Natural Gas Politics
26 May 2009
by Abrahm Lustgarten,
Four years after Vice President Dick Cheney spearheaded a massive
energy bill that exempted natural gas drilling from federal clean water
laws, Congress is having second thoughts about the environmental
dangers posed by the burgeoning industry.
With growing evidence that the drilling can damage water supplies,
Democratic leaders in Congress are circulating legislation that would
repeal the extraordinary exemption and for the first time require
companies to disclose all chemicals used in the key drilling process,
called hydraulic fracturing .
The proposed legislation has already stirred sharp debate.
The energy industry has launched a broad effort in Washington to fend
off this proposed tightening of federal oversight, lobbying members of
Congress and publishing studies that highlight what it says are the
dangers of regulation. In mid-May, the industry released a detailed
report asserting that the changes in current law would cost jobs and
slash tax revenues. A key advocate of past efforts to regulate gas
drilling, Rep. John Salazar (D-CO), has declined to support the
legislation, expressing concern about how it would affect the energy
However, with a strengthened Democratic majority in Congress and the
party's capture of the White House in last year's election, the
fracturing legislation is viewed as having its best chance at passage
in years. Its House sponsor, Rep. Diana DeGette (D-CO), aims to attach
a bill to a larger piece of legislation with broad support -- possibly
a bill on climate change or a new energy policy measure – where it
would be shielded from industry resistance. On the Senate side,
according to congressional staff close to the effort, Sen. Bob Casey
(D-PA) has a companion bill ready to follow.
The drilling process involves injecting millions of gallons of water
and sand mixed with tens of thousands of gallons of chemicals -- some
that are known to cause cancer -- deep into the ground, where as much
as a third of those fluids typically remain after the gas is removed.
Global companies including Halliburton and Schlumberger have fought
hard to shield from public view the chemical recipes they use to drill,
saying that the formulas are valuable trade secrets. Scientists say
that is precisely the information they need to determine if drilling
caused the water pollution that has been reported in Colorado and
"The regulatory loophole for hydraulic fracturing puts public health at
risk and isn't justified," said Henry Waxman (D-CA) , chair of the
House Energy and Commerce Committee that will offer the bill, in an
e-mail. "The current exemption for the oil and gas industry means that
we can't even get the information necessary to evaluate the health
threats from these practices."
The industry argues that state laws and regulators are doing an
adequate job of regulating the hydraulic fracturing process, and that
more layers of regulation would be burdensome and expensive.
"We don't think the system is broke, so we question the value of trying
to fix it with a federal solution," said Richard Ranger, a senior
policy analyst at the American Petroleum Institute. "So proceed with
caution if you are going to proceed with regulating this business
because it could make a very significant difference in delivering a
fuel that is fundamental to economic health."
Proponents of regulation, including DeGette, the author of the bill,
say protecting water resources is worth the slightly higher gas costs
that might come with regulation, but that the industry's assessment of
those costs is dubious. The exemption, they say, has artificially
lowered drilling costs because it means the companies don't always have
to follow the safest practices.
"I find it kind of a novel argument that it will be burdensome to
comply with one federal law when they could potentially have to comply
with 50 state laws," she said. "I just think that they don't want to
have to do it."
A key question for proponents and opponents alike is how strong a
stance President Barack Obama's administration will strike on this
legislation. A White House spokesman said that the administration
hasn't yet taken a position.
The Safe Drinking Water Act, enacted in 1974, governs what chemicals
can be injected underground and applies to essentially every industrial
activity in the United States. It limits what levels of pollution are
allowed, but then permits states to create more detailed regulations if
they choose. The law also sets minimum standards for well design and
other protections of health and safety.
"We are not aware of any other industries that have an exemption," said
Stephen Heare, director of the Drinking Water Protection Division at
the Environmental Protection Agency.
As the law currently stands, the EPA is not allowed to set conditions
for hydraulic fracturing or even require states to have regulations of
States often look to the federal agencies for guidance on how to craft
environmental rules. And hydraulic fracturing is an especially
complicated process that scientists say warrants more study. The
current regime leaves state agencies -- which are often understaffed
and underfunded -- to do their own research and develop their own best
practices, according to EPA scientists.
