Natural gas resources will continue to play a significant role in the sustainability and objective of having an independent, self sufficient energy mix for the United States in the coming years. With its objective of being able to increase its use of clean energy in the mix, American energy sector policy makers are looking to harness the extensive stores of natural gas that have become commercially viable resulting from the use of cutting edge technology in the fields of “horizontal drilling” and “hydraulic fracturing” that have allowed operators to extract greater amounts of oil and natural gas from shale formations (United States Environmental Protection Agency 1).
The renewed confidence of American energy policy makers on the viability and sufficiency of hydraulic fracturing, or more known as “fracking”, to handle the growing energy needs of the United States that it is willing to take on large energy suppliers such as Iran and not flinch knowing that a shortage will be imminent if Iran chooses to retaliate against the United States and the West.
Prior to the discovery of these oil bearing shale formations, it would have been political suicide for the United States that was at the time extremely dependent on oil from oil producing countries. As a result of the energy boom in North America, the anticipated negative impact of an Iranian oil sanction has greatly been reduced. With the Iranians having less influence on the global market, and in particular on the United States, American government and foreign policy makers have greater leeway in pushing for more stringent trade and economic sanctions against Iran (Nicks 1).
Even with the growing sense of apprehension in the global community owing to a myriad number of problems, from tensions in the Middle East to the growing scarcity of conventional energy resources, the twin activities of horizontal drilling and hydraulic fracturing has allowed the United States to increase the country’s reserves by more than 75 percent from 2004-2011. However, the use of these technologies has generated considerable debate among politicians not only in the United States, but also in the international community. In addition, “fracking” has also given rise to a number of contentious legal issues being tried and resolved in a number of agencies and courts of law (Pierce, Jr. 3).
Economic impacts of fracking
Pierce, Jr. (2013) states that the activity of hydraulic fracturing will greatly aid the United States in generating significant energy reserves to attain self sufficiency. According to the reports of the Energy Information Administration (EIA), this trend is expected to continue, stating that the use of hydraulic fracturing will help the United States have enough natural gas and oil reserves to be able to satisfy domestic demand for at least 100 years; in addition, it is also expected that the United States will be able to generate a surplus that will permit the United States to export natural gas to the Asian region.
At present, hydraulic fracturing has given the American energy sector to replace approximately 10 percent of its coal supply that have been traditionally used, replacing coal with natural gas in order to produce a cleaner energy mix. In the report of the International Energy Agency (IEA), the group believes that by 2017, the United States will assume the position as the largest producer of natural gas in the world. As a result of fracking, natural gas costs a third less than oil in the United States, and has resulted in the generation of thousands of job opportunities in the growing industry (p. 4)
Legal and Environmental Issues Related to Fracking
The use of fracking has led to the rapid development of the natural gas industry has mushroomed at break neck speed, allowing the oil and gas industry to harness oil and gas reserves that were previously unreachable or even unprofitable to extract. Regrettably, Federal as well as state laws and regulations designed to safeguard the health and well being of the people have miserably failed to keep pace.
The failure of the Federal as well as the state and local governments has given rise to an extremely hazardous, debilitating, and pollution generating threat to the citizens and environment. The unrestrained growth of hydraulic fracturing has given the oil and gas industry to overrun the needs and requirements of the law as well as the demands of the communities where the operations will be done, leaving a long list of “collateral damage” to satisfy the needs of a growing energy market.
Poisoned wells, tainted rivers and waterways, heavy air pollution rates as well as destroyed land values for towns and other rural areas across the United States. There are those that advocate calls for the oil and gas industry to be made accountable to the people or to the authorities. However, the sector has doggedly and aggressively resisted these calls for increased transparency, inclusive of the demands to disclose the chemicals being injected into the ground, the standard being used in the measurement of the air pollutants at the areas, and the definition and the monitoring of the waste water that is being discharged into the immediate environment (Natural Resources Defense Council 1).
