Congress Votes Yea on Hydraulic Fracturing

dc_fallYesterday, the U.S. House of Representatives passed H.R. 2728, the Protecting States’ Rights to Promote American Energy Security Act and H.R. 2850 the EPA Hydraulic Fracturing Improvement Act by a bipartisan vote of 235-187. This legislation was introduced by Rep. Flores (R-TX-17), a Congressman with oil and gas industry experience.

On a macro level, this is a seminal moment, as it is one of the first times the U.S. House of Representatives has gone on record and recognized the technology that has spurred a promising era in our nation’s energy history. Hydraulic fracturing combined with horizontal drilling, technologies developed by independent producers, have reversed our nation’s energy fortune. In fact, just last week the EIA announced that for the first time in two decades, the U.S. is producing more oil and natural gas here at home than we are importing from foreign countries. This is thanks to the shale revolution, and the passage of H.R. 2728 affirms this progress.

On a micro level, the content of H.R. 2728 is a rebuke to the Department of Interior’s proposed rule on hydraulic fracturing and well construction on federal lands, set to be finalized next year. IPAA has fought this regulation since it was proposed in May of 2011. H.R. 2850 also injects sound science into the EPA’s study on the impacts of hydraulic fracturing on drinking water, which it has been drawing out for years. It would make the study accountable to a rigorous third-party peer review process and make the process more transparent and accountable to the American people. IPAA’s stance is that this legislative package is a pro-energy, pro-hydraulic fracturing vote.

But wait, what’s wrong with the federal government regulating hydraulic fracturing? Here’s the problem: the states are already doing it. In fact, they are doing a fantastic job and have done so for more than a century. States are even continuously updating their regulations. Of the approved permit applications to drill on federal lands, 98 percent were in seven states. Six of those seven states have updated their regulations, and the seventh (California) issued a regulation addressing operations standards and fluid disclosure in December 2012.

In the press release applauding the U.S. House of Representatives, IPAA President Barry Russell stated,

“This legislation, H.R. 2728, safeguards natural gas and oil development on federal lands by empowering states to regulate energy development, as they have been doing safely and responsibly. The long history of effective state regulation demonstrates that a one-size-fits-all federal requirement is unnecessary and will not increase environmental protection.”

We’ve seen what happens when the federal government gets involved in plans that area already working. We don’t want that to happen in the energy sphere, and we don’t want to jeopardize the shale revolution.

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IPAA has thus argued in its official comments to the administration that this is an unwarranted rule — a rule in search of a problem. The Department of Interior has yet to point to any systemic problems in the states’ regulation of hydraulic fracturing. The implications of the bureaucratic burden are large. In fact, IPAA and Western Energy Alliance commissioned a study this summer which demonstrated that the rule would cost $96,913 per well for a cumulative annual cost of $345 million.

Not only would it hurt independent producers, further driving them from federal lands, but it would cut jobs and energy supply. This week, Interior announced it received $14.2 billion dollars from energy production on public lands and offshore. This is money that goes to our children’s education, infrastructure, and national security efforts. Decreased oil and gas production resulting from this rule would limit revenue to the U.S. Treasury, further constraining federal budgets.

That’s why the vote on H.R. 2728 and H.R. 2850 are so important and why IPAA spent much of the last month educating legislators and their staff in the House on the importance of hydraulic fracturing and this legislative package. Outside groups varying from the National Association of Manufacturers to Heritage Action weighed in, echoing IPAA’s call that a vote for H.R. 2728 was a vote for energy, national security, jobs, and growth. It was a vote for hydraulic fracturing. IPAA urged our membership to tell their congressman to vote for this bill and we also scored the bill.

Yes, it’s unlikely that it will go anywhere in a Democratic-controlled Senate. But thirteen Democrats (mostly from shale states) voted for the legislation, which shows that those who are familiar with hydraulic fracturing have nothing to fear. It shows that IPAA’s education campaign, Energy in Depth, and its efforts to educate about the safety of hydraulic fracturing are gaining traction.  And despite his praise of the shale revolution, the president has threatened to veto if it crossed his desk.

But this legislation passed by the U.S. House of Representatives sends a message that hydraulic fracturing has reversed our nation’s energy fortune and that it is safe. It sends a message that the American people are the collective owners of federal lands, not bureaucrats in Washington. It puts the U.S. House of Representatives, the body most directly accountable to the American electorate, on record as saying “If the states like their energy plans, they can keep them.” If given the chance, we think they will. Thank you to those members who voted for this legislation.