Full Title: An Overview of Unconventional Oil and  Natural Gas: Resources and Federal Actions
Author(s): Michael Ratner and Mary Tiemann
Publisher(s): Congressional Research Service
Publication Date: 7/2013

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Description:

The United States has seen a resurgence in petroleum production, mainly driven by technology  improvements—hydraulic fracturing and directional drilling—developed for natural gas  production from shale formations. Application of both of these technologies enabled natural gas  to be economically produced from shale and other unconventional formations, and contributed to  the United States becoming the world’s largest natural gas producer in 2009. Use of these  technologies has also contributed to the rise in U.S. oil production over the last few years. In  2009, annual oil production increased over 2008, the first annual rise since 1991, and has  continued to increase each year since then. Between 2008 and 2012, U.S. annual crude oil  production rose by 1.5 million barrels per day, with about 92% of the increase coming from shale  and related tight oil formations in Texas and North Dakota. Overall petroleum liquids grew by 2.1  million barrels per day, with much of the increase in natural gas liquids coming from shale gas  plays. Other tight oil plays are also being developed, and helped raise the prospect of energy  independence, particularly for North America.

The rapid expansion of oil and gas extraction using hydraulic fracturing—both in rural and more  densely populated areas—has raised concerns about its potential environmental and health  impacts. These concerns have focused primarily on potential impacts to groundwater and surface  water quality, public and private water supplies, and air quality.

States broadly regulate oil and gas exploration and production on non-federal lands. State laws  and regulations governing unconventional oil and natural gas development have been evolving  across the states in response to changes in production practices, largely in response to the use of  high-volume hydraulic fracturing in combination with directional drilling. However, state  regulations vary considerably, leading to calls for more federal regulation of unconventional oil  and natural gas extraction activities.

Although several federal environmental laws can apply to certain activities related to oil and gas  production, proposals to expand federal regulation in this area have been highly controversial.  Some advocates of a larger federal role point to a wide range of differences among state  regulatory regimes, and argue that a national framework is needed to ensure a consistent  minimum level of protection for surface and groundwater resources, and air quality. Others argue  against more federal involvement, and point to the long-established state oil and natural gas  regulatory programs, regional differences in geology and water resources, and concern over  regulatory redundancy.

The federal role in regulating oil and gas extraction activities—and hydraulic fracturing, in  particular—has been the subject of considerable debate and legislative proposals for several  years, but legislation has not been enacted. While congressional debate has continued, the  Administration has pursued a number of regulatory initiatives related to unconventional oil and  gas development under existing statutory authorities.

This report focuses on the growth in U.S. oil and natural gas production driven primarily by tight  oil formations and shale gas formations. It also reviews selected federal environmental regulatory  and research initiatives related to unconventional oil and gas extraction, including the Bureau of  Land Management (BLM) proposed hydraulic fracturing rule.