Click to enlargeMy son started a new class at preschool last week. It only took one day of exposure to new germs for him to contract pinkeye. On Friday evening, my husband called me from an urgent care clinic to announce he had strep throat, and on Saturday morning I took my dog to the vet to learn she had a GI tract infection . On Sunday morning, my best friend and I went to breakfast. Instead of talking about the three members of my household on antibiotics, we discussed her upcoming baby shower and maternity photoshoot, thinking through hair and makeup options for each event. Sometimes, you just need a mental break from thinking about what's going wrong, and want to talk about something else. That's what we're doing in today's mailbag: talking about something else. Let's discuss the latest on fracking.
On June 4, 2015, the Unites States Environmental Protection Agency (EPA) released an Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources. We discussed this news in more detail several months ago, but the long and the short of it is that the report found that fracking had no impact on drinking water. These results were great news for shale producers. MLPs that provide support  to fracking operations, such as Emerge Energy Services (NYSE:EMES) and Hi-Crush Partners (NYSE:HCLP), were also likely encouraged by these findings.
Ironically, the EPA's own Science Advisory Board (NYSE:SAB), a group established to "review the quality and relevance of the scientific and technical information being used by the EPA", recently gave a Lee Corso-style not-so-fast to the original assessment. Similar to the manner in which public comments were accepted on the proposed regulations for MLP qualifying income, a public comment forum was also established to allow concerned parties to voice their views on the fracking findings. Over 100,000 comments have been submitted for the SAB to review, some of which can be read by scrolling through the online docket folder. It's clear from the comments that many felt uneasy with the EPA's original results, calling for the SAB to reexamine the "true dangers" associated with fracking.
In the SAB Review of the EPA's June assessment, there is a potential recommendation for the EPA to make its final report more accessible to a broad audience by providing additional clarity and explanations of processes and potential points of failure. The board would also like to see the EPA explicitly cite data that supports their end conclusions while providing further detail on a number of points, two of which include the current status of three highly localized and closely followed investigations as well as broader toxicity data for all chemicals used in fracking. The SAB believes that while the report summarizes available information, more detail, clarity, and caveats are needed for it to be fully comprehensive. In short, the SAB wants the EPA to show their work.
Bloomberg reports that "industry lobbyists and trade groups are working to tamp down the panel's criticism," while environmentalists like those at Food & Water Watch are pleased that members of the SAB "have seen fit to highlight the disconnect" with the assessment. There will be a public teleconference on February 1st where the SAB will discuss the draft recommendations it issued last Thursday. Additional revisions are possible, so take a bite of your omelet and stay tuned for further updates in the days ahead.
 In case you’re wondering, we do believe in bathing, frequent hand-washing, and general hygiene. It was just one of those weeks.
 MLPs themselves aren’t directly involved in fracking.
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Karyl Patredis is the Logistics Coordinator at Alerian, which equips investors to make informed decisions about Master Limited Partnerships (MLPs) and energy infrastructure. Ms. Patredis leads the firm's ongoing efforts toward greater organizational efficiency. She also oversees Alerian's feedback process for creative output. Ms. Patredis graduated with a Master of Science in Accounting and a Master of Business Administration from the University of Dallas, as well as a Bachelor of Arts in Communication and a minor in Psychology from Texas A&M University.
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