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Madeline Lefton
April 30, 2013
THE FALSE HOPE OF FRACKING OUR WAY TO ENERGY INDEPENDENCE
North America has extensive natural gas deposits, but up until recently, their geologic
formation has rendered them largely unreachable. With improvements to the hydraulic fracturing
process, developers are now successfully and aggressively capturing the previously inaccessible
gas. The promise of bringing such huge natural gas stores to market has triggered a boom that
has reverberated through the entire energy market. The following discussion assesses the
hydraulic fracturing process, how it is regulated, and associated negative impacts that undermine
the position that fracked natural gas will predominate the US energy supply in the long-term.
I. What is Hydraulic Fracturing and The Natural Gas Boom
Hydraulic fracturing is a process that begins by drilling a traditional vertical borehole. The
depth of the vertical borehole will range based on the depth of the shale formation, but for
instance, wells drilled in the New York and Pennsylvania area Marcellus shale range from 7,000
to 10,000 feet below the surface. Most shale drilling occurs at least a mile underground.1 Once
the vertical wellbore is drilled, drilling will continue horizontally. This is the major breakthrough
that allowed the process of hydraulic fracturing to take shape. Instead of punching holes from the
surface, drillers will extend the horizontal wellbore great lengths within the shale formation,
some wells extending several miles long.2 Once the wellbore is drilled, small seismic detonations
are set off periodically down the length of the horizontal wellbore to disturb the rock formation,
1 HYDRO-FRACTURING, http://waytogoto.com/wiki/index.php/Hydro-fracturing, (last visited Dec.
10, 2012).
2 HORIZONTAL DRILLING, http://www.geology.wisc.edu/courses/g115/oil/4.html (last visited Dec.
10, 2012).

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creating fissures and cracks. A proppant, or solution consisting typically of water, sand, and
some mix of chemical lubricants, is used to flood the fissures and cracks to keep them propped
open, while the remaining length of the wellbore is seismically disturbed. When the seismic
rupturing has taken place down the entire length of the wellbore, the proppant is removed.
Sometimes a portion of it is recycled, or it is disposed of. Free of proppant, the small ruptures in
the rock are the capillary like structures that allow gas stored within the shale formation to flow
into the main wellbore, to be extracted. Hydraulic fracturing technology is more efficient over
previous drilling methods, in that the one more complex well replaces the practice of punching
multiple wells in a cluster, to extract reserves.
Use of hydraulic fracturing technology has taken off in light of the immense natural gas
stores that are available for development. This can According to the Energy Information
Administration, the U.S. has some 2,214 trillion cubic feet of recoverable natural gas.3 This is
enough gas to satisfy the U.S. natural gas demand at current rates for about a century. This figure
is based off of the massive shale formations that have recently been discovered, such as the
Marcellus shale in the Appalachian basin, which spans from New York and Pennsylvania, to six
other states, but the exact amount recoverable is far from clear. The Marcellus shale was
originally estimated to harbor 168–500 trillion cubic feet of gas.4 However, the U.S. Department
3 HOW MUCH NATURAL GAS DOES THE UNITED STATES HAVE AND HOW LONG WILL IT LAST?,
http://www.eia.gov/tools/faqs/faq.cfm?id=58&t=8 (last visited Dec. 10, 2012).
4 MARCELLUS SHALE – APPALACIAN BASIN NATURALGAS PLAY,
http://geology.com/articles/marcellus-shale.shtml, (last visited Dec. 10, 2012) and Marin Katusa,
Shale Gas Takes On Coal To Power America’s Electrical Plants, FORBES MAGAZINE, May
30, 2012, available at http://www.forbes.com/sites/energysource/2012/05/30/shale-gas-takes-on-
coal-to-power-americas-electrical-plants/.

