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Fracking Rules Require a Goldilocks Approach

The Department of the Interior will be announcing a new set of fracking regulations in the coming weeks. Details are scarce at present, but that hasn’t stopped greens and browns from staking out their battle lines. The FT reports:

The interior department’s bureau of land management is due to release new rules on the use of hydraulic fracturing on public lands—the first in 30 years—within the next few weeks, after more than a year’s delay. […]

The new rules are expected to require companies to disclose which chemicals they are using in fracking and impose new standards on well integrity, among other regulations.

The Department of the Interior needs to strike the right balance here. Too much regulation will stifle drillers negotiating what is already a complicated process. With gas as cheap as it is, many drillers have thin profit margins. Overregulation could make some US shale energy too expensive to extract. On the other hand, too little regulation will likely lead to environmental damage. Most of the environmental problems caused by fracking occur when concrete casing isn’t installed correctly or when wastewater isn’t disposed of properly. Effective regulation can mitigate these risks.

Conceptually there’s a sweet spot here: regulations that work reasonably well at a reasonable cost will actually accelerate development, because they will provide a framework that the public accepts going forward. Done right, this will ensure fracking is a safe and effective tool in America’s energy toolbox.

[Oil rig image courtesy of Shutterstock]

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