IPAA advocates fact-based hydraulic fracturing study

Paula Dittrick
OGJ Senior Staff Writer

NEW ORLEANS, Nov. 6 -- The Independent Petroleum Association of America will work to ensure that an upcoming study on hydraulic fracturing is scientific, based on facts, and includes input from the oil and gas industry as well as state regulators.

Various speakers at IPAA’s annual meeting in New Orleans discussed the attention and concerns raised by some members of Congress and some environmental groups about fracing and its safety.

Water management issues have come into play because of suggestions by some industry critics that fracing chemicals might get into ground water. There has been no definitive evidence of that in various studies that have been done.

On Oct. 29, the US House of Representatives and US Senate approved a Department of Interior appropriations bill that includes a provision directing the Environmental Protection Agency to produce another study on hydraulic fracturing.

IPAA Chairman Bruce Vincent, president of Swift Energy Co., Houston, said no such study is necessary. Fracing is crucial to recovering gas from shale plays.

Vincent noted that state regulators have successfully monitored fracing operations for 60 years. He said ongoing congressional efforts to impose federal regulations could result in extensive, costly monitoring of chemicals throughout the life of a well.

“It’s the environmentalists wanting a way to further regulate our business,” Vincent said. “Antidevelopment movements based on misinformation and scare tactics cannot delay or deter the responsible development of American resources,” he said.

Vincent said other principal policy priorities for IPAA are resisting tax changes as proposed in US President Barack Obama’s 2010 budget. The Obama administration has proposed repealing numerous tax provisions, including percentage depletion and intangible drilling costs.

“There is still serious concern about the direction of energy policy in this country,” Vincent said, adding, “It’s clear to me that policy battles will remain front and center.”

Other areas of concern are increased oversight and regulation of financial markets along with gaining access to more oil and gas off the US, Vincent said.

Chemical disclosures
Lee O. Fuller, IPAA's vice-president of government relations, told OGJ on the sidelines of the IPAA meeting that he has never seen “an environmental issue with less substance behind it” as concerns about fracing chemicals contaminating ground water.

Well completions create a barrier around the wellbore to prevent the leeching of any chemicals, Fuller said, noting that industry has been doing this successfully for decades.

“There’s been no history of problems with hydraulic fracturing,” Fuller said. “It is a very orchestrated effort to try to diminish production.” He believes “people historically opposed to developing natural gas” are raising the concerns.

Some groups have called for oil and gas companies to disclose the chemicals that they use in fracturing. Most producers resist that, saying the chemical mixtures are proprietary information.

IPAA does not believe that companies should have to disclose the chemicals, Fuller said. If analysis were to show chemicals from a specific oil and gas operation getting into water, then IPAA would support getting the chemical information to regulators who could supply it to first responders, he said.

Industry comments
Separately from the IPAA meeting, Oklahoma City-based independent Chesapeake Energy Corp. issued an Oct. 28 news release saying that it supports efforts by the state of New York to require fracing vendors to register their products and disclose the chemicals used.

Chesapeake already has posted its fracing chemical mixture on the company web site, Chesapeake Chief Executive Officer Aubrey A. McClendon said.

“We fully support setting high environmental standards for the extraction of natural gas from the Marcellus shale, and we look forward to continuing that process with the state,” McClendon said.

On Oct. 23, Schlumberger Ltd. Chief Executive Officer Andrew Gould said he expects to see some new US drilling regulations, and he supports public discussion about disclosure of fracing ingredients.

“I’m pretty sure that there will be some form of new regulation in order to satisfy the authorities and the public’s desire to know that what is being done is safe,” Gould said during an Oct. 23 webcast on Schlumberger’s quarterly earnings.

Contact Paula Dittrick at paulad@ogjonline.com.

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