Bloomberg News

States Fail to Oversee Fracking, Environmental Group Says

September 25, 2012

U.S. states fail to adequately monitor hydraulic fracturing and use outdated fines that are inadequate to deter violations, an environmental group said as drillers back state rather federal oversight.

Pennsylvania and Ohio each didn’t inspect 91 percent of active oil and gas wells in 2010, Washington-based Earthworks said today in a report. In New Mexico, the top fine of $1,000 per day for violations has been in place for more than 75 years.

“States are dangerously unprepared to oversee current levels of extraction,” according to the report that examined six states accounting for 46 percent of U.S. production. “Inspectors are rarely provided with the equipment necessary to catch all of the problems that may be occurring at oil and gas facilities.”

Drilling companies such as EOG Resources Inc. (EOG:US), the top oil producer in a Texas shale formation, and states such as North Dakota argue in favor of state regulation of natural gas production and oppose federal rules proposed by the President Barack Obama’s administration. Republican presidential nominee Mitt Romney has sided with producers and the states.

Hydraulic fracturing, or fracking, uses millions of gallons of chemically treated water and sand to free oil and natural gas from rock. The technology helped the U.S. cut dependence on imported fuels, lower power bills and cut state unemployment from Pennsylvania to North Dakota.

‘Denigrate’ Regulators

“Environmental groups want centralized planning and control, and are constantly trying to denigrate state regulators,” Kathleen Sgamma, vice president of government and public affairs at Western Energy Alliance, a Denver-based trade organization, said in an interview. “States have an exemplary safety and environmental protection record when it comes to hydraulic fracturing.”

Earthworks examined six states: Texas and Pennsylvania, where fracking is booming; Colorado and Ohio, where the group said shale oil and gas development will expand; New Mexico, where natural-gas output has been declining; and New York, which in 2010 halted hydraulic fracturing.

The nonprofit group, which says it works to expose health and environmental impacts from mining, said New Mexico, New York and Ohio regulators initiate few enforcement actions each year. In Texas and Pennsylvania, “numerous oil and gas operators are repeat violators,” according to the report.

Colorado, after resolving a backlog of enforcement cases, collected more fines in 2011 compared with the previous year, Earthworks said in the report.

“A strong regulatory program aligns well with a healthy, productive industry that is providing the state and the country with energy essential to all of us in in our daily lives,” Todd Hartman, spokesman for the Colorado Department of Natural Resources, said today in an e-mail.

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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