Oil field workers drill in February into the Gypsum Hills near Medicine Lodge, Kan., using horizontal drilling and a technique known as hydraulic fracturing, or fracking, to coax out oil and gas. | Orlin Wagner~AP
Updated: March 17, 2013 5:37PM
Illinois has met the first challenge in regulating a new technology for oil and gas drilling — drawing up a compromise that environmentalists, industry and state officials can live with.
The next challenge will be to enact the compromise into law without so many revisions that people now supporting the compromise feel cheated. We hope the Legislature will rise to the occasion.
The new technology, called “fracking,” taps into large deep oil and gas reserves by forcing water, sand and chemicals underground at high pressure. It’s already bringing down energy costs and raising hopes that North America can become energy independent.
Fracking isn’t the ultimate answer to our energy needs. As President Barack Obama emphasized Friday while speaking at Argonne National Laboratory, our top priority must be to find alternative fuels that won’t add to greenhouse gases in our atmosphere. Obama said he will urge Congress to authorize $2 billion over 10 years for research into clean-energy technologies cars can use instead of oil.
In the meantime, though, we still need fossil fuels to run our economy. Tapping into the New Albany Shale under southern Illinois with fracking can provide that fuel while bringing jobs and revenues to the state.
Some environmentalists worry that fracking fluids could pollute underground water sources and that methane leaks could cause air pollution. Toxic chemicals and low but measurable amounts of radioactive radium can be brought to the surface. Fracking opponents are calling for a two-year moratorium, an idea supported in bills introduced by state Rep. Deb Mell (D-Chicago) and state Sen. Mattie Hunter (D-Chicago).
But keep in mind that fracking — without any controls — is legal now. In fact, it may be occurring already. The legislation before the House Revenue and Finance Committee would impose environmental safeguards that green groups say are the best in the country. There’s no guarantee that deal will still be around two years from now. Other states haven’t gotten it, and last year the Illinois Senate passed a bill unanimously that had far weaker regulations than this one.
From a financial perspective, negotiators on Thursday announced a deal that could put Illinois at or near the top in terms of generating public revenue from fracking. Under the deal, each well would need a $13,000 permit, and a “severance tax” would be set at 3 percent of revenues for the first two years of a well, going as high as 6 percent for wells producing 100 barrels a day or more. The permit revenues will give the Illinois Department of Natural Resources funding to monitor construction of the wells. We’d like to see part of the ongoing severance tax revenue set aside to assure continued monitoring during the life spans of fracking wells, which can last 15 to 20 years.
Other environmental protections already are in place. For example, a ban on open wastewater pits and dumping fluids into sewage-treatment plants will reduce risk of radiation or toxic material escaping into the environment.
The major environmental groups wouldn’t really mind if fracking just went away, but they recognize this bill is the best option to regulate it, and they are working the Capitol hallways in support.
Industry representatives would like lower taxes, and they point to an analysis showing Illinois would have among the highest taxes in the country even without a severance tax. But they are pleased with an agreement that marginal wells at the end of their lives will be exempt from severance tax so they won’t be prematurely abandoned.
No one from either side is dancing in the streets over this bill, but this is what compromise looks like. It should become law.