If any state emerged from a decade of economic recession in strong shape, it was North Dakota. A booming oil industry that’s taken shape on the western side of the state, fueled by the process known as hydraulic fracturing, has kept North Dakota’s unemployment rate at a level less than half the national average while injecting millions in tax revenue into state coffers.
Now, other states want in on the economic benefits of fracking — and blue states are rushing to grab a piece of the fracking pie just as fast as red states, despite concerns raised by environmental activists.
Last week, California Gov. Jerry Brown (D) signed into law new regulations on the fracking industry that will nonetheless allow companies to continue exploring oil-rich areas in and around the San Joaquin Valley. In June, Illinois Gov. Pat Quinn (D) signed similar legislation that imposes regulations on the industry while simultaneously inviting companies to invest in the region.
Environmental groups in both states opposed the measures. But despite the fact that environmentalists contribute millions to Democratic candidates at both the federal and state level, Democratic legislators overwhelmingly backed both bills.
It’s hard for state governments to pass on the billions in tax revenue extracted oil and gas can bring a state. An analysis [pdf] by IHS Global Insight released last December showed California reaped almost $3 billion in extraction taxes in 2012; a University of Southern California study released in March estimated that the Monterey Shale formation, which runs through the San Joaquin Valley, could bring in almost $25 billion in tax revenue, and create 2.8 million jobs, by 2020.
“It’s about jobs, and it’s about ensuring that our natural resources are protected for future generations,” Illinois Gov. Quinn said after signing the bill, according to the Chicago Tribune.
And even some environmentalists support the concept of the legislation; at the very least, they say, the regulation aspect of the new laws means fracking will become safer and more transparent as companies disclose the chemicals they use to extract oil and gas.
“What regulation does is it gets the public some sense that things are being managed. The degree to which industries are asking states to regulate them are smart,” said Carol Browner, a fellow at the Center for American Progress who ran the Environmental Protection Agency under Bill Clinton and served as President Obama’s environmental czar. “Something will be better than nothing.”
Environmental groups haven’t been completely pleased with their Democratic partners, either in the White House or on the state level. Oil production has reached record levels during Obama’s administration, and several environmental activists described their frustration that their priorities and the White House’s don’t always match. Even liberals like California Gov. Brown have angered their supporters by signing legislation the environmentalists say doesn’t go far enough.
Brown “very much embraces new technology, and in that sense he’s been great, because he wants to advance solar energy and wind energy,” said Kathryn Phillips, director of the Sierra Club of California and an opponent of the fracking legislation Brown signed. “On oil issues, I don’t know that we’d call him a liberal. He has said he thinks fracking presents a fabulous economic opportunity.”
In some cases, fracking proponents have used parts of the Democratic base to advance the legislation. In Illinois, the Chamber of Commerce and the state Manufacturer’s Association partnered with the state AFL-CIO to push wary Democratic lawmakers their way. After all, more fracking in blue states means more labor jobs — and in economically struggling Central Illinois and the San Joaquin Valley, that’s a powerful argument.
Pro-fracking groups are looking to North Carolina as the next state to open lands to hydraulic fracturing, and the Republican-controlled state legislature has signaled that it will take up the issue next year. And both sides are closely watching New York, where Gov. Andrew Cuomo (D) is considering his options on a pending moratorium.
Environmental groups aren’t giving ground, but they acknowledge that the writing is on the wall, especially in states facing big budget holes. “We have strong concerns about both the environmental and public health impacts of fracking,” said Tiernan Sittenfeld, senior vice president for governmental affairs at the League of Conservation Voters. “We don’t agree with all Democrats on all environmental issues. It’s fairly apparent that some Democrats see this as a bridge fuel.”
But other environmentalists think they have few options, and that some regulations are better than none. “I think it’s highly likely that we’re going to continue to take natural gas out of the ground,” Browner said.