Excessive federal regulation, including restrictions on hydraulic fracturing, could shut down production from the country’s prolific shale plays, according to testimony heard Thursday by the House Subcommittee on Energy and Mineral Resources in Washington, DC.

“Hydraulic fracturing is absolutely essential to the development of the [Barnett, Fayetteville, Haynesville and Marcellus] plays,” said Mike John, Chesapeake Energy Corp. vice president of corporate development and government relations. “We would not be able to produce natural gas without being able to frac those wells.”

Federal regulation of hydraulic fracturing could once again become part of the Safe Drinking Water Act (SWDA) if some in Congress have their way. Those supporting the idea say hydrofrac’ing needs to be closely monitored to protect drinking water from being contaminated by chemicals used in the process. Hydrofrac’ing was covered by the 1974 Safe Drinking Water Act, but Congress lifted the restrictions from hydrofrac’ing in 2005.

A bill introduced last year by Rep. Diana DeGette (D-CO) and apparently ready to be reintroduced this year would require producers using hydrofrac’ing to comply with SWDA underground injection control provisions — and would add an estimated $150,000 of compliance costs to every well, according to the American Petroleum Institute (API). If approved, the legislation would add a layer of unnecessary regulation and reduce drilling, the API said in testimony before the subcommittee.

“Despite allegations to the contrary, there is no confirmed evidence that hydraulic fracturing has resulted in the contamination of drinking water supplies,” the API said. The Independent Petroleum Association of Mountain States has said there are no documented cases of drinking water contamination cause by hydrofrac’ing.

But according to infrastructure and environmental consultant Albert Appleton, some of the chemicals used in the hydrofrac’ing process must be closely monitored because they are not biodegradable and could eventually make their way into drinking water supplies.

“Once they’re in the environment, they’re in the environment to stay,” Appleton said. “We have learned through long and bitter experience that the only way to protect the environment from these types of materials is to keep them out of it.”

Just last month concerns that gas drilling in the Marcellus Shale could damage the region’s water quality prompted the Delaware River Basin Commission to require, pending a review, commission approval before energy companies drill in the drainage area of the basin’s special protection waters (see Daily GPI, June 1).

Increased regulation and expense is the biggest concern facing producers working the shale plays, John said.

“It’s clear that hydraulic fracturing is required to cause these plays to be viable in order to extract gas,” John said. “I would also emphasize that we’re confident that the existing regulatory framework is adequate for the protection that needs to be in place to allow that fracturing to occur…We as an industry are confident that we’re poised to develop these large plays. Our biggest concern would be that there wouldn’t be any negative changes in the [regulatory] environment that would preclude us or hinder us from going forward with the development of the plays.”

A recent report from the Ground Water Protection Council (GWPC) concluded that current state regulatory programs for water and environmental resource protection vary in scope and specificity, but they invariably have common elements in place to ensure oil and natural gas resources are developed in a way designed to protect water resources (see Daily GPI, June 2). GWPC asserted that there are adequate rules in place, and instead of a complete overhaul, regulators should review their water protection regulations and tweak their drilling regulations as needed.

©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.