Burning Water

By John Howell, Esq., Vice President

blog - burningwater

The debate surrounding hydraulic fracturing, or “fracking”, is hot…almost as hot as burning water. At the federal, state, and local levels a battle is being waged and there seems to be no middle ground, no room for negotiation. While fracking has been around for decades, this battle over its future viability is just beginning. Pitting the environment against energy independence, a stream of documentaries and even a feature film, has certainly led to greater awareness and, perhaps, greater vitriol on both sides of the issue. If nothing else, watching this debate and monitoring the regulatory activity across the country is a fascinating exercise as the federal government, state legislatures, governors, local municipalities and courts are all active participants.

Last month, the U.S. Department of Energy’s Secretary of Energy Advisory Board (SEAB) published its Task Force Report on FracFocus 2.0. FracFocus is the reporting mechanism through which companies engaged in fracking disclose the chemicals added to their respective fracking fluid. This disclosure is intended to provide stakeholders with sufficient information to make informed decisions concerning environmental impacts due to fracking. FracFocus is maintained by the Ground Water Protection Council (GWPC) and the Interstate Oil and Gas Compact Commission (IOGCC) lending credibility to the data contained in FracFocus.

The Task Force Report is informative and I believe it is a good tool to limit the environmental impacts of fracking fluid…but, absent a willingness to find a middle ground concerning fracking, will it be effective? Claims of sickness, higher concentrations of cancer, undrinkable water, and even earthquakes have been attributed to fracking by its opponents. Will detailed and effective reporting of chemical use somehow lessen the import of these claims when those same claims are based on the use of chemicals? Not in Butte County California.

Last week, the Butte County Board of Supervisors voted to draft an ordinance that could ban fracking in the county. If this ordinance is ultimately passed Butte County will be the first county in California to enact a ban. One Supervisor, speaking in support of drafting an ordinance, cited a concern that fracking “is moving a lot of stuff underneath us that’s holding us up…by taking the foundation away, we’ll crumble”. Can middle ground exist if people are concerned with falling into the earth? It is worth noting that there have been no fracking operations in Butte County to date so, perhaps, everyone is safe.

Texas – a solidly pro-fracking state – utilizes a framework of sophisticated industry-friendly regulation that governs recycling practices for fracking flowback fluids and for casing, cementing, and well control of fracking well holes. Similarly, the Texas Commission on Environmental Quality adopted rules in 2013 to regulate disposal of certain radioactive tracers used in the exploration, development, and production of oil and gas resources. In Flower Mound Texas that may not be enough. Last week the Flower Mound City Council convened to “discuss and consider action related to gas drilling and development” with a focus on “community health issues related to hydraulic fracturing.” In Denton, Texas, a local activist group is working to place an ordinance banning fracking on ballots. The ordinance may result in a possible legal battle over the authority of local governments to ban fracking in Texas. In New York State, the November elections appear to be keeping the fracking discussion to a slow crawl. Now in the 6th year of a moratorium to study the effects of high-volume hydraulic fracturing, New York is not expected to issue final regulations anytime soon….certainly not before the elections. Despite dozens of bills sitting in the State Legislature and claims that the lack of movement in New York on the issue is having a significant economic impact and stunting job creation, final regulations are not expected from the Department of Environmental Conservation until at least April 2015. As a result, in February, a pro-fracking group filed suit against Governor Andrew Cuomo (D) to compel the state to complete its review of high volume hydraulic fracturing. In addition, the New York Court of Appeals is expected to hear cases soon regarding whether municipal governments have the authority to ban fracking within their borders.

While the fracking battle is being waged in these states and others across the country, money is flooding into North Dakota due to roughly 1 million barrels of oil production per day from the Bakken shale formation. This oil boom transformed North Dakota into the second largest oil producer in the country, only surpassed by Texas in terms of oil production. As a result, the unemployment rate in North Dakota is the lowest in the nation and the state has the most counties with increases to median household income. While North Dakota supports disclosure of fracking fluid chemical use in FracFocus and has recently adopted rules addressing oil and gas exploration, neither the court of law nor the court of public opinion seem to be impeding the state’s economic velocity.

Effectively monitoring state legislative and regulatory activity surrounding fracking is a true national effort. We are aware of the same dynamic playing out in Maryland, Minnesota, Los Angeles and everywhere else in between. Rarely have we monitored an issue this polarizing and divisive. Federal activity and the jurisdictional battles being waged in courtrooms across the country only add complexity and dimension to this effort. While issues often start out contentious and resolve with a predictable compromise, we do not see a compromise on the fracking horizon. Rather, we see the hydraulic fracturing debate being waged for years to come by two sides firmly entrenched in their beliefs.

About that burning water: in certain localities across the country, tap water can be lit on fire due to the level of methane in the water. Opponents of fracking claim methane in tap water as direct evidence that fracking fluid is poisoning groundwater and is not worth the environmental risks. Supporters of fracking point to the fact that tap water has been lit on fire since the 30’s – predating the first fracking operation. How, then, is fracking to blame? If we cannot agree on burning water, what can we possibly agree on?

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John Howell is Vice President of Regulatory Services at Stateside Associates. With substantial policy and legal experience, Mr. Howell guides Stateside Associates’ regulatory counsel and provides clients with hands on Regulatory Issue Management support from strategic planning, regulatory advocacy, and working with groups of state and local officials.

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