Friday, November 25, 2011

Increasingly High Stakes in State Energy Decisions

As oil and natural gas drilling enabled by hydraulic fracturing has rapidly expanded in the United States, the importance of state regulation has become more apparent--as have concerns about regulatory capture at the state level.  States have the bulk of the regulatory control over this practice, and they have taken different approaches to development, with New York showing perhaps the most precautionary approach.  The New York Department of Environmental Conservation has placed permits for gas drilling and fracturing on hold for wells that require large volumes of water in order to be fractured--which most in the Marcellus Shale do--as it completes a supplemental generic environmental impact statement reviewing high-volume fracturing.  Any drillers wanting to press ahead with these wells while the statement is being completed must undergo a detailed site-specific environmental review.   The public comment period for the Revised Draft Supplemental Generic Environmental Impact Statement ends on December 12, 2011, and The New York Times reports today that as the DEC has come closer to finalizing the statement--and thus to a point where it will begin permitting more wells--industry has taken notice, spending "more than $3.2 million lobbying state government" since the beginning of 2010. I have not seen similar data for other states, but it would be useful to better understand how much money both industry and nonprofits have spent supporting or opposing proposals by other state regulators.  Increasingly, states may be the primary battlegrounds for a number of important energy decisions, from updates to renewable portfolio standards to regulation of oil and gas development.  

-Hannah Wiseman

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