API economist warns against duplicative fracing regulations

Policymakers across all levels of US government must guard against unnecessary or duplicative regulations that could impede investments in unconventional oil and gas plays, which already created jobs and boosted revenues for some states, American Petroleum Institute Chief Economist John Felmy said.

Speaking with reporters during a conference call from Washington, DC, Felmy affirmed API believes that strong state regulations and safety practices already are in place for shale development and hydraulic fracturing.

“In recent years, the application of horizontal drilling has allowed hydraulic fracturing to access enormous, previously unreachable supplies of oil and natural gas—and to do so safely and responsibly,” Felmy said.

“It was these technological achievements that led to what is known as the ‘North Dakota Miracle,’ which has transformed that state into our nation’s No. 2 oil producer, reduced unemployment there to 3%, and driven incomes up sharply,” he said.

These same technologies were used to tap unconventional reserves, create jobs, and boost state revenues in Pennsylvania, Texas, Arkansas, Louisiana, Ohio, and other states, he added.

New York frac ban

New York state officials are considering whether to relax a ban on high-volume hydraulic fracturing in certain areas of the state (OGJ Online, June 14, 2012).

A New York Times article dated June 13 quoted sources close to Gov. Andrew Cuomo saying the state might pursue a plan “to limit the practice to several struggling counties along the Pennsylvania border, only in towns that approve the technology.”

Felmy said, “We’re hopeful that Gov. Cuomo too will soon allow New York to join the growing list of states reaping the benefits of developing energy from shale. Polls show a large majority of New Yorkers believe that oil and natural gas development in New York will create jobs.”

Meanwhile, industry has worked hard to increase public awareness about the economic benefits of shale development.

API has five standards specific to fracing (OGJ Online, Oct. 13, 2011). These include standards for well construction and integrity, water management, mitigating surface impacts, environmental protection for production operations, and isolating potential flow zones during well construction.

These standards and other fracing information are available on the API web site. Information that API presented via workshops to state officials in New York, Pennsylvania, West Virginia, Ohio, and other states also is available online from an industry web site.

“We remain committed to safe and responsible development of our shale energy resources and to working closely with the states to ensure effective, appropriate regulation,” Felmy said.

Contact Paula Dittrick at paulad@ogjonline.com.

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