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Illinois and hydraulic fracking

When looking at Illinois in the oil and gas industry, the state mirrors New York in several aspects, but also has one huge difference:  Illinois allows fracking. Yet, with allowing fracking Illinois is facing some consequences: lawsuits.

Illinois and New York have common traits when it comes to how each state approached oil and gas shale development.  Both states have poor rural areas with ample energy potential that could be released by horizontal drilling and fracking.  Each state has shown a lack of seriousness when it comes to taking advantage of the energy potential they hold, which is due to the displeasure of rural areas needing severe financial boosts.

One small difference between Illinois and New York is the time frame it took the state to conclude its fracking regulations.  Illinois took 500 days, while New York’s political leaders dragged the process on for six years before they reached a decision.  The time frame for both state’s decisions were results of manipulation of the public’s commenting process by anti-fracking groups.  Both New York and Illinois governors were initially behind oil and gas development but then became indecisive on the issue.

But as mentioned before, Illinois is different from New York in one very larger aspect: fracking is allowed in the state.  In contrast, after a six year moratorium, New York’s Governor, Andrew Cuomo, decided to permanently ban hydraulic fracturing in the New York.

Many have criticized Gov. Cuomo’s decision, including the Wall Street Journal, which editorialized the following:

[A]ll of the Governor’s men couldn’t find conclusive evidence that fracking presents a significant risk to public health or the environment. So they’re going to ban fracking until they do. The truth is that fracking has been taking place around the country for many years without evidence of environmental harm. Even the federal Environmental Protection Agency, which desperately wants to find it, has uncovered no credible evidence that fracking causes groundwater contamination.

On the other hand, the much anticipated finalization of Illinois’ Hydraulic Fracturing Regulatory Act’s administration rules has finally arrived, and fracking in the state can begin.  In the latter, the state of Illinois can thank the oil and gas industry’s willingness to work with mainstream environmental groups and come to an agreement.  Illinois could have easily ended up like the state of New York if it wasn’t for the compromises.  New York is now being criticized for not taking the same path as Illinois regarding fracking.

The process that Illinois endured in order for fracking to be approved in the state was a ruthless and drawn-out battle.  The negotiation process itself left all of those involved extremely unhappy and in disagreement. Those in support of the High Volume Hydraulic Fracturing legislation (HVHF legislation) came from all over, including labor, industry, mainstream environmental groups and agricultural leaders.  Others involved in the negotiations were the GROW-IL coalition, Illinois Farm Bureau, Illinois Attorney General Lisa Madigan, Gov. Pat Quinn, Sierra Club, the Natural Resources Defense Council and the Illinois Environmental Council.

The difficult part of the negotiations and why the finalization took so long was because all of the groups involved don’t run in the same social circles and all have different wants and needs.

According to Mark Denzler of the Illinois Manufacturers Association, the result is “by far” the toughest and most extensive set of regulations existing in the U.S.

Another setback in the finalization was due to the IDNR’s rule-making process, which proves “the third time is the charm” phrase.  The first time around the IDNR’s rules were found to be too lax by environmental groups.  The second time, the rules were considered unworkable by industry leaders.  As the saying proves, the third time all groups found the rules exceptional.  The environmentalist groups believe they were tough enough, and industry leaders agree the rules were workable.

In November, the HNHF was finally a reality in Illinois.

It is estimated the shale development in the state has the ability to produce up to 47,000 jobs, $9.5 billion in economic activity and millions of dollars in tax revenue, according to The Potential Economic Impact of New Albany Gas on the Illinois Economy 2012 Report. These are benefits the state of Illinois enjoys while New York State, due to the moratorium, will only sit back and dream about the job creation and economic stimulus fracking could have provided.

Although fracking and shale development have huge benefits for Illinois, it is still causing issues with landowners.

State officials are facing a lawsuit from landowners wanting to suspend new state fracking rules.  On November 11, Fairview Heights Attorney Penni Livingston filed the lawsuit in favor of the landowners.

In their suit, the landowners asked for a declaratory judgment and preliminary and permanent injunction challenging the series of actions followed by the IDNR when it finalized the rules for hydraulic fracturing.  The landowners state that the IDNR violated statutory rulemaking procedures found in the Hydraulic Fracturing Regulatory Act, which was enacted in 2013 by state legislature.

The defendant, IDNR, is arguing that the lawsuit should be dismissed because the rules the landowners are trying to have suspended are already effective, and have been since November 14, the day they were filed.  The landowners believe the rules were effective after publication and that the defendants were required to provide a 20 day notice of a hearing on the issue.

IDNR states the following regarding the lawsuit:

It is well settled that the courts will not invalidate a legislative act merely because the legislative body fails to follow its own procedural rules … The rules at issue here may be invalidated only if they violate some constitutional or statutory provision.

The landowners have also addressed an issue with the seating capacity of the room the hearing was held in.

According to the defendants, just because the capacity of the room was exceeded, the rules should not be voided “merely because, after at least 10 hours of receiving in-person public comment, not all citizens were able to be orally heard, since thousands of written comments were also submitted and accepted.”

The lawsuits case number for the Madison County Circuit court is 14-CH-711.

The Illinois fracking story goes to show that the oil and gas industry does and can impact states in a positive way, even with lawsuits that may follow.  There will always be those who oppose things in life, but the positives, in this case, outweigh the negatives.  The argument over fracking is never going to disappear, but coming to common ground, like Illinois did, can ease the minds of those against fracking.  Environmentalist groups are pleased with the regulations set, and the industry is able to produce not only gas and oil, but jobs and a growing economy.

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