Vann , Murrill, and Tiemann (2013) state that owing to the purported impacts of “fracking” on the health of the general public as well as the preservation and protection of the environment, several jurisdictions have enacted resolutions calling on the Federal government to adopt laws with the objective of aggressively monitoring hydraulic fracturing and similar activities in the United States.
Amendments to the Safe Water Drinking Act (SDWA) enacted as components of the Energy Policy Act of 2005 defined that the “underground injection control” mandates listed in the SDWA are not applicable to the activity of hydraulic fracturing; though the exemption does not apply to the utilization of diesel fuel in the operation of hydraulic fracturing.
The SWDA mandates the United States Environmental Protection Agency (EPA) to monitor the “underground injection” of liquids, inclusive of solids, gas materials and liquid materials, to safeguard underground resources for drinking water. In Part C of the SWDA, there is the establishment of the Federal regulatory system for the protection of underwater sources of potable water.
This is inclusive of the oversight and the restriction of underground injections that can negatively impact aquifers by the establishment of underground injection restriction mechanisms. In addition, Section 1421 of the SDWA orders the Administrator of the EPA to enact policies for the administration of “state underground injection control processes, and ensure that EPA policies list down fundamental requirements to stop underground injection activities that can negatively impact potable water resources (p. 1).
In 1994, the Legal Environmental Assistance Foundation (LEAF) sought the intervention of the EPA that demanded that the EPA withdraw its sanction of the UIC program in the state of Alabama. The proceeding was initiated by the group as the program did not any provision monitoring hydraulic fracturing activities in the state linked to the production of methane gas derived from coal formations. The EPA, in 1995, rejected the petition of LEAF, basing the decision on a finding that the activity of hydraulic fracturing does not fall within the comprehension of “underground injection” as listed in the SDWA as well as the EPA regulations adopted in the law
The ruling of the United States Court of Appeals for the 11th Circuit in LEAF focused the debate on the issue of whether the SDWA, in its present form and language at the time, mandated the EPA to control the activity of hydraulic fracturing. Even though the decision of the 11th Circuit only applied to hydraulic fracturing on the circumstance of methane gas production from coal bed formations, the logic of the court, that hydraulic did fall within the definition of underground injection, did give rise to the concern of whether the EPA can be mandated to oversee hydraulic fracturing under the ambit of the SDWA (Vann, Murrill, and Tiemann pp. 3, 5).
Pollution in “energy boom “states: energy over health?
Over the past decade, hydraulic fracturing has generated a significant rise in the production of oil and natural gas in the United States. The activity has resulted in a dramatic drop in the amount of importation of oil and natural gas as well as generated hundreds of billions of dollars in earnings for energy companies as well as for landowners. However, these have resulted in apprehensions regarding the pollutive potential of these technologies.
Harnessing fuel from shale requires the pumping of a great amount of water into the soil, reaching hundreds of thousands of gallons, as well as sand and other chemicals to fracture the rocks and free the trapped gas and oil in these formations. A portion of the water, with some parts of the groundwater in the area, is returned to the surface, and these waters can contain a great amount of salt, used drilling fluids, heavy metals, and recurring low radiation levels (Associated Press 1).
Four states that have been critical in the rise of the United States have been deluged with complaints regarding drinking water resource pollution from oil and natural gas drilling activities; a number of cases displayed the fact that oil and gas drilling did play a factor in the pollution of these resources. These facts have cast serious aspersions on the official position of energy sector analysts that state that incidents such as these are a rare occurrence.
In the report of the Associated Press, a number of these energy producing states-Pennsylvania, Ohio, West Virginia, and Texas- have reported significances in the procedures that these jurisdictions take in reporting these incidents. Among these states, Texas provided the most data, while the other states were only able to provide generic reports.
