Industry split on who should regulate fracking

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In a recent chat with analysts, the chairman and CEO of Schlumberger indicated that his company is willing to accept federal regulation of the widespread gas drilling practice of hydraulic fracturing.

Schlumberger is a French-American oilfield services company based in Houston. It rivals Halliburton and has operations in nearly 80 countries. According to the transcript of the October 23 meeting, Andrew F. Gould said he was "pretty sure" some new federal regulation of "fracking" will be created "in order to satisfy the authorities and the public's desire to know that what is being done is safe. And that seems to me a perfectly natural thing to want."

That point of view is not shared by Bruce Vincent, incoming chairman of the Independent Petroleum Association of America. Speaking on behalf of the IPAA before the House Natural Gas Caucus the same week, he said: "Those who seek to inhibit or prevent the development of natural gas recognize the linchpin role that fracturing plays in shale gas production."

"They regularly demean the effectiveness of the state regulators despite a history of success -- turning to a federal solution where none is warranted and would freeze the development of shale gas if it were imposed," said Vincent, who also is president of Houston-based Swift Energy. "They focus on intellectual property rights to force disclosure of the proprietary chemicals used in fracturing. This strategy seeks to impose unnecessary and costly monitoring and reporting requirements on independent producers when no history of problems exists."

According to Vincent, "the industry now has under development materials designed to provide producers with better guidance on managing the surface areas of our sites, on hydraulic fracturing techniques and on well casing and cementing procedures. We will be sharing these materials with state regulators to enhance transparency in the regulatory process. We work with state regulators to improve the efficiency of the process."

Whether the services companies like Schlumberger or the independent producers  IPAA represents wins out remains to be seen as Congress debates the increasingly contentious issue this fall.

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This page entry was written by Rodney White and was published on October 27, 2009 3:18 PM ET.

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