Undermines the states, stifles energy development in America, asks for things we might not even own … Energy In Depth counts down the ways

Last night, Senate Majority Leader Harry Reid released the text of energy legislation that reports indicate could be brought up for debate on the floor as early as this week.  Unfortunately, although described as a “scaled-back” and “non-controversial” iteration of previous legislative attempts, the bill includes sections explicitly targeting the safe and steady use of hydraulic fracturing — reminiscent of language found in theso-called FRAC Act, which has yet to generate a single committee hearings or markup since first being introduced in the previous Congress.

Here’s how Energy In Depth executive director Lee Fuller characterized those provisions today:

“The entire universe of additives used in the fracturing process is known to regulators and the public, as is mandated as such under federal rules enforced by OSHA. The problem with this provision is that it has the potential to create a series of legal responsibilities that operators, and even service companies, might not be able to fulfill, especially under a scenario where folks are asked to post information that doesn’t even belong to them. The amazing thing is this provision appears to be moving ahead even as EPA and Congress continue to study the issue. It raises the question of why they’re doing the study in the first place if policymakers don’t appear to be all that interested in learning anything from it.”

Below, EID counts down the reasons that Reid’s HF provisions should be opposed by anyone who supports the economic, strategic and environmental imperative of producing shale gas resources in America:

1)     Section 4301 would undermine existing state regulatory authority, be inconsistent with federal environmental laws that balance disclosure issues against confidential business information, chill technology innovation and investment related to hydraulic fracturing, and restrict the development of the nation’s enormous reserves of shale gas.

2)     Section 4301 places unrealistic burdens on producers. Operators and service companies currently provide full chemical disclosure in accordance with all applicable federal and state authorities. In contrast to the assertions on which this section premised, these materials are well known to state regulators, and are generally available to members of the public upon a quick search of the Internet, or by request to the state.

Unfortunately, this section would compel producers to disclose detailed information that they may neither have nor have the legal right to disclose.  Additives used in the fracturing process are manufactured by companies that determine the amount of information they can post on Material Safety Data Sheets.  Service companies and producers purchase these materials from manufacturers. That use does not either provide information such as CAS registry numbers or create a legal right to disclose such information publicly.  Consequently, producers could be in a position where they cannot meet these new requirements and would either be subject to $10,000/day fines under EPCRA, or limit their ability to fracture natural gas formations.

3)     Section 4301 is inconsistent with federal statutes. The language is inconsistent with the key Congressional policies set up in EPCRA and other federal environmental laws for attempting to balance disclosure issues against confidential business information.  For example, in EPCRA Congress recognized the need to strike a balance between reporting on additive use to local authorities and the need to protect confidential business information. However, the language does not extend these protections for valuable information related to hydraulic fracturing.

4)     Section 4301 will adversely impact energy development in the U.S. with no tangible benefits to show for it. It would provide a strong disincentive to service companies to engage in further innovation with respect to the development of new fracturing solutions. The loss of these new and innovative products would greatly reduce energy production in the U.S., and ratchet up our reliance on imports. Even though state regulatory programs have effectively managed the environmental considerations associated with fracturing, companies are actively working to produce new HF systems that are even more environmentally benign than they are today. The Reid language would undermine this technology development and innovation.

5)     Isn’t EPA in the middle of doing a study on this exact thing right now?  In the FY2010 Appropriations bill, Congress directed EPA to undertake a study focusing on the relationship between hydraulic fracturing and drinking water. In 2004, the agency published a report finding hydraulic fracturing to be a safe and well-regulated technology. Notwithstanding those findings, EPA is honoring the Congressional request to study the technology once again. Legislative efforts such as this one should wait until the results of that study are released. Otherwise, why should the time, energy and resources be spent on doing the study in the first place?

6)     States’ record of enforcement/oversight proves they know how to regulate the process better than the feds. States have effectively regulated hydraulic fracturing for over 40 years with no confirmed incidents of groundwater contamination associated with HF activities. Section 4301 would undermine existing state regulatory authority, be inconsistent with federal environmental laws that balance disclosure issues against confidential business information, chill HF technology innovation and investment, and restrict the development of the nation’s shale gas resources.