Tony Clark may have traded in his state regulator’s hat for a seat at FERC, but he has not changed his opinion that states are better equipped to oversee the regulation of hydraulic fracturing (fracking) than the federal government.
“I probably have the same opinion today [on federal fracking regulation] as I would have back then, which is that it’s not needed…and will probably do more harm than good,” Clark, who has been at the Federal Energy Regulatory Commission (FERC) for less than a year, told executives at the Natural Gas Roundtable in Washington, DC, last Tuesday. Clark was commissioner and chairman of the North Dakota Public Service Commission, which regulates the Bakken Shale play, prior to coming to FERC.
“How lucky am I” to have served on the North Dakota commission for 12 years and have had a “front row seat” to the development of the prolific Bakken play, which extends from Alberta, Canada, down into the Dakotas, Kansas, Oklahoma and Texas, Clark said.
“Exploration and production of natural gas has been done forever at the state and local level, and has been done well at the state and local level,” and should remain there, Clark said. “It’s big enough to have the resources to get the job done well. At the same time, the state government is going to have a lot more information about the geology in that particular area, and the substrata” of the land.
“We have to keep going with what works. The comprehensive state and local…regulation of exploration and production of the oil and gas industry has worked well for this country,” he said.
But Clark said he has a “big concern” that a wildcat operator will do “something stupid one day and [dump] some untreated waste water” into the Susquehanna River, the longest river on the East Coast, which flows through New York, Pennsylvania and Maryland, or some other water body. If that were to happen,”we’ve got the federal government coming in and potentially clamping down.”
The debate over racking has fallen into two camps and has been driven in part by media coverage, Clark said. “One school of the media coverage is probably more wrong than the other. It could be the school that is relentlessly in some cases negative about what is going on in the oil and gas industry,” reporting that “western North Dakota is an environmental disaster…and [that] the man camps are full of deviant criminals who are worse than anything you’ll find in the Baltimore City lock-up.”
The other school of thought argues that “Yakked is perhaps the greatest thing that’s ever happened to any single state anywhere in our nation’s history, and will single-handedly be responsible for full employment within five years. The reality is somewhere in the middle,” he said. But racking is a “clear net positive,” which comes with some challenges, including social, the environment and demand for new infrastructure (gas pipelines and processing facilities).
Tens of thousands of oil and gas wells have been safely drilled over the years, and domestic production has risen significantly. But “I think I can say with some certainty [that] this didn’t happen because of the federal government,” he said.
The United States was believed to be destined to become dependent on imports of natural gas, but “that’s proven to be false” due to the shale gas revolution, Clark noted. “Applications that FER has had sitting around for awhile that use to say import terminal” have now been scratched out to say export liquefied natural gas terminal.
He estimated that the U.S. is importing just a little more than 3 Tcf of gas, of which 95% comes from Canada. He noted that net natural gas imports make up 6% of U.S. consumption, down from a a high of 16% five years ago.
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