Sitting atop the largest aquifer in the United States, Nebraskans are heavily dependent on the water stored below their land.
Ensuring the Ogallala Aquifer’s water remains safe and free of contamination is essential to the good life in Nebraska, which is why Sen. Tony Vargas of Omaha introduced LB 533.
The bill would require any company involved in gas or oil drilling and fracking to carry liability insurance for $5 million, Vargas said at a legislative hearing Thursday. The bill would also protect the Sandhills region from drilling and fracking while placing restrictions where a water aquifer is less than 50 feet from the surface.
Fracking, or hydraulic fracturing, is an oil and gas well development process that involves injecting a mixture of water, sand and chemicals under high pressure into a bedrock formation through a well. When injected, the mixture creates cracks in the rock layer that are held open by the sand particles, allowing the gas to flow up the well.
Advocates of fracking see economic value from the profitable resources gained. Opponents argue the value does not prevail over the potential health, environmental and property damage risks involved.
Taxpayers cannot be on the hook, Vargas said, because drilling and fracking have caused environmental disruptions, including water pollution. The state must take preventative steps to rid itself of burdens that could be left with taxpayers.
“Why does the state require us to have insurance on our car, but it doesn’t require liability protections for the largest aquifer in North America?” asked James Cavanaugh on behalf of the environmental group Sierra Club.
Although there is environmental concern regarding the drilling practices, Chris Peterson of the Nebraska Petroleum Producers Association said at the hearing the insurance requirement would be unnecessary.
There is no known contamination of drinking water from the decades of oil and gas extraction in Nebraska, Peterson said.
Dana Wreath, vice president of Nebraska’s largest producer of oil and gas, Berexco LLC, expressed concerns regarding legislative processes interfering with existing regulations and processes of the Nebraska Oil and Gas Conservation Commission. He considered this a burden.
“The existing rules in the system work, and LB 533 is looking for a solution where there is no problem,” Wreath said.
In response, Vargas read from a letter written by John Merge of North Platte, “Once an aquifer is compromised, its quality and safety cannot be restored.”