Posts Tagged ‘regulation’
IHS study finds elimination of hydraulic fracturing could cost 364K jobs in TX, 292K in CA, 250K in PA and NY
As communities across the country continue to speak out against a proposed plan in Congress to impose unprecedented new restrictions on the safe, already well-regulated process of hydraulic fracturing, a new study released this week by IHS Global Insight and the American Petroleum Institute (API) sheds new light on what those communities can expect if those efforts ultimately prove successful.
“Hydraulic fracturing has been safely and effectively used for more than 60 years now, but at no point has this technology been as directly tied to jobs, revenue and U.S. energy security as it is today,” said Lee Fuller, policy director for Energy In Depth. “The study released this week underscores that point in clear and compelling detail, and strengthens the suggestion that when it comes to imposing extraordinary new regulations on this common and increasingly critical energy technology, we better look before we leap.”
The report, the second in a series of three studies commissioned by API examining the critical role that hydraulic fracturing plays in delivering a secure energy future, projects the potential impacts – broken down by state – assuming three separate (and plausible) scenarios under which EPA could regulate fracturing activities.
First scenario: Expansion of Underground Injection Control (UIC) program to include the EPA regulation of hydraulic fracturing
Under this scenario, hydraulic fracturing and the materials related to the process would in effect be treated the same way as the law treats hazardous wastes for the purposes of permanent disposal. Including hydraulic fracturing activities in this category of regulation violates both the intent and design of the law, and as such, could result in the following impacts:
Second scenario: New restrictions on materials used in fracturing a well
Although water and sand comprise 99.51% of the materials used in a typical frac job, efforts to hand over the job of regulating this crucial technology to EPA could also lead to new restrictions on the types and quantities of additives used by operators to alter the surface tension of the fracturing fluids.
Under that scenario, the IHS report predicts that states such as Wyoming and Louisiana would be hardest hit:
Third scenario: Elimination of hydraulic fracturing
Although characterized by its authors as a “commonsense” effort to promote new reporting and disclosure requirements on operators who use fracturing technology, the actual text of the FRAC Act of 2009 fails to align with that description.
In spirit and in letter, H.R. 2766 is about EPA regulation, not disclosure – with section 2(a) of the bill clearly amending the Safe Drinking Water Act (SDWA) of 1974 to include the regulation of hydraulic fracturing under its portfolio. With SDWA regulation comes EPA permit-authority over the process, a prospect that then-EPA administrator Carol Browner admitted was unnecessary in 1995.
According this scenario, the IHS study suggests the following impacts would follow:
More resources and materials from Energy In Depth:
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Earlier today, left-leaning think tank Center For American Progress (CAP) issued a web memo praising legislation, coined the FRAC Act, that will impede the production of clean-buring American-made natural gas. Surprisingly, or maybe not, the memo omits some important facts. Below, we do our level best to clean some of that up for them.
As laid out in this Energy In Depth Issue Alert, CAP senior fellow Tom Kenworthy – a former journalist who has been recognized by the Sierra Club for his excellent reporting – mixes a couple things up in trying to structure a defense of what increasingly is becoming a difficult bill to defend.
Here’s a quick synopsis of Mr. Kenworthy’s a few of the errors made in the piece:
CAP writes: “Re-establishing federal regulation of hydraulic fracturing seems a sensible precaution.”
We respond: Hydraulic fracturing has never been under the direct jurisdiction of federal law, rendering inaccurate the suggestion that “[r]e-establishing” such regulation would be a “sensible precaution.”
CAP writes: “The oil and gas industry has recently begun a multimillion campaign to defend the practice against the new legislation, which would force the industry to disclose the chemicals it uses and would make fracking subject once again to the Safe Drinking Water Act.”
We respond: While appreciative of Mr. Kenworthy’s generous characterization of the Energy In Depth coalition, the suggestion that the DeGette/Casey legislation “would make fracking subject once again to the Safe Drinking Water Act” is, as we’ve shown, mistaken. So too is the CAP description of the DeGette/Casey bill as an effort to “force industry to disclose the chemicals it uses,” a notion premised on the idea that state regulators have no access to information related to the materials used in local fracturing operations. The truth is, states do have access to that information. Some of them even post it on the Internet.
CAP writes: “Fracking is used in most U.S. oil and gas wells and involves pumping a combination of water, sand, and chemicals under high pressure deep into rock formations that hold oil and gas.”
