Senator Inhofe released a new Senate report by the EPW Minority staff on Thursday entitled, "Clouded Waters: A Senate Report Exposing the High Cost of EPA's Water Regulations and Their Impacts on State and Local Budgets."
This report examines the effects on state and local governments of several federal water regulations that the Obama EPA is, or will shortly be, implementing: new water quality criteria in Total Maximum Daily Load (TMDL) and numeric nutrient criteria for geographic locations, new stormwater rules, and the new Pesticide General Permit (PGP). These rules carry with them significant unfunded mandates that will cost state and local governments tens, if not hundreds, of billions of dollars. These new rules are not the outcome of legislation or rigorous scientific findings, but the direct result of a number of lawsuits by environmentalists. And the benefits do not outweigh the costs: as this report shows, these new rules will cause a lot of economic pain for state and local governments, without any guarantee of water quality improvement.
"The Obama-EPA has put forward an unprecedented number of costly federal regulations," Senator Inhofe said. "While the Agency's onerous air rules have long been in the spotlight, its water regulations, which are lesser-known, will also harm the economy and will greatly expand federal reach over the nation's waters. Today, I am releasing a report that highlights four of the most expensive water rules that EPA is planning to implement-they will cost billions of dollars and put thousands of jobs at risk, all for little, if any environmental benefits."
"Some have suggested that EPA's budget cuts are the cause of hardship for state and local governments, but this is misleading: states and municipalities are suffering because this administration is cranking out expensive unfunded mandates at a breakneck pace, while decreasing the amount the Agency is spending to implement them. In fact, EPA requested dramatic cuts for water programs in its FY2012 budget. The result is that state and local governments are faced with unreasonable costs, and it is the ratepayer that will undoubtedly foot the bill."
On Thursday, the Senate confirmed Dan Ashe to serve as the Director of the Fish and Wildlife Service (FWS).
Due to concerns over the potential listing of the Lesser Prairie Chicken under the Endangered Species Act (ESA), and the role of the FWS with regard to climate policy, Senator Inhofe voted against Ashe's nomination in the EPW Committee and expressed a desire to follow up with him on these issues. After meeting with Dan Ashe and Interior Secretary Ken Salazar, Senator Inhofe was satisfied that his concerns were addressed and he decided not to hold up Ashe's nomination. The details of the agreement between Senator Inhofe and Dan Ashe are contained in a letter dated May 17, 2011, in which Ashe pledged to hold meetings with stakeholders in Oklahoma to discuss the problems surrounding the potential ESA listing of the Lesser Prairie Chicken.
"Throughout the nomination process, Dan proved himself by his willingness to work with me and a number of Senators who had significant concerns about his nomination," Senator Inhofe said. "I congratulate Dan on his confirmation and look forward to working with him in his new role.
"During the nomination process, I was pleased to secure a commitment from Ashe to hold listening sessions in Oklahoma to address the problems surrounding the potential listing of the Lesser Prairie Chicken. Many Oklahomans are concerned that the federal government is harming economic development in favor of creating a habitat for the species, even though it is hunted in neighboring Kansas. He also pledged to make all of the listing-decision information on the Lesser Prairie Chicken subject to FOIA requests available online. This will increase transparency and minimize unnecessary litigation.
"I hope that in these listening sessions we can move away from the concept of restricting the rights of private property owners and instead implement voluntary partnerships such as Candidate Conservation Agreements with Assurances. These public-private partnerships are the best way to achieve progress in conservation efforts while sustaining economic growth."
Senator Inhofe commented Tuesday when the Environmental Protection Agency (EPA) announced its new label for E15.
"Today the EPA introduced a new orange and black warning label for E-15 blends that will be located at any pump in the United States that dispenses E-15," Senator Inhofe said. "The good news is that Oklahomans, who have a strong dislike of E-15, have little to worry about because E-15 isn't coming to Oklahoma any time in the near future. The reasons are straightforward. Retailers will not sell E-15 because of substantial fuel tank and dispensing infrastructure costs, as well as liability issues associated with misfueling and potential engine damage.
