Fracking Study Undercuts Environmentalists’ Calls for Regulation

(Bloomberg) — It was always a longshot that the Obama
administration or Congress would crack down on the golden goose
of hydraulic fracturing.

The chances shrunk further Thursday with the release of a
landmark U.S. Environmental Protection Agency study that found
the drilling method had no widespread impact on drinking water.

“That is as close as the federal government gets to
saying, ‘I’m not that interested in you,’” said Michael McKenna, a pollster and lobbyist close to Republican lawmakers.

Fracking has helped bring about a boom in U.S. oil and gas
production, turning the world’s largest hydrocarbon user into
its largest producer. With that boom have come complaints that
it’s fouled water supplies, polluted the air and even triggered
earthquakes.

Some communities and states have responded by banning
fracking, in which millions of gallons of water mixed with sand
and chemicals are forced underground to free natural gas or oil.
Environmental groups have urged Congress to strip a 2005
exemption of fracking from drinking water laws and asked the EPA
to tighten rules on disclosure of the chemicals used and limits
on the methane emitted.

“The EPA fracking study does not appear likely to spur
additional federal water regulation beyond initiatives that are
already in process,” Kevin Book, an analyst at ClearView Energy
Partners, said in a research note.

Large Producers

That’s good news for companies such as Halliburton Co. and
Schlumberger Ltd., the largest oil services companies, as well
as producers Exxon Mobil Corp. and Chesapeake Energy Corp., as
they weather a drop in oil and natural gas prices.

The 998-page EPA study concluded there are “mechanisms by
which hydraulic fracturing activities have the potential to
impact drinking water resources.” But, it “did not find
evidence that these mechanisms have led to widespread, systemic
impacts on drinking water resources.”

Thomas Burke, the EPA’s top science adviser, told reporters
that given 30,000 fracked wells each year, “the number of
documented impacts on groundwater resources is relatively low.”

Industry groups said that result vindicated what they have
been arguing for years: drilling activity has risks, but
fracking doesn’t deserve new federal oversight because the risks
of underground water contamination is low.

Exxon Mobil

The study “is absolutely consistent with all the previous
studies that show that effective well containment practices make
hydraulic fracturing a very safe practice,” Alan Jeffers, a
spokesman for Exxon, said in a telephone interview Thursday.

The report’s conclusions don’t provide any support for
fracking regulations proposed by congressional Democrats, said
Larry Nettles, a partner with law firm Vinson & Elkins who
represents several industry clients that supplied data for the
study.

“I think this report effectively kills those bills,”
Nettles said.

The report is also a boost for President Barack Obama’s
reliance on natural gas to achieve cuts in greenhouse-gas
emissions from power plants, an effort that’s the mainstay of
his agenda to combat climate change.

Obama Policy

“It’s quite clear that the Obama administration remains
committed to the all-of-the-above energy plan, of which natural
gas is a huge part,” said Lauren Pagel, policy director for
Earthworks, an anti-fracking group. “I don’t think the Obama
administration would ever come out against fracking.”

The Obama administration in March issued fracking
regulations for drilling on public land, requiring drillers to
reveal the chemicals they use and to meet construction standards
for wells. Most of oil and natural gas production, however,
occurs on private lands and isn’t affected by the rule.

Stanford University professor Rob Jackson has tested water
supplies in communities where residents said they had
contaminated supplies, and found there are risks from the
process but not insurmountable ones. The EPA study doesn’t add
much to that and other on-the-ground research, he said.

The EPA could never come to terms with gas producers such
as Range Resources Corp. or Chesapeake Energy to conduct water
tests near where wells were to be drilled and fracked, and then
go back and re-test afterward. Without that baseline data, the
EPA said it’s hard to tell if fracking is the cause in instances
of alleged contamination.

Waste Disposal

In addition, when the study began much of the focus was on
the risk that chemicals mixed in fracking fluids could flow
through underground fissures and into underground water
reservoirs. The results show that might not be the biggest risk.

“The process of fracking itself is one risk factor. But in
fact it’s not the biggest one,” said Mark Brownstein, vice
president of the Environmental Defense Fund. “Ongoing physical
integrity of the wells and handling the millions of gallons of
wastewater coming back to the surface after fracking, over the
lifetime of each well, are even bigger challenges.”

And the biggest worry now about fracking, is one that has
nothing to do with the process itself. Residents in Oklahoma,
Ohio and other states have seen more and more earthquakes, which
researchers tied to the increasing use of disposal wells for the
wastewater from fracking.

“The water quality issue is not the primary problem with
fracking impacts, it’s seismicity,” said Paul Bledsoe,
president of Bledsoe & Associates, a strategic policy firm, and
a former aide to President Bill Clinton.

To contact the reporters on this story:
Mark Drajem in Washington at
mdrajem@bloomberg.net;
Jim Snyder in Washington at
jsnyder24@bloomberg.net

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

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