We respond: While this definition of hydraulic fracturing is technically accurate, the author’s insistence on lumping together “water, sand, and chemicals” implies that the concentrations of each must be in equal, or at least similar, parts. The reality of the situation is quite a bit different, as water and sand on average comprise 99.51% of the liquids and materials used in the fracturing process (see graphic on page 62 of this report, issued in April by the Ground Water Protection Council and the U.S. Department of Energy). “[C]hemicals,” the vast majority of which you can find in your cupboard or under your sink, make up less than one-half of one-percent of the total mixture.
NOTE: To view the full Issue Alert, click HERE.
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Bloomberg Host: But there is some legislation, right? There’s legislation that’s pending in the Congress … that’s linked to natural gas, because of this new technology that so many of the natural gas companies have been using. Right? Fracturing? In order to get the natural gas out? What have you been seeing in this vein?
Jason Gammel, Macquarie Securities: Well you’re exactly right. The issue is to bring the regulation of fracing up to the national level versus the state level where it’s always been. It really is a big deal because almost every well that’s been drilled to produce natural gas right now is fractured. There’s been over 1 million wells that have been fractured and there’s never been a single incident of pollution of the water table as a result of that. But it is an issue that has been raised that potentially goes to EPA. It probably means that you are really going to delay the drilling of wells and probably push prices up.”
Click HERE to play.
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Tags: anti-hydraulic fracturing, Bob Casey, Diana DeGette, Energy In Depth, energyindepth.org, Hinchey, Hydraulic fracturing, Maurice Hinchey, natural gas, regulation, shale
12.June.2009admin
Got your attention, didn’t we? Actually, the Hinchey we’re referencing here is Bruce, not Maurice. Bruce (no relation, we think) is president of the Petroleum Association of Wyoming, and today in the Casper Star-Tribune, he suggests that the anti-fracking bill moving through Congress right now would “create an added expense — an estimated $100,000 per well.” He says further:
“There’s been well over a million wells drilled and fracked, and not one problem of contamination of groundwater. There’s no need to put [hydraulic fracturing] under the Safe Drinking Water Act. Companies have already proven that not only are they regulated by the state, but they have proven that the process is safe and it works.”
Bruce’s long-lost cousin is Rep. Maurice Hinchey (D-NY), a vocal opponent of domestic production of traditional energy resources and chief cosponsor of legislation that aims to bring hydraulic fracturing to a standstill. But even though his legislation seeks to transfer authority currently possessed by states to regulate hydraulic fracturing over to the federal Environmental Protection Agency (EPA), don’t for one second think he’s an opponent of states’ rights. This little gem comes from a Hinchey speech on the floor of the US House during a debate last Congress:
“That is what they want to do, have the Federal Government step in here on top of the States, deny the States the right that they have under the Constitution to protect the health and safety and welfare of their citizens by passing legislation which preempts all of those State laws. This is a very bad idea and it must be defeated.”
Rep. Hinchey’s Democratic colleague, Rep. Dan Boren (D-OK), told The Oklahoman today that the DeGette-Hinchey bill “would be disastrous.” Boren also said “hydraulic fracturing had been used in an estimated 1 million wells and had not posed any problems to drinking water.”
So why is Rep. Hinchey selectively supportive of states’ rights? If Mr. Hinchey believes legislation to deny states the ability to ‘protect the health and safety and welfare of their citizens‘ was ‘very bad,’ why the about face on the state regulated, environmentally sound production of clean-burning natural gas?
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Hydrofracturing in oil production draws federal scrutiny. Wichita Eagle. “The industry says adding a layer of regulations would cost the federal government $4 billion and state governments $785 million in lost revenue. The bite out of Kansas tax revenues would be $63 million, according to Energy In Depth, a coalition of the nation’s producers. Basically, what these environmental groups are saying is that no law but federal law can regulate the oil and gas industry,” said Ed Cross, president of Kansas Independent Oil and Gas Association. “But the states have done a good job of regulating the industry. They’re the ones closest to the scene, the ones on the ground.” … Putting hydrofracturing under federal regulation would reduce domestic production, cutting oil by 183,000 barrels a day and gas by 245 billion cubic feet a day, Energy In Depth said. Tucker said part of the reduction would be caused by investors backing out on projects. “The EPA is a big hurdle,” he said.
Shale drillers push back against calls for more oversight. Houston Chronicle. “The oil and gas industry’s trade group says increased federal regulation of a method to crack underground shale rock to release natural gas could increase costs and chill production. … Environmental groups are pushing for more federal oversight of such operations, which boomed throughout 2008. Led by Rep. Diana DeGette, D-Colo., they want hydraulic fracturing to be subject to requirements of the Safe Water Drinking Act, which is under the auspices of the Environmental Protection Agency. Hydraulic fracturing involves injecting massive amounts of water, sand and chemicals underground at high pressures to break shale rock and release natural gas.”
