Another leader in the oil and gas industry has called for tighter government regulation of hydraulic fracturing.
A couple of weeks ago, the former CEO of BP Lord Browne, joined a growing chorus that is wisely calling for tougher regulations on fracking. Now, in an interview with Forbes magazine, , the man who essentially invented the process of hydraulic fracturing to access oil and gas deposits in shale formations, has called for increased government regulation of the process.
He is quoted as saying:
“The administration is trying to tighten up controls. I think it’s a good idea. They should have very strict controls. The Department of Energy should do it. Because if they don’t do it right there could be trouble.”
Read that last line again.
Mitchell said that, “There are good techniques to make it safe that should be followed properly.” He feels that most drillers are responsible, but “It’s tough to control these independents (which he characterized as ‘wild’). If they do something wrong and dangerous, they should punish them.”
The “it’s the independents that are the problem” line of thinking is something that deserves closer scrutiny. An analysis of incidents and fines levied against drillers to see if that assertion is borne out would be an important exercise and inform continued public dialogue. But it would not obviate the need to more strictly regulate the practice of hydraulic fracturing – and all of its practitioners.
According to the article, Mitchell dismisses any concern that the costs of complying with stronger regulations would be “egregious.” Extra costs associated with best practices would be passed on in the price of natural gas, says the article.
That is the conventional wisdom - often used by industry in arguing against tighter regulatory controls. Remember, however, the International Energy Agency has estimated that the costs of employing the highest standards for fracking are minimal. They are also treated very favorably for tax purposes.