GOP Proposal Would Expand Oil Shale Development

December 3, 2012

HARRIS: Unconventional oil and gas resources will provide sorely needed stimulation of our economy and create high-paying middle class jobs. (Li Tsin Soon Image)

WASHINGTON –House Republicans unveiled legislation Friday that would authorize the spending of $111 million over five years for the research and development of oil shale and hydraulic fracturing.

Supporters of the bill said federal backing for the industry has worked for the previous two decades, as oil shale and hydraulic fracturing have contributed to increases in domestic oil and gas production, putting the United States on a path to overtake Saudi Arabia as the world’s second largest oil producer by 2020.

Continuing to promote research and development would help enable natural oil and gas companies to overcome technological and scientific hurdles in the way of greater production, they said.

“(T)he United States has a wealth of untapped unconventional energy resources,” Rep. Andy Harris (R-Md.), chairman of the energy and environment subcommittee for the House Science, Space, and Technology Committee, said in a prepared statement.

“Tapping American’s unconventional oil and gas resources will additionally provide sorely needed stimulation of our economy, restore our manufacturing sector, and create high-paying middle class jobs,” Harris added.

H.R. 6603 would spend $50 million over five years for oil shale research and development, $36 million over three years for shale gas extraction research and development, and $25 million over five years for more environmentally-sensitive methods of hydraulic fracturing. If approved, the bill would affect Colorado’s growing industry.

Some Democrats on the energy and environment subcommittee indicated support for the legislation, noting that its provision on environmentally-sensitive “produced water” was similar to a bill that House Democrats passed more than two years ago.

“Many Democrats, including me, have supported government funding for fossil fuels research, and will likely support this legislation as well,” Rep. Brad Miller (D-N.C.) said in a prepared statement.

David Martineau, chairman of the Texas Independent Producers and Royalty Owners Association, noted that  federal investments in hydraulic fracturing have increased the technology’s capacity to produce oil greatly.

“Fracking has been around for 50 years, but the technology to drill for oil horizontally (deep under the earth) has gone from 2,000 to 3,000 feet underground to now it’s 6,000 to 7,000 feet underground,” Martineau said.

Some in the environmental lobby oppose the use of fracking, arguing that it poses risks to water quality.  But concerns about the fiscal impacts of the proposal generated more interest than environmental ones.

Anthony Cugini, director of the National Energy Technology Laboratory for the Department of Energy, was asked if he thought the bil would boost energy production.

“I think added resources would have the opportunity to do it,” he told Rep. Harris.

Critics were less optimistic.

Rep. David Curson (D-Mich.) asked a witness at the hearing if the government should give money to oil and gas companies when the industry’s top businesses enjoy record profits. Dr. Daniel Hill, interim department head in Petroleum Engineering at Texas A&M University, noted that most of the federal dollars in the legislation would go to universities, non-profits, and national labs rather than directly to the private sector. “It’s not going directly to industry. It’s really in support of education,” Hill said.

With less than a month before Congress adjourns for the Christmas holidays, the legislation is not expected to be approved this year.

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