The FRAC Act under attack

Are Democrats going wobbly as energy companies resist curbs on the natural gas drilling practice known as fracking?

Published July 14, 2009 10:17AM (EDT)

Under intense lobbying pressure and after a personal request from Colorado's Democratic governor, members of Congress who've been pushing a bill to regulate a controversial natural-gas drilling process are now calling for further scientific study, a change in tack that means the bill is unlikely to pass any time soon.

The process, known as hydraulic fracturing, or "fracking" for short, involves the injection of a mix of water, sand and chemicals into gas wells to break up rock and ease the gas to the surface. Environmental groups have long said that fracking -- especially common in the mountain West -- causes chemicals to leach into drinking water, and exposes people living nearby to health risks. But Rep. Diana DeGette, D-Colo., and Rep. Maurice Hinchey, D-N.Y., two of the sponsors of the FRAC Act, a House bill that would establish federal environmental controls over the process of hydraulic fracturing, are now calling for committee hearings and renewed research into the environmental impacts of the drilling method. Last month Hinchey attached a provision to the House Appropriations bill authorizing funding for such a study.

In an interview last week, Hinchey told ProPublica he is not backing off the bill, and that he is concerned about new reports of water contamination from drilling and thinks a study could bring those incidents to the forefront of the debate.

"What we want to do is make it clear what is going on," Hinchey said. "The appropriations bill is an incremental step. It will continue to focus attention on this."

Asked whether the FRAC Act is losing momentum, Hinchey pointed out that the bill now has 13 sponsors, 10 more than it had in June. But he acknowledged that the energy industry's opposition to the bill has swayed some members of Congress. "It's not moving forward with the rapidity that I would like to see it move forward," he said.

That may be in part because of the difficulties of bringing diverse perspectives together on energy and economic issues, even within the Democratic Party.

In a speech Thursday before the Colorado Oil and Gas Association, a prominent industry trade group, Colorado's Democratic Gov. Bill Ritter assured the group of his support for the natural gas businesses and said he had asked DeGette not to pursue the legislation.

"I encouraged Congresswoman DeGette to consider authorizing a comprehensive study of this issue instead of going directly to a new and potentially intrusive regulatory program," the governor said. "She agreed at that time to go instead to something that would be more in the way of a study instead of an amendment that would prescribe a certain way of every state having to put in place these rules. I thank the congresswoman for having done that."

DeGette, who has been trying to pass fracturing legislation since 2005, confirmed through a spokesman that she and the governor had spoken sometime last month, but said that she had not agreed to abandon the legislation.

"She understands [Ritter's] concerns," said DeGette spokesman Kristofer Eisenla, "but all options remain on the table. She is moving forward with a potential hearing, and with a study which she would welcome the industry to be a part of."

In an earlier interview, Eisenla said that the information campaign undertaken by the bill's opponents had surprised legislators and slowed their progress.

"The oil and gas guys came out of the barnstorming," he said. "I think that opposition has been throwing out scare tactics and mischaracterizations of what she is trying to do."

At least five reports have been issued since January arguing that the proposed legislation -- which would give the Environmental Protection Agency authority to investigate fracturing accidents and to dictate how the process is done -- would hamper exploration, raise fuel prices, and cost Americans jobs and energy.

The industry maintains that state regulations already sufficiently protect drinking water from hydraulic fracturing. In Thursday's speech Ritter touted Colorado's new rules as a success and in a follow-up news release the industry underscored Ritter's statement as testimony to a shining example. What neither mentioned at the time: The Colorado Oil and Gas Association is suing Colorado to block those rules.

The reports supporting the industry's arguments were examined in a recent article by ProPublica, which found that the economic assessments were exaggerated and based in part on 10-year-old data. Three of the reports were paid for by the Department of Energy, but produced by consulting firms that also work for the oil and gas industry. One of the DOE reports was written by the same person who produced a study for the Independent Petroleum Association of America -- and bore a nearly identical cover.

The oil and gas industry has spent millions of dollars lobbying against fracturing regulation over the last two years. In May it launched a Web site that disputes criticism of the industry and argues against regulation.

As a result, Eisenla said, the true content of the FRAC Act and its implications for the oil and gas industry have become muddled in a thicket of rhetoric and misleading data.

The FRAC Act proposes to remove an exemption that was written into the Safe Drinking Water Act (SDWA) in 2005 that says hydraulic fracturing is not subject to regulation. It would also require drilling companies to disclose the names of the chemicals they pump underground, information that is currently a protected trade secret. If the act is passed, hydraulic fracturing would be governed by the portion of the SDWA that controls what is injected into underground wells and how it is done.

Officials with the Environmental Protection Agency in Washington have said that the exemption for fracturing is unique, and that the oil and gas industry is the only industry to be exempted from oversight under one of the nation's landmark laws to protect drinking water.

But representatives of the energy industry maintain that the Safe Drinking Water Act didn't explicitly apply to hydraulic fracturing until 2001, when the 11th Circuit Court of Appeals forced the EPA to oversee the process in Alabama. At the time the EPA wasn't using the SDWA rules to monitor hydraulic fracturing, then an emerging technology. Thus, industry spokespeople say, the 2005 legislation wasn't an exemption as much as a clarification of the law.

Whether the EPA applied the SDWA to fracturing or not, prior to 2005 it had the authority to do so, according to the agency's former water director, Benjamin Grumbles. Now it does not.

Industry analysts, including at the American Petroleum Institute, maintain that in hydraulic fracturing drilling fluids aren't disposed of underground, so the process shouldn't be subject to Safe Drinking Water Act regulations about injection disposal. But these industry sources also acknowledge that 30 to 70 percent of fracturing fluids can be left underground after the process is completed, and that hydraulic fracturing with chemicals is far more prevalent today than when the Safe Drinking Water Act was written or when courts were examining the issue in Alabama.

The language of the SDWA explicitly gives states authority to enforce the law as long as they meet basic federal criteria. So if federal authority is restored, state regulations would be superseded only if the EPA deemed them insufficient.

The proposed bill would not ban hydraulic fracturing. Nor does the bill, or the Safe Drinking Water Act, require the expensive processes that one industry report said it does.

"Because there has never been any federal regulation of hydraulic fracturing, we have to make some assumptions based on what could be done," said Lee Fuller, vice-president of government relations at the Independent Petroleum Association of America. "It's an educated guess based on what the history of regulation has been and the kinds of requirements they would plausibly think that the EPA might require."

Several industry representatives have told ProPublica that what is really driving their opposition to the FRAC Act is their worst fear: that if EPA authority is restored, a suite of lawsuits from environmental organizations will follow, forcing the agency to institute tougher regulations -- possibly even creating a new class of laws for fracturing -- and grinding business to a halt while the issues play out in court. 

By Abrahm Lustgarten

Abrahm Lustgarten is a New York writer and photographer who reports on the environment, health and sports.

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