Hydraulic Fracturing: A Series of Events in Key Oil Producing States

PanXchange Blog

While hydraulic fracturing activity is, in some cases, governed federally (such as when conducted on federal land), but based on the high level of individual land ownership in the United States, it is largely influenced at state and local levels as well. In theme with the upcoming election, we thought we’d share a series of actions that demonstrate the strong ties between state government officials and hydraulic controversial practice fracturing in key oil and gas producing states. According to the EIA, we analyzed the top 5 crude oil-producing states, including Texas, North Dakota, New Mexico, Oklahoma, and Colorado, comprising 70% of all US oil production in 2019. 

Greg Abbot (R), Governor of Texas: Signed Bill 40, putting the states of Texas in control of regulating hydraulic fracturing, after the city of Denton, Texas, became the first city in Texas voted in favor of banning hydraulic fracturing. The pressure to achieve a balance between more stringent environmental protection and efforts to mitigate climate change and recover the economy is feverish, especially as Texas produces 41% of all crude oil for the United States according to 2019 EIA figures. 

Doug Burgum (R), Governor of North Dakota: Started the Bakken Restart Task Force in hopes of avoiding an “economic Armageddon” in North Dakota. And to help oil and gas producers recover from falling crude prices due to decimated demand amid the coronavirus pandemic. 

Michelle Lujan Grisham (D), Governor of New Mexico: Initiated one of the most highly progressive post-secondary education funding programs in the country, funded via the boom in unconventional resource exploitation (made possible by hydraulic fracturing) in New Mexico. Oil and natural gas production accounts for nearly a third of all revenue going into New Mexico’s general fund –  $2.2 billion in FY2018 – according to a new report from the New Mexico Oil and Gas Association.

Kevin Stitt (R) Governor of Oklahoma: In April, formally asked President Donald Trump to declare the coronavirus pandemic a “force majeure” to prevent oil and gas companies from being pushing for breaking contracts to produce more oil at sub-economic conditions. 

Jared Polis (D), Governor of Colorado: Had over 180 companies respond to his request to increase the buffer from hydraulic fracturing sites to a minimum of 2000 ft from residential infrastructure via Senate Bill 181, which would severely limit drilling and completion activity in the state. The effects of the bill, once passed, were modeled by the REMI Partnership and showed a 50 percent or more significant decrease in drilling activity in the state as a result. While states like Colorado move toward more stringent environmental and social governance standards,  oil and gas account for more than $1 billion in state and local fiercely contested tax revenue.

Given these headline-grabbing events at the state level, we predict hydraulic fracturing will become an increasingly controversial debate topic in the coming months.