America’s recent domestic oil and shale gas revolution is largely attributable to innovations in horizontal drilling and hydraulic fracturing. These technological advances have unlocked vast domestic oil and gas reserves that were historically inaccessible. The impact of these technologies can’t be overstated: they have transformed the U.S. from a nation dependent on natural gas imports into the largest producer in the world; and have put American energy independence within reach. In fact, last week the U.S. Energy Information Administration announced that domestic oil production had surpassed imports for the first time since 1995, by 170,000 barrels.
Hydraulic fracturing technology has existed for decades and has been appropriately regulated by the states, as they are uniquely positioned to understand their distinct geology and water resources. Yet, the Obama Administration has proposed a one-size-fits-all regulatory scheme on hydraulic fracturing that would excessively burden energy production and hamper job creation.
Facts You Need to Know:
- Hydraulic fracturing (HF) is used on 90% of wells drilled on public land in the U.S.
- States have regulated HF for more than 60 years.
- Developments in horizontal drilling and [HF] have enabled vast expansions of domestic natural gas production: “In 2000, shale gas provided 1% of our nation’s gas supplies; today it is 25%. Half of the natural gas consumed today is produce[d] from wells drilled within the last 3.5 years.”
- “Development of oil and natural gas shale resources supported more than 2.1 million jobs in 2012.”
- If HF were eliminated, U.S. natural gas production would fall by 45% and oil production would fall by 17% within five years.
- Advances in HF have dramatically reduced prices for domestic natural gas: “Prior to the shale breakthrough . . . prices exceeded $15 per million btu . . . . Today proven reserves are the highest since 1971, and prices have fallen close to $4 per million btu.”
- According to the International Energy Agency (IEA), natural gas prices in the U.S. are “about one-third of import prices to Europe and one-fifth of those to Japan.”
- According to recent projections, the U.S. is on course to become the world’s largest oil producer by 2015, surpassing Saudi Arabia.
- In October of 2013, the U.S. produced 7.74 million barrels of oil, 170,000 barrels more than it imported. This represented the first time the U.S. has produced more oil than it imported in nearly twenty years.
- The International Energy Agency (IEA) expects the U.S. to achieve almost complete energy independence by 2035.
- In May of 2013, the Department of the Interior proposed new federal regulations for HF on public lands.
- The Obama Administration’s pursuit of a burdensome and duplicative regulatory agenda threatens to significantly drive up the cost of HF. While the Administration estimates that the proposed regulations will cost only $11,000 per well and have little impact on economic development, a recent analysis estimates the proposed regulations, if finalized, will cost $345 million annually—or $96,913 per well.
- This will disproportionately impact small, independent producers, which rely largely on federal land for production.
- According to the Chair of the Alaska Oil and Gas Conservation Commission, “The last thing the United States needs right now is duplicative regulation of an already stringently regulated process, unless, of course, we need increased federal spending and bureaucracy; delays in providing jobs, revenue, and affordable domestic energy; confusion among operators and regulators; and one-size-fits-all regulations that are ignorant to regional differences…”
- Despite critics’ assertions that HF is dangerous to groundwater, Obama Administration officials have—on a number of occasions—admitted that there is no “proven case where the fracking process itself has affected water.”
- From 2007-2012, oil and natural gas production on non-federal lands increased, while production on federal lands fells. Natural gas production on non-federal lands increased by 5.8 trillion cubic feet, or 40%, while production on federal lands declined by 1.3 trillion cubic feet, or 23%. Additionally, oil production on non-federal lands increased by 1.2 million barrels per day, or 35%, while production on federal lands declined by 68,500 barrels per day, or 4%.
 House Natural Resources Committee: Oversight Hearing on ‘DOI Hydraulic Fracturing Rule: A Recipe for Government Waste, Duplication and Delay’ (May 8, 2013).
 House Committee on Natural Resources: Witnesses to House Committee: Federal Government Must Stay Out of Hydro-Fracking Regulation (May 8, 2013).
 House Committee Report 113-261 at 2.
 Shale Energy: 10 Points Everyone Should Know (Oct. 2013).
 Measuring the Economic and Energy Impacts of Proposals to Regulate Hydraulic Fracturing, IHS Global Insight (2009).
 House Committee Report 113-261 at 3.
 World Energy Outlook 2013 Factsheet, International Energy Agency at 2.
 International Energy Agency: World Energy Outlook (Nov. 12, 2013). See also House Energy and Commerce Committee: U.S. Oil Production Tops Imports; America On Track for Energy Self-Sufficiency (Nov. 14, 2013).
 Short-Term Energy Outlook, U.S. Energy Information Administration (Nov. 13, 2013).
 World Energy Outlook 2013 Factsheet, International Energy Agency at 1.
 Supplemental Notice of Proposed Rulemaking and Request for Comment, Department of the Interior (May 2013). See also Interior Releases Updated Draft Rule for Hydraulic Fracturing on Public and Indian Lands for Public Comment (May 16, 2013).
 Business Impact of Revised Completion Regulations, John Dunham & Associates (July 22, 2013). This figure assumes a best case scenario in which BLM approves 100% of all applications.
 House Committee Report 113-261 at 3.
 Witnesses Highlight States’ Successes in Regulating Fracking, House Natural Resources Committee (July 25, 2013).
 Witnesses to House Committee: Federal Government Must Stay Out of Hydro-Fracking Regulation, House Natural Resources Committee (May 8, 2013). See also What They’ve Said About Hydraulic Fracturing, American Petroleum Institute.
 Marc Humphries, U.S. Crude Oil and Natural Gas Production in Federal and Non-Federal Areas, Congressional Research Service (Mar. 7, 2013) at Table 2.
 Id. at Table 1.