Time to Close the Fracking Loophole

This blog is also posted on Triple Pundit.

Latest Developments

The Environmental Protection Agency (EPA) recently announced that hydraulic fracturing (fracking) may be to blame for causing groundwater pollution. Although the findings are specific to Wyoming, it will likely influence other states that are determining whether and how to regulate fracking. In New York, for example, fracking is highly contentious because Governor Andrew Cuomo wants to lift the ban on fracking in the Marcellus Shale area. As reported in the Huffington Post, the public outcry in New York has been especially strong.

Hydraulic Fracturing Process

What is Fracking?

Hydraulic fracturing is a process that pumps millions of gallons of water, sand, and chemicals into a well deep underground to break apart the rocks so that the gas is released and flows more freely out of the well. Scientists are worried that the chemicals used in fracturing pose either a threat underground or on the surface from waste fluid spills.

To learn more about fracking, watch this PBS NewsHour video.

The Issues

* Economic Boon: Initially, fracking natural gas seemed like an ideal answer to the need for cleaner energy, lower fuel prices, new jobs, and a boost to local economies. According to the economic forecasting firm, IHS Global Insight, by 2015, shale-gas extraction will account for 870,000 U.S. jobs and $118 billion in economic impact.

* Environmental and Health Problems: These economic benefits, however, come at a price. The hazardous and carcinogenic chemicals used in fracturing fluids are not regulated because fracking was exempted from the Safe Drinking Water Act in the Energy Policy Act of 2005 – the infamous “Halliburton Loophole.” Without adequate regulation, it is becoming increasing clear that current fracking practices create environmental problems (e.g., contaminated groundwater, pipeline leaks) and health risks (e.g., skin rashes, respiratory infections, tumors).

* Political Debate: Fracking has become a heated political issue, with people complaining to their politicians that fracking invades their private property rights and has undue impact on their communities (e.g., high truck traffic with heavy equipment). The public is pressuring for stronger regulations at the local, state, and national level. Energy companies are lobbying politicians, too, trying to stop or weaken regulations that would be costly to them. For example, the Gothamist reports that pro-fracking interests have spent $3.2 million lobbying Albany in 2010 alone and donated over $100,000 to Governor Cuomo himself.

What To Do

We need a better balance between protecting the nation’s environment and health from the hazards of fracking, and pursuing the economic benefits of fracking. There are a couple of approaches to consider:

1. Follow the “Precautionary Principal”
One obstacle to determining appropriate policy is insufficient scientific understanding of fracking’s impact on the environment and public health. Many argue that the lack of scientific knowledge is due to the “Halliburton Loophole” which exempts energy companies from disclosing fracking chemicals. Given the notable risks to public health and the environment, until there is greater scientific certainty that fracking is not harmful, all players should follow the “precautionary principle”. This means that the burden of proof is on energy companies to prove that fracking is safe.

2. Close the “Halliburton Loophole”
If fracking is as safe as energy companies claim, then complying with national standards for clean drinking water should not be an issue. In 2009, Congress introduced the Frac Act to remove the exemption of hydraulic fracturing from the Safe Drinking Water Act (SDWA) and to require the disclosure of chemicals used in the fracturing process. The Frac Act was reintroduced in 2011. Under heavy lobbying pressure from the energy industry, the Frac Act has not yet been passed. Even though the current Congress seems locked in a partisan stalemate, citizens should continue to pressure legislators to pass the Frac Act and close the Halliburton Loophole.

3. Look for EPA’s Research Results
The Safe Drinking Water Act authorizes the EPA to set national health-based standards for drinking water to protect against both naturally-occurring and man-made contaminants that may be found in drinking water. It also oversees states, localities, and water suppliers who implement those standards. Although fracking is not currently regulated by the EPA because it is exempt from the Safe Drinking Water Act, the EPA is studying the impact of fracking on water quality and expects to release its findings in 2012, with a final report in 2014. The research should inform appropriate regulatory policies. As mentioned above, the EPA recently released a report stating fracking may be to blame for causing groundwater pollution in Wyoming.

4. Continue to Use the Courts
Common law, torts, and property laws protect people and communities from harm caused by the actions of others, i.e., harm caused by companies involved with fracking. Citizens and communities are turning to the courts to sue energy companies for damaged property, contaminated well water, lower property values, surface spills, etc. However, the court system has its limitations such as cases taking years to settle, limited jurisdiction, or inability to prevent negative behavior.

5. Weigh In on State Regulation
Given the lack of progress in the areas cited above, states have taken the lead in developing policies to regulate fracking. States have common law jurisdiction over local energy company activities and are best suited to deal with local geology and drilling issues. States have the authority to adopt stricter fracking regulations. For example, states could require:

  • fracking disaster prevention plans,
  • stricter permitting processes,
  • stiffer penalties for violations,
  • more frequent inspections, and
  • greater disclosure.

In terms of incentives, states could also provide tax credits to businesses that operate environmentally-sound fracking programs and pass inspections. Many people, however, question some states’ ability to manage fracking activities in light of too few resources for enforcement and susceptibility to lobbying by big business. Also, since state regulations vary greatly, gas drillers can simply move to less regulated states.

6. Pressure New York State
Governor Cuomo wants to lift the ban and fast-track fracking in the Marcellus Shale area. He believes fracking can be done in a way that protects public health and the environment. However, many argue that we have seen far too many examples of fracking-gone-wrong and the harm it does, including contaminating drinking water, destroying property values, transforming communities into industrial zones, etc. New York State is particularly vulnerable because fracking could threaten water supplies for millions of people by polluting New York City’s upstate reservoirs. If this happens, New York City would need to spend $6-8 billion to construct a filtration plant to treat the polluted water.

To learn more about Governor Cuomo’s efforts to allow fracking, read articles in The New York Times and the Gotham Gazette.

It is Time to Close the Fracking Loophole

If fracking is so safe, why does it need loopholes? It is time to close the Halliburton Loophole and have fracking practices comply with the national health-based standards designed to protect the American people against contaminated drinking water.

This entry was posted in change management, green, sustainability, sustainability consulting, sustainability strategy, Sustainable Business and tagged , , , , . Bookmark the permalink.

One Response to Time to Close the Fracking Loophole

  1. Orin Y. O'Brien says:

    Dear Vreni,
    This article on Fracking is great: just read the recent one on Gamification… at first I thought that term was “bad”. Now I realize, thanks to your article, that it is just a way to get people to cooperate with the “green movement.”
    Orin O’Brien

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