Fracking Regulation: Don’t Ask, Don’t Tell

May 1st, 2012
in econ_news

Econintersect:  A draft rule being considered by the U.S. Department of the Interior would require drillers for natural gas on U.S. land to disclose what fracking-diagramSMALLchemicals are used after drilling is completed.   A proposed rule version in February would have required drillers to file a complete list of chemical formulations at least 30 days before work began.  The Environmental Working Group, a public interest lobby based in Washington, said in February that some of the chemicals already disclosed by the companies are implicated in cancer and reproductive damage.  The February version of the regulation has been protested by energy trade groups and Republican lawmakers.

Follow up:

Bloomberg cites the problem specified by the Washington-based American Exploration and Production Council, other industry groups and GOP legislators:

They said it could slow energy production on federal lands.

Considering the glut of natural gas production that has recently driven prices down by more than 85% over the past six years (see Dee Gill article, GEI Investing), perhaps a slowing of production would not be a bad thing.  The price of natural gas has been cut in half in just the last year alone.  These dramatic price declines do not indicate a production shortage.

Republicans in the Senate have taken action to try to halt the imposition of more federal regulation.  From Progress Ohio:

Senior Senate Republicans are floating legislation that would slam the brakes on Obama administration efforts to expand regulation of the controversial oil-and-gas drilling method called "hydraulic fracturing" on federal lands.

Sen. James Inhofe (Okla.), the ranking Republican on the Environment and Public Works Committee, is the lead sponsor, and the seven other backers include Sen. Lisa Murkowski (Alaska), the top GOP member on the Energy and Natural Resources Committee.

The bill is unlikely to advance but will provide Republicans another rallying point for allegations that President Obama's Interior Department and Environmental Protection Agency have an overzealous agenda that will stymie development.

The bill introduced Wednesday requires that only states may regulate hydraulic fracturing -- or "fracking" --- on federal lands within their borders.

"States better understand their unique geologies and interests," Inhofe said when introducing the measure

There are plans to publicly post fracking information for public viewing.  From Bloomberg:

The Obama administration plans to post the fracking information on a public website, possibly on, according to the draft. FracFocus is managed by the Ground Water Protection Council and Interstate Oil and Gas CompactCommission.

The Ground Water Protection Council is composed of state environmental regulators; The Interstate Oil and Gas Compact Commission is composed of governors of energy producing states.

The following is a statement from

Participating companies have agreed to post records of wells fractured after the later of the date they registered to participate or January 1, 2011. As of November 10, 2011 there were over 7,000 records in the system and 80 participating companies.

However, the list at contains only 59 specific chemicals.

While disclosure of specific risks to regulators, environmental groups and land owners seems to be lacking, according to the Environmental Working Group, apparent fear of investor liability exposures have gas drillers disclosing to shareholders and prospective investors a ....

...daunting list of possible mishaps, including leaks, spills, explosions, bodily injury, limited insurance coverage - and death.

But the industry backed proposal now under consideration for "regulation" will only disclose the chemical risks after they have already been incurred and the driller moved on.

Editorial notes: A hat tip to Roger Erickson who has suggested the following interpretation for the latest draft regulation proposal:

Translation: all reporting of barn door manipulation to occur after the horse theft is concluded.

Erickson has asked if this is not just another form of legalized looting.

What is Fracking: The fracking process can be quickly understood at the highest level with the following diagramatic representation.  Click on graphic for larger image.


John Lounsbury


Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.

Facebook Comment

1 comment

  1. roger erickson says :

    hat tip Selva Tinnan:
    "no surprise here"

 navigate econintersect .com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2020 Econintersect LLC - all rights reserved