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of Energy recently reduced their Marcellus Shale reserve estimates by over two-thirds.5 The
Haynesville shale in Louisiana is estimated to hold 25–30 trillion cubic feet of natural gas. But,
the numbers grow even more impressive as you add in the many other finds, such as the
Fayetteville shale in Arkansas, the Barnett in Texas, Bakkan in North Dakota, and many others.
Because of the predicted steady supply of natural gas, the energy market, and derivative
markets have responded in kind.6 The public and private sectors have both been invigorated by
the abundance of natural gas.7 Developing and employing natural gas is playing a major role in
clean energy plans authored by the White House, with expectations of it being deployed in
transportation, and electricity markets nationwide.8 Utilities across the U.S. are taking advantage
of low natural gas prices to displace some coal-fired generation. Some utilities are making use of
already constructed natural gas burning capability that was previously reserved for peak-power
use. But some utilities are actually building new gas-fired plants to replace aging, inefficient
facilities.9 In derivative markets, Dow Chemical, who uses natural gas as a basis for
manufacturing plastics, has committed to building new natural gas to plastics facilities,
5 Department of Energy Reduces Marcellus Shale Estimates, StateImpact, National Public Radio,
available at http://stateimpact.npr.org/pennsylvania/2012/01/24/department-of-energy-reduces-
marcellus-shale-estimates/.
6 ABUNDANT NATURALGAS IS A GAME CHANGER, http://www.c2es.org/blog/claussene/abundant-
natural-gas-game-changer (last visited, Dec. 10, 2012).
7 NATURALGAS EXTRACTION-HYDRAULIC FRACTURING, http://www.epa.gov/hydraulicfracture/
(last visited Dec. 10, 2012).
8 Press Release, Office of the White House, President Obama’s Blueprint to Make the Most of
America’s Energy Resources, Jan. 26, 2012, available at http://www.whitehouse.gov/the-press-
office/2012/01/26/fact-sheet-president-obama-s-blueprint-make-most-america-s-energy-resour.
9 Marin Katusa, Shale Gas Takes On Coal To Power America’s Electrical Plants, FORBES
MAGAZINE, May 30, 2012, available at
http://www.forbes.com/sites/energysource/2012/05/30/shale-gas-takes-on-coal-to-power-
americas-electrical-plants/.

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assembling 91 new manufacturing projects, potentially representing $70 billion in investments
and 3 million jobs.10
II. Federal and State Regulation of Hydraulic Fracturing
Beyond the advent of fracking technology, natural gas has had the opportunity to boom due
to a minimally restrictive regulatory oversight scheme. In terms of federal oversight, government
regulation is very limited and states are incredibly inconsistent in their hydraulic fracturing
regulatory approaches.
a. Federal Oversight
At a minimum, the federal government can regulate activities that impact interstate
commerce in light of the commerce clause, however securing economic fairness is the least of
many concerns stemming from the fracking process. The key impediment to a functional federal
regulatory scheme is that oil and gas development enjoys major exemptions from the mainstay
environmental statutes.
The Safe Drinking Water Act (SDWA) is the only major federal statute that is capable of
directly imposing regulations on hydraulic fracking. The SDWA regulates any “underground
injection,” meaning “subsurface placement of fluids by well injection.”11 Quizzically, this is not
how hydraulic fracturing falls under the SDWA. In a study assessing the potential for
contamination from hydraulic fracturing to public water supplies, the process was found to pose
little or no threat.12 Based on 2005 amendments to the SDWA, hydraulic fracturing will only fall
10 Daniel Gilbert, Chemical Makers Ride Gas Boom, WALL STREET JOURNAL, Apr. 18,
2012, available at
http://online.wsj.com/article/SB10001424052702304331204577352161288275978.html.
11 Safe Drinking Water Act, 42 USC § 300h (a) (2011).
12 ENVTL. PROT. AGENCY, EVALUATION OF IMPACTS TO UNDERGROUND SOURCES OF DRINKING

