[Congressional Record (Bound Edition), Volume 155 (2009), Part 14]
[Senate]
[Pages 19347-19349]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        OIL AND GAS EXPLORATION

  Mr. INHOFE. Mr. President, a surprise to a lot of people as to what 
we can do in the oil and gas business when we are concerned right now 
about the problem we have--our dependence on foreign countries for the 
ability to run this machine called America--is that we actually could 
resolve that problem. We could produce enough oil and gas and all the 
other resources I mentioned earlier so we would not have to be 
dependent on the Middle East for anything.
  Increasing attention has been given to hydraulic fracturing, a key 
production method which aided in U.S. production of oil and gas from 
more than 1 million wells and continues to aid in the production from 
over 35,000 wells a year.
  Hydraulic fracturing is a system that forces water into the ground to 
release oil and gas coming up. In fact, there are two things that open 
our potential. One is horizontal drilling and the other is hydraulic 
fracturing. It is a 60-year old technique. It has been responsible for 
7 billion barrels of oil and 600 trillion cubic feet of natural gas. 
The National Petroleum Council reports that 60 to 80 percent of all 
wells in the next 10 years--most of these are gas wells--will require 
hydraulic fracturing to remain productive and profitable.
  The first use of hydraulic fracturing was near Duncan, OK, in my 
State, way back in 1949. Since that time, companies such as Oklahoma's 
Devon and Chesapeake have perfected the practice. Very simply, it is 
the temporary injection of mostly water with sand, nitrogen, carbon 
dioxide, and other additives to fracture and prop open a ground 
formation to improve the flow of oil and gas through the rock pores and 
increase oil and gas production. Mr. President, 95 percent of the fluid 
is water; 99 percent is water and sand. We are talking about putting in 
the water and sand that would already be there. Hydraulic fracturing is 
used for both oil and gas production, but I would like to focus mostly 
on natural gas.
  I have kind of good news and bad news. First, let me tell you the 
good news.
  The Potential Gas Committee at the Colorado School of Mines reported 
in June that the United States has--it is kind of hard to talk about 
figures such as this--1,836 trillion cubic feet, or 1.8 quadrillion 
cubic feet, of technically recoverable natural gas. This is the highest 
reserve total ever reported by this organization in the last 44 years.
  When the U.S. Department of Energy proven reserves are added to the 
total, the future natural gas supply of the United States is over 2,000 
trillion cubic feet. At today's rate of use, that is enough natural gas 
to meet demand for the next 100 years. Only 1 trillion cubic feet of 
natural gas can heat 15 million homes for a year or fuel 12 million 
natural-gas-powered vehicles for a year.
  T. Boone Pickens is often quoted in this Chamber. He characterizes 
the reserves this way: 2 quadrillion cubic feet of gas is equivalent to 
Saudi Arabia's total petroleum reserves.
  I guess what we are saying is people are complaining we are importing 
from the Middle East oil and gas, and then they find we have it all 
right here. We don't have to do it. If the argument is, we don't want 
to use oil and gas which we think pollutes--which it does not--if that 
is their argument, then why are we willing to import it from Saudi 
Arabia and the Middle East? We can produce it right here in the United 
States.
  Much of the increase noted in the news report comes from estimates of 
shale gas found in formations throughout the United States. In fact, 
shale gas accounts for one-third of America's total gas reserves. 
Again, we are talking about natural gas, which is very low in fossil 
fuels, burns very cleanly, very inexpensively, and certainly, as we can 
see by this chart, is very abundant.
  The U.S. Department of Energy reports that by 2011, most new reserves 
growth will come from nonconventional shale gas reservoirs. The 
American Petroleum Institute forecasts that unconventional gas 
production, such as that from coalbed methane, or CBM, and shale will 
increase from 42 percent of total U.S. gas production to 64 percent in 
2020. However, shale resources are largely only economically and 
technologically available due to hydraulic fracturing, that technique 
of forcing the gas out of the ground.
  The good news does not only involve oil and gas reserves, it also 
means good news for jobs. For example, the 10,000 wells producing in 14 
counties in north Texas, Barnett shale--Barnett shale is the type of 
shale that is characteristic in the northern part of Texas--in 14 
counties, they are responsible for 110,000 jobs and $4.5 billion in 
royalty payments. That is the people who own the land. That is a 
property rights issue. They account for 8 percent of the personal 
income, 9 percent of employment, and over $10 billion in increased 
economic activity in north Texas.
  The Haynesville shale in Louisiana has created 33,000 jobs, $2.4 
billion in business sales, $3.9 billion in salaries, and $3.2 billion 
in royalty payments. This is the economy we are talking about. We are 
talking about two separate issues: one is making us independent, the 
other is doing something for the economy.
  People look at these things and say: Why in the world will the 
Democrats in this Chamber not allow us to drill offshore, won't allow 
us to get into shale production in the Western United States, and yet 
they complain about the fact we are importing our oil and gas from the 
Middle East?
  The IPAA reports that the Marcellus shale in Pennsylvania and New 
York contains 516 trillion cubic feet of natural gas, which is enough 
to satisfy the U.S. demand for more than 35 years--in two States, 
Pennsylvania and New York, enough to satisfy our needs for the next 35 
years.
  A 2008 report on the Marcellus shale attributes production in the 
Marcellus to two key methods. One is hydraulic fracturing, again, the 
system used to make sure we are able to retrieve, to produce this 
shale. Oil and gas development employs more than 26,000 and continued 
development in the Marcellus shale is forecasted to create over 100,000 
jobs. These jobs pay more than $20,000 above the average annual salary 
in Pennsylvania. We have New York and Pennsylvania, two States--they do 
have economic problems. This is a way to produce 100,000 jobs, and 
those jobs average $20,000 a year more than the average job in 
Pennsylvania and New York.
  The Walton School of Business at the University of Arkansas recently 
completed an economic forecast of the Fayetteville shale. It estimates 
a business and capital investment in the area of $22 billion, the 
creation of 11,000 jobs, and new State revenues of more $2 billion by 
2012.
  We are talking about just in the State of Arkansas. In my State of

