Energy Industry Lobbies to Avert Drilling Rules
The Wall Street Journal
5 June 2009
By Ben Casselman
The oil-and-gas industry is gearing up for a battle over the regulation
of a high-tech drilling technique that has opened up huge new fields
for drilling, but that environmentalists fear could contaminate ground
On Thursday, a congressional subcommittee held a hearing on the
practice, known as hydraulic fracturing, and two Democratic lawmakers
said they would introduce legislation that would regulate it at the
federal level for the first time. Environmental groups and members of
Congress are also pushing the Environmental Protection Agency to
investigate the impact of fracturing on drinking-water resources.
Hydraulic fracturing -- known within the industry as "hydro-fracking,"
or simply "fracking" -- involves the injection of millions of gallons
of water and chemicals into oil or natural-gas wells at high pressure.
The process cracks open rock formations thousands of feet underground,
allowing trapped hydrocarbons to flow to the surface.
Fracking has been used since the 1940s, but it has become far more
common in recent years, as the industry has increasingly drilled in
dense rock formations that require fracking to produce significant
quantities of oil and gas. The industry estimates 60% to 80% of new
wells require fracking to be profitable.
Environmental groups worry that chemicals used in the process -- which
can include benzene, hydrochloric acid and other potentially harmful
substances -- could contaminate drinking-water reservoirs on the
surface or underground. Those concerns have increased as drilling has
spread to more heavily populated areas such as Fort Worth, Texas;
Shreveport, La.; and parts of Pennsylvania and New York.
Oil and gas producers say fracking is safe when done correctly, and
that state regulations already adequately protect water supplies. State
and federal authorities have generally concluded fracking poses little
threat, but no large-scale studies have been done, leaving industry and
environmental groups to battle over anecdotal cases.
On Thursday, Democratic Reps. Diana DeGette of Colorado and Maurice
Hinchey of New York said they plan to introduce legislation to allow
the Environmental Protection Agency to regulate fracking under the Safe
Drinking Water Act, which would repeal a provision in a 2005 law that
exempted it from EPA oversight.
"We're not opposed to gas drilling....We just want it to be done in a
way that is not going to injure other people, not going to damage their
property, not going to contaminate their water supply," Mr. Hinchey
In response, industry has launched a multimillion-dollar lobbying and
public-relations campaign to defend the practice. Last month, a
coalition of industry groups unveiled a Web site dedicated to hydraulic
fracturing, and the American Petroleum Institute held a conference call
with reporters on the subject ahead of Thursday's congressional hearing.
The issue is especially sensitive for gas producers, because the
industry has been trying to portray itself as more environmentally
friendly. Burning natural gas releases less carbon dioxide into the
atmosphere than burning coal or oil.
In its lobbying, the industry is stressing the economic benefits of
drilling, and warning that increased regulation could lead to layoffs,
reduced state tax revenues and higher energy prices for consumers.
Rising production and soft demand has driven gas prices down in recent
months to less than $4 per million British thermal units, down from
more than $13 per million BTUs last July.
The lobbying effort is concentrating on lawmakers from energy-producing
states to make sure they "understand the implications," said Lee
Fuller, vice president for government relations for the Independent
Petroleum Association of America.
The fight joins a list of battles waged by the energy industry in the
newly Democrat-controlled Washington. The industry also is challenging
proposals that would restrict drilling in environmentally sensitive
areas, eliminate tax breaks on some drilling projects and restrict