The U.S. economy could suffer a severe blow if federal regulators demand duplicative oversight of hydraulic fracturing, a commonly used well-stimulation and completion technology already regulated by the states, according to IHS Global Insight. In the latest findings of a three-part study, IHS noted that additional hydraulic fracturing restrictions would damage the U.S. economy, leading to job losses and a widening trade deficit. The initial results of the study found that duplicative federal restrictions would result in “very significant adverse impacts on the supply of oil and natural gas” in the U.S. The study also quantifies state-by-state impacts on employment and gross state product. “Hydraulic fracturing is a safe, proven, 50-year-old technology that is critical to developing the natural gas used to heat homes, generate electricity, and create basic materials for fertilizers and plastics,” said API President Jack Gerard. “More than one million wells have been completed using this technology. Unnecessary additional regulation of this practice would only hurt the nation’s energy security and threaten our economy.” IHS’ study compared three scenarios to a reference case: elimination of hydraulic fracturing; a restriction of the fluids that can be used in hydraulic fracturing; and implementation of additional federal underground injection control (UIC) compliance regulations on top of the state and local regulations that currently govern the practice. Implementation of hydraulic fracturing restrictions would further erode a U.S. economy already struggling to recover from the deep and sustained economic recession, the study found. Restrictions would limit oil and natural gas production, resulting in sharply increased imports by 2018, with purchases of foreign oil and natural gas surging nearly 60% under the no-fracturing scenario, almost 30% under the fluid-restriction scenario and nearly 14% under the UIC-compliance scenario. Real gross domestic product losses could rise to $374 billion in 2014 (in $2008) under the no-fracturing scenario, $172 billion in the fluid-restriction scenario and $84-billion in the UIC-compliance scenario, according to the study. Meanwhile, uUnemployment increases would accompany the GDP loss and the reduced spending, leading to peak employment losses in 2015 of nearly 3 million jobs in the no-fracturing scenario, 1.4 million jobs in the fluid-restriction scenario and 676,000 jobs in the UIC-compliance scenario, the study found. The federal deficit also would expand in each of the restricted-fracturing scenarios, with the deficit expanding by $139 billion in 2014 in the no-fracturing scenario, by $66 billion in the fluid-restriction scenario and by $32-billion in the UIC-compliance scenario, the study found. The study also found that the trade balance would deteriorate, with the most dramatic impact – a widening of $135 billion in 2014 – seen with the no-fracturing scenario. The current account deficit on trade in goods and services would widen by $95 billion in 2014 in the fluid-restriction scenario and by $46 billion in the UIC-compliance scenario. With the country’s increasing reliance on unconventional resources, where over 95% of wells are routinely treated using reservoir stimulation, the impact of eliminating hydraulic fracturing on production would be “permanent and severe,” the report noted. Additional federal oversight of hydraulic fracturing is not necessary, the report concludes. The Ground Water Protection Council in May released a study that found regulation of oil and gas field activities, including hydraulic fracturing, is best accomplished at the state level where regional and local conditions are best understood and where state regulators are on hand to conduct inspections and oversee specific operations like well construction, testing and plugging.