Occupy Marcellus Shale?: Activists Undermine Budding Domestic Energy Resource

Cross-posted by Forbes.com at WLF’s Contributor Site

Innovations in extracting natural gas and oil from America’s vast shale deposits offer the possibility of new jobs, higher tax revenues, more investment, and up to a century’s-worth of cleaner-burning domestic energy. So why is it, then, that the revolutionary process to pursue such energy – known as hydraulic fracturing, or “fracking” – has become the latest environmental cause celebre for professional activists and their allies in government? Is their support for suffocating, precautionary restrictions or outright bans motivated by environmental and health concerns, or by a reflexive, ideological disdain for fossil fuels?

Whatever motivates them, fracking naysayers are pursuing a campaign straight out of the Activism 101 playbook, utilizing a patented mixture of demonization, regulation, and litigation. 

Opponents have bombarded the media with unfounded claims that the process contaminates groundwater, accelerates global warming, and even causes earthquakes. A 2010 documentary, Gasland, demonized fracking with a one-sided examination of natural gas extraction. Some of the movie’s claims were deemed so inaccurate that Colorado oil and gas regulators issued a formal refutation document.

Activist groups such as the Community Environmental Legal Defense Fund have harnessed such demonization to convince local governments in New York, Pennsylvania, and elsewhere to pass laws banning or limiting fracking. Over 100 cities as large as Pittsburgh and towns as small as Dryden, New York have adopted such laws. Some face legal challenges with energy business plaintiffs arguing that state oil and gas laws supersede such local rules. A circuit court judge in West Virginia this past August ruled that state law preempted Morgantown’s fracking ban.

At the state level, both New York and New Jersey have banned fracking until more studies are done. Advocates for plaintiffs with groundwater contamination suits have urged New York legislators to create a strict liability standard for such legal actions. And not to be left out, the New York Attorney General has sued to stop a Pennsylvania-based commission from issuing proposed rules on fracking. (See this WLF Legal Opinion Letter for more on the New York AG suit.)

Even though state regulators have been far from reticent in addressing hydraulic fracturing, professional activists consider business activity to be underregulated unless the federal government is involved. Not surprisingly, federal bureaucrats have been eager to oblige. 

EPA this past week embraced in part an Earthjustice petition asking it to apply the Toxic Substance Control Act to chemical agents used in the fracking process. Such disclosure will be duplicative of what state laws already require, and will also commence ahead of the conclusion of EPA’s wide-ranging study of fracking. Additionally, EPA will soon release guidelines to state environmental regulators on applying the federal Safe Drinking Water Act (SDWA) to fracking permit requests. The SDWA applies to substances such as diesel fuel, which has been used in fracking solutions. Reportedly, the EPA guidance will be written in such a way that it will cover not only diesel fuel, but also substitutes that can be used in fracking, such as mineral and canola oils. One state regulatory, Lynn Helms of the North Dakota Department of Mineral Resources, has stated that EPA’s guidance could lead to a devastating two-year delay in approving new fracking projects in his and other states.

As if those new regulatory layers weren’t enough, other federal agencies are clamoring to get into the game. The Energy Department has issued two studies on fracking calling for – you guessed it – more federal rules.  The Interior Department wants greater disclosure of chemicals used for fracking on public lands.  Securities regulators, inspired by shareholder activists, have even joined the stampede, threatening new disclosure rules for fracking “problems.” Of course, politicians have jumped on board too, with several introducing fracking regulation bills in Congress.

Businesses poised to profit from what has been called a “21st-century gold rush” have innumerable incentives to protect human health and the environment, and understand that there will be regulation. Such regulations will, in fact, help businesses in their efforts to counter all the misinformation some activists are peddling to stop fracking. But rules must be clear and tailored to the unique needs of each state. Much can be achieved if businesses feel comfortable to craft solutions with regulators, rather than fighting with them. That won’t happen at the federal level.

One prime example: Oklahoma-based Devon Energy worked with state regulators to establish rules that would allow it to create a contained water recycling pond for water used in the fracking process. Such balancing of economic and environmental benefits will benefit all Americans.

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