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A Project of The Annenberg Public Policy Center

Just the Fracking Facts

Rick Perry said he would “create another 250,000 jobs by getting the EPA out of the way” of natural gas drilling. But the EPA isn’t currently in the way: The very study on which Perry relies assumes that all of those jobs will result if current regulations are not changed.

In a speech at a steel plant in Pittsburgh on Oct. 14, the Texas governor outlined a sweeping plan to create over a million jobs by increasing American energy production. The plan involves opening up numerous areas currently off-limits to oil and gas exploration, and repealing regulations he said are hampering domestic production of fossil fuels.

The full potential for American energy production can only be realized, he said, “if environmental bureaucrats are told to stand down.”

Calling natural gas a “game-changer” in U.S. energy production, Perry cited regulation of hydraulic fracturing as an example of government overreach. Hydraulic fracturing, or “fracking,” is the process of extracting natural gas from underground shale formations. Spurred by technological advancements, the Department of Energy projects shale gas will constitute over 20 percent of the total U.S. gas supply by 2020.

With the Marcellus Shale deposits in the northeast U.S. poised to be the largest producing gas field in the U.S., they have come under intense national focus. Gas companies see huge potential for production and profits, and environmentalists worry about damage to drinking water and other environmental impacts. Perry, who is running for the GOP presidential nomination, said development of the Marcellus Shale would be a presidential priority for him.

Perry, Oct. 14: And right here in Pennsylvania, and across the state line in West Virginia and Ohio, we will tap the full potential of the Marcellus Shale and create another 250, 000 jobs by getting the EPA out of the way.

According to a footnote in the full energy plan published on Perry’s campaign website, the 250,000 jobs projection comes from a study released in July, “The Pennsylvania Marcellus Natural Gas Industry: Status, Economic Impacts, and Future Potential.” The study was funded by the Marcellus Shale Coalition, a trade association that represents gas companies, and was performed by three energy professors at the University of Wyoming and Penn State University.

According to the report, if natural gas prices don’t fall significantly, “Marcellus economic activity could support over 250,000 jobs” by 2020.

But current EPA regulations aren’t holding back that potential, as Perry contends.

“We made our projections under current policy in effect,” said one of the study authors, Timothy J. Considine, a former Penn State professor who is now director of the Center for Energy Economics and Public Policy at the University of Wyoming.

The EPA is studying the issue of hydraulic fracturing, but no new regulations have yet been proposed. Due to the expanded use of fracking, Congress in 2010 directed the EPA to study the topic, “to better understand any potential impacts of hydraulic fracturing on drinking water and groundwater.” The EPA’s initial research results aren’t expected until the end of 2012, and the final report is expected to be released in 2014.

“If there are real stringent regulations imposed, I think the governor has a point that it could significantly impact the industry,” Considine said. But it’s premature to speculate on what regulations might be proposed and how they might affect job projections, he said.

But based on some of the questions being raised during the EPA study process, there is at least reason for concern by the gas industry, said one of the study’s co-authors, Robert W. Watson, an emeritus professor at Penn State and chair of the technical advisory board to oil and gas management of the Pennsylvania Department of Environmental Protection. Of particular concern, Watson said, is the possibility of permit requirements regarding diesel equipment used to extract the natural gas. Those could potentially be costly and discourage production, he said.

But again, those are potential regulations that have not been proposed. We take no position on what the EPA should or shouldn’t do, or what the Obama administration will or won’t do on its own. It’s fair game for Perry to say he’d prevent future regulations from being imposed, but he misleads when he says he would clear away impediments that the industry’s own study says don’t currently exist.

— Robert Farley