NCPA: Federal Control of HF Would Undermine U.S. Shale Boom

The nonpartisan National Center for Policy Analysis (NCPA) recently released an issue brief that highlights the critical role hydraulic fracturing has played in the rapid transformation of our energy outlook – a transformation from scarcity to abundance.  As NCPA points out, this is also just the beginning: the United States has the capacity to continue rapidly increasing oil and gas production, provided the federal government removes onerous regulatory barriers and refrains from imposing new ones.

NCPA details just how big of a game-changer horizontal drilling and hydraulic fracturing have been: “many analysts argued that oil was nearly tapped out, and that America needed to plan for a post-petroleum future,” the issue brief observes. “Now, however, natural gas has taken the stage…Natural gas could not play this role without the vast reserves fracking opens up every day.”

Fifteen years ago, it was assumed that America only had 60 years of natural gas supplies at then-current consumption levels.  Today, we have 100 years or more – and that’s with even higher natural gas demand.  In fact, the Marcellus Shale could contain 1,307 TCF – even at a 30 percent recovery rate that’s enough to meet 14 years of our present demand. And that’s just in the Marcellus!

But the shale revolution isn’t just about natural gas. Just last year, politicians were still telling us that we can’t drill out way to energy security, and we only have two percent of the world’s proven oil reserves.  Now, thanks to hydraulic fracturing, the United States has reversed a 20-year long production decline in just two years.  In 2009, the United States’ crude production dropped to four million barrels per day, but since then production has nearly doubled to 7.5 million barrels per day.

The news gets even better, though: Given our vast resources, this boom could continue full speed ahead, slashing imports of foreign oil and making the United States more energy secure.  The bad news, as NCPA points out, is that this energy game-changer could also be hamstrung or otherwise stalled by burdensome federal regulations.

It is well known that even as domestic oil and gas production have rapidly increased, production on federal lands has declined, in large part due to a costly and slow federal regulatory regime.  NCPA warns that there are even more regulations in the works: “The federal government is considering more stringent regulations, despite study after study indicating that fracking has few, if any, negative environmental consequences.”

NCPA notes that the federal government should leave the regulation to the states, and it isn’t alone in defending the states’ role. Energy Secretary Ernest Moniz recently made a similar point:

“I think in the end there has to be a very, very strong state role there [for states]…The situations are different in different states, the geologies are different.”

High ranking officials in the Environmental Protection Agency have also agreed. As former EPA Administrator Lisa Jackson said in 2011, “We have no data right now that lead us to believe one way or the other that there needs to be specific federal regulation of the fracking process.” She later added, “States are stepping up and doing a good job. It doesn’t have to be EPA that regulates the 10,000 wells that might go in.”  EPA’s Drinking Water Division Director Steve Heare has also said states are doing a “good job” regulating hydraulic fracturing.

With that, perhaps NCPA’s conclusion puts it best:

“If fracking cannot definitively be linked to a persistent, widespread, inherent problem, the federal government should accept the mountain of evidence that fracking is safe. The federal government should streamline the permitting and leasing process on public lands – leaving regulation on private land to the states – in order to reap the fiscal, economic and energy bounty of fracking.”

As IPAA and the Western Energy Alliance have pointed out before, the federal government’s proposed rule on hydraulic fracturing would come at an enormous cost without solving any legitimate problem. Although critics of hydraulic fracturing have repeatedly called for costly federal regulation, it’s clear that such a move is guided more by an interest in shutting down the U.S. shale revolution than it is in addressing environmental concerns.

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