"Opposition to federal ethanol policy in Congress is growing. This shouldn't come as a surprise due to ethanol's incompatibility with existing engines, its sustainability, as well as its transportation and infrastructure needs. These serious problems will be exacerbated as the blend wall forces EPA to make bad decisions in order to accommodate the large volumes of ethanol the Renwable Fuel Standard (RFS) mandates in our gasoline.
"Fortunately, there is a viable solution. I recently introduced the Fuel Feedstock Freedom Act-a bill that gives individual States the option not to participate in the corn ethanol portion of the RFS. It would allow markets to supply consumers with the fuels they prefer."
After the Senate confirmed William Ostendorff to serve another term as a Commissioner at the Nuclear Regulatory Commission (NRC) on Thursday night, Senator Inhofe said,
"I am pleased that Commissioner Ostendorff has been reconfirmed by unanimous consent to continue to serve as a Commissioner at the NRC. The public is best served by a full commission and Ostendorff's extensive knowledge, both of nuclear reactor operations and the national security issues surrounding it, is vital now as the NRC unravels the lessons-learned from the Fukushima accident and works to issue the first reactor licenses in thirty years.
"There is no doubt that Commissioner Ostendorff, with his stellar qualifications and his dedication to ensuring a safe, reliable supply of domestic energy, will continue to be a valuable asset at the NRC. I look forward to working with him again as he continues his important role as a Commissioner."
In the News...Talking Points Memo: James Inhofe: Al Gore Is Right, Obama Bailed On Talking About The Environment
Talking Points Memo
James Inhofe: Al Gore Is Right, Obama's Bailed On Talking About The Environment
June 30, 2011
One of America's foremost climate change skeptics, Sen. James Inhofe (R-OK) says Al Gore (one of the nation's foremost climate change believers) is right in saying that President Obama has backed off when it comes to selling climate change to the electorate.
Inhofe says climate skeptics like him are partially responsible for the change. And he also warns that the shift is only skin-deep.
Inhofe was scheduled to give the keynote opening address at the Annual International Conference on Climate Change hosted by the Heartland Institute, an organization devoted to shooting down the accepted scientific view that human behavior is altering the climate.
Inhofe is a regular in these circles, but not today. He couldn't make the conference, citing health reasons. Instead he sent over a statement read from the podium to the several hundred climate change skeptics gathered in Washington Thursday.
He said that skepticism has won out on Capitol Hill, pointing to the death of cap-and-trade and the rise in views like his since the Republicans took over the House in January.
"Today the mood in Washington is significantly different," Inhofe said. "Everyone readily admits that cap-and-trade legislation is dead on Capitol Hill -- even our good friend, Senator [Barbara] Boxer [D-CA]."
Boxer chairs the environment committee in the Senate and has said that Republican gains in Congress have made it clear carbon-capping legislation is not moving forward anytime soon. Inhofe is ranking member on the committee and the two have sparred publicly in the recent past.
As for Obama, Inhofe said that the president is feeling the shift away from global warming support as well. The American people don't want to hear about global warming anymore, Inhofe says, and Obama is obliging them.
Still, as Inhofe himself points out, Obama's administration has made a number of green pushes since taking office. From the president's own fixation on green jobs and the alternative energy industry -- which is so strong some say it's becoming a liability -- to the EPA's push to regulate greenhouse gasses and dramatically increase fuel efficiency in automobiles, the current White House is far greener than its predecessor.
So, despite the gains they've made, Inhofe warned attendees at the skeptic conference that Obama is still not their friend, despite what Al Gore may have written.
"President Obama has received the message loud and clear: you don't often hear him speak about global warming, much to the consternation of Al Gore," Inhofe said. "He understands that the green agenda is not popular but that doesn't mean he has given up trying to implement it. Take a good close look at the President's administration."
"I hope you agree with me that our work is far from over," he added.
