New Regulations on the Shale Industry Will Hurt Competitiveness

By August 19, 2011Energy

Yesterday the Department of Energy’s (DOE) Natural Gas Subcommittee released its interim report which makes recommendations to the Secretary regarding the safety and environmental performance of hydraulic fracturing from shale formations. The final report is expected in November of this year and the public will be given a chance to comment.

The preliminary report recognizes that “natural gas is a cornerstone of the U.S. economy, providing a quarter of the country’s total energy.”  It also acknowledges that technologies used in extracting natural gas from shale formations have increased production by 30 percent. What does all this mean? It’s very simple; it means more domestic jobs, stronger economy, lower natural gas prices and greater energy security.

In a Bloomberg story that ran today on new possible regulations for the shale industry, it would seem that the Director of the Bureau of Land Management may seem eager to issue potentially burdensome regulations on the industry.  

Do we need to make sure we extract shale gas responsibly and safely, yes! Can the states do a good job of regulating shale gas production? Yes they can.  States have been doing it for 150 years, 4.3 million wells, and by the way, most of the natural gas wells involve some form of hydraulic fracturing. Companies are continuing to work to improve the process, technology and implement the best practices possible.

It is critical to the global competitiveness of manufacturers and job creation in our country that we are able to utilize all the sources of energy available. We can’t afford to lock any of it away. Shale gas can provide much of our country’s natural gas needs. If the federal government is put in charge of regulating shale gas production then I have already seen this movie and it doesn’t end well. Let’s not go down the path of limiting what energy sources we will use, but let’s pursue a course of utilizing all of our sources which will help lead to lower energy costs and economic growth. 

Chip Yost is vice president for energy and resources policy, National Association of Manufacturers.

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