[[Page 19348]]

 Oklahoma, we have the Woodford shale, which is pictured here and 
extends through southwest Oklahoma.
  In Oklahoma, exploration of natural gas accounts for 80 percent of 
the State's energy production and over 50,000 people are directly 
employed by the oil and gas industry. One in seven jobs in Oklahoma is 
directly or indirectly supported by the crude oil and natural gas 
industry because we rank fourth in the Nation for natural gas 
production and fifth in crude oil.
  Oklahoma received $1.3 billion in taxes directly from oil and gas 
production in 2009. In fact, oil and gas account for 25 percent of all 
taxes paid in my State of Oklahoma.
  These reserves mean domestic energy production and jobs, but now I 
have bad news. Another reason hydraulic fracturing has received 
increasing attention is because some Members of Congress want to 
subject it to new Federal regulation, specifically the Safe Drinking 
Water Act, by claiming the practice endangers drinking water sources. 
This Congress, House Members from Colorado and New York and Senate 
Members from Pennsylvania and New York have introduced legislation 
imposing new Federal regulation. Some of these Members claim that 
allowing the practice is a loophole in the Federal law and that it is 
free of regulation.
  Last Congress, at a House hearing, the current chairman of the House 
Energy and Commerce Committee complained about hydraulic fracturing:

       Oil and gas companies can pump hundreds of thousands of 
     gallons of fluid--containing any number of toxic chemicals--
     into sources of drinking water with little or no 
     accountability.