Inhofe Hearing Statement: Subcommittee hearing on Oversight: Review of EPA Regulations Replacing the Clean Air Interstate Rule (CAIR) and the Clean Air Mercury Rule (CAMR)
At a Subcommittee hearing entitled, "Oversight: Review of EPA Regulations Replacing the Clean Air Interstate Rule (CAIR) and the Clean Air Mercury Rule (CAMR)" on Thursday, Senator Inhofe issued the following statement:
Chairman Carper, thank you for holding this hearing today to discuss EPA's proposed Transport and Utility MACT rules. I would also like to thank the witnesses for being here today.
Let me say at the outset that, when it comes to reducing real air pollution from power plants, the best way to accelerate environmental progress and institute certainty for businesses is through multi-pollutant legislation. And even though we have fallen short in recent years, it is increasingly clear that the Clean Air Act needs to be updated and the rules for electric utilities are the place to start.
This is not something new for me. I supported 3-P legislation when, as Chairman of EPW, I tried to advance the Clear Skies bill. Because that effort eventually failed, for reasons I won't get into now, we received regulations under the Clean Air Act that the DC Circuit ultimately rejected-something I predicted would happen. Here's what I said when the Bush Administration's Clean Air Interstate Rule was promulgated: "This Clean Air Interstate Rule is significantly more vulnerable to court challenges than legislation and will undoubtedly be held up. Trying to litigate the way to cleaner air only delays progress, often yields little or no result and wastes millions in taxpayer dollars."
So here we sit, debating EPA's replacement regulations that are onerous and complex and vulnerable to the same lawsuits that stymied previous attempts to reduce emissions of sulfur dioxide, nitrogen oxides and mercury.
Most alarming is the effect the rules will have on our economy. Messy court rulings and bureaucratic overreach have produced regulations that will harm the economy. As the National Economic Research Associates (NERA) recently pointed out, these rules will likely result in electricity costs increasing by as much as 23 percent and 1.4 million lost jobs by 2020. Not a recipe for economic recovery.
Of course, these aren't the only hurdles the power sector faces. Known as the "train wreck," utilities also face moving and uncertain emissions targets as EPA further tightens National Ambient Air Quality Standards (NAAQS) for ozone and Particulate Matter (PM) over the next few years. Combined with rules for regional haze, new source performance standards, Acid Rain, and new source review requirements, the Clean Air Act presents a labyrinth of overlapping and redundant requirements that drive up electricity costs and hamper our economy.
In my state of Oklahoma, EPA's rules are causing substantial concern. And we're starting to see the effects already. Earlier this month, American Electric Power (AEP) announced it would be forced to close power plants in six states and lay off 600 workers as a result of EPA's rules. Two plants are being idled in Oklahoma.
All of this might be great for environmental lawyers who, incidentally, make money by exploiting the citizen suit provisions of the nation's environmental laws. That's right, your tax dollars being used to destroy jobs in your own community. So you can bet these rules will be challenged, and we'll be back here next year.
It might also be great for energy companies - who profit by rising electricity prices. Exelon CEO, John Rowe, has been quoted as saying that for every $5 dollar increase per megawatt of power generated, his company makes $700 to $800 million in additional annual revenue. The regulations we debate here today could raise electricity prices by as much as 20 percent in some markets.
But ultimately, it's working families that pay the price.
Of course, there are ways to reduce emissions and help keep electricity rates low. Perhaps the biggest one would be to update the Clean Air Act to stop the EPA "train wreck." Reducing emissions doesn't have to be this costly - the Obama EPA just wants it to be. Recall President Obama's pledge: "under my plan...electricity rates will necessarily skyrocket."
Last year, Senators Carper and Alexander introduced "3P" legislation that began to look at many of the issues we address here today. I commend them for taking on that challenge. But that legislation failed to get widespread support because it did nothing to address the utility "train wreck." It simply added new requirements on top of old, increasing uncertainty and costs.
Now, with plant closures on the horizon, workers being laid off, and electricity prices sure to rise, a coalition of Congressmen and Senators is coming together to fix the Clean Air Act. I look forward to working with them. We can and should continue to reduce emissions, but we should do so in a way that protects families from skyrocketing electricity prices and businesses from unachievable requirements.
