Will Fracking Rules Impact Energy Costs?

The US Department of the Interior (DOI) has issued rules for hydraulic fracturing (“fracking”) on federal lands that aim to protect groundwater from contamination, reported the Business Journals’ Washington Bureau last week. The legislation would affect 90 percent of the more than 100,000 wells on federal lands.

The American Petroleum Institute (API) said the rules are unnecessary since states already have fracking regulations of their own. API suggested the rules will hamper development on federal lands, which has already seen a 22 percent drop in production since 2009. It should be noted that there is a major glut of natural gas supply on the market, as Retail Energy Buyer reported last week. The glut has led to lower prices, and in turn producers have dramatically cut spending on exploration efforts, which makes it questionable the extent to which drillers would increase fracking activities on federal lands regardless of regulations.

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