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More Federal Regulation of Hydraulic Fracturing

May 14, 2012 3 minute Read by Bernard L. Weinstein

As the Wall St. Journal recently reported, the Obama administration’s Department of the Interior will soon issue numerous new environmental and safety rules pursuant to hydraulic fracturing for natural gas on federal lands. Though only 25% to 30% of fracked wells are on federal lands, these rules may become the template for fracking on private leases as well.

The underlying justification for these new regulations is to ensure that fracking doesn’t contaminate groundwater or cause earthquakes. Specifically, Interior will require that drilling companies (a) disclose the names of all chemicals contained in fracking fluids, (b) set standards for well construction and waste-water treatment, and (c) request permission to frack with every permit application.

This is another example of federal regulators arriving late to a party to which they weren’t invited. For more than 40 years, the individual states have had exclusive regulatory oversight of natural gas drilling, and hydraulic fracturing has been used in nearly one million wells across the U.S. Careful studies by the Environmental Protection Agency (EPA) and the Ground Water Protection Council haven’t revealed a single case of ground water contamination from shale gas drilling. That’s because the fracturing occurs far below the location of drinking water, and the gas wells are encased in steel and concrete to ensure isolation from ground water. All but 1% of the fracturing mixture is made up of water and sand, so the small amount of chemicals and additives is well diluted. Furthermore, most states already require disclosure of chemicals used in drilling fluids.

As for earthquakes, the U.S. Geological Survey (USGS) recently completed a study that concluded hydraulic fracturing does not cause them. The study did find an increase in “seismic activity” near some well sites but attributes these episodes to injections of well wastewater and not fracking. The study also notes there are more than 140,000 disposal wells in the U.S. with only a handful potentially linked to seismic activity.  Importantly, the USGS found that the “earthquakes” were fairly small and rarely caused damage.

The soon-to-be promulgated rules on fracking come on the heels of 588 pages of new regulations from the EPA to control alleged air pollution from natural gas wells. Not only are these new directives from Interior and EPA duplicative of state regulations, complying with them will impose unnecessary additional costs on drilling companies and likely slow the pace of permitting on federal lands.


Author

Bernard L. Weinstein
Bernard L. Weinstein

Bernard L. Weinstein is Associate Director of the Maguire Energy Institute and an Adjunct Professor of Business Economics in the Cox School of Business at Southern Methodist University. He has taught at Rensselaer Polytechnic Institute, the State University of New York, the University of Texas at Dallas, and the University of North Texas. He has authored or co-authored numerous books, monographs, and articles on the subjects of economic development, energy security, public policy, and taxation. His work has appeared in professional journals as well as the popular press. He earned an A.B. degree from Dartmouth College and an M.A. and a Ph.D. in economics from Columbia University.

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