Tag Archives: fracking

EPA’s regulations would not be a burden on the natural gas industry, says Bloomberg Government

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Vignesh Gowrishankar’s Blog
 – Posted: August 1, 2012

Bloomberg Government (BGov) recently released a report [subscription required for full report] that assesses the business implications of the EPA’s regulations to control air pollution from the natural gas industry. While NRDC does not agree with some of the report’s specific cost estimates, NRDC does echo some of the key findings of the report: that the regulations will not be a burden on natural gas producers; that the price of natural gas drives production levels, while regulatory compliance costs have a minimal to imperceptible impact on production; and that the regulations will be lucrative and create jobs for many well service providers and equipment manufacturers, especially small and medium sized ones, which will be vital in this economy.

According to the report, the EPA estimated that the regulations would necessitate upfront industry-wide investments of $170 million, which would be more than compensated for from the sale of captured methane and natural gas liquids, thus generating a net profit of approximately $15 million. Unsurprisingly, in November 2011, the American Petroleum Institute (API) claimed sky-high annual costs of compliance, with an estimate of more than $2.5 billion (yup, with a ‘b’). In comparison, the BGov report estimates a net cost between $300 and $500 million.

At the outset, NRDC takes issue with BGov’s cost estimates for green completions, a process that captures vented, leaked or otherwise wasted natural gas from wells as they are being fracked and readied for natural gas extraction. BGov assumed 15 days for completing a well, at a cost of $4,500 per day. In addition, the report assumes $15,000 for set-up and transportation costs. That’s a total of $82,500. We think that number is too high for a few reasons

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OMB Watch — President Obama: You Had Me Until Fracking

In last night’s State of the Union address, President Obama reiterated his support for the development of clean energy sources that will create jobs and protect the environment. But while developing clean energy is essential for moving us into the 21st century energy marketplace, the way we build our clean energy future also matters. We must develop energy without harming public health and the environment.

photo by pingting via flickr

A natural gas extraction process, commonly referred to as fracking, was cited in last night’s State of the Union as an example of clean energy. But using fracking to extract natural gas is anything but clean. In fact, the process produces more greenhouse gas emissions over time than traditional methods of oil drilling or coal mining, according to a Cornell University Study. In addition, fracking poses a great risk to public health and property, as evidenced by the multiple documented cases of severe water contamination near fracking sites, including water than can be actually set on fire as it comes out of the faucet.

Though Obama pledged to “develop this resource without putting the health and safety of our citizens at risk,” it is unclear as to how this would be accomplished. A loophole in the 2005 energy law (often called the Cheney or Halliburton loophole) granted oil and gas industries an exemption from the Safe Drinking Water Act. This means the Environmental Protection Agency (EPA) cannot require drilling companies to disclose the toxic chemicals used in fracking, or limit their activities in order to protect drinking water. And, following an order from Congress, the EPA has not yet finalized an important national study on the potential impacts of fracking on drinking water. Thus, the public remains in the dark about the chemicals used in fracking, as well as the risks they pose to their drinking water.

Read the full story here.