Senator Inhofe joined 32 colleagues Monday to send a bipartisan letter to the Environmental Protection Agency (EPA) Administrator Lisa Jackson requesting that EPA extend the implementation timeline for the Oil Spill Prevention, Control and Countermeasure (SPCC) rule for farmers, and work to ensure that the rule is not overly burdensome or confusing.
In an effort to prevent oil spills, the EPA requires that certain facilities develop and implement oil spill prevention, control, and countermeasures. It's common practice for farms and ranches to have fuel storage tanks and containers. The SPCC program calls for farmers and other facilities to have an oil spill prevention plan to avoid spills which can damage water resources needed for farming operations. Last year, the EPA proposed extending the compliance date under the SPCC rule to November of 2011 and only for farms that came into business after August of 2002. However, concerns have been raised that not all farms have sufficient opportunity to meet their obligations under this rule.
Senator Inhofe and Senator Kent Conrad (D-ND), senior member on the Senate Agriculture Committee, sent the letter with Senators Claire McCaskill (D-MO), Tim Johnson (D-SD), Mark Pryor (D-AR), Mary Landrieu (D-LA), Ben Nelson (D-NE), Amy Klobuchar (D-MN), Max Baucus (D-MT), Lamar Alexander (R-TN), John Barrasso (R-WY), Roy Blunt (R-MO), John Boozman (R-AR), Richard Burr (R-NC), Saxby Chambliss (R-GA), Thad Cochran (R-MS), John Cornyn (R-TX), Mike Crapo (R-ID), Mike Enzi (R-WY), Lindsey Graham (R-SC), Chuck Grassley (R-IA), John Hoeven (R-ND), Johnny Isakson (R-GA), Mike Johanns (R-NE), Ron Johnson (R-WI), Richard Lugar (R-IN), Jerry Moran (R-KS), Lisa Murkowski (R-AK), James Risch (R-ID), Pat Roberts (R-KS), Marco Rubio (R-FL), John Thune (R-SD), and David Vitter (R-LA).
Senator Inhofe: "Today a significant number of rural state Senators are sending a clear bipartisan message to the EPA that it must extend the implementation timeline for the SPCC rule for farmers. EPA has set stringent, costly standards without ensuring that small farms in Oklahoma and across the nation can comply: many farmers do not have access to the professional engineers needed to bring them into compliance, and many others, who were previously not subject to this rule, may now have to comply on very short notice due to EPA's draft guidance document. An extended timeline is not just desired, it is absolutely necessary. I will be working with my colleagues to ensure that this issue gets resolved in a timely manner. "
Senator Conrad: "The SPCC rule is confusing and compliance under the EPA's timeline is putting an added burden on North Dakota's family farmers and those all across rural America. We are asking the EPA to seek further conversation with agricultural community to create a regulation and a timeline that makes sense for all parties."
