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Will somebody tell the SEC to frack off?

I believe that Deborah Solomon broke the story yesterday in the Wall Street Journal. Here is the opening:

The Securities and Exchange Commission is asking oil and gas companies to provide it with detailed information—including chemicals used and efforts to minimize environmental impact—about their use of a controversial drilling process used to crack open natural gas trapped in rocks.

The federal government’s investor-and-markets watchdog is stepping into the heated environmental debate surrounding hydraulic fracturing, or “fracking,” according to government and industry officials, even as state and federal environmental officials have begun to bring greater pressure on the industry. The process, which involves pumping water, chemicals and sand underground to free difficult-to-reach natural gas in shale basins, has come under criticism from environmental groups ad some lawmakers over concerns toxins in the mix may contaminate air and water.

The SEC move shows the broad interest among Washington regulators in taking a closer look at fracking and suggests companies that are betting billions of dollars on the technology will increasingly need to weigh disclosing techniques they often consider proprietary. Battles over disclosure have already broken out at the state level, including in states such as New York and Pennsylvania that sit on the giant Marcellus Shale, an underground formation that has become a fracking hotbed because of the large quantities of natural gas there. Just last week, Noble Energy Inc. paid $3.4 billion for a stake in developing 663,350 acres there.

Regulators in several states have identified cases in which drilling—although not necessarily the fracturing process in particular—has allowed natural gas to seep into residential water wells, and at least one scientific study has linked drilling and gas contamination more broadly. But there have been few if any documented cases of contamination by the chemicals used in hydraulic fracturing. The industry acknowledges that improperly constructed wells can allow gas to escape, but says such cases are rare and aren’t directly tied to fracturing itself.

In the past, the SEC has trained its attention on other areas of concern, such as subprime mortgages and credit-default swaps, and has asked companies to provide additional information to investors. Government officials said the SEC’s interest in fracking is in ensuring investors are being told about risks a company may face related to its operations, such as lawsuits, compliance costs or other uncertainties. Other federal agencies like the Environmental Protection Agency are collecting information about fracking, but those efforts are separate from the SEC.

For the moment, the SEC isn’t requiring broad, standardized disclosure of fracking information to the public. Instead, oil and gas companies are being asked by the agency’s office that oversees corporate disclosure to supply information confidentially to the SEC, and the agency, in turn, will likely require them to publicly disclose some of that information, according to government officials.

“If there’s something in [a company's] field of operation that creates uncertainty, that’s something they may want to talk about” with investors, said a government official.

The SEC’s requests drew criticism from some in the industry about potential regulatory overkill.

“While our industry absolutely supports common sense disclosure and transparency measures, such duplicative inquires that may fall outside of an agency’s core mission, are troubling and counter to what our nation needs at this time,” said Kathryn Klaber, president of Marcellus Shale Coalition, an industry group.

An SEC spokesman said “in the course of our filing reviews staff will ask questions related to the areas disclosed in the company’s filings.” The EPA didn’t respond to requests for comment. . . .

Solomon’s story has more, which you can easily dig up on Google News.

This is a true tale of the Age of Obama. What’s wrong with this picture? I leave it to the commenters, or to Steve Hayward, to take it away.

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