It must also be noted that though the reported incidents only form a small fraction of the problem posed with the drilling of thousands of wells for oil and gas in the United States, the absence of any verifiable data on these issues only helps to fuel the confusion and skepticism prevailing in the industry (Associated Press 1).
However, there are instances that would seem to support the fear of people with hydraulic fracturing. In Ohio, officials closed down a “fracking” facility after two tremors were recorded in the area within approximate range of the Pennsylvania border. In the report of the United States Geological Survey’s National Earthquake Information Center, the two quakes registered a magnitude of 3.0 and 2.6, along with two smaller tremors also recorded in the day.
The drilling operations, run by Texas-based Hilcorp Energy, were ordered to cease operations by the Ohio Department of Natural Resources, allowing scientists to evaluate the data from the tremors. The tremors have once again raised the issues of environmental damage, public health and the need to balance these needs with the issue of energy self sufficient of the United States.
Ohio already has policies banning the disposal of the wastewater generated in the process; critics of the process states that the data derived from the earthquakes should first be thoroughly investigated and examined before permitting Hilcorp to resume operations, and that energy companies should be banned from conducting fracking operations near fault lines (Ahmed, 2014, p. 1).
In Pennsylvania, energy companies are “dusting off” old, idle laws that can coerce property owners to put up with oil and gas extraction operations done beneath their lands. This instance will place neighbors against each other in a community in the state that can also place lawmakers on the spot and force these to take sides on the dilemma.
Hilcorp, the same company in the issue in Ohio, is looking to use a 1961 state law that will permit them to drill under the land of landowners in New Bedford, at the Ohio border and one hour from Pittsburgh. The principle, “forced pooling”, can be construed as placing people who do not agree to sign leases for oil and gas companies with those who do sign. This will allow for a more efficient drilling operation and at the same time ensuring equitable compensation for all the landowners in an area, whether these agree or not.
The “stakes” in these arguments are very high. Land owners stand the chance of reaping a significant amount of money, ranging from hundreds of thousands to millions of dollars from allowing drilling operations at the Utica Shale formation, which is located underneath the more known Marcellus Shale.
Though there are landowners who resisted the offer of the company and were infuriated when the company was finally given the green light to drill, others who did agree to the extraction received significant amounts of financial rewards, inclusive of one landowner who received $500,000 upon the signing of the lease agreement, and an additional 18 percent royalty for future production outputs of the well.
The Houston based energy company states that almost all of the landowners on the more than 3,200 acre piece of land have affixed their signatures on the lease agreement. The drilling activities would be done a mile underneath the land of the holdout landowner. Under the unused law, all of the landowners, whether these have signed the lease agreement or not, will be compensated. With the technology of horizontal drilling and hydraulic fracturing, wells can first be drilled down and then directed sideways, and then the “extensions” can then be attached, with a main site a mile or more away.
In addition to the social conflict, there is a political angle to the whole affair. Pennsylvania’s Department of Environmental Protection will make the last ruling on whether the lease agreement will be allowed or rejected. The response to the lease agreement has been so contentious that the agency plans to hold hearings on the issue have been moved to later dates. The state has allowed more than 5,000 wells to be drilled since 2008 by the use of hydraulic fracturing, or fracking. However, the law will not be applicable to the Marcellus Shale formation, where majority of the oil and gas is harnessed, but will be applicable to the Utica formation, where energy companies are looking to pour in extensive resources as it is believed that the formation also holds oil reserves (Begos, Levy 1).
For the case of Colorado, its citizens will have the power to be able to determine the future of fracking activities in the state. Owing to this development, the state has become the rallying point of various environmental advocates pushing for moratoriums and even policies that will ban hydraulic fracturing. However, even though there has been a significant number of instance that would seem to display the dangers attributed to “fracking”, this activity has been done in the state not only for a number of years, but even decades.