API opposes efforts to federally regulate hydraulic fracturing. Oil & Gas Journal. “Proposed federal regulation of hydraulic fracturing under the Safe Drinking Water Act could add $150,000 to deep-well costs and reduce drilling, American Petroleum Institute officials warned on June 3. Requiring producers using hydraulic fracturing to comply with the SDWA’s underground injection control provisions would add another regulatory layer that many states’ water laws already cover, API members told reporters in a teleconference.”
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Tags: energy, Energy In Depth, frac fluid, Hydraulic fracturing, Marcellus, natural gas, oil and natural gas producers, Pennsylvania, Project BRIEF, regulation, shale, West Virginia, www.energyindepth.org
28.May.2009admin
The State Journal (WV): Officials Hope Brine Pilot Project Helps Other Cities. “A pilot project that allows a Clarksburg wastewater treatment plant to accept gas well drilling brine could lead to other municipal systems making money from the Marcellus gas boom. After months of study, the state Department of Environmental Protection soon may recommend permit modifications for a Clarksburg wastewater treatment plant that is accepting gas well drilling brine. It’s a pilot project that Plant Manager Bill Goodwin hopes will help other municipal systems make money from the Marcellus gas boom. ‘It keeps everybody’s rates down,’ Goodwin said. ‘We have a $1.5 million budget. This is generating between $200,000 and $400,000,’ he said.”
Oil & Gas Journal: EIA Global Outlook Sees More use of Unconventional Fuel Sources. The US Energy Information Administration reported in its International Energy Outlook that unconventional sources including biofuels could provide nearly half of the growth in global liquid fuel supplies in the coming decades. “Unconventional gas production from both tight sand and shale formations could increase from 47% of the US total in 2006 to 56% in 2030,” the report continued. “There’s no question that the gas growth we see in the US from tight sands and shale depends on hydraulic fracturing. If that’s taken off the table, the impact would be profound,” Acting EIA Administrator Howard K. Gruenspecht said.
Wellsboro Gazette: Gas Could Fuel Hotel Boom. It’s getting harder and harder to find a hotel room in the gas producing areas of the Marcellus. As gas production activities grow, the need will become even greater. Fortuna Energy Inc. is expanding activities in the area, and its spokesperson says the company is having difficulties finding places for its workers to stay.
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As Waxman, DeGette consider handing regulatory reins over to EPA,state legislatures speak up in support for maintaining,strengthening current state-federal partnership
WASHINGTON, DC – As their federal counterparts in Washington, D.C. look for new and creative ways to restrict the responsible use of a critical natural gas and oil extraction technique known as hydraulic fracturing, states with decades of experience in regulating the technology are not taking the effort lying down.
Earlier this week, the Louisiana House became the latest in a string of legislatures where resolutions affirming the chamber’s support for hydraulic fracturing – or opposition to Congress’s effort to disrupt the current partnership – were either formally filed or broadly approved. Many of these states have effectively regulated fracturing activities for more than a half century, and stand to lose the most – in jobs, revenue, royalties and energy output – should EPA be given regulatory authority over the proven technology. To learn more specifics about hydraulic fracturing technology, click here.
“If hydraulic fracturing were unsafe, unregulated, and largely unnecessary as a tool of producing American energy, Congress would have a good reason to step in, and states would have an even better one to step out,” said Lee Fuller, a spokesman for Energy In Depth, a new coalition of American oil and natural gas trade groups. “Clearly, that is not the case. And that’s why you’ve seen states from the Southeast to the Intermountain West stand up, shoulder-to-shoulder, and affirm their support for this safe, critical and increasingly valuable well stimulation technology”.
The latest effort out of Baton Rouge, La. was introduced by Rep. Joe Harrison, R-Napoleonville, and calls on Congress to maintain a provision in existing federal law preserving Congress’s intent not to regulate hydraulic fracturing under the Safe Drinking Water Act (SDWA) of 1974, legislation designed to protect public water supplies. In 1974, hydraulic fracturing had already been in commercial use for 25 years. At no time during its deliberation, nor in subsequent debates on amendments to SDWA in 1986 and 1996, was the concept of regulating hydraulic fracturing under SDWA ever a consideration.
The reason? Hydraulic fracturing was then, and continues to be now, aggressively regulated by the states, compiling an impressive record of safety and performance over that time. More than 60 years after its first commercial use, not a single case of hydraulic fracturing-related contamination has been documented by the federal government. In fact, a landmark 2004 study conducted by EPA found that hydraulic fracturing posed “no threat” to underground drinking water supplies.
