President Obama recently signed an executive order creating a task force to coordinate the efforts of several government agencies considering regulations on hydraulic fracturing. Though some have welcomed the order as a way to standardize myriad state approaches, federalization is far more likely to cause overregulation and a new open-ended political lever against our domestic energy supply.
Fracking, as it is often called, is a technology that makes possible the production of vast amounts of U.S. oil and natural gas, creating thousands of jobs and lowering energy costs across the economy. This boom makes government-dependent ethanol a homegrown boondoggle.
Thanks to deep-shale-gas fractionation, the U.S. now has an estimated 100-year supply of clean-burning fuel. As supplies have increased, the price has fallen, a godsend to residential and industrial consumers.
Fracking also is coaxing crude oil and natural gas liquids from the Eagle Ford formation in Texas and the Bakken Shale in North Dakota and Montana. As more domestic oil is produced, less is imported, reducing the U.S. trade deficit and strengthening the value of the dollar. Increased supplies will also put downward pressure on gasoline, diesel and fuel-oil prices at home and abroad.
President Obama wants to take credit for the U.S. energy boom, noting that U.S. oil production has climbed to an eight-year high during his term in office. But his administration has been criticized for doing virtually everything in its power to hinder hydraulic fracturing.
Some 10 government departments and agencies are considering regulations to control unconventional oil and natural gas production. Leading the charge is the Environmental Protection Agency with proposed rules on wellhead emissions, and the Interior Department, which is preparing new regulations for fracking on public lands. Additionally, the administration's 2013 budget proposes a 10-fold increase in the funds available for studying fracking's impact on health, safety and the environment.
Why this rush to regulation by the federal government? Fracking has been used in more than one million U.S. wells since the 1940s. Despite the claims of environmental groups, groundwater contamination is virtually unknown outside of improperly cased wells, which is not unique to the one particular technology.
EPA Administrator Lisa Jackson admitted this fact to a congressional panel a year ago. Recent EPA water quality investigations in Pavillion, Wyo., and Dimock, Pa. -- where much of the sensational and erroneous "Gasland" video was produced -- turned up no credible evidence of groundwater or well water pollution associated with fracking.
Further, oil and natural gas field operations already are covered by myriad federal and state rules. A 2009 study by the respected Ground Water Protection Council found the states were better suited to regulate oil and natural gas field operations. The study warned that new federal regulations are likely to be "duplicative" and "ineffective because such regulations would be too far removed from field operations."
Rather than rushing to regulate, the administration should be lauding fracking's success. According to Robert Hefner, author of "The Grand Energy Transition," abundant natural gas supplies and lower prices have reduced the annual cost of heating 65 million U.S. homes by $26 billion.
Cheap natural gas also is leading to resurgent U.S. manufacturing. Dow Chemical and other petrochemical companies are choosing to retain operations in the United States rather than move to Asia, where labor costs are lower.
This spark of hope for the economy could be snuffed out by overregulation. Texas Railroad Commission Chairman Barry Smitherman, for one, believes it could "kill the technology that's taking us to energy independence," and prevent Texas from quadrupling its oil production in the next decade to 4 million barrels a day.
The economic benefits of the new energy boom should take precedence over knee-jerk politics. Private property rights and tort law, coupled with common-sense local and state oversight, leaves federal regulation with little upside but much cost -- and great potential for future mischief.
Robert L. Bradley Jr. is founder and CEO of the Institute for Energy Research. His most recent book is Edison to Enron: Energy Markets and Political Strategies.