The trio of senators crafting energy and climate change legislation has signaled that language barring federal regulation of the production technique known as hydraulic fracturing (hydrofracing) will not be included in the measure, the head of the American Gas Association (AGA) said Tuesday.
“They’ve indicated that [hydrofracing] may not be one of the things addressed” in their legislative proposal, said AGA President David Parker at the Natural Gas Roundtable in Washington, DC. “The initial preference is it will not be directly referenced” in the draft, an AGA spokeswoman said.
Parker’s comments were based on a meeting that he and other trade association officials attended last Thursday with the three senators — John Kerry (D-MA), Lindsey Graham (R-SC) and Joseph Lieberman (I-CT) — who are drafting the proposal, the AGA spokeswoman noted.
The New York Times, however, has reported that the latest Senate draft of the climate and energy bill reportedly includes language that the Environmental Protection Agency (EPA) would not regulate hydrofracing.
BP America Inc. and two other oil and gas companies are calling on the senators to recommend against federal regulation of hydrofracing in the climate measure, the newspaper said.
There are a number of “public concerns” about hydrofracing, said R. Skip Horvath, president of the Natural Gas Supply Association. And trying to address these concerns is one of the greatest challenges now facing the industry, he said. Hydrofracing, which is used to stimulate many oil and gas wells, is a process in which fluids are injected at high pressure into underground rock formations to fracture the rock and increase the flow of fossil fuels.
“All energy entails some risk,” Horvath noted. However, that message has not been received so well by policymakers and regulators in Washington. Both the EPA and the House Energy and Commerce Committee currently are looking into the adverse risks of hydrofracing on public health and the environment (see Daily GPI, March 19; Feb. 19).
And shale natural gas has its owns challenges. With the “recent shale discoveries, natural gas is sustainable for generations to come…It’s easy to get complacent and just sort of think, ‘Oh, gas has won,’ but we have challenges ahead of us,” Horvath said.
“We really have completely modified the way we [have] to think about natural gas. And the reason is there are no dry holes in shale…That is such a huge leap for us,” he noted.
Horvath further said the shale gas industry could face a public relations problem as a result of the documentary Gasland, which won a prize at the Sundance Film Festival earlier this year.
The film examines natural gas drilling and the effects on the environment and the people who live around these operations. What it allegedly finds is gas seeping into people’s drinking water, making entire households sick; giant corporations denying the facts; government bureaucrats doing nothing; and people in despair clamoring for help, according to one reviewer. It also shows a few instances of “flammable tap water.”
Horvath further said the natural gas “fuel wars” with renewable fuels and coal have to end. “Neither one of those [wars] are good.”
The Senate climate change proposal is expected to have a natural gas title. That’s probably because the natural gas industry is speaking as a “more combined group” in lobbying the Senate than it did when the House worked on its cap-and-trade legislation, which was sponsored by House Energy and Commerce Committee Chairman Henry Waxman (D-CA) and Rep. Edward Markey (D-MA), said AGA’s Parker.
“Our philosophy at the time [of the House bill] was gas sells itself. That was a mistake,” Horvath said. “We do feel we’ve taken care of that business on the Senate side.”
Parker said Clear Skies is partnering with AGA and other organizations to conduct an investigation of price volatility in the gas market. The study is a concern of producers, pipelines and distributors, he said, adding the the results of the study are due out in a year or more.
As for growth in natural gas consumption, Horvath sees the “electric side” experiencing “explosive [growth] in a big way.” And Parker said the “direct use of natural probably [will be the] most important market for utilities.”
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