Because of that, other states – such as Alabama, North Dakota, Utah, Wyoming, Oklahoma and Texas – have taken up or passed resolutions similar to the one being considered in Louisiana. In New Mexico, former U.S. Energy Secretary and current Governor Bill Richardson introduced a plan in February aimed at easing unnecessary compliance burdens, recognizing that thousands of jobs and millions in potential revenue were tied to safe, responsible, state-regulated natural gas and oil production.
Those conclusions are supported in full by a recent set of studies known collectively as Project BRIEF (Bringing Real Information on Energy Forward), commissioned by the Energy in Depth coalition. In particular, BRIEF found that proposed changes to federal regulations, including those related to hydraulic fracturing, could result in:
- The forced closure of more than half of America’s oil wells, and a third of its gas wells
- $4 billion in lost revenue to the federal government; state treasuries would lose $785 million
- Domestic oil production slashed by 183,000 barrels per day; natural gas by 245 billion cubic feet per year
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Tags: barnett, energy, Energy In Depth, energyindepth.org, frac fluid, gas, Haynesville, Hydraulic fracturing, Jobs, Marcellus, natural gas, oil and natural gas producers, Pennsylvania, Project BRIEF, regulation, shale, taxes, www.energyindepth.org
12.May.2009admin
The Progress (PA): Township Officials Gather for Their Annual Spring Convention. Representatives of 30 townships came together at the Clearfield County Association of Township Officials annual meeting last week. Natural gas activities in the Marcellus were widely discussed. It was reported that a countywide Marcellus Shale Task Force Committee is being formed, which “will serve as a clearinghouse for information and promote the positive effects of gas development.”
PittsburghLive.com: Natural Gas Processing Plant Operational in Washington County. “A Washington County plant that will process natural gas taken from the Marcellus Shale formation in Southwest Pennsylvania and Northern West Virginia now is operational.” The plant can process 30 million cubic feet of natural gas daily. The plant’s opening was also reported in the Houston Chronicle.
American Daily Review: Case for Biofuels Weakens Further. American Daily Review’s Dennis Avery writes that while America continues to depend on foreign oil and biofuels do not appear to be the solution, “the U.S. is gaining energy independence in one area-the huge amounts of modestly priced natural gas, from shale, that are now hitting the market…We’re producing the shale gas with computer-guided horizontal drilling, then ‘frakking’ the shale layers with high-pressure liquids and sand to release more gas. Hugely productive new fields are being developed: Texas (the Barnett shale); Louisiana (the Haynesfield shale); and across Appalachia, from western New York clear down through West Virginia (the Marcellus shale)… We can use the same drilling technology for the 400 billion barrels of light, sweet crude oil in the Bakken shale formation that underlies the Dakotas, Montana, and Saskatchewan.”
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Tags: budget, energy, Energy In Depth, Hydraulic fracturing, Jobs, Marcellus, natural gas, Pennsylvania, Project BRIEF, regulation, Rendell, shale, taxes, www.energyindepth.org
11.May.2009admin
A story out of Pennsylvania today (which ran in several papers throughout the state) lays out the case that Governor Ed Rendell has been making for imposing new taxes on natural gas development in the Marcellus Shale — a 365 million-year-old layer of rock that underlies 54 of Pennsylvania’s 67 counties (and may hold more than $1 trillion worth of gas).
The governor’s position? Pennsylvania is an economic mess right now, and slapping new taxes on Marcellus Shale development could help generate $632 million for the state in just four years. But there’s a problem – from the Philadelphia Inquirer today:
“Virtually all of the Marcellus wells are still in the exploratory stage, with only one in southwestern Pennsylvania sending gas into a production pipeline.”
$632 million from a single producing pad? Maybe if were mining gold bullion instead of natural gas. Anyone else have anything else to say about that figure?
Stephen Rhoads, president of the Pennsylvania Oil and Gas Association, opposes the tax, calling Rendell’s numbers “a complete fantasy,” claiming a tax would yield less than $40 million. He said the tax would also hit landowners as well as drillers, and disputed poll numbers that show the state’s residents support the tax.
Where did the Rendell administration come up with these numbers? Who’s been providing him the air support he needs to make these outlandish claims to the public, the legislature, and the press?
The Pennsylvania Budget and Policy Center, in a report released late last month, supported the governor’s proposal, saying severance taxes are common across the United States as a way to cover the public costs – most notably environmental ones – created by resource extraction.
However, the Pennsylvania Budget and Policy Center (PBPC) is a regional offshoot of the Center on Budget and Policy Priorities, a Washington, D.C.-based organization that advocates for larger, more expansive government and higher taxes, no matter what the issue.
