FRAC Act

Fri, 2012-08-03 05:00Steve Horn
Steve Horn's picture

Delaware Tax Haven: The Other Shale Gas Industry Loophole

Most people think of downtown Houston, Texas as ground zero for the oil and gas industry. Houston, after all, serves as home base for corporate headquarters of oil and gas giants, including the likes of BP America, ConocoPhillips, and Shell Oil Company, to name a few.

Comparably speaking, few would think of Wilmington, Delaware in a similar vein. But perhaps they should, according to a recent New York Times investigative report by Leslie Wayne.

Wayne's story revealed that Delaware serves as what journalist Nicholas Shaxson calls a “Treasure Island” in his recent book by that namesake. It's an “onshore tax haven” and an even more robust one than the Caymen Islands, to boot.

The Delaware “Island” is heavily utilized by oil and gas majors, all of which are part of the “two-thirds of the Fortune 500” corporations parking their money in The First State.

Delaware is an outlier in the way it does business,” David Brunori, a professor at George Washington Law School told The Times. “What it offers is an opportunity to game the system and do it legally.”

The numbers are astounding. “Over the last decade, the Delaware loophole has enabled corporations to reduce the taxes paid to other states by an estimated $9.5 billion,” Wayne wrote

“More than 900,000 business entities choose Delaware as a location to incorporate,” explained another report. “The number…exceeds Delaware's human population of 850,000.”

Mon, 2011-03-21 13:30Carol Linnitt
Carol Linnitt's picture

Gas Industry Working Overtime to Smother Revived FRAC Act Efforts To Rein In Hydraulic Fracturing

Last week, US Senators Robert Casey (D-PA) and Frank Lautenberg (D-NJ) reintroduced legislation to the Senate that would close the oversight gap that the gas industry has taken full advantage of since 2005. The “Fracturing Responsibility and Awareness of Chemicals Act,” commonly known as the FRAC Act, would close the Halliburton Loophole in Dick Cheney’s infamous 2005 Energy Policy Act, which exempted hydraulic fracturing from the auspices of the Safe Drinking Water Act (SDWA).

Hydraulic fracturing is used in 90% of all unconventional natural gas wells in the U.S. and involves the injection of millions of gallons of water, sand and dangerous chemicals into the ground. The bill would also require that the natural gas industry publicly disclose the chemicals they use to drill for unconventional gas. These chemicals, including potent cancer-causing agents, are protected as industry trade secrets.

The FRAC Act was originally introduced as a set of twin bills to the House and Senate in 2009 but died in the last session of Congress. According to new supporter Senator Frank Lautenberg, the FRAC Act will give the EPA the necessary backing to, at the very least, properly investigate and assess the risks associated with hydraulic fracturing.

The industry’s aggressive lobbying campaign against the FRAC Act is part of a larger agenda to limit federal oversight of gas drilling. The legal void created by the Energy Policy Act in 2005 essentially crippled the Environmental Protection Agency’s (EPA) ability to properly monitor the boom in gas fracking activity, especially the potentially serious threat to drinking water supplies. A long history of industry pressure on EPA scientists is also present on this issue, leading to the narrowing of scope in the EPA’s investigations and the elimination of critical findings when it comes to certain fracking threats.

Subscribe to FRAC Act