  This is completely false. Nothing could be further from the truth. As 
former chairman and the current ranking member of the Senate 
Environment and Public Works Committee, I have a history of working on 
environmental and energy issues. I can tell you new Federal regulation 
of hydraulic fracturing would be a disaster.
  The Safe Drinking Water Act was enacted in 1974. It was enacted to 
establish drinking water standards and to control permanent disposal of 
waste by underground injection. By 1974, hydraulic fracturing had been 
in commercial operation for 25 years. This law was not designed nor 
intended to regulate the practice, and the legislative history 
demonstrates that. The 1974 conference report states that none of the 
act's underground injection provisions are to ``needlessly interfere 
with oil and gas production.'' That was in the law in 1974.
  The 1980 amendments were probably the most significant until 2005 for 
clarifying the act's application to oil and gas operations. The 1980 
amendments created a new section 1425 to allow States to regulate 
underground injection from two types of oil and gas operations known as 
injection wells and disposal wells. However, given the chance to 
additionally address hydraulic fracturing, Congress declined. In the 
2005 Energy bill, Congress specifically clarified the act is not 
intended to apply to hydraulic fracturing.
  Everything all the way up from 1950, all the way up to the present 
time was saying the act was not intended to apply to hydraulic 
fracturing. There are a myriad of Federal statutes, such as the Federal 
workplace rules, the Emergency Planning and Community Right to Know 
Act, the Toxic Substances Control Act, among others, which regulate the 
storage and disposal, transporting, handling, and reporting of chemical 
use. Federal law requires disclosure of any release to the environment. 
Those statutes overlay State laws which also include extensive rules 
permitting oil and gas drilling and production. No state has been 
required to regulate hydraulic fracturing under the Safe Drinking Water 
Act with the exception of Alabama.
  The Eleventh Circuit Court in Alabama issued an opinion in 1997 
ignoring legislative history, oil and gas industry practices, and the 
clear text of the law, finding that Alabama should subject hydraulic 
fracturing in coalbed methane production to the Safe Drinking Water 
Act. However, hydraulic fracturing has not been subject to the Safe 
Drinking Water Act and is not correctly governed by the act.
  I am not alone in this opinion. President Obama's energy czar agrees 
with me. In 1995, as EPA Administrator--during the Clinton 
administration--Carol Browner wrote in response to litigation that 
Federal regulation is not necessary for hydraulic fracturing. She 
correctly made the point that the practice was closely regulated by the 
States and ``EPA is not legally required to regulate hydraulic 
fracturing.'' Most importantly, she further wrote that there was no 
evidence that hydraulic fracturing at issue resulted in any 
contamination or endangerment of underground sources of drinking water. 
Now, this is Carol Browner. That is the current energy czar serving in 
the White House.
  Following the 1997 litigation in Alabama, I introduced legislation in 
1999 with Senator Sessions and again in 2005 clarifying that hydraulic 
fracturing is not correctly regulated by this act. In March of 2002, 
the Senate spoke on this issue voting 78 to 21 on Senator Bingaman's 
amendment, which I cosponsored, to study ``the known and potential 
effects on underground drinking sources of hydraulic fracturing.'' That 
amendment ultimately did not become law, but in June of 2004, the U.S. 
Environmental Protection Agency gave us the answer. It issued its 
lengthy report, which EPA began in late 2000 to determine if 
underground drinking water sources have been or are endangered from the 
use of hydraulic fracturing from coalbed methane production. The EPA 
study of coalbed methane wells is particularly important because the 
CBM wells are shallower, meaning they would be closer to the 
underground drinking water sources than other conventional or 
unconventional oil and gas well production.
  In other words, the other production is down much deeper than that 
which uses the technique of hydraulic fracturing. These are deep wells. 
In fact, most ``fracked'' wells--that is what they are called--are 
hundreds of thousands of feet deep and well below drinking water 
sources. In this 2004 report, EPA conducted a review of all 11 major 
coal basins across the country and of 200 peer-reviewed publications. 
It reviewed 105 comments in the Federal Register. It requested 
information from 500 local and county agencies in States where CBM 
production occurs. It interviewed 50 local and State government 
agencies, industry representatives, and 40 citizens groups which 
alleged drinking water contamination from hydraulic fracturing. After 
completing its 4-year study--a 4-year study--the EPA concluded:

       The injection of hydraulic fracturing fluids into CBM wells 
     poses little or no threat to underground sources of drinking 
     water and does not justify additional study at this time.

  EPA had planned to study contamination in a two-phase study. 
Following these findings, the EPA did not even initiate the second 
phase of the study. In fact, it was so strong that they didn't even do 
the next study.
  This is a very strong statement. In fact, in hydraulic fracturing's 
60-year history there has not been a single documented case of any kind 
of contamination. Mr. President, that is 60 years. As early as 1998, 
the Ground Water Protection Council conducted the first survey of the 
25 States in which hydraulic fracturing for oil and natural gas 
production occurs for any complaints of underground contamination. The 
survey reported no instance of contamination from the practice. In 
2002, the IOGCC, representing 37 States, conducted its own survey 
making the same findings. On June 12, the Oklahoma Corporation 
Commission addressed the issue of hydraulic fracturing again in 
correspondence with these 37 States. The Corporation Commission wrote 
that it has been regulating oil and gas drilling and production for 90 
years, which has included tens of thousands of hydraulic fracturing 
operations over the past 60 years. The commission wrote:

       You asked whether there has been a verified instance of 
     harm to groundwater in our state from the practice of 
     hydraulic fracturing. The answer is no.


[[Page 19349]]


