Tuesday, 25 November 2014

Why we need to pay for fracking regulations

My first thought on reading 'Taxpayers to fund 100s of fracking boreholes across the country' (Guardian) was - why are we paying for environmental monitoring for fracking ? Why don't we make the fracking companies pay? But my second thought was that the monitoring agencies have to be completely independent of fracking money and hence influence. The boreholes are for monitoring ground water for contamination and for detecting earthquakes. We need to collect data before fracking starts so that we have a baseline to detect changes. I strongly object to fracking because we want to take less oil and gas out of the ground, not more, see 'Renewable Energy or Fracking'. However if there is going to be any then we have to have strong independent regulation.

This is why - The Downside of the Boom (New York Times) relates a shocking tale of energy companies in North Dakota polluting the environment with impunity because the officials responsible for regulation are elected and the energy companies bankroll their election campaigns.

That article is behind a paywall so in case you can't get to it here are some extracts:

...Blowouts represent the riskiest failure in the oil business. Yet, despite these serious injuries and some 115,000 gallons spilled in those first 10 blowouts, the North Dakota Industrial Commission, which regulates the drilling and production of oil and gas, did not penalize Continental until the 11th.

The commission — the governor, attorney general and agriculture commissioner — imposed a $75,000 penalty. Earlier this year, though, the commission, as it often does, suspended 90 percent of the fine, ...

The Times found that the Industrial Commission wields its power to penalize the industry only as a last resort. It rarely pursues formal complaints and typically settles those for about 10 percent of the assessed penalties.

North Dakota’s oil and gas regulatory setup is highly unusual in that it puts three top elected officials directly in charge of an industry that, through its executives and political action committees, can and does contribute to the officials’ campaigns. Mr. Hamm and other Continental officials, for instance, have contributed $39,900 to the commissioners since 2010. John B. Hess, chief executive of Hess Oil, the state’s second-biggest oil producer, contributed $25,000 to Gov. Jack Dalrymple in 2012.

One environmental incident for every 11 wells in 2006, for instance, became one for every six last year, The Times found.

Through early October of this year, companies reported 3.8 million gallons spilled, nearly as much as in 2011 and 2012 combined.

[Lynn D. Helms is the the director of the Department of Mineral Resources.]

Penalizing companies for every violation is imprudent and can be counterproductive, Mr. Helms said, potentially “leaving the citizens of North Dakota with enormous liabilities on their hands when bankrupt operators walk away.”

[So what does not penalising companies achieve?]

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