The Final Countdown

Should state officials remain in charge of regulating fracturing activity in their communities? Yes. And EID counts the reasons why

Support for the safe development of clean-burning natural gas has always been a bipartisan affair. But to listen to Democratic Rep. Mike Doyle (Pa.) extol the virtues of modern-day shale gas exploration at a hearing in Congress last week, one was left to wonder how anyone, of any party, of any sensibility, could possibly oppose it.

Remember, Rep. Doyle still apparently supports the ill-advised windfall profits tax; he’s hardly a shill for the oil and natural gas industry. But the congressman can’t ignore the potential – heck, the reality – for shale gas to create jobs, revenue and opportunity for the residents of Pennsylvania. Just take a look at key segments of his excellent opening statement:

“We have had enormous success in my State of Pennsylvania with horizontal drilling in natural gas shale plays.”

“My State, Pennsylvania, has done a great job in regulating the natural gas industry, while allowing it to grow and prosper.”

“We have been known as a steel city, but pretty soon we may be known as the Saudi Arabia of natural gas with the Marcellus shale sitting underneath western Pennsylvania.”

“Last year alone Pennsylvania could attribute nearly 50,000 jobs to environmentally safe natural gas production.”

All that’s true, by the way – according to Penn State University, “in excess” of 48,000 jobs were created in the state in 2009 alone (and nearly $4 billion in economic activity) all thanks to a technology that allows producers to access and recover resources that would be too deep and difficult to otherwise get. Congressman Doyle certainly read the Penn State study, and it’s clear he knows a thing or two about the safeguards in place to ensure the critical work of developing these job-creating shale resources doesn’t come at the expense of our air, water or surrounding environment.

But that’s not to say that Rep. Doyle claims to know it all; as he made clear during last week’s hearing, he’s still got plenty of questions on the design, intent and potential impact of the FRAC Act on his district. Fortunately for Rep. Doyle, the bill’s lead sponsor – Rep. Diana DeGette (D-Colo.) — sat only a few seats away from him at last Wednesday’s hearing, eager to explain the functions of her bill to a subcommittee of which she isn’t even a member. Unfortunately for Rep. Doyle, Rep. DeGette’s characterization of her bill was, in the final analysis, so irreconcilably divorced from reality that it’s tough to imagine how anyone could have left the room with more or better information on the legislation than when he came in.

Which is too bad, really – because Rep. Doyle came to this hearing with a series of important questions on the FRAC Act, for which he expected answers. Here, according to the hearing transcript, is how Rep. Doyle set up his line of questioning:

Statement #1: In Pennsylvania, officials have “done a great job in regulating” Marcellus Shale exploration in the state;

Statement #2: In Pennsylvania, “we have rules in place to protect our underground sources of drinking water”;

Statement #3: In Pennsylvania, “in order to obtain a permit, drillers must identify any anticipated impacts of water withdrawals on water resources.”

Statement #4: In Pennsylvania, the “law requires drillers to case in grout wells through all freshwater aquifers before drilling through deeper zones in order to protect ground water from pollutants inside wells”;

Statement #5: In Pennsylvania, “there are also rules that require operators to disclose all chemicals to be stored and used at a drilling site, including chemicals and fracking fluids in order to guard against contamination and ensure safe disposal of these chemicals. That is Pennsylvania law.

And Now His Question: Having established that Pennsylvania’s laws 1) are tough, 2) work well, and 3) haven’t forced producers to leave the state – what would be wrong with imposing a “national regulatory framework” based on the Pennsylvania model to create “uniformity and predictability” for those who operate in multiple states?