If Gov. Rendell were trying to advance a tax on lollipops, you could bet PBPC would support it. And likely work up a quick study suggesting it generate a billion in revenue, and a trillion dollar savings in health care (no more trips to the dentist!)
Still, PBPC occasionally finds its way into energy-related issues now and then, recently coming out in strong opposition to energy exploration in and among a small portion of the state’s forest areas. How could producing more of our nation’s energy – and collecting the fees and taxes associated with it – be a bad plan from a budgetary perspective? It’s not. Too bad an outfit that touts itself as a “budget and policy center” can’t realize it.
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U.S. Natural Gas and Oil Producers Launch “Energy In Depth” Initiative to Educate the Public, Prevent Losses
WASHINGTON, DC – A coalition of America’s oil and natural gas producers today released the findings of a major research initiative, which, among other things, concludes that enacting new federal environmental regulations – especially related to hydraulic fracturing – could have disastrous economic consequences and increase our dependence on foreign sources of oil.
Known as Project BRIEF – Bringing Real Information on Energy Forward – the research initiative is comprised of studies on the history and progress of effective state regulation of energy development, the proper role of the federal government in regulating development, and the economic consequences associated with changes to existing regulatory frameworks. To highlight the Project BRIEF findings and educate the public, the coalition also launched a new website, which can be found at www.EnergyInDepth.org.
“The scope of the Project BRIEF research project is unprecedented, and its findings are stark,” said Lee Fuller of the Independent Petroleum Association of America, one of the coalition organizers which represents the 5,000 smaller, independent producers that drill 90 percent of the nation’s wells. “Implementing new federal regulations that threaten domestic energy production and increase costs – without creating any additional environmental benefits – is the wrong policy course for the country, and could cost thousands of hard-working Americans their jobs. That’s the bottom line in the BRIEF reports, and the reason we’ve launched this public education initiative.”
America’s natural gas and oil producers provide massive untold contributions to the national economy, and play a critical role in ensuring that America’s energy needs are – and will continue to be – met. Saddling these producers with new, unnecessary, and ineffective environmental regulations could put them out of business, destroy jobs, and increase our U.S. dependence on foreign sources of energy. That’s especially true if lawmakers in Congress move forward with plans to target hydraulic fracturing, a safe and commonly used production technology that renders possible the efficient extraction of energy resources from shale rock.
“Energy is the lifeblood of our economy and the fuel that sustains and creates good jobs here at home,” Fuller continued. “The men and women who work for America’s roughly five thousand small and independent oil and natural gas producers are using 21st century technology to develop supplies safely, efficiently, and effectively – as their long record of achievement illustrates. Policymakers and the American public need to get unvarnished facts and see firsthand the environmentally-sensitive technology we have at our command today to produce energy safely. They’ll get both, and more, with Energy in Depth.”
Key Findings of the Project BRIEF reports include:
- 1.2 million Americans are directly employed by domestic oil and natural gas producers
- In 2007 alone, the industry invested a record $226 billion in domestic exploration and production, driving countless state and local economies
- In 2007, the oil and gas industry paid public and private landowners $30 billion in royalties.
- State regulation of the domestic energy activities has effectively protected the environment and public health for over a century.
- Potential new regulations now circling around Washington could:
o Force the closure of more than half of America’s oil wells and a third of our gas wells
o Cost the federal government $4 billion in revenue; state treasuries would lose $785 million
o Slash domestic oil production by 183,000 barrels per day; natural gas by 245 billion cubic feet per year
For more information on Project BRIEF and to learn more about American energy production, visit www.EnergyInDepth.org – a first-of-its kind, insider’s look at domestic energy production. It features a virtual well site, a storehouse of interactive features and videos aimed at giving users an up-close view of American oil and natural gas production.
Some of the other features visitors will find useful on Energy In Depth:
- Interactive State-by-State Map: Includes data on how many jobs would be at risk and how much annual tax and royalty revenue each state would stand to lose under regulations currently being considered in both state and federal legislatures.
- Frac In Depth/Environment In Depth: A stand-alone section devoted to the who, what, when, how, and where of a drilling practice known as hydraulic fracturing – along with a separate section detailing recent breakthroughs in technology that are allowing producers to protect and preserve our environment. Hydraulic fracturing is responsible for delivering 30 percent of America’s oil and natural gas, and has aided in the extraction of more than 600 trillion cubic feet of natural gas and seven billion barrels of oil over the history of its use.
- Comprehensive Energy Research Library: The product of months of independent research and hundreds of hours of document assembly, the library brings together reports, studies and hard-to-find analyses to complement the site’s already established content.
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