The Environmental Protection Agency has given Montana a golden opportunity to regulate “fracking,” the technology behind the Bakken oil boom, a former EPA administrator said Tuesday.
Federal officials have sat on the sidelines as fracking, or hydraulic fracturing, has prompted an oil-and-gas boom in the United States, said Winston Porter, a former EPA assistant administrator. Without federal involvement, rules for fracking are likely to be set by the states.
“The EPA said a few years ago they were really concerned about fracking and so what did they do? They started a four-year study, not a two-year study, not a four-month study,” Porter told the Billings Downtown Exchange Club. “You’re being watched by Washington.
"I just believe it would be a better idea to have the states be the primary regulators, but we’re being watched.”
A former assistant administrator for EPA solid waste and emergency response under presidents Ronald Reagan and George H.W. Bush, Porter said hydraulic fracturing is transforming the U.S. from an energy importer to an exporter within the next 25 years. With that transformation has come questions about the safety of the chemical cocktail injected into wells under pressure to force open shale bed cracks to free oil and gas.
Fracking fluid ingredients are considered proprietary by drilling companies, and the EPA does not require companies to reveal what’s in their recipes. However, people concerned about fracking worry the chemicals used could be dangerous to humans, possibly contaminating water wells or fouling surface water. Porter said the EPA has found no evidence of well water contaminated by fracking fluid yet.
Several states with hydraulic fracturing activity have opposed federal involvement. Wyoming, Montana and Colorado have disclosure rules, though environmentalists have criticized those state governments for not requiring more disclosure.
In Montana, companies can avoid disclosure of chemicals they consider trade secrets.
Wyoming was the first state to author disclosure laws. Those rules allow 146 fracking chemicals to remain secret.
Porter identified liquid natural gas as a resource to watch. The U.S. has an abundance of natural gas and consequently some of the cheapest natural gas rates among developed nations. Natural gas sells for four to five times more in other countries where natural gas isn’t abundant.
The reason natural gas remains cheap in the U.S. is because natural gas is difficult to export, which means Americans benefit from low prices with gas supplies ample. The U.S. would do well to develop ways to export natural gas to foreign customers, Porter said.
While some companies push to expand exports into profitable markets, others balk at sending liquid natural gas overseas. Chemical companies, which are highly dependent on natural gas, are fighting to prevent exports.
“There’s a future for natural gas exports,” Porter said. “Chemical companies oppose it because they like cheap gas. The U.S. Chamber of Commerce is against them. The oil industry is against them. Japan is desperate for energy because of their tsunami. Their price is about $15 per billion British thermal units. We’re at $3 per million Btu. We’ve got some of those megastates overseas who want to pay us a great fee for gas.”