Fracking 2013: Obama's Draft Regulations Contains Loopholes

The Obama administration has released new guidelines for one of the most profitable industries, the oil and gas industry, over how to frack safely on public land. As a work-in-progress, there have been several revisions over the past few years; a sign of both sides' lobbying ability. Industry leaders and environmentalists alike have something to say for and against the new regulations.

The president is seemingly trying to appease both sides with these new federal provisions. Natural gas companies would have to disclose more of the chemicals they use, while environmentalists have already taken notice of the loopholes. These rules are not even finalized yet and will undergo a comment phase to gain public opinion.

As the oil and natural gas companies have seen a massive increase in production over recent years, there is still a need to prepare for catastrophes. Safety regulations are needed to prevent and prepare for such events, but the new regulations have big loopholes while trying to accommodate environmentalists' concerns.

An example of how Obama is attempting to appease both sides is by raising the concern for environmentalists over what chemicals the fracking companies are using. Under the new draft, these companies would have to disclose the ingredients they blast into the ground. The exception, to the environmentalist's dismay, is that these companies could claim to use proprietary mixtures that do not need to be disclosed.

FracFocus.org is a database containing a list of such chemicals, from hydrochloric acid to guar gum. It is a focal point for the new regulations, and provides public information on what chemicals are being used in a well near you. Yet, with some information missing, it could be improved. Even with the proprietary blend loophole, it is an informative site and showcases safety and state regulations, some of which have their own chemical disclosure laws, such as Oklahoma.

Another new regulation is increasing safety checks on the drilling wells and securing waste water. It is as if the government is telling the companies how to do their jobs. There is good reason because the slightest mistake, such as a gas leak or toxic water spill, will not only impact the company, but the community that relies on the land.

The American Petroleum Institute, which represents the oil and gas industry, claimed there is no need to increase the rules. Erik Milito, from API, argued:

"States have led the way in regulating hydraulic fracturing operations while protecting communities and the environment for decades."

Last month, the EPA lowered their estimate on methane emissions over the past two decades. This is important because since 1990, natural gas production increased over 40%. While the industry was producing more, they were "leaking" less. This is proof that technological advances provided safer environmental precautions.

In the environmentalist’s corner are organizations such as the Sierra Club and the Environmental Defense Fund. According to them, the entire process of fracking is hazardous, regardless of how many safety rules there are. The Sierra Club's Executive Director Michael Brune had this to say:

"Although no amount of regulation will make fracking acceptable, the proposed BLM [Bureau of Land Management] rules fail even to take obvious steps to make it safer. This proposal does not require drillers to disclose all chemicals being used for fracking and continues to allow trade-secret exemptions for the oil and gas industry."

The Department of the Interior, in particular the Bureau of Land Management which has oversight pertaining to fracking, is where the new safety draft originated. Fracking is the process by which water and other chemicals are injected into shale in order to release oil and natural gas. These chemicals can spread from their intended target and contaminate nearby water supplies. These rewritten rules also only pertain to drilling on federal land and Native American territory.

There is also a tremendous economic effect for Obama to allow this practice to continue. The Department of Energy has conditionally approved Freeport LNG (liquefied natural gas) to export over 1.4 billion cubic feet of natural gas per day, primarily to countries in Europe and Asia. This would likely cause fluctuations in the price of natural gas production within the United States, which is already at record lows.

In 2012, the United States has produced 25.3 trillion cubic feet of natural gas and the industry is hoping for more exports to be approved so they could export up to 29 billion cubic feet a day. These increases would do more than help the trade balance; they would also stimulate the economy through job creation.

Conflict is expected whenever the government intervenes in a private industry, especially one that operates across borders with varying state-regulations. To complicate matters further, industry groups are urging the government to give more leeway in how to deal with natural gas that was already produced. As technology improves, it becomes easier to extract oil and natural gas, but safety should improve as well. Safety should always come first.