Half Of U.S. Legislatures Contemplating Hydraulic Fracturing Bills

As natural gas and oil extraction expands across the United States thanks to hydraulic fracturing and advances in horizontal drilling, almost half of the country's state legislatures have enacted or have pending legislation that regulates the controversial practice.

As of March 2012, at least 137 bills in 24 states have been introduced. At least six of those states -- Indiana, North Carolina, South Dakota, Tennessee, Pennsylvania and Utah -- have enacted legislation on fracking.

The findings are part of a report published this month by the National Conference of State Legislatures, which highlights what continues to be a contentious topic in the nation's quest to balance energy independence with environmental stewardship.

The result is a myriad state laws, each trying to regulate a booming industry.

Hydraulic fracturing requires millions of gallons of water to be injected deep underground to fracture shale rock formations. The water is mixed with a chemical cocktail to facilitate the fracturing. Oil and natural gas are then captured as they seep through the rock.

Hydraulic fracturing, or fracking, is already taking place in Pennsylvania and parts of Texas, Ohio, Virginia, Colorado and South Dakota. The drilling technique is on the cusp of expanding into New York, and natural gas and oil companies have spent millions in acquiring mineral leases in southern Illinois ahead of shale development in that region.

Opponents of the drilling technique say it is harmful to the environment, and the U.S. Environmental Protection Agency is reviewing allegations that hydraulic fracturing tainted water wells in Dimock, Pa., and Pavillion, Wyo.

In the meantime, however, legislatures throughout the country are not taking any chances, the report said.

Hydraulic fracturing remains controversial in state legislatures, and the debate has turned into a balancing act. Policymakers, who are responsible for ensuring that regulations are in place to protect the environment and public health, also recognize the revenue potential the industry could bring to state and local economies, the report said.

Among some of the more popular regulations considered, state legislatures have contemplated enacting impact fees, drilling moratoria, laws imposing the disclosure of fracking chemicals and various well integrity and casing requirements.

So far, 36 states have imposed severance taxes designed to make sure costs associated with extracting oil or natural gas are paid by the producer, not the landowner, the report said.

As the industry expands into regions not accustomed to energy drilling and mineral extraction, the expectation is that states will contemplate legislating matters not covered by federal laws.

In 2012, fracking will continue to be debated and the top legislative trends will likely be in fracking fluid disclosure and monitoring, the report said. Many states also will consider how to treat and dispose of waste to protect water sources; improve drill casing and well spacing requirements to prevent spills and leaks; and consider severance tax changes to help fund environmental projects and balance state budgets.