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within its scope if the proppant solution includes diesel as an ingredient.13 This has been dubbed
the “Halliburton Loophole,” because of former Vice President Dick Cheney’s connection to
Halliburton, where he previously served as CEO, who invented hydraulic fracturing in the
1940’s.14
The Clean Water Act (CWA) is another major federal statute that fails to be triggered by
hydraulic fracturing. Under the CWA, it is unlawful to discharge any pollutant from a point
source, to a navigable waterway.15 If a party anticipates polluting a waterway, from a point
source, they may apply for a permit from the National Pollution Discharge Elimination System,
regulated by the Environmental Protection Agency. In 1987 Congress amended the CWA to
exempt oil and gas exploration, production, processing, and the like.16 Then, in 2005, like the
SDWA, the CWA was amended to include construction activities, which served to exempt all oil
and gas field operation activites, including activities related to hydraulic fracturing.17
Similarly treated, hydraulic fracturing fails to fall under the regulatory scheme of the Clean
Air Act, CAA. The CAA is a comprehensive federal statute regulating air emissions from
stationary and mobile sources.18 The National Ambient Air Quality Standards (NAAQS) is a
baseline federal regulatory plan, implemented and tailored by the states to regulate emissions by
industrial sources. Within the CAA, NAAQS is rarely triggered by oil and gas exploration or
WATER BY HYDRAULIC FRACTURING OF COALBED METHANE RESERVOIRS 7-5 (2004), available
at
http://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/wells_coalbedmethanestud
y.cfm/.
13 42 USC §300h (d)(1)(B).
14 See Inadequate Regulation of Hydraulic Fracturing, EARTHWORKS,
http://www.earthworksaction.org/halliburton.cfm (last visited Dec. 10, 2012).
15 33 USC §1342 (1)(2).
16 Id.
17 33 USC §1362 (24).
18 The Clean Air Act, 42 USC §7412 (2011).

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production as these activities are exempt from aggregation rules. Since most oil and gas wells
fail to emit enough hazardous emissions on their own to require a NAAQS permit, oil and gas
wells are essentially unregulated under the CAA.19
The Resource Conservation and Recovery Act, or RCRA, is an environmental statute
intended to regulate the generation, transportation, treatment, storage and disposal of hazardous
wastes.20 However, before RCRA was fortified with a completed a regulatory scheme, the Solid
Waste Disposal Act, which exempted oil field wastes from the hazardous waste definition
section of RCRA, unless they could be proved to pose a hazard to human health and the
environment.21 As a result, EPA regulations now exclude most oil field wastes under RCRA.
This definition gap also impacts the regulatory scheme of CERCLA, the Comprehensive
Environmental Response, Compensation and Liability Act. CERCLA establishes a ‘Superfund’
to pay for the clean up of abandoned or uncontrolled hazardous waste sites.22 Again, because
RCRA excludes petroleum, crude oil, natural gas, and derivations thereof from the definition of
hazardous wastes, they fail to fall within the scope of CERCLA.
b. State Oversight
In light of the federal government’s failure to regulate oil and gas development activities, the
only opportunity for government oversight remains in the hands of each state’s regulatory
scheme. Some states have chosen to regulate hydraulic fracturing directly, while others have
housed it under their general oil and gas permitting requirements. This has led to a rather
19 40 CFR §63.764(f).
20 Resource Conservation and Recovery Act, 42 USC §6903 (2011).
21 Summary of the Conservation and Recovery Act, U.S. ENVTL. PROT. AGENCY.
22 Summary of the Comprehensive Environmental Response, Compensation, and Liability Act,
ENVTL. PROT. AGENCY.

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piecemeal approach to regulation, with opportunity for extra-boundary impacts, as any individual
state scheme may not align with its’ neighbors.
In California, fracking has been used for over 50 years with no state regulatory oversight.23
Any reporting by the industry to the State was on a voluntary basis.24 A 2011 news investigation
revealed the wide-spread use of fracking technology, and in response, Tim Kustic at California’s
Division of Oil, Gas and Geothermal Resources, admitted that the State had failed in its public
duty.25 In response, the State is developing regulations to directly oversee fracking activity.26
Whereas in New York, fracking was directly banned in a temporary moratorium, beginning in
2008, until a comprehensive review of the practice and its impacts could be assessed.27
In Colorado the Oil and Gas Conservation Act is primarily responsible for regulating oil and
gas development.28 The Act gives a commission the authority to grant permits to drill that require
water sources within 400 feet of the wellhead to be disclosed.29 Permit approval may be withheld
if there is concern of imminent threat to public health, safety, and welfare, including the
environment and wildlife.30 Where fracking practices are being employed, well casings must be
described as well as a statement of the type of fluids to be injected, as well as a chemical analysis
23 Stephen Stock, California Will Regulate Fracking After All, NBC News, Oct. 18, 2012,
available at http://www.nbcbayarea.com/news/local/California-Will-Regulate-Fracking-After-
All-174408581.html.
24 Id.
25 Id.
26 Id.
27 Associated Press, Expert’s Review of Fracking Soon to be Complete, WALL STREET
JOURNAL ONLINE, Dec. 1, 2012, available at
http://online.wsj.com/article/AP0708f481ec2844cca10389aca8a10053.html.
28 Oil and Gas Conservation Act, COLO. REV. STAT.ANN. § 30-60-101 – 30-60-129 (West 2011).
29 2 Colo. Regs. §404-1:303
30 Id.

