Bloomberg News

States Don’t Meet Global Fracking Guideline, Group Says

June 01, 2012

States that regulate production of U.S. natural gas using hydraulic fracturing fail to meet international standards developed to prevent the process from damaging natural resources, the Environmental Defense Fund said.

“We’re just out of the starting gate on this,” Eric Pooley, senior vice president of strategy and communication at the organization, said today in an interview. “There are regulations in place in many states, they’re not strong enough, I don’t know of any state that has everything in place that’s needed.”

Hydraulic fracturing, or fracking, uses chemically treated water to free gas trapped in shale, and helped the U.S. overtake Russia as the world’s largest producer while cutting prices 80 percent in the past four years. The Paris-based International Energy Agency said policy makers and energy companies should follow guidelines regarding chemical disclosure, well design and waste-water disposal, to avoid local opposition to expanded production.

Fracking now accounts for about 35 percent of U.S. natural- gas production, up from about 1 percent in 2005 and 2006, Carlos Pascual, the State Department special envoy and coordinator for international energy affairs, said today.

Global gas extraction from unconventional resources, such as shale formations, may more than triple through 2035, provided that environmental concerns are resolved, according to the International Energy Agency.

‘Reputation, Destiny’

“The reputation and the destiny of the shale-gas industry will not depend on the best practices,” Fatih Birol, the chief economist for the international agency, told reporters in Washington today. “It will mainly depend on the worst ones, because an incident, which can take place in any country, not only in the United States, such as water contamination, could have serious consequences, overarching impact for the reputation and the destiny of the shale-gas industry.”

About 26 states have been reviewing and revising their fracking legislation over the past 12 months, as they learned more about fracking, Amy Emmert, a policy adviser for Washington-based energy-industry trade group, the American Petroleum Institute, said in an interview.

“State regulations are extremely effective,” she said.

The International Energy Agency, which published rules on May 29, said slow development of shale fields in nations such as China and Australia, tied to water shortages and public opposition, may add demand for liquefied natural gas shipped from the U.S.

To contact the reporter on this story: Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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