Shale Daily / NGI All News Access

State-Federal MOU Could Resolve Fracking Conflict

The federal government and states would reach a compromise on regulation of hydraulic fracturing (fracking) if the parties agreed to a memorandum of understanding (MOU) on the issue, a Texas official told a House panel Wednesday.

"Why do you think that the federal government is not reaching out to the states for MOUs on fracking?" Rep. Doc Hastings (R-WA), chairman of the House Natural Resources Committee, asked Texas Land Commissioner Jerry Patterson at a hearing addressing state regulation of the oil and natural gas industry.

"Unfortunately, issues [like fracking] take on a life of their own" that is not necessarily related to how important they are, Patterson said. Fracking has become a "polarizing issue similar to the Keystone Pipeline," and is seen by some as a pariah.

In response to another question from Hastings, Patterson said he saw no reason why the states and the federal government couldn't have an MOU to resolve their differing views on the regulation of fracking.

MOUs between states and the federal government have been done before. In late 2009, Interior Secretary Ken Salazar and California Gov. Arnold Schwarzenegger signed an MOU to establish a fast track program primarily aimed at large-scale solar, wind and geothermal development on federal lands. In that same year, the Bureau of Land Management and Oregon's Department of Energy signed an MOU to create a "harmonious relationship" to facilitate the siting of future wind energy projects.

Texas has had no contamination in its waters as a result of fracking, Patterson said. Utah Lieutenant Gov. Gregory Bell said the same was true in his state. "In Utah there has not been a single recorded instance of hydraulic fracturing fluids polluting Utah's waters." Nevertheless, the state and industry are faced with "unnecessary uncertainty regarding looming federal actions."

The Interior Department's BLM is drafting a final rule to regulate fracking at the federal level, which would take fracking regulation out of Utah's hands. The state has been regulating fracking, a practice for stimulating oil and gas wells, since 1955.

"It appears to us that the BLM is responding to a political demand for action in the form of an unnecessary and duplicative regulation of hydraulic fracturing operations," Bell said.

He conceded, however, that while federal regulation of fracking may not be needed for Utah, it may be required in other states. "While new federal rules could potentially add value for states new to oil and gas development, given Utah's history of proactive and successful state regulation, it is clear that new federal rules will not improve the program and could very well slow processes and add unnecessary costs."

There are just some things that states do better than the federal government, said Richard Simmers, chief of the Division of Oil and Gas Resources Management for the Ohio Department of Natural Resources (ODNR). He said that his office in January received an anonymous tip that oilfield waste was being illegally discharged into a storm sewer in the Youngstown, OH, area (see Shale Daily, March 26). He said he immediately had two inspectors on the scene who were able to witness the illegal action and shut it down.

"If it was not for the on-the-ground efforts of ODNR's oil and gas inspectors, this criminal and environmentally threatening illegal activity of dumping oilfield waste directly into the Mahoning River could still be occurring."

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