Dubbing it the nation's most stringent, the Illinois state Senate on Friday passed oil and natural gas drilling regulations (SB 1715), sending the proposed provisions to Gov. Pat Quinn for his signature. The governor is expected to sign the bipartisan legislation.
Among other things, the bill, passed on a 52-3 vote, will require exploration and production (E&P) companies to disclose the chemicals used in hydraulic fracturing (fracking) and to test nearby groundwater before and after the drilling operations.
"We strongly support it," said Brad Richards, executive vice president of the Illinois Oil/Gas Association (IOGA), which along with the Illinois Petroleum Council (IPC) and major environmental groups helped push the measure through both houses of the state General Assembly.
Calling it the nation's strongest E&P legislation, Quinn said the legislation represents "the nation's strongest environmental protections when it comes to hydraulic fracturing. "This legislation will open the door for thousands of jobs and significant economic development in southern Illinois. It could be a shot in the arm for many communities. I look forward to signing this legislation."
Industry representatives worked hard to avoid threats of a proposed moratorium on fracking becoming part of any legislative package (see Shale Daily, Feb. 25).
"We worked very hard to get broad-based support, and we don't anticipate any problems in getting the governor to sign the bill," Richards told NGI's Shale Daily on Monday. "We hope [Quinn] will act on it quickly."
Richards said that shale leasing activity in the state has slowed in anticipation of a legislative outcome and other factors, with some companies holding back, waiting to see what came out of the legislature. Now he expects some of these firms to jump into the fray.
"I think there were companies on the sidelines waiting to see how the legislature would act," Richards said. "There was the threat of a moratorium, and obviously [E&P] companies were reluctant to invest millions of dollars in a state that might not be open for business. Thankfully, we're now past that, and we think there are at least a couple of companies that are willing to come in here and make some pretty large investments."
Earlier, Richards confirmed that interest was very hot in plays covering up to 12 counties in southern Illinois, including the New Albany Shale (see Shale Daily, Dec. 17, 2012).
Among its provisions, Illinois's Hydraulic Fracturing Regulation Act would require operators to test water before, during and after drilling, and it holds them liable for any contamination found after the drilling begins. It also carries chemical disclosure requirements that are typical of fracking legislation in other states.
Operators are required to disclose the chemicals used and to control emissions from the work, along with being subjected to scrutiny in public hearings and from potential lawsuits from residents who believe the drilling activity is harming them. Backers of the law are claiming that its requirements go beyond what are now in place in states where fracking is ongoing.
The law would authorize the state Department of Natural Resources to adopt rules "as may be necessary" to fulfill the bill's intent, and it would create a statewide "Mines and Minerals Regulatory Fund."