Praise from Oklahoma Ag Community:
"Oklahoma's farmers and ranchers need assistance in determining whether their operations must comply with SPCC regulations. Because of the necessity for assistance and the shortage of engineers prepared to work with the agricultural community, there is a critical need for an extension of the compliance deadline." -Mike Spradling, President, Oklahoma Farm Bureau
"We strongly support Senator Inhofe's efforts. Many farmers have been able to manage increased fuel and other input costs to some extent by making bulk purchases. This management tool can only be utilized if the farmer has invested in storage capacity large enough to accept tanker load quantities of fuel or multiple truck loads of other inputs. However, many farmers are discovering that this strategy comes at the cost of finding a registered professional engineer to develop spill prevention plans required to comply with SPCC spill prevention rules. In several rural areas of our state, these engineering services are unavailable, thus forcing a farmer to consider reducing storage capacity on his farm to below the limit allowed for self-certification status in order to achieve compliance in a timely manner. We appreciate and support Senator's Inhofe's efforts to provide additional time to achieve compliance because many farmers are having difficulty engaging appropriate engineering services." -Danny Robbins, Chairman of the Oklahoma Cotton Council
Support for the SPCC timeline extension from the Farming Community
"America's farmers and ranchers need more time and assistance in complying with SPCC regulations and we appreciate Senator Inhofe's effort to extend the deadline. Farmers in Oklahoma and elsewhere have struggled to find registered professional engineers to develop the necessary spill prevention plans required under SPCC rules. Senator Inhofe's request for an extension of the compliance deadline would greatly benefit our farmers and ranchers." - Bob Stallman, President, American Farm Bureau Federation
"The National Cattlemen's Beef Association (NCBA) would like to thank Senators Inhofe and Conrad for their leadership on the Spill Prevention, Control and Countermeasure (SPCC) rule as it affects farmers and ranchers. NCBA is the nation's oldest and largest trade association for cattle producers and represents more than 147,000 cattle producers through direct membership and our state and breed affiliates. We fully support their efforts to extend the compliance deadline, which will give cattle producers the additional time needed to implement the rule in their operations. Cattle producers want to be in compliance with the regulation, but they must have the resources available to do so. Compliance with the rule will cost producers thousands of dollars at a time when their budgets are very limited due to the economic downturn. In addition, the farming community in many instances lacks access to an adequate number of Professional Engineers (PEs) to do the engineering work required. Without access to PEs, it is impossible for farmers to become SPCC compliant. The lack of technical professionals creates the need for an extension of the compliance deadline. NCBA would like to thank them for all their efforts to provide relief from the looming compliance deadline for the SPCC rule for farmers and ranchers across the country. - Bill Donald, President of National Cattlemen's Beef Association
"The timeline for implementation of the SPCC rule continues to be troublesome for many farmers who, despite best efforts, have been unable to complete their oil spill prevention plans. Often this is because access to registered professional engineers willing to review and approve plans is limited at best or not available at worst. The National Cotton Council (NCC), on behalf of its members, applauds the pilot initiative announced October 21, 2010 by the Department of Agriculture and administered by the Natural Resources Conservation Service (NRCS) to help agricultural producers comply with the revised SPCC regulations by the EPA. Senator Inhofe and Conrad's effort represents a great first step in helping producers understand and work toward complying with regulations. The NCC would like this cost share program expanded to ensure access for all producers. An additional extension of the deadline by EPA combined with more extensive outreach by the agency working in conjunction with the NRCS pilot initiative would be most helpful in achieving the desired compliance results." -National Cotton Council
Senator Inhofe along with 40 Republican colleagues sent a letter Thursday to Environmental Protection Agency Administrator Lisa Jackson and Assistant Secretary of the Army Corps of Engineers Jo-Ellen Darcy asking the Agencies to abandon their draft guidance document, which sets the stage for a significant expansion of federal jurisdiction over the nation's waters.
"I am pleased to join 40 of my colleagues in opposition to EPA and Army Corps' recent guidance document, which seeks to greatly expand federal jurisdiction over our nation's waters," Senator Inhofe said. "Whether it's global warming or clean water, the Obama EPA is aggressively trying to achieve through regulation what could not be achieved through legislation, and this guidance document is a prime example. The Agencies should immediately abandon it and work to implement an effective balance between state and federal authority-that balance is the best way to achieve substantial progress in protecting water."
In the News...Dallas Morning News: Cornyn shut out of Senate hearing on new air regs that affect Texas
Dallas Morning News
Cornyn shut out of Senate hearing on new air regs that affect Texas
June 30, 2011
Republicans are complaining that California's Barbara Boxer, the Senate's foremost environmentalist, won't let Sen. John Cornyn participate in a committee hearing tomorrow that affects Texas.
Cornyn is not a member of the Senate Environment and Public Works Committee. But Republicans claim Boxer has allowed fellow Democrats who aren't members of the committee to participate at such hearings in the past.
Tomorrow's hearing will examine a pending EPA regulation that would further restrict coal-fired power plants' emissions of sulfur dioxide and nitrogen oxide. The EPA didn't include Texas in this rule when it was proposed in Aug. 2010. However, the agency later announced that Texas' plan for controlling downwind pollution from its coal-fired power plans was inadequate.
