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 billclearly 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:

• API Press Release: Duplicative hydraulic fracturing rules could imperil U.S. economy

• Graphic: How Far Down Do We Frac?

• Fact Sheet: New Federal Regulations Will Cost Americans Jobs, Revenue, and Security

• EPA Study: Study to Evaluate the Impacts to USDWs by Hydraulic Fracturing of Coalbed Methane Reservoirs

• Browner Memo: Letter of Support for Hydraulic Fracturing from Carol Browner, Fmr. EPA Administrator

• Interactive Graphic: How Could Efforts to Attack Hydraulic Fracturing Impact Your State?

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