Tuesday, June 9, 2009

The hydrofracing bill, ANWR and offshore drilling

A couple more quick notes for the evening: the bill to move hydrofracing under the Clean Water Act and about which I summarized the hearing last week, was put forward today.
Democratic Representatives Diana DeGette, Maurice Hinchey and Jared Polis offered a bill that would reverse a 2005 measure that excluded hydraulic fracturing from regulation under the Safe Drinking Water Act.

In the Senate, Democrat Bob Casey introduced similar legislation
While the initial intent, as commented by Congresswoman DeGette at the hearing last week was purportedly just to have the chemicals included in the hydrofrac reported, under the rules of the Safe Drinking Water Act, the impacts on the supply of natural gas, which relies on hydrofracing to release the gas in the gas shales, is also going to be a consequence. The API highlighted an IHS report that concluded that:
additional federal regulations would lower the number of US wells drilled by more than 20% over a five-year period, while cutting natural gas production by about 10% from last year’s levels by 2014.
That does not seem to concern the bill’s authors who seemed to have a much more severe impact in mind.
"It's time to fix an unfortunate chapter in the Bush administration's energy policy and close the 'Halliburton loophole' that has enabled energy companies to pump enormous amounts of toxins, such as benzene and toluene, into the ground that then jeopardize the quality of our drinking water," Hinchey of New York said.
The fact that they are being pumped some 8-10,000 ft down, and are then removed, accounted for and safely disposed of in other wells at depths well below the few hundred feet to the water table is irrelevant to a point of view that seems to want the practice of hydrofracing completely banned. It might be interesting to hear where he expects the heating fuel to come from for his constituents next winter.

Certainly they should not, it seems, expect much help from Alaska, the Senate Energy and Natural Resources Committee has refused permission to use directional drilling to reach oil formations in the Arctic Natural Wildlife Refuge, in a way that would not put drilling rigs into the refuge.

As another part of that action the Committee voted to end the ban on drilling offshore in the Eastern Gulf, something not that popular in Florida. But it will require a state initiative to remove the ban that Florida has imposed.

Offshore Sweden and Finland plans are still moving forward to run the Nord Stream gas pipeline down through the Baltic. But there is a rumor that both the Swedish and Finnish authorities may oppose the project.

All in all, perhaps not a good day for the natural gas industry.

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