After that finding, the EPA indicated that it could include Texas in the new regulation, known as the Clean Air Transport Rule, according to a recent letter from 24 Texas Republicans to the White House. The requirements could force Texas utilities to temporarily shut down coal-fired generating plants, according to Republican lawmakers.
The chairman of the Texas Commission on Environmental Quality is scheduled to testify at tomorrow's hearing. Republicans say Cornyn wants to ask questions of Bryan Shaw and the EPA witness, Asst. Administrator Gina McCarthy. But Cornyn has been told he won't be able to ask questions, according to his office.
"Senator Cornyn is concerned that the issues addressed in tomorrow's hearing will have enormous impacts on his state," wrote Sen. James Inhofe, R-OK., the top Republican on the committee. "If Texas is required to comply, the state could be faced with a large number of plant retirements, thousands of lost jobs, and significantly higher energy costs."
Wall Street Journal
Editorial: The Facts About Fracking
The real risks of the shale gas revolution, and how to manage them
June 25, 2011
The U.S. is in the midst of an energy revolution, and we don't mean solar panels or wind turbines. A new gusher of natural gas from shale has the potential to transform U.S. energy production-that is, unless politicians, greens and the industry mess it up.
Only a decade ago Texas oil engineers hit upon the idea of combining two established technologies to release natural gas trapped in shale formations. Horizontal drilling-in which wells turn sideways after a certain depth-opens up big new production areas. Producers then use a 60-year-old technique called hydraulic fracturing-in which water, sand and chemicals are injected into the well at high pressure-to loosen the shale and release gas (and increasingly, oil).
The resulting boom is transforming America's energy landscape. As recently as 2000, shale gas was 1% of America's gas supplies; today it is 25%. Prior to the shale breakthrough, U.S. natural gas reserves were in decline, prices exceeded $15 per million British thermal units, and investors were building ports to import liquid natural gas. Today, proven reserves are the highest since 1971, prices have fallen close to $4 and ports are being retrofitted for LNG exports.
The shale boom is also reviving economically suffering parts of the country, while offering a new incentive for manufacturers to stay in the U.S. Pennsylvania's Department of Labor and Industry estimates fracking in the Marcellus shale formation, which stretches from upstate New York through West Virginia, has created 72,000 jobs in the Keystone State between the fourth quarter of 2009 and the first quarter of 2011.
The Bakken formation, along the Montana-North Dakota border, is thought to hold four billion barrels of oil (the biggest proven estimate outside Alaska), and the drilling boom helps explain North Dakota's unemployment rate of 3.2%, the nation's lowest.
All of this growth has inevitably attracted critics, notably environmentalists and their allies. They've launched a media and political assault on hydraulic fracturing, and their claims are raising public anxiety. So it's a useful moment to separate truth from fiction in the main allegations against the shale revolution.
• Fracking contaminates drinking water. One claim is that fracking creates cracks in rock formations that allow chemicals to leach into sources of fresh water. The problem with this argument is that the average shale formation is thousands of feet underground, while the average drinking well or aquifer is a few hundred feet deep. Separating the two is solid rock. This geological reality explains why EPA administrator Lisa Jackson, a determined enemy of fossil fuels, recently told Congress that there have been no "proven cases where the fracking process itself has affected water."
A second charge, based on a Duke University study, claims that fracking has polluted drinking water with methane gas. Methane is naturally occurring and isn't by itself harmful in drinking water, though it can explode at high concentrations. Duke authors Rob Jackson and Avner Vengosh have written that their research shows "the average methane concentration to be 17 times higher in water wells located within a kilometer of active drilling sites."
They failed to note that researchers sampled a mere 68 wells across Pennsylvania and New York-where more than 20,000 water wells are drilled annually. They had no baseline data and thus no way of knowing if methane concentrations were high prior to drilling. They also acknowledged that methane was detected in 85% of the wells they tested, regardless of drilling operations, and that they'd found no trace of fracking fluids in any wells.