Natural gas, used for heating, electricity and manufacturing, supplies
a fifth of the energy used in the United States and is an increasingly
valued resource. According to the Energy Information Administration ,
domestic gas reserves, including those held in vast shale deposits that
underlie the Appalachian states, could meet the country's natural gas
needs for more than 100 years. Without hydraulic fracturing, which is
now used in almost all new gas wells, much of this supply would remain
beyond reach, according to the American Petroleum Institute.
Natural gas is also widely viewed as an important transitional fuel in
American climate and energy policy -- emitting 23 percent less carbon
dioxide per unit of energy than oil. Its development has spurred jobs
and economic activity in some of the poorest and most rural parts of
But as gas drilling has expanded, a wave of reports have emerged that
the drilling is affecting water. In Colorado and Wyoming, state and
federal officials have concluded that benzene and other contaminants
have made their way into aquifers, streams and well water as a result
of drilling accidents or spills of drilling fluids. Officials have
linked methane gas in groundwater to drilling in Colorado (PDF),
Ohio (PDF) and Pennsylvania. Fracturing may or may not be to blame, EPA
officials say; it's hard to tell because they don't oversee the process
and can't trace chemicals that are unidentified.
"We're not talking about banning fracking here. What we're for is
regulating it," said Rep. Jared Polis (D-CO), a co-sponsor of the House
bill, emphasizing that his hope is to give scientists the tools to
measure, and to control, its impact on the environment. "Other than oil
and gas companies, I am not aware of anyone that supports allowing that
to continue in an unregulated way."
Even so, DeGette will need to gather support from some representatives
in states that stand to reap substantial economic benefits from
drilling. The retreat of Salazar, a prominent moderate whose
co-sponsorship helped draw support for a similar measure in the House
last year, is a warning sign that the passage is not preordained.
"I think Salazar is a very strategic target on all of this," said Sarah
Tucker, an analyst for Trout Unlimited, a sportsman's group that is
lobbying for more oversight of drilling. "He is from an oil and gas
district ... that gives him a lot more credibility when working on
these issues ... Those moderate Democrats are always the sticking point
as to whether or not a bill actually moves."
In an e-mailed response, Salazar said he would still consider voting
for the bill, but that he may pursue an alternative compromise.
"I believe that developers may have legitimate concerns about the
impact that removing the exemption may have on their ability to find
and extract oil and gas," he said. "But ... the current regulatory
approach is probably not sustainable and will probably need to be
revised in some way."
Passing such legislation has proved difficult in the past. This year's
efforts to reverse the exemptions will constitute at least the fourth
effort by Democrats to shore up protections against hydraulic
fracturing since it became a focus of the White House's Energy Task
Force in 2001. According to records of committee debates from 2003, the
exemptions were forced through against objections, without hearings by
a Republican majority and eventually tucked into the 2005 Energy Policy
Act (PDF). Ever since, in the face of intense lobbying, any efforts to
address the topic have stalled in committee.
Last year the bill's authors, including Salazar, received a flurry of
letters and phone calls urging them not to pursue the legislation. One,
addressed to DeGette from Jerry McHugh, president of Denver-based San
Juan Resources, said "Now is not the time to impede development of any
domestic resources. Please pull your sponsorship."
The industry has spent millions of dollars lobbying Congress on issues
including fracturing since 2008, according to disclosure forms filed
with Congress. Now, it's circulating new research to bolster its
The industry -- which has long argued that fracturing has never been
proven to have contaminated water -- points to a study published in
April by the Department of Energy, which asserts that state laws
adequately regulate hydraulic fracturing. But that report, titled
"Modern Shale Gas Development in the United States: A Primer" (PDF),
and written by the Ground Water Protection Council, a broad consortium
that includes industry groups, contains several questionable
statements. One passage notes that "the Safe Drinking Water Act
regulates the injection of fluids from shale gas activities," without
mentioning that the exemptions have created significant exceptions, and
that on the whole the act does not regulate all injections.
"You have very substantial economic elements that are concerned about
their abilities to do whatever they want to for their own economic
advantages," said Rep. Maurice Hinchey (D-NY), who is also sponsoring
the bill. "They are going to do whatever they can to ensure that there
is not a majority of the members here voting for something like this