Ardor lacking on fracking
For a state that is in desperate need of high-paying jobs and the tax revenues they generate, Illinois is remarkably indifferent when it comes to creating an atmosphere that encourages them.
In January 2013, the Illinois General Assembly passed and Gov. Pat Quinn signed a hydraulic-fracturing bill that won support from Democrats, Republicans, environmentalists and business. The action appeared to set the stage for much-need investment in Illinois, particularly in the economically depressed areas of southern Illinois where the New Albany shale formation is considered prime for exploration.
But nothing happened — at least not until Friday when bureaucrats at the Illinois Department of Natural Resources completed rules that put flesh on the bone of the original legislation and presented them for approval to the General Assembly's Joint Committee on Administrative Rules.
Finally, it would appear that this drawn-out process is coming to some sort of identifiable end. But don't hold your breath on that.
The legislative committee has 45 days to review and approve the regulations. After that, companies interested in making investments and hiring workers must observe another 90-day permitting process that could be subject to further delays if, as expected, critics seek to drag things out. That means it could be another six months to a year before real work gets underway.
Some might cheer the politicized review that has delayed hydraulic fracturing, which is called "fracking," in Illinois. It's no secret that environmentalists from coast to coast have made apocalyptic predictions about the danger posed by this new means of energy exploration, even as energy producers in other states are reporting record oil and natural gas production.
In that context, it's important to remember the fracking legislation Gov. Quinn signed with such enthusiasm was the product of agreements reached by industry and environmental representatives and described as a model of regulatory oversight. In other words, it was win-win — full speed ahead on new exploration but under precedent-setting safeguards.
All that was lost somewhere along the line of an ultra-slow rule-making process.
Hydraulic fracturing may sound exotic in Illinois, but it's old news elsewhere. A revolutionary new means of reaching energy, fracking involves drilling — both vertically and horizontally — deep into the earth. A high-pressure water mixture directed into shale rock releases the oil or gas inside, so much so that the United States has become the world's leading oil producer on the strength of fracking.
The Pew Research Center reports that "though many Americans apparently don't realize it, the U.S. is producing considerably more of its own energy," meaning reduced reliance on oil imports.
Pew further reports that "domestic crude oil production bottomed out in 2008 at a rate of 5 million barrels a day," but "since then, production has jumped 46 percent, to an average rate of almost 7.3 million barrels a day," saying that "much of that increase is due to the boom in shale/tight oil production in the past few years."
Analysts say production will continue to increase. This energy revolution is forcing governments across the world to recalculate their foreign policy vis a vis the politics of oil while simultaneously supercharging the economies of states here at home.
North Dakota is perhaps the best example of what fracking can do for a state's economy. Thanks to fracking, its biggest problem is a shortage of workers to fill available jobs, a supply/demand issue that has driven wages sky-high. At the same time, a gusher of new revenue is flowing into the state's treasury.
Does Illinois wish to take similar advantage of this opportunity? Or will it continue to slow-walk the permitting process to the point that developers redirect their efforts to states where their capital and their jobs will be welcome?
Unfortunately, there's no clear answer to those questions. It's marginally good news that the Department of Natural Resources has now issued its proposed rules. But energy explorers face still more hurdles and delays before the promise of the original bipartisan legislation is realized.