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of the solution.31 However, faith that this regulatory scheme will secure the public health and
safety is not without its doubts.
“In response to concerns about these [fracking] impacts, state officials announced … that
they will review Colorado's fracking regulations. While this may be heartening to some,
this review promises to provide little protection for Colorado residents… In Garfield
County, 8,000 natural gas wells have inched closer to residential areas. A hydrological
study found that as the number of gas wells in this heavily fracked county increased,
methane levels in water wells also rose. In 2008, a wastewater pit in Colorado leaked 1.6
million gallons of fluid, which migrated into the Colorado River.”32
Thus, despite state oversight, public sentiment reflects concern that rampant drilling activity will
negatively impact the public health.
In Pennsylvania, no person is allowed to drill a well unless they obtain a permit from the
state Department of Environmental Protection (DEP).33 In response to drilling activity, if a
landowner experiences a diminution in water quality, they may request an investigation by the
DEP. If the drilling activity is found to be the cause of the water quality diminution, the operator
must restore or replace the water supply in commensurate value. Similar to Colorado, the
regulatory scheme in Pennsylvania has failed to secure the confidence of state residents that
fracking practices in conjunction with state controls will protect their health and well-being. In a
lawsuit claiming that fracking had sickened the plaintiffs and contaminated drinking water
sources, it was revealed that the State had left out information on poisons in a report on the water
near the well site in question.34 “In a deposition, a scientist for the Pennsylvania Department of
Environmental Protection testified that her laboratory tested for a range of metals but reported
31 Id.
32 Sam Schabacker, New hydraulic fracturing regulations won't keep the public safe, The Denver
Post, available at http://www.denverpost.com/opinion/ci_18436003#ixzz2Dxrqu3zj.
33 58 PA. CONS. STAT. § 601.201(e)(1) (2011).
34 Jon Hurdle, Pennsylvania Report Left Out Data on Poisons in Water Near Gas Site, THE
NEW YORK TIMES, Nov. 2, 2012, available at
http://www.nytimes.com/2012/11/03/us/pennsylvania-omitted-poison-data-in-water-report.html.

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results for only some of them because the department’s oil and gas division had not requested
results from the full range of tests.”35
Since 2005, approximately 90% of all new U.S. oil and gas wells drilled utilized
hydraulic fracturing technology.36 Considering the widely disparate state regulatory schemes, it
is no wonder that fracking has been so feverishly utilized.
III. Impacts of the Natural Gas Boom
Due to the rapid influx of supply, and the promise of relatively long-lasting reserves, the
price of natural gas has plummeted from $7–$8 per million cubic feet in 2008 to $3 per million
cubic feet today.37 Currently, prices are at a ten-year low,38 the value of natural gas having
dropped as much as 85%.39 In the haste to take advantage of the financial opportunity that the
huge shale finds represent, investors oversold and flooded the market.
a. Economic Uncertainty
The root of the market insecurity stems from the actions of like those of Oklahoma’s
Chesapeake Energy Corporation, the self-proclaimed “champion of America’s gas.” Chesapeake
had quietly acquired leases on hundreds of thousands of acres of natural gas fields, now
comprising the Haynesville Shale. Chesapeake’s chief executive called on the services of a
35 Id.
36 ENVTL. WORKING GROUP, FREE PASSFOR OIL ANDGAS: ENVIRONMENTAL PROTECTIONS
ROLLED BACK ASWESTERN DRILLING SURGES (2009), available at
http://www.ewg.org/book/export/html/27154.
37 The Once and Future Shale Gas Revolution, WHARTON BUSINESS SCHOOL, LAW AND
POLICY BLOG, Aug. 12, 2012, available at
http://knowledge.wharton.upenn.edu/article.cfm?articleid=3068.
38 U.S. Energy Information Administration, Today In Energy, April 19, 2012,
http://www.eia.gov/todayinenergy/detail.cfm?id=5910.
39 Marin Katusa, Shale Gas Takes On Coal To Power America’s Electrical Plants, FORBES
MAGAZINE, May 30, 2012, available at
http://www.forbes.com/sites/energysource/2012/05/30/shale-gas-takes-on-coal-to-power-
americas-electrical-plants/.