In a four decade old scientific study, the paper articulates the active nature of “fracking” in the state in the past. For example, the paper cites the Wattenberg field near the Denver area is a resource that can be characterized as a “tight gas reservoir”. With the application of hydraulic fracturing to the field, the Wattenberg is now considered a commercially viable energy resource. The area extending to Greeley from Denver, where critics of hydraulic fracturing are campaigning against the practice, was extensively used as a testing area to develop the best hydraulic fracturing practices since the 1970s. The declarations of critics that there has not been any compelling evidence and scientific examination into hydraulic fracturing are a betrayal to more than four decades of fracking research and development (Biederman 1).
Nevertheless, there are conflicts that seem to challenge the credibility and safety of fracturing in the state. There are proposals in the state to establish a new research study regarding the impact of drilling on the health impacts at the Front Range; the debates on the proposals have sparked wide spread and highly emotional debates even at its first hearing in the Colorado legislature. Though the House Health, Insurance and Environment Committee did not vote on the proposals, the body did hear hours upon hours of testimony on the proposal. If approved, the resolution would require the Colorado Department of Health to investigate the effects on the health as well as the quality of life in the counties of Boulder, Larimer, Weld, and Adams. Business and landowners who have signed lease agreements with these companies have called the proposal as frivolous and inclined against the oil and gas sector (Wyatt 1).
It must be noted that hydraulic fracturing as well as the industry that is an integral part of the Colorado economy have played a long and safe part in that economic growth. Weld County, in 2008, was considered as the largest county with the biggest output of natural gas in Colorado. The Energy Information Administration (EIA), in the same year, listed the Wattenberg field in the state as the “9th largest proven reserves of any Wet Natural Gas Field in the Nation”. The DJ Basin has a total of more than 20,000 wells, 11,000 of these wells have been hydraulically fractured not only once, but have been so over a number of years. The industry in the state has long used hydraulic fracturing safely and effectively for a number of decades, without any proven data to contradict this claim. If allowed, the banning of fracking in the state can result in the loss of a great number of jobs and have devastating effects on the state economy (Biederman 1).
Though litigation and other legislative proposals have been started or are in their initial stages, the benefits of fracking are incontrovertible. A balance must be struck in assessing the possible effects of this technology with the needs of the communities to be safe from any threats. Lastly, there must be a sufficient information campaign to calm the fears of the community as well as convey the benefits of the practice to them and the country as a whole.
References
Ahmed, Amel. “Ohio earthquakes linked to fracking’. <http://america.aljazeera.com/articles/2014/3/10/ohio-earthquakeslinkedtofracking.html>
Associated Press “Fracking contamination more common than US states report, says new review.” The Guardian 6 January 2014 Print
Begos, Kevin, and Levy, Marc. “Forced drilling law in Pennsylvania pts neighbor against neighbor.” <http://www.huffingtonpost.com/2014/03/31/forced-gas-drilling-law-pennsylvania_n_5062914.html>
Biederman, David. “Colorado has been fracking for 40 years; why all the fuss?” Forbes 2 February 2014 Opinion Print
Natural Resources Defense Council “Fracking in Pennsylvania.” <http://www.nrdc.org/energy/fracking-map/pa.asp>
Nicks, Denver. “How the US energy boom is changing America’s place in the world”. <http://time.com/5922/fracking-energy-boom-natural-gas-geopolitics-iran/>
Pierce, Jr., Richard. “Natural gas fracking addresses all of our major problems”. Journal of Energy and Environmental Law 2013 pp. 1-10
United States Environmental Protection Agency. “Natural gas extraction-hydraulic fracturing”. <http://www2.epa.gov/hydraulicfracturing>
Vann, Adam, Murrill, Brandon J., Tiemann, Mary. “Hydraulic fracturing: selected legal issues”. <http://www.fas.org/sgp/crs/misc/R43152.pdf>
Wyatt, Kristen. “Colorado drilling health study under review”. <http://www.huffingtonpost.com/2014/03/21/colorado-drilling-health-study_n_5003902.html>
