Introduction
This blog post will look at bills having to do with hydraulic fracturing introduced in the current or most recent sessions and consider the challenges the states have in trying to balance the benefits and risks of oil and gas development. But first I’ll cover a little bit of background about the oil industry to help put these bills in context. I’ll also try to summarize some of the arguments for and against hydraulic fracturing, before taking a deep dive to look at specific bills to see how some states are trying to deal with this controversial topic.
If you’d like to see how things have changed in this area over the last few years, you might want to peek at a similar post I did in 2013
Background on the Oil Industry in the United States
The first well was drilled by Colonel Drake in Pennsylvania, in 1859.
Since then around four and a half million oil wells have been drilled in the United States, with drilling peaking in the 1980’s.
Wells have been drilled in most states, with commercially productive wells currently producing in about half the states. Here’s a map of oil and gas in the lower 48 states; Alaska produces significant oil and gas, Hawaii produces none.
If you’d like to take a deeper look at where wells are, the USGS has this great interactive map. This map will be relevant when we look at what states have introduced legislation encouraging or discouraging (in various ways) oil and gas development.
Explanation and History of Hydraulic Fracturing
In this section I’m going to say “oil” for simplicity. Most wells actually produce both oil and natural gas in varying ratios. Everything I say below applies to both oil and gas.
Hydraulic fracturing has been in common use since the 1940’s; including most of the oil wells in the 80’s . The understand the big changes in oil production recently we should first discuss the increasing sophistication of horizontal drilling, allowing for the development of shale. A quick (overly simplified) petroleum geology lesson: biomass like dinosaurs and plant life is squashed into oil shale, the oil then migrates up to the surface. If the oil meets an impermeable barrier along the way like a fault or salt dome, and there is a suitable rock such as sandstone to store the trapped oil, then we have an oil field and can tap into that trapped oil.
This sandstone storing the oil is called a “reservoir” rock formation, and can be tens or hundreds of feet thick. A well is drilled vertically down through this sandstone to extract the oil. The shale itself, the “source” rock formation, on the other hand, tends to be just inches or feet thick. So a well drilled vertically through it won’t have much contact with the shale, making it difficult to extract much oil. Horizontal wells, on the other hand, can stay within the shale for miles, changing the ball game completely.
Another key point is that sandstone is much more permeable, so oil can migrate through the rock into a nearby well. Shale is *much* less permeable, so a shale well won’t be able to drain oil from a very big radius at all. That’s where hydraulic fracturing comes in. Water mixed with sand is pumped into the well under high pressure to create fractures in the target rock formation, when the pumping finishes the water flows back out but the sand is left behind, propping the fracture open. The water, called frac fluid, is treated with certain chemicals to make it better able to carry the sand, inhibit rust, reduce damage to the formation, flow back when needed, and so on. The resulting fractures enable oil to travel to a well from a wider area. Since shale is so much less permeable, it requires many more fractures to be commercially productive. So it is the combination of horizontal drilling along with new high volume hydraulic fracturing techniques that have made it possible to effectively produce shale. These technologies together open significant new development potential within the United States.
The Good and The Bad
Hydraulic fracturing has had a huge impact on oil production, decreasing our dependence on foreign oil and lowering energy prices. But as treatment volumes have become larger and larger, concerns have also grown about the safety and environmental impact of the procedure. Groundwater contamination has been the primary concern, but people are also worried about earthquakes, the volume of water required, and other concerns. Some also argue that by keeping fossil fuel abundant and prices low, we are slowing the development of alternative energy technologies; so the increased production itself may be a mixed blessing.
Here’s a look at where we get the oil we consume, and the impact of shale development, even just over the last few years:
2012 graphic from NPR, 2016 data from EIA. The EIA notes the oil imports are at their lowest point since 1970.
State Legislatures have been wrestling with the balance between the pros and cons of hydraulic fracturing for many years. Oil producing states have long had extensive regulations in place around well construction, location, treatment, and reporting. I myself have been studying hydraulic fracturing since the early 1990’s, using data about treatments from as far back as the 1950’s. But the newest treatments are orders of magnitude larger than in even the recent past, and public awareness is shining a new spotlight on the topic; state legislatures have responded in a variety of ways.
Current Hydraulic Fracturing Legislation
Here’s a look at all of the bills in the current (or most recent) sessions dealing with hydraulic fracturing:
To summarize, here are counts of what the bills are about:
You can review all of the individual bills here. Most of the water disposal controls and bans (in which I included total fracking bans, bans on certain chemicals, bans on injection, moratoriums, etc) are in New York.
What I’ve called transparency – telling the public about what’s in frac fluid mostly, but also sharing more information in general – has been a big topic for several years. There are relatively fewer bans this year, though; attention seems to have turned more to water, both where you can get it and what to do with waste water after it’s been used for fracking.
Hydraulic Fracturing Bills of Interest
There are several speicific bills worth highlighting from this year. First, a series of bills in Michigan. MI HB5366 says they intend to repeal their moratorium on high volume hydraulic fracturing if the legislature can agree on how to: assess the impact of water withdrawal (MI HB5373), require operators to disclose what is in their frac fluid (MI HB5367), increase public participation and control (MI HB5371 and MI HB5372), and require certain setbacks (MI HB5369). The reason I picked out this collection of bills in particular is that the first bill lays out what the Michigan legislature sees as the challenges from fracking to health and the environment, and then they suggest a series of solutions with individual bills tackling one issue at a time. This allows each issue to be individually focused on and debated. Regardless of the merits of the individual bills, I find this basic framework a sensible way to proceed.
Second, TX HB4021, encouraging operators (via tax incentive) to find alternative sources of water instead of fresh water to use for fracking, namely “brackish groundwater, desalinated, recycled, municipal treated water or any other technologies that may be developed as alternative to fresh water.” Although the bill died in committee, it was an interesting approach. As concerns mount over the volume of fresh water being used in hydraulic fracturing I believe more states will be looking at both carrots and sticks to cope.
And finally, I want to highlight the contrast between NJ A2625, AZ HB2407, SD HB1197, HI SB1197 proposing total bans or moratoriums, from states with little or no current oil and gas production, and various statements of strong support of the oil industry from CO HJR1020, TX HR1145, OK SB1485 from states with more significant oil and gas production. Also, from TX HB40 this year we get
“The legislature finds that the laws and policy of this state have fostered successful development of oil and gas resources in concert with the growth of healthy and economically vibrant communities for over 100 years. The legislature acknowledges this cooperative progress and that mutual benefit is derived from the statutes already in effect, which provide effective and environmentally sound regulation of oil and gas operations that is so comprehensive and pervasive that the regulation occupies the field, while facilitating the overriding policy objective of this state of fully and effectively exploiting oil and gas resources while protecting the environment and the public’s health and safety. The legislature recognizes that in order to continue this prosperity and the efficient management of a key industry in this state, it is in the interest of this state to explicitly confirm the authority to regulate oil and gas operations in this state. The legislature intends that this Act expressly preempt the regulation of oil and gas operations by municipalities and other political subdivisions”
which I think we can also consider unambiguous support for the oil industry. The contrast in tone between non-oil producing states and states with a significant economic stake is not surprising perhaps, but notable.
Conclusion
Fracking technology will surely continue to evolve, and hopefully scientists will continue to better understand its impact. Also each state faces their own unique mix of challenges based on economic, environmental, and political factors. It will be interesting to see what incentives and restrictions states can think up to try to balance the benefits and risks of oil and gas development within their borders. After all, as both consumers of energy and denizens of the planet we all have a stake in the outcome.
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