The Duke study did spotlight a long-known and more legitimate concern: the possibility of leaky well casings at the top of a drilling site, from which methane might migrate to water supplies. As the BP Gulf of Mexico spill attests, proper well construction and maintenance are major issues in any type of drilling, and they ought to be the focus of industry standards and attention. But the risks are not unique to fracking, which has provided no unusual evidence of contamination.
• Fracking releases toxic or radioactive chemicals. The reality is that 99.5% of the fluid injected into fracture rock is water and sand. The chemicals range from the benign, such as citric acid (found in soda pop), to benzene. States like Wyoming and Pennsylvania require companies to publicly disclose their chemicals, Texas recently passed a similar law, and other states will follow.
Drillers must dispose of fracking fluids, and environmentalists charge that disposal sites also endanger drinking water, or that drillers deliberately discharge radioactive wastewater into streams. The latter accusation inspired the EPA to require that Pennsylvania test for radioactivity. States already have strict rules designed to keep waste water from groundwater, including liners in waste pits, and drillers are subject to stiff penalties for violations. Pennsylvania's tests showed radioactivity at or below normal levels.
• Fracking causes cancer. In Dish, Texas, Mayor Calvin Tillman caused a furor this year by announcing that he was quitting to move his sons away from "toxic" gases-such as cancer-causing benzene-from the town's 60 gas wells. State health officials investigated and determined that toxin levels in the majority of Dish residents were "similar to those measured in the general U.S. population." Residents with higher levels of benzene in their blood were smokers. (Cigarette smoke contains benzene.)
• Fracking causes earthquakes. It is possible that the deep underground injection of fracking fluids might cause seismic activity. But the same can be said of geothermal energy exploration, or projects to sequester carbon dioxide underground. Given the ubiquity of fracking without seismic impact, the risks would seem to be remote.
• Pollution from trucks. Drillers use trucks to haul sand, cement and fluids, and those certainly increase traffic congestion and pollution. We think the trade-off between these effects and economic development are for states and localities to judge, keeping in mind that externalities decrease as drillers become more efficient.
• Shale exploration is unregulated. Environmentalists claim fracking was "exempted" in 2005 from the federal Safe Water Drinking Act, thanks to industry lobbying. In truth, all U.S. companies must abide by federal water laws, and what the greens are really saying is that fracking should be singled out for special and unprecedented EPA oversight.
Most drilling operations-including fracking-have long been regulated by the states. Operators need permits to drill and are subject to inspections and reporting requirements. Many resource-rich states like Texas have detailed fracking rules, while states newer to drilling are developing these regulations.
As a regulatory model, consider Pennsylvania. Recently departed Governor Ed Rendell is a Democrat, and as the shale boom progressed he worked with industry and regulators to develop a flexible regulatory environment that could keep pace with a rapidly growing industry. As questions arose about well casings, for instance, Pennsylvania imposed new casing and performance requirements. The state has also increased fees for processing shale permits, which has allowed it to hire more inspectors and permitting staff.
New York, by contrast, has missed the shale play by imposing a moratorium on fracking. The new state Attorney General, Eric Schneiderman, recently sued the federal government to require an extensive environmental review of the entire Delaware River Basin. Meanwhile, the EPA is elbowing its way into the fracking debate, studying the impact on drinking water, animals and "environmental justice."
Amid this political scrutiny, the industry will have to take great drilling care while better making its public case. In this age of saturation media, a single serious example of water contamination could lead to a political panic that would jeopardize tens of billions of dollars of investment. The industry needs to establish best practices and blow the whistle on drillers that dodge the rules.
The question for the rest of us is whether we are serious about domestic energy production. All forms of energy have risks and environmental costs, not least wind (noise and dead birds and bats) and solar (vast expanses of land). Yet renewables are nowhere close to supplying enough energy, even with large subsidies, to maintain America's standard of living. The shale gas and oil boom is the result of U.S. business innovation and risk-taking. If we let the fear of undocumented pollution kill this boom, we will deserve our fate as a second-class industrial power.