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college friend, and investment banker, Ralph Eads, who “wakes up every day thinking about
how to finance big things,” to raise the funds to develop the leases.40 Since 2007, Eads has been
involved in $159 billion worth of oil and gas deals.41 Eads seduced many an eager investor.
“This is like owning the Empire State Building…[i]t’s not going to be repeated. You miss the
boat, you miss the boat.”42 Eads has played a central role in the market collapse, but absolves
himself of any wrongdoing. “Typically, we represent sellers, so I want to persuade the buyers
that gas prices are going to be as high as possible. The buyers are big boys – they are giant
companies with thousands of gas economists who know way more than I do. Caveat emptor.”43
In 2011, Eads brought in 1.1 billion in investment revenues for his employer, Jefferies &
Company, a firm record.44
Those who have been on the losing end of the industry have not written off the actions of
Eads, and the many others who behaved similarly, so cavalierly. Fadel Gheit, a managing
director at Oppenheimer & co commented, “[h]e’s like the bartender serving drinks for people
who can’t handle it, and the industry has gotten a rude awakening – a hangover – with gas prices
plummeting. The investment bankers were happy to help with a smile and get their cut.”45
The energy giant Exxon Mobile is one of the players left on the losing end. Exxon spent $41
billion buying into the natural gas market in 2010, when gas prices were nearly double their
40 Clifford Krauss and Eric Lipton, After the Boom in Natural Gas, THE NEW YORK TIMES,
October 20, 2012, available at http://www.nytimes.com/2012/10/21/business/energy-
environment/in-a-natural-gas-glut-big-winners-and-losers.html?pagewanted=all&_r=0.
41 Id.
42 Id.
43 Id.
44 Id.
45 Id.

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current value.46 But according to its’ Chief Executive, Rex Tillerson, “we’re all losing our shirts
today. We’re making no money. It’s all in the red.”47 From the perspective of Maynard Holt, co-
president of Tudor Pickering & Holt Company, a Texas-based investment bank responsible for
dozens of shale deals in the last four years, “[w]e just killed more meat than we could drag back
to the cave and eat. Now we have a problem.”48 That problem is having too much of a good
thing.
Unfortunately, the impacts of the natural gas industry’s greed extend well beyond
managing boards bonuses and shareholder losses. Because natural gas prices are so low, interest
investing in the renewable energy market has waned.49 Relative to natural gas electricity
generated from a renewable energy project is appreciably more expensive.50 Investors are scaling
back their commitments to developing clean energy sources, since the lag time in yielding profits
is growing.51 But delaying the prospect of clean energy generation in the face of shale gas
supplies is shortsighted for a multitude of reasons.
b. Environment
One of the most tangible and striking downsides to hydraulic fracturing hits very close to
home. Natural gas developers tout the extreme depths at which fracking practices occur, and
46 Id, and Exxon Mobil: Too Much Weight In Natural Gas?
http://seekingalpha.com/article/858961-exxon-mobil-too-much-weight-in-natural-gas.
47 Clifford Krauss and Eric Lipton, After the Boom in Natural Gas, The New York Times,
October 20, 2012, available at http://www.nytimes.com/2012/10/21/business/energy-
environment/in-a-natural-gas-glut-big-winners-and-losers.html?pagewanted=all&_r=0.
48 Id.
49 See, Eileen Claussen, ABUNDANT NATURALGAS IS A GAME CHANGER, CENTER FOR CLIMATE
AND ENERGY SOLUTIONS, available at http://www.c2es.org/blog/claussene/abundant-natural-gas-
game-changer.
50 Vicki Ekstrom, A SHALE GAS REVOLUTION?, MIT NEWS, available at
http://web.mit.edu/newsoffice/2012/shale-gas-revolution-report.html.
51 Dallas Kachan, A CLEANTECH STATE OF THE UNION, RENEWABLE ENERGY WORLD, available
at http://www.renewableenergyworld.com/rea/blog/post/2012/10/a-cleantech-state-of-the-union.

