Feb. 8 (Bloomberg) -- Oversight of drilling and hydraulic fracturing for oil and gas on federal land is “erratic and inconsistent” and in a decade led to about $300,000 in fines, according to report released by U.S. House Democrats.
The Interior Department avoids imposing fines for violations such as deficient casing and cementing, which may lead to tainting of drinking water, and lets some companies break rules while imposing penalties for identical breaches by competitors, according to the report on the House Natural Resources Committee Democrats’ website. The analysis covered cases from 1998 to 2011.
“It’s incomprehensible,” Representative Rush Holt, a New Jersey Democrat, said in an e-mailed statement. “Oil and gas companies have committed thousands of drilling violations, yet they have faced a grand total of $300,000 in fines. That’s roughly a single minute of oil company profits -- the equivalent of levying a 10-cent fine against someone who earns $50,000 a year.”
Hydraulic fracturing, or fracking, releases gas trapped in shale rock by injecting water, sand and chemicals thousands of feet underground, is used for almost every new natural-gas well drilled on U.S. lands. Fracking helped boost production of the fuel to a record, while pushing prices to 10-year low.
President Barack Obama said the U.S. has natural gas supplies that can last almost a century, and urged safe development of the resource in his Jan. 24 State of the Union address.
Adam Fetcher, an Interior Department spokesman, said the agency will review the Democrats’ report.
--Editors: Steve Geimann, Jon Morgan
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