Political fracturing

Nov. 17, 2008
Oil and gas producers in the US can profit by brushing up on the regulatory background of hydraulic fracturing.

Oil and gas producers in the US can profit by brushing up on the regulatory background of hydraulic fracturing. So can consumers of natural gas. So, for that matter, can anyone eager to lower emissions of carbon dioxide in response to climate change.

Producers may think regulatory questions ceased when the Energy Policy Act of 2005 became law. The comprehensive energy bill contains an exemption for hydraulic fracturing from federal regulation under the Safe Drinking Water Act.

But the exemption may be in jeopardy. It has received persistent scorn from Rep. Henry Waxman (D-Calif.), who launched a portentous leadership challenge the day after this month’s general election.

Challenging Dingell

Waxman wants to replace John Dingell (D-Mich.) as chairman of the House Energy and Commerce Committee. So far, his move against the most senior member of Congress has been analyzed mostly in the context of climate change policy (see story, back page).

Dingell and Rick Boucher (D-Va.) last month finished climate change legislation on which they have worked for months and which environmental groups dislike because of accommodations to industries important to the lawmakers—autos and coal. In fact, the environmental group Greenpeace has formally complained to House Speaker Nancy Pelosi of California about the lawmakers’ approach to the issue.

A Waxman takeover of the energy committee can be counted on to harden climate change legislation in the House. But the indefatigable Waxman wouldn’t stop there.

As chairman of the House Committee on Oversight and Government Reform, he has made clear his dislike of the energy bill’s exemption for hydraulic fracturing.

“I and other members opposed this special interest giveaway,” he said while opening an October 2007 hearing entitled “Oil and Gas Exemptions in Federal Environmental Protections.” Waxman used the hearing to bore into officials from the Department of the Interior, complaining that the agency ignored a requirement in the 2005 energy law for a study of coalbed methane and the effects of hydraulic fracturing.

“The theory seems to be that the less we know about the dangerous practice of hydraulic fracturing, the better,” he said.

Wrong. Operators have used hydraulic fracing safely for nearly 60 years. By 2002, when the Interstate Oil & Gas Compact Commission completed a survey of the subject, nearly 1 million wells had been hydraulically fraced.

US producers now apply the technique to about 35,000 wells/year, regulated by states. There is no record of consequent harm to groundwater.

But facts seldom stop environmental witch-hunts.

In 1994 an environmental group called the Legal Environmental Assistance Foundation (LEAF) petitioned the Environmental Protection Agency to regulate hydraulic fracing of coalbed methane wells in Alabama.

EPA declined. In 1997 LEAF won a court ruling that hydraulic fracing represents underground injection and therefore falls subject to EPA regulation. The court didn’t address environmental damage—or the absence of it. Its ruling had to do strictly with legal definitions.

So Alabama adapted its underground injection control program to federal requirements and court directives.

The results, testified Deputy Director of the State of Alabama Oil and Gas Board David E. Bolin at the October 2007 hearing: “Substantially increased aDministrative and production costs with no public health or environmental benefit.”

In 2004, EPA completed a study that concluded “that the injection of hydraulic fracturing fluids into coalbed methane wells poses minimal threat to underground sources of drinking water.”

Facts thus demolish Waxman’s “the-less-we-know” innuendo. Yet he still raises undue alarm at every opportunity over an altogether benign and well-regulated production technique.

He’ll stay on this crusade if he displaces Dingell. And if he succeeds in raising the costs of producing natural gas he’ll contravene his own agenda for climate change.

Cause vs. outcomes

Any effort to limit emissions of carbon dioxide has to emphasize gas. Almost half of US gas production now comes from unconventional reservoirs—coalbeds, tight sands, and shales—and the share is rising. Most such reservoirs require hydraulic fracing, raising the costs and regulatory burden of which would constrict gas supply and lift prices. That’s no way to lower carbon dioxide emissions or help energy consumers.

Liberal fire-breathers like Waxman, of course, never heed self-contradictions like these. To them, the presumptive righteousness of cause trumps practical worry over outcomes.

Waxman’s lightning assault on the energy committee bespeaks a legislature in political turmoil. For a new president, the obvious void in perspective represents an immediate test.