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purport to take sufficient safeguards to keep the process contained52. Nevertheless, concerns are
prevalent that methane gas released during the fracking process and chemicals used used in the
proppant solution will seep into and ruin groundwater supplies.53 Also, earthquakes and ground
support subsidence have become concerns as a result of compromising the geological integrity of
areas where fracking is employed.54 Communities near fracking developments have reported
smelling wafts of chemical or metallic fumes, as well as fainting, headaches, nausea, rashes,
wheezing, and other unusual symptoms.55 One of the most striking examples of groundwater
contamination is that of water from the faucet catching on fire in the homes of residents near
fracking sites.56 In late 2011, the U.S. Environmental Protection Agency completed an
investigation in Pavillion, Wyoming that affirmatively linked fracking to contamination of
groundwater supplies, foreclosing the argument that such contamination was not possible.57
Though groundwater contamination has not been directly linked near all fracking sites, the EPA
Pavillion finding legitimizes the alarming impacts widely reported near fracking operations,
52 SHELL CEO: FRACKING DONE RIGHT DOESN’T POLLUTE GROUNDWATER, THE DAILY CALLER,
available at http://dailycaller.com/2012/12/03/shell-ceo-fracking-done-right-doesnt-pollute-
groundwater/.
53 WORRIES OVER WATER ASNATURALGAS FRACKING EXPANDS, NATIONALPUBLIC RADIO,
available at http://www.npr.org/2011/08/02/138820966/worries-over-water-as-natural-gas-
fracking-expands.
54 HOW FRACKING WASTEWATERIS TIED TO QUAKES, NATIONALPUBLIC RADIO, available at
http://www.npr.org/2012/01/05/144694550/man-made-quakes-blame-fracking-and-drilling.
55 SICK FROM FRACKING? DOCTORS, PATIENTS SEEK ANSWER, NATIONALPUBLIC RADIO,
available at http://www.npr.org/2012/05/15/152268475/sick-from-fracking-doctors-patients-
seek-answers.
56 FLAMING TAPS: METHANE MIGRATION AND THE FRACKING DEBATE, NATIONALPUBLIC RADIO,
available at http://stateimpact.npr.org/pennsylvania/2011/12/19/flaming-taps-methane-
migration-and-the-fracking-debate/.
57 U.S. ENVTL. PROT. AGENCY, INVESTIGATION OF GROUNDWATER CONTAMINATIONNEAR
PAVILLION, WYOMING, (Dec. 8, 2011), available at
http://www.epa.gov/region8/superfund/wy/pavillion/EPA_ReportOnPavillion_Dec-8-2011.pdf.

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previously flatly denied possible. Thus, deploying fracking operations on a massive, long-term
scale is simply imprudent in light of dire safety concern.
IV. Looking Forward
Fracking is a valuable technological development that will allow natural gas to flow into the
marketplace in quantities unlike ever before. However, without a comprehensive federal
regulatory scheme, the days of fracking with wild abandon will persist.58 Though the devaluation
of natural gas prices has chilled investing in renewable energy, in the long-term, renewables are
the better bet. Increasing dependence on natural gas was proposed as a bridge between dirtier
fossil fuel dependence and a clean renewable energy market. Fracking changed extended the
length of that bridge considerably, but considering the very distressing impacts to the
environment and public health, reliance on the technique is too costly. Relying on natural gas at
the expense of methodically developing renewable energy generation is shortsighted.59 Rather,
we should continue to view the gift of cheap and abundant natural gas as an opportunity to
leverage an economically sound, and sustainable renewable energy system for the long term.
58 See, Jody Freeman, The Wise Way to Regulate Gas Drilling, THE NEW YORK TIMES, (July 5,
2012), available at http://www.nytimes.com/2012/07/06/opinion/the-wise-way-to-regulate-
hydraulic-fracturing.html.
59 Thomas L. Friedman, Get it Right on Gas, THE NEW YORK TIMES, (August 4, 2012), available
at http://www.nytimes.com/2012/08/05/opinion/sunday/friedman-get-it-right-on-
gas.html?_r=1&.