U.S. to Set Rules for Fracking on Federal Land

May 8, 2012

The Obama administration will soon issue sweeping new environmental safety rules for hydraulic fracturing ("fracking") on federal land, setting a new standard that natural gas wells on all lands could eventually follow.  The rules are designed to address concerns that the method of extracting natural gas known as "fracking" can contaminate groundwater, says the Wall Street Journal.

Environmental groups, among the most vocal opponents of the drilling method, say hydraulic fracturing should be stopped until experts can confirm it is environmentally safe, and some city governments have banned hydraulic fracturing within their districts.  Nevertheless, the Obama administration thus far seems to have offered a relatively friendly hand to the industry.

  • The Interior Department loosened a proposed requirement for companies tied to disclosing the chemicals they use to extract natural gas from the earth, after the industry complained an earlier version would slow drilling too much.
  • Last month, the Environmental Protection Agency (EPA) gave the industry two years to comply with new air-quality standards for oil and natural gas wells after the industry complained it would be difficult to meet new standards.
  • The EPA has also backed away from several alleged cases of groundwater contamination, concluding that there was not enough evidence to support such claims.

Industry advocates hope that the new rules will be relatively amicable; the still-blossoming industry sees within itself the potential to be an enormous domestic production over the course of the next several decades.

  • An estimated 25 to 30 percent of fracked wells are on federal land, according to Baird Equity Research.
  • Of the 3,400 wells that are drilled on public lands each year, about 90 percent use hydraulic fracturing.
  • Furthermore, it is believed that the federal rules would likely serve as a template for additional state-level regulations, contributing to the importance assigned to the Interior Department's rulings.

Researchers suggest that the United States has domestic stores of natural gas that could last for decades.  What remains to be determined is the speed and ease with which the industry will be allowed to exploit that resource.

Source: Tennille Tracy, "U.S. to Set Rules for Fracking on Federal Land," Wall Street Journal, May 3, 2012.

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