Report: Fracking regulations could cost billions

New regulations proposed by the U.S. Bureau of Land Management for unconventional natural gas exploration could cost the country billions of dollars each year, suggests a new report released by energy industry group Western Energy Alliance.

The process of hydraulic fracturing has led to a surge in natural gas production from Pennsylvania to Colorado, but some critics have expressed concerns that the process could lead to the contamination of nearby water reservoirs.

The Denver Business Journal notes that the BLM introduced new rules that would require companies to verify that fracking fluids, mixtures of water, sand and chemicals used to crack shale formations, are not escaping from the well.

However, the industry has argued that state laws already govern these concerns sufficiently and the WEA report, produced by John Dunham & Associates, suggests implementation could cost from $1.5 billion to more than $1.6 billion each year.

"States have been successfully regulating fracing for generations, including on federal lands, with no incident of contamination that would necessitate redundant federal regulation,” said Kathleen Sgamma vice president of government and public affairs for WEA "BLM’s proposed fracing rule would impose a huge cost on society by diverting $1.615 billion annually away from investment in job creation into redundant regulation."

Unconventional gas resources are detailed at PennEnergy's Research area.

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