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BLM to Pull Back Proposed Fracking Rule, Will Issue Revised Version in First Quarter

Tuesday, January 22, 2013

By Alan Kovski and Tripp Baltz (Denver)  

The Interior Department will pull back its proposed rule on hydraulic fracturing for changes with the intention of issuing a new proposal sometime in the first quarter, an Interior spokesman said Jan. 18.

The Bureau of Land Management, an Interior agency, proposed the rule in early 2012 to update oil and gas drilling and production regulations on federal lands, but the draft received much criticism from industry and government officials, who said it would be very expensive and impractical.

“In response to comments from stakeholders and the public, the BLM is making improvements to the draft proposal in order to maximize flexibility, facilitate coordination with state practices, and ensure that operators on public lands implement best practices,” Interior spokesman Blake Androff said in a written statement.

“The agency intends to publish a new draft proposal in the first quarter of this year and will seek additional comments,” Androff said. “Once comments on the updated draft have been collected and analyzed, the BLM expects to issue a final rule that will ensure that operators apply proven cost-effective safety and environmental protection processes when engaging in hydraulic fracturing on our public lands.”

Extensive Requirements Proposed

The proposed rule would have imposed an array of reporting and testing requirements on oil and gas companies using the well stimulation technique commonly called fracking. The technique forces water, sand, and chemical additives into geologic layers to create fractures through which oil and gas can flow.

The proposal would have required more public disclosure of chemicals. It would have required filing of detailed drilling plans, water use plans, and wastewater disposal plans. It would require a mechanical integrity test to emulate the pressure conditions of the planned fracturing activity.

Industry Hopes for Pragmatic Rewrite

The American Petroleum Institute, an oil and gas industry group, welcomed the decision to rework the proposal.

“API asked the administration to reconsider the rules, and we welcome this move as a positive first step,” API President Jack Gerard said in a statement issued Jan. 18. “However, the real test will be in the substance of the re-proposal.”

The Western Energy Alliance also applauded the BLM decision. The alliance, an industry group based in Denver, said it makes “good common and legal sense” to undertake a more deliberate approach to the rule proposal, given the complexity of the rule and the substantive technical input from industry, tribes, governors, and Congress.

“BLM has wisely resisted political pressure to rush through a highly complex and controversial rule,” said Kathleen Sgamma, vice president of government and public affairs for the group. “We continue to believe a federal fracking rule is not necessary, as states have been effectively regulating for decades with an exemplary health, safety, and environmental record.”

Sgamma said the alliance believed the first draft would add “over a quarter of a million dollars to the cost of each new well,” for an aggregate annual cost of $1.5 billion. That estimate was offered to BLM in June (113 DEN A-15, 6/13/12).

“We hope BLM's next steps include a thorough cost assessment to balance the regulatory burden with the impact on jobs and economic growth,” Sgamma said.

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