The board of directors of the National Association of Regulatory Utility Commissioners (NARUC) has adopted a resolution opposing federal regulation of hydraulic fracturing (hydrofracing), saying it would add “burdensome and unnecessary regulatory requirements” for domestic oil and natural gas drilling.

“State regulatory agencies are the most appropriate regulatory bodies to provide oversight and production of hydrologically and environmentally sensitive localities as they relate to hydraulic fracturing,” the NARUC board said in its policy resolution, which was passed Wednesday at its summer committee meetings in Seattle, WA.

“The regulation of hydraulic fracturing under the federal Safe Drinking Water Act [SDWA] would add burdensome and unnecessary regulatory requirements to the drilling and completion of oil and gas wells, thereby increasing costs of producing domestic natural gas resources without any ancillary benefit to public health, safety or the environment,” it said.

The additional costs “will reduce domestic supplies of natural gas; increase utility prices and other costs to consumers; reduce tax and royalty revenues for local, state and federal governments; and increase the nation’s dependence on foreign energy imports,” the resolution said.

Hydrofracing involves the injection of fluids into wells at extremely high pressures to crack underground formations and stimulate the flow of oil and gas. More than 90% of oil and gas wells in the United States employ hydrofracing. Most states where it occurs either have regulations in place governing the practice and/or are working on new rules to cover the increased activity with shale gas drilling.

In June Senate and House Democrats introduced bills to repeal the 2005 exemption in the SDWA for hydrofracing. The bills also would require oil and natural gas producers to disclose to the Environmental Protection Agency (EPA) the chemicals they use in their hydrofracing processes, although not the proprietary formulas unless there is a medical emergency (see Daily GPI, June 10).

The Energy Policy Act of 2005 clarified that hydrofracing was not intended to be regulated under the SDWA, which seeks to protect the public water supply from toxic contamination. The oil and gas industry is the only industry exempted from the SDWA.

The House in late June voted out a spending bill that calls on the EPA to study the risks of hydrofracing to the nation’s drinking water (see Daily GPI, June 29).

Producers contend that hydrofracing does not harm public drinking water and that stripping them of this exemption would stunt natural gas production, particularly from shale gas plays. Repealing the exemption for hydrofracing could add incremental initial costs of more than $100,000 per well for unconventional natural gas, according to industry analysts.

In a survey of oil- and gas-producing states, the Interstate Oil and Gas Compact Commission found that there were no known cases of ground water contamination associated with hydrofracing, the NARUC resolution said.

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