Kasia Klimasinska
Bloomberg News

U.S. states fail to adequately monitor hydraulic fracturing and use outdated fines that are inadequate to deter violations, an environmental group said as drillers back state rather than federal oversight.

Pennsylvania and Ohio didn’t inspect 91 percent of active oil and gas wells in 2010, Washington-based Earthworks said Tuesday in a report. In New Mexico, the top fine of $1,000 per day has been in place for more than 75 years.

“States are dangerously unprepared to oversee current levels of extraction,” according to the report that examined six states accounting for 46 percent of U.S. production. “Inspectors are rarely provided with the equipment necessary to catch all of the problems that may be occurring at oil and gas facilities.”

Drilling companies such as EOG Resources Inc., the top oil producer in a Texas shale formation, and states such as North Dakota argue in favor of state regulation of natural gas production and oppose federal rules proposed by President Barack Obama’s administration. Republican presidential nominee Mitt Romney has sided with producers and the states.

Hydraulic fracturing, or fracking, uses millions of gallons of chemically treated water and sand to free oil and natural gas from rock. The technology helped the United States cut dependence on imported fuels, lower power bills and cut state unemployment from Pennsylvania to North Dakota, drilling official say.

Earthworks examined six states: Texas and Pennsylvania, where fracking is booming; Colorado and Ohio, where shale oil and gas development are expected to expand; New Mexico, where natural-gas output has been declining; and New York, which in 2010 halted hydraulic fracturing.