States Take the Lead on Regulating Hydraulic Fracturing: Overview of 2012 State Legislation

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drillingRecent technological advances in hydraulic fracturing and horizontal drilling have opened up unconventional natural gas resources that were inaccessible or uneconomical to develop just a decade ago. Supplies have been expanded so much that some project current consumption levels could be sustained for another 90 years. This abundant domestic supply of a relatively cheap and clean-burning fossil fuel offers not only energy security and reliability benefits, but also tremendous economic potential to state and local economies through job creation, economic growth, tax revenues and lower natural gas prices.
 
Rapid expansion into sometimes densely populated regions and areas unfamiliar with resource extraction, however, has increased public concern about the potential effects on human health and the environment. In particular, heightened attention has focused on natural gas extraction impacts on public drinking water resources and air quality.
 
Although a number of federal regulations govern the hydraulic fracturing process, states have regulatory primacy. Many legislatures are examining how to ensure safe extraction of natural gas while also taking advantage of its tremendous economic potential. More than 170 bills in 29 states were introduced last legislative session (including those introduced in 2011-2012 for carryover in some states or only those introduced in 2012 for other states). While this reflects a high level of state interest and activity, only 14 of the 29 states enacted legislation, suggesting that some states still may be exploring the level and type of regulation that may be most suitable for their unique needs.
 
Legislative proposals have spanned many areas of natural gas development, from exploring avenues for generating revenue to measures to help protect the environment and human health. Specific proposals addressed severance taxes, impact fees, well spacing and setback requirements, waste treatment and disposal regulations, hydraulic fracturing fluid additives and composition disclosure, and levels of governance regarding who should have authority to regulate.

Access the full report (including comprehensive charts of state legislation) here. (32-page PDF)