Fracking Presents Big Problems That Towns Have Little Authority to Fix

Almost every time localities attempt to regulate the oil industry, courts or legislatures stop them.
by | February 2017
(AP)

Hydraulic fracturing generates a lot of low-cost energy, but as has been widely reported, it carries with it troubling liabilities. Most of those involve an environmental price paid by the areas where the drilling takes place and oil or natural gas is transported. Localities have limited ability to do anything about them.

In December, the Environmental Protection Agency released a study that found fracking can have a negative impact on local drinking water. Injection wells used in fracking have also been linked to earthquakes. The U.S. Geological Survey says the earthquake issue has been overstated, but such concerns drive down local home values and, with them, property tax receipts.

Given all the headaches, supervisors in Winneshiek County, Iowa, decided to call a time out a couple of years ago. The county put an 18-month halt on new fracking in order to study potential harmful effects and come up with regulations to deal with them. “I don’t think the board ever thought that it would be appropriate or legal, probably, to permanently ban it,” says County Auditor Ben Steines. “They used a temporary moratorium to make sure it was appropriately regulated.”

Winneshiek County was lucky. Lots of local governments that have sought to bring fracking to a halt, even temporarily, have had their actions blocked. Oklahoma and Texas, for example, have passed preemption laws to take regulatory authority over the fracking process away from localities. Last year, the Colorado Supreme Court said that the state was acting within its rights when it took similar steps. Notably, the court found that even the temporary moratorium approved in the city of Fort Collins was subject to preemption. “The most important thing is that this is an issue that’s decided state by state,” says Deborah Goldberg, an attorney with the advocacy group Earthjustice. “If there’s a locality thinking about trying to address oil and gas development, they really need to understand the legal landscape in their state.”

The technology and operations of the energy industry are for the most part regulated at the state level, as the Colorado court found. Local governments may have more luck if they approach fracking as a land use issue. Courts will look more favorably on local jurisdictions that decide they don’t want to allow heavy industry at all, as opposed to those that single out a particular industry such as fracking.

Of course, this question isn’t always decided in court. Legislatures often step in, which means the trend of states blocking local regulation of fracking is unlikely to stop. Companies with substantial fracking operations, such as Devon Energy, Marathon Petroleum and Noble Energy, spent heavily on last year’s elections, including six-figure checks to the Republican State Leadership Committee. Energy companies were major donors in drilling states such as Pennsylvania and North Dakota.

When it comes to fracking, the pain may be felt locally, but many of the decisions will be made elsewhere.