Well, the votes are in, and America’s first black President, Barack Hussein Obama, has handily won a second term.
The U.S. energy companies, having heavily backed Obama’s opponent, former Massachusetts governor Mitt Romney, are now nervously contemplating their future on many levels, as they massively supported his opponent. Romney promised to get the federal government, most notably the Environmental Protection Agency (ironically, established by a Republican President, Richard Milhous Nixon, in 1970) to back off their practices, as well as opening up to their interests both federal lands and offshore areas to energy companies in a search for U.S. energy autonomy.
As the newest but most impressively productive of America’s newer energy assets, the hydraulic fracturing companies, which have unleashed the potential of the U.S. shale gas reserves, are clearly nervous that a second Obama administration will impose additional federal regulations on their activities. Had Romney won, fracking would have remained largely regulated by state legislatures, without countrywide mandates on the controversial practice.
There was no equity in America’s major energy conglomerates in funding the rivals’ campaign. As Bloomberg News, a dispassionate economic website focused solely on the bottom line reported, “Oil, gas, coal and electricity interests donated in this election as if their fate depended on it. Together, energy companies spent more than $115 million on the election, more than on any campaign since at least 1990, according to the Center for Responsive Politics’ aggregation of federal data. Eighty percent of candidate donations went to Republicans.”
Now, what, especially for natural gas fracking companies, which in less than a decade, have managed to insinuate themselves into America’s energy matrix? Environmental groups are ramping up their lobbying efforts with centrist Democrats like Obama to tighten regulations on fracking even as efforts on pressuring Congress to battle climate change fall by the wayside.
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Heightening the industry’s concerns, earlier in 2012 the Obama administration delayed decisions on exporting vast new natural gas field finds developed by fracking to any nations besides those with which Washington already has free-trade agreements.
What’s at stake?
In 2011 the U.S. produced a record amount of natural gas, primarily from fracking and horizontal drilling, with shale gas well output alone quadrupling nationwide 2007-2010.
But that impressive increase in output has come at a cost -each hydraulic fracturing well is drilled with 2 to 4 million gallons of fluid, and it is the component of those fluids injected that are raising concerns, as fracking companies insist that releasing their components would violate industrial trade secrets. Even the U.S. Department of Energy notes that the fluids injected contain hydrochloric acid.
Some states allow water used with fracking to be recycled into the public water supply, while others require it to be buried in underground tanks. A Romney victory would have reined in federal oversight, leaving it to states, even as at the local level, studies are attempting to assess possible health and environmental effects.
It is the disparity between state and federal regulation that will mark the next several years of American energy policy. The Republicans, as they recover from their electoral loss, are already attempting to redefine the fracking debate parameters. In an article prior to the election, the Washington Times ran an article by Thomas Mullikin, “a lawyer, ecologist and climate change expert,” headlined, “Obama EPA set to derail fracking, kill 1.7 million jobs - Administration’s energy regulations stifling the economy.”
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At least until 2012, when the next round of Congressional elections are scheduled, the Obama administration will be in the driver’s seat of national energy policy – this is not rhetoric, simply a fact. Accordingly, fracking companies and proponents can either accept that reality and work with federal agencies to allay rising public and state concerns about the procedure or they can obstruct requests for such information as the components used in the process, hoping for better days when more energy friendly congress and, after 2016, presidency, might assist in swatting off pesky requests about their methods.
And Democratic Congressional members are already investigating. According to the “Chemicals used in hydraulic fracturing” report prepared for the “United States House of Representatives Committee on energy and Commerce Minority Staff, April 2011,” after noting, “Hydraulic fracturing has helped to expand natural gas production in the United States, unlocking large natural gas supplies in shale and other unconventional formations across the country,” the report added, “Between 2005 and 2009, the oil and gas service companies used hydraulic fracturing products containing 29 chemicals that are (1) known or possible human carcinogens, (2) regulated under the Safe Drinking Water Act for their risks to human health, or (3) listed as hazardous air pollutants under the Clean Air Act. These 29 chemicals were components of more than 650 different products used in hydraulic fracturing.”
For those readers who will undoubtedly whine about how partisan this article is, “Appendix A lists each of the 750 chemicals and other components used in hydraulic fracturing products between 2005 and 2009.”
The information, both pro and con, is out there for those willing to seek it.
Long and short – the fracking industry will come under renewed scrutiny, and decrying environmental tree-hugger groups and Congress members is unlikely to prevent increasing scrutiny.
By. John C.K. Daly of Oilprice.com