  States have been regulating oil and gas exploration and production 
for years. The Department of Energy and Ground Water Protection Council 
released a report in May titled ``State Oil and Natural Gas Regulations 
Designed to Protect Water Resources,'' where it described State 
regulations which require multiple barriers, casings, and cement 
reinforcement to protect against groundwater contamination. Fracturing 
involves removing thousands of gallons of waters from the well which 
includes the fracturing fluids. Once these fluids are returned to the 
surface, regulations require they are treated, stored, and isolated 
from groundwater zones. All these processes together work to 
significantly reduce the risk to groundwater.
  This DOE and Ground Water Protection Council report ultimately 
concluded that Federal regulations on fracturing would be ``costly, 
duplicative of State regulations, and ultimately ineffective because 
such regulations would be far removed from field operations.'' Equally 
interesting, the report also concluded--and keep in mind this is the 
report of the Department of Energy and the Ground Water Protection 
Council--the ``only alternative to fracturing in reservoirs with low 
permeability such as shale would be to simply have to drill more 
wells.'' In other words, if we are not able to get these wells to 
produce a lot of shale, we would have to drill a lot of wells in their 
place.
  These findings mirror the EPA's 2004 report of hydraulic fracturing 
in CBM production. EPA noted that fracturing involves the removal of 
thousands of gallons of ground water. This removal includes the 
fracturing fluids and the possibility that fracturing chemicals affect 
ground water. EPA also concluded that the low permeability of rock 
where hydraulic fracturing is used acts as a barrier to any remnant of 
fracturing chemicals moving out of the rock formations, as has been 
proven.
  None of these findings are new. In the 1980 amendments to the Safe 
Drinking Water Act, Congress acknowledged that ``32 States that 
regulate underground injection related to production of oil and gas 
believe they have programs already in place to meet the requirements of 
this Act. States should be able to continue these programs unencumbered 
with additional Federal requirements.''
  We need to recognize that in considering additional Federal 
regulation we are experimenting with disaster. In January, the DOE 
released a report by Advanced Resources International, which evaluated 
the economic and energy supply effects on oil and gas exploration and 
production under a series of new regulatory scenarios. One scenario 
evaluated the effects from new Federal regulation of hydraulic 
fracturing. According to the report, the largest cost for new 
unconventional gas wells would be from any new Federal regulations on 
hydraulic fracturing. The report concluded these costs would amount to 
an additional $100,000 for each well in the first year alone.
  Among other factors, this report concludes that increasing Federal 
regulations on hydraulic fracturing would reduce unconventional gas 
production by 50 percent over the next 25 years. Even more recently, 
the American Petroleum Institute released a report in June which only 
evaluated the effect of increased Federal regulations and the effect of 
eliminating the practice of hydraulic fracturing altogether. The report 
determined that through duplicative Federal regulations, the number of 
new oil and natural gas wells drilled would drop by 20 percent in the 
next 5 years.
  Should hydraulic fracturing be eliminated, new oil and gas wells 
would drop by 79 percent resulting in 45 percent less domestic natural 
gas production and 17 percent less domestic oil production.
  It would be a disaster to impose new Federal regulations. They are 
talking about doing that now. They talked about it a few years ago. 
Every report has discouraged that from happening. Again, I am not alone 
in this opinion. Colorado Governor Bill Ritter recognizes the value of 
the practice. In the Denver Business Journal, the Governor 
characterized the bills pending in Congress imposing new Federal 
regulations on hydraulic fracturing as ``a new and potentially 
intrusive regulatory program.'' That was Governor Bill Ritter. A 
Colorado newspaper recently reported a number of Colorado counties have 
adopted resolutions against the pending Federal bills. States are 
passing their own resolutions opposing new Federal regulation of 
hydraulic fracturing.
  For example, in March the North Dakota Legislature passed a 
concurrent resolution--I say to the Senator from North Dakota--to not 
subject hydraulic fracturing to needless and new Federal regulation. 
North Dakota is home to the Bakken shale, where oil wells are reported 
to be producing thousands of barrels a day.
  America has tremendous natural gas reserves. The exploration and 
production of these reserves using hydraulic fracturing has been 
regulated by the States and conducted safely for 60 years. The oil and 
gas industry contributes billions in State and Federal revenues each 
year and billions in salaries and royalty payments. The oil and gas 
industry employs 6 million people in the United States. When the United 
States is approaching 10 percent unemployment, and when we want energy 
security and independence from foreign energy, why would we want to go 
out of our way to restrict an environmentally and economically sound 
means to extract our own resources--a means that has demonstrated 
effectiveness and safety for 60 years?
  The oil potential in ANWR would produce 10 billion barrels or 15 
years' worth of imports from Saudi Arabia. The RAND Corporation has 
reported that the new potential production in just Utah, Colorado, and 
Wyoming would be around 1 trillion barrels of oil. That is three times 
Saudi Arabia's oil reserves and more oil than we are currently 
importing from the entire Middle East. But the Democrats will not let 
us produce. We are currently the only country in the world that doesn't 
develop its own resources. In fact, the President's budget imposes $31 
billion in new taxes on oil and gas development. We must not impose any 
new----
  The ACTING PRESIDENT pro tempore. The morning business period is 
closed.
  Mr. INHOFE. I will finish this last sentence, if it is all right.
  We must not impose new burdens. This is a procedure that is necessary 
for us to put ourselves in a situation where we can become energy 
independent, and I encourage all my colleagues to look very carefully 
at the one thing that is going to give us that independence, and that 
is this procedure called hydraulic fracturing.
  I yield the floor.

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