The Subcommittee on Water Resources and Environment, chaired by U.S. Rep. Bob Gibbs (R-OH), held a hearing this morning to explore potential new regulations by the Environmental Protection Agency (EPA) on the hydraulic fracturing of shale beds.
EPA has found that natural gas production from shale formations has grown as a result of advances in drilling technologies and greater use of the technique of hydraulic fracturing. It has developed from a negligible amount just a few years ago to almost 15% of total U.S. natural gas production and is expected to triple in the coming decades. The newly extractable shale gas resources have changed the U.S. natural gas position from net importer to potentially a net exporter.
Hydraulic fracturing has become a widely used technique for extracting natural gas from reservoirs such as tight sands, coal beds, and deep shales. The process creates small cracks in horizontal underground rock formations of up to two miles below ground level to extract gas from shale. One of the main challenges involved with hydraulic fracturing is the management of the wastewater that is produced during the process. EPA has recently announced that they plan to look into implementing additional regulations of this wastewater under the Clean Water Act, and the main focus of this morning's hearing was ensuring that these potential regulations are reasonable and do not hamper the enormous economic benefits of natural gas production.
"In numerous areas around our nation where shale gas formations are found, there has been an economic boom resulting from gas exploration and production," said Chairman Gibbs. "Not only is America getting a relatively cheap and less polluting source of energy, but the activity is generating thousands of direct jobs in the drilling, extracting, and refinement processes.
"In Pennsylvania alone, employment is projected to expand by over 180,000 jobs during 2012 in the Marcellus Shale region of the state," Gibbs continued. "And in my state of Ohio, activities associated with energy production from the Utica Shale will be responsible for generating more than 204,000 jobs and $12 billion in wages by 2015. In addition to the clear economic benefits of energy production through fracking, there is a national security benefit as well. Making greater use of domestic sources of energy reduces our dependence on foreign energy sources that are often unstable and unfriendly."
Gibbs also spoke to the satisfactory job states are doing currently to regulate hydraulic fracturing, saying, "Even though no comprehensive set of Federal standards exists at this time for the disposal of wastewater discharged from natural gas extraction activities, states have been picking up the slack to make sure such activities are conducted safely. Moreover, the states are constantly improving their efforts to make sure that the extraction of these important energy resources are done in a safe and environmentally protective manner. I am concerned that, given the recent history of new EPA regulations, these new effluent guidelines will be so needlessly restrictive that the gas extraction operations in Ohio and many other states, and the resulting economic benefits they provide to the states, will suffer."
Thomas Stewart, Executive Vice President of the Ohio Oil & Gas Association (OOGA) echoed Chairman Gibbs' point on the economic benefits of the natural gas industry, saying, "The new and efficient development of natural gas from the resources shale plays is providing the American consumer an incredible energy bargain providing a fuel priced at 22 percent of its intrinsic energy value, a trend that the marketplace indicates will continue into the future. It is also enticing the chemical industry to reenter the United States and build new chemical manufacturing facilities because they will have access to a super-competitive and plentiful feedstock, jump starting the job growth potential downstream of the wellhead."
Michael Krancer, Secretary of the Pennsylvania Department of Environmental Protection, also testified: "Our ability to unlock the huge clean burning energy source contained in unconventional shale formations will transform Pennsylvania into an energy exporter and move our nation toward energy independence. In addition, we are looking at an economic and energy transformation. We have already seen tens of thousands of new jobs here in Pennsylvania from the industry itself as well as from new industries spawned to support it. These are good paying career jobs in many fields. And that is just the start. There will be hundreds of thousands more good paying skilled and unskilled jobs in a variety of sectors."
Krancer continued, "Simply put, because of our long history of oil and gas development and comprehensive regulatory structure, Pennsylvania does not need federal intervention to ensure an appropriate balance between resources development and environmental protection is struck Pennsylvania is already showing that the balance of environmental protection and the development of this world class resources is being accomplished."
Dana Murphy, Chair of the Oklahoma Corporation Commission, said, "The oil and gas industry's annual operations in Oklahoma generate $51.7 billion in goods and services, nearly one-third of Oklahoma's gross state product. The industry directly employs more than 65,000 Oklahomans, and its activity means many more jobs in other sectors of the state's economy as well. One in seven jobs in Oklahoma is directly or indirectly supported by the oil and gas industry."
Murphy continued, "We have protected our underground water supplies and continue to guard our surface water. We have protected existing jobs and in a time of economic doldrums, we have actually promoted new jobs One of the best steps the federal government and agencies can take is to support and encourage the states and the working relationships among the states in ensuring the best regulatory practices are put in place for various states."