Drilling bonds are inadequate, group complains

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M. Todd Miskel glibly opines that enacting the regulations described above would make local natural gas infeasible to develop until the market price reaches that of Japan’s – $14.50 per million cubic feet (mcf).  Since the current market price is $3.67 per mcf, his unsupported assertion is that reasonable regulation of natural gas production and fracking would add over $10 per mcf to the cost of production.

While there is no question that increased regulation would indeed add to the industry’s “cost of doing business”, the magnitude suggested by Miskel – absent a more specific breakdown of those costs – is manifestly absurd. 

Miskel obviously favors a regulatory regime in which costs are “externalized” to the public rather than “internalized” to the industry.  Therefore, the real question is:  who should bear the public health, economic, and environmental costs of expanded natural gas production – the industry that expects to profit handsomely or we taxpayers (including future generations) who depend on effective governmental laws and regulations (not “voluntary compliance”) to protect the water we drink and the air we breathe. 

Thus, Miskel offers no justification (other than exaggerated “costs of compliance”) for continuing the “Halliburton Exceptions” to the Safe Drinking Water Act and the Clean Water Act, despite increasing evidence that “fracking” can contaminate water supplies.
More credible industry consultants previously estimated that compliance with the “FRAC Act” would add about $ .50 to the “breakeven price” for Western Slope natural gas.

Likewise, Miskel offers no justification for the continued use of toxic fracking fluids and diesel fuel, when marginally (20%) more expensive “green” fluids are already in use offshore.  Moreover, Miskel entirely ignores the public health benefits (and thus savings to taxpayers) of mandatory public disclosure – if not outright prohibition – of all toxins contained in proprietary fracking fluids and/or produced by chemical reactions between fracking fluids (and diesel fuel) and naturally occurring compounds in the well bore.

Finally, while the use of “best available technology” to capture escaping methane would indeed be expensive, that cost would be offset by both the market value of the methane being captured and sold, and by reducing the wasteful emission of “greenhouse gases”.

In other words, while exporting liquid natural gas will increase the domestic price of the product and thereby adversely impact American consumers, Miskel would continue both direct and indirect taxpayer subsidies to a profitable industry.  Instead, all such subsidies should be eliminated—and the savings invested in renewable energy sources and to offset the effects of higher domestic gas prices on U.S. businesses and residents.

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