobs.
“This amendment would do nothing more than add an unnecessary layer of bureaucracy that would stifle domestic energy production, increase energy costs for American consumers and small businesses, and potentially force U.S. manufacturing overseas. At a time when the United States is trying to become energy independent, fight an ailing economy, and put Americans back to work, now, more than ever, is the time to harness the power of proven technologies that will develop American energy resources.” (Letter, 5/25/10)
National Association of Manufacturers
“The amendment … is expected to include language taken from H.R. 2766, and will seek to rewrite the Safe Drinking Water Act in a manner that will limit energy producers’ ability to deploy a key technology, known as hydraulic fracturing, which is needed to access abundant energy resources from shale formations onshore.
“Manufacturers rely on natural gas not only as a source of electricity, but as a feedstock for products such as plastics, fertilizer and pharmaceuticals. U.S. manufacturers use approximately one-third of the nation’s natural gas supplies. Because natural gas is a regional commodity, U.S. manufacturers need reliable and increased access to domestic supplies, especially to the large reserves contained in the nation’s natural gas shale formations.” (Letter, 5/25/10)
U.S. Sen. Mary Landrieu knows a thing or two about what it takes to safely produce energy in America today. As senior senator from Louisiana, she represents the fourth-leading petroleum-producing state in the country – and that doesn’t even account for what’s produced along the federal OCS off the Pelican State’s shores.
Now, with the emergence of the Haynesville Shale in the northwest part of the state, Louisiana is poised to be a national leader in the development of natural gas as well. It’s an effort supported by Democrats and Republicans – and, not for nuthin’, probably a half-decent, instructive example for folks in hyper-polarized Washington to take an look at. Looking for new jobs? Congressman Steve Scalise writes that well-regulated energy production in the Haynesville “created almost 33,000 jobs and generated $3.2 billion into our state’s economy” in a recent Energy In Depth “Guest Blog” post.
Unfortunately, rather than acknowledging these economic and energy security benefits, and promoting them as aggressively as they can, some in Washington are working to add layers of burdensome, duplicative and unnecessary regulations to the 60-year old technology called hydraulic fracturing.
Landrieu, a member of the Senate Energy & Natural Resources panel, “made a stop by the Haynesville Shale play near Mansfield Monday.” NWLA News tells us what comes next:
Fracking critics claim the process can contaminate drinking water. However, in 2004 the Environmental Protection Agency found that the process does not contaminate drinking water and needed no further study. “There are people in Washington want to claim that fracking cannot be done environmentally safely and they’re wrong it can be done in an environmentally safe way,” said Landrieu.
The Shreveport Times reports this about Sen. Landrieu’s recent visit to DeSoto Parish:
County officials in New York “need to hear from you that it is not dangerous,” [Sen. Landrieu] said of the fracing process.
Hear that, Sen. Casey? Ask someone who knows: Hydraulic fracturing is safe. It’s heavily regulated. And it’s helping to create tens of thousands of good-paying American jobs, and delivering stable, clean-burning, homegrown energy to families and small businesses at the same time.
Brad Gill, a member of Energy In Depth and executive director of New York’s Independent Oil & Gas Association, sheds some additional light on the supposedly “secret” aspects of this commonly used process, in the form of a letter-to-the-editor in the Binghamton Press & Sun Bulletin today:
Your readers should know that the fluids used in the fracturing process are made of more than 99.5 percent water and sand. It’s true that chemical additives are commonly used in the process, but great efforts are made to reduce the likelihood those ingredients would ever come in contact with people, animals and all sources of fresh water. These ingredients – even those that are no longer used – are available on the DEC Web site.
The writer is correct on one thing: “Rural landowners badly need an economic break.” Safe, environmentally sound, well-regulated natural gas production – enabled by hydraulic fracturing – represents such a break.
But the tens of the thousands of jobs being created through environmentally sound shale gas development are not limited exclusively to the energy industry. Scores of good-paying, permanent indirect jobs are being created at breakneck rates. Despite this, some continue to lodge baseless attacks on hydraulic fracturing, the linchpin to shale gas development.
At a recent meeting with the Wilkes-Barre (PA) Times Leader editorial board, senior American Petroleum Institute economist Sara Banaszak said “this concern [about hydraulic fracturing] is misplaced,” noting that the fluids used in the process – made up of more than 99.5 percent water and sand – “are the same chemicals we see in our everyday use.”
As it relates to the new jobs associated with responsible shale gas development, Ms. Banaszak said the “economic potential cannot be ignored.” This from the paper:
For example, 50,000 jobs were created in Pennsylvania as a result of natural gas drilling in 2009. That number is expected to rise to 98,000 this year. That economic boost is why Pennsylvania lawmakers cannot afford to impose a severance tax on natural gas companies. “If you impose a tax, you get less investment and the government could see less revenue,” she said.
“This is an opportunity that is sort of unprecedented,” Banaszak concluded.” Not just for Pennsylvania, but for the entire country.”
Speaking of indirect economic benefits tied directly to shale gas production, the Associated Press reports this yesterday under the headline “Railroads booming with Marcellus Shale business”:
“The need to transport millions of pounds of sand and other materials to the rapidly increasing number of Marcellus Shale natural gas well drilling sites in Pennsylvania is bringing big business to railroads.
The new business is arriving as Pennsylvania’s railroad operators – the state has the most in the nation – were suffering shrinking demand for loads of traditional materials, such as coal.
Lorain, Ohio’s Morning Journal writes this a recent editorial:
Lorain seems to be in the right spot to capitalize on the nation’s desire to drill for more clean-energy natural gas.
U.S. Steel is considering spending $250 million to expand its Lorain Tubular Operations because of the Lorain plant’s proximity to an immense Appalachian Marcellus shale deposits that include parts of Ohio, West Virginia, Pennsylvania and New York.
Natural gas is locked in that shale and energy companies need specialized steel tubing to drill for it. Some of the best steel tubing is made by U.S. Steel in Lorain.
Local government and business leaders should work together to make the U.S. Steel expansion in Lorain a reality.
And in a recent Philadelphia Bulletin op-ed, the Commonwealth Foundation’s Elizabeth Bryan writes this about responsible shale gas development:
The Marcellus Shale boom is accomplishing something that all of Governor Rendell’s economic development programs cannot: permanent jobs and more state tax revenue without a dime of taxpayer subsidies. Resisting the calls to tax natural gas producers will ensure Pennsylvania maintains a competitive edge without compromising our fiscal health or natural resources.
EID Fact Check: Center for American Progress Weighs in on Hydraulic Fracturing
Earlier today, the Center for American Progress (CAP), an influential, left-of-center public policy organization based in Washington, D.C., posted a memo on its website in support of the FRAC Act of 2009 – legislation that seeks to impede the development of America’s abundant shale gas resources bytargeting the critical tools needed to bring those resources to market.
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Issue Alert: DeGette Bill Targeting Hydraulic Fracturing To Be Introduced Today
Later today, U.S. Reps. Diana DeGette (D-Colo.) and Maurice Hinchey (D-N.Y.) are expected to introduce legislation seeking to strip a critical provision of the Energy Policy Act of 2005 – one offering a clear declaration of Congress’s intent on whether hydraulic fracturing was ever intended to be regulated under the Safe Drinking Water Act (SDWA) of 1974 (it was not).
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