Why not back a national standard? And while we’re at it, why not back the FRAC Act – since all it’s trying to do is put a uniform rule in place? Reasonable questions, to be sure. Thankfully, they’re questions for which there are similarly reasonable and straightforward answers. Energy In Depth counts the ways:

1)     Fractured Thinking on the FRAC Act. Those who say the FRAC Act will setup a straightforward, uniform standard for the regulation of hydraulic fracturing nationwide are simply not telling you the truth. In reality, and made clear by the actual text of the bill, the FRAC Act has only one single purpose in mind: prevent the development of America’s shale gas by establishing a de facto ban on the technology needed to produce it. Mechanically, the means by which the bill seeks to do that are genius: It doesn’t actually ban fracturing from taking place in explicit terms, it simply mandates that no fracturing activity can proceed until EPA issues the appropriate permits/approval under the Safe Drinking Water Act – something EPA literally cannot do under the current structure of SDWA.

2)     The Fallacy of the Slacker State. One of the central justifications for imposing an EPA-driven, one-size-fits-all regulatory regime on hydraulic fracturing is that some states, to put it plainly, just aren’t doing their job. Observe here (page 80 of the PDF) how Rep. Doyle puts forward the proposition at the hearing:

“So my question is, because this Marcellus shale formation goes over several States and we have some laws that have regulations ?? some States that have regulations, some States that have no regulations and everything in between, would a national regulatory framework … create uniformity and predictability for a company like yours?

Here are the facts: Of the 27 states that support 99.9 percent of all oil and gas exploration activities nationwide, all 27 have permitting requirements in place, right now, governing the siting, drilling, completion and operation of wells – which include operations related to hydraulic fracturing. Some of these states have had experience in regulating this process for more than 100 years. You can find a fact sheet on our website capturing all the relevant rules, regulations and data in the individual states.

3)     Shale Plays are Like Snowflakes. No two are alike. Plainly put, the subsurface geology ofPennsylvania is dramatically different from the composition of underground strata in TexasNew York is different from West Virginia. Colorado is different from Kansas. Each state presents unique challenges to producers operating in that region – from the depth of the shale play, the volume of resources attached, to the temperature of rock below, to the availability of injection wells as an option for disposal. No two states – not even any two regions – will require the same exact fracturing treatment, and therefore no two states should be forced to live under the exact same regulatory system for bringing these resources to market. Regulators on the ground, in the community, know this terrain – physical and regulatory – better than anyone sitting at a desk in Washington, D.C.

4)     EPA is Simply Ill-Equipped to Do the Job. Every month, more than 35,000 separate wells in 27 states undergo fracture stimulation work, and nine out 10 wells in America will require this technology to yield additional energy in the future. The idea that EPA staff – the majority of whom work out of offices in Washington, D.C. – would have the ability to properly oversee this system, and issue permits pursuant to it, is ridiculous. Even Carol Browner, the president’s current energy and environment czar, admitted thatin a letter she wrote while serving as administrator of EPA. And, not for nothing, but doesn’t EPA already have enough on its plate these days without injecting itself in process the state’s have managed well for decades?

5)     The Current System Works – and History Bears That Out. To accept the argument that EPA regulation of hydraulic fracturing is necessary, first you need to accept the premise that the current system of state-based regulation is broken. But the facts simply don’t bear that proposition out. From North Dakota to Texas, Montana to New Mexico, Colorado to Pennsylvania, Tennessee to Alaska – every one of these states has testified that fracturing activities pose no discernable threat to local drinking water. And as we’ve written before, there’s a darn good reason for why that’s the case: The areas we frac are isolated from the areas the house drinking water by thousands of feet in distance and millions of tons of impermeable rock. And on the surface, when a rare spill or incident does occur, state regulators – to a man – have testified that they’ve got all the authority they need to prosecute the offending parties, and ensure those incidents do not occur in the future.

Now are you starting to get the picture here? Truth is, energy producers encourage commonsense regulations. Fortunately, under the present system, operators have the ability in most states (New York, we’re looking at you) to produce these abundant shale gas resources in a way that’s both economical for their businesses, and safe for the surrounding communities in which they work. Those are the facts – and at a time of record unemployment and winnowing state revenues, those are the realities that policy-makers should consider before walking into the buzz saw known as the FRAC Act.

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