SEC Jumps Into Fight Over Fracking

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The Securities and Exchange Commission is jumping into the fight over hydraulic fracturing. Drillers could be required to tell investors more about the risks associated with the controversial practice. This, as federal geologists estimate the Northeast's Marcellus Shale could contain even more gas than first thought.

MELISSA BLOCK, host: From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, host: And I'm Robert Siegel. The U.S. Securities and Exchange Commission is jumping into the fight over hydraulic fracturing or fracking. Officials in the natural gas business say the SEC is asking drillers for specific information, including what chemicals are used in the controversial process. As NPR's Jeff Brady reports, this has some in the industry worried that yet another government agency may be looking over their shoulder in the near future.

JEFF BRADY: Fracking is facing more scrutiny because some worry it may be polluting drinking water. Much of the natural gas left in the U.S. is deep underground. Drillers use water laced with sand and sometimes harmful chemicals under high pressure to break up shale and release the gas. If in that process a drilling company pollutes someone's water, cleaning up the mess could cost a lot of money. If the company is publicly traded, you could argue it should warn investors of that financial risk ahead of time.

While the SEC won't confirm specifically - that's why it's asking drillers for information now - the agency does tell NPR that it regularly asks questions about companies' SEC filings. That's fine, says Steve Forde, with the industry group Marcellus Shale Coalition.

STEVE FORDE: But it appears, at least some of the initial requests and news that have been coming out of the SEC, that it may be a bit more of an overreach than that.

BRADY: The SEC joins a growing list of state and federal agencies taking more interest in hydraulic fracturing. While the practice has been around for decades, the number of wells fracked is increasing. A report released earlier this week says there's much more gas contained in the northeast Marcellus Shale than first thought. Brenda Pierce with the U.S. Geological Survey says there's about 84 trillion cubic feet of gas in the Marcellus.

BRENDA PIERCE: This is about four times what the United States uses in a year, so it's a significant resource.

BRADY: Pierce warns that not all the gas is economically recoverable, and that number - 84 trillion cubic feet - is a mean for the estimate, not a hard number itself. Still Pierce says it's more than 40 times what the Geological Survey estimated back in 2002.

PIERCE: It's not that there's more gas there. It's that what is technically recoverable has changed so significantly in these last 10 years.

BRADY: And that's due almost entirely to new technologies, like horizontal drilling and hydraulic fracturing. Some environmentalists want to ban fracking until more research can be done on its effects. New Jersey's Republican governor, Chris Christie, vetoed a ban in his state today, then issued a one-year moratorium on fracking. It was a symbolic move, since companies aren't clamoring to drill in the Garden State, but environmentalists say such moves indicate a change is under way. Bruce Ferguson is with Catskills Citizens for Safe Energy.

BRUCE FERGUSON: This industry is hell-bent on getting its wells in the ground and drilling, and it's almost always been able to do it without scrutiny.

BRADY: Ferguson points to Pennsylvania as an example, where a gas boom is happening now. But next door in New York state, drilling is going much slower, in part because groups like Ferguson's have raised questions.

FERGUSON: We are actually examining fracking, shale gas extraction before it gets under way.

BRADY: And in Ferguson's ideal world this go-slow approach will become the new and growing trend instead of fracking. Jeff Brady, NPR News.

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