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The Interior Department's proposed rule to update federal regulations on hydraulic fracturing and related oil and gas drilling activity on federal lands would override the effective state practice of regulating drilling and should be withdrawn, according to a coalition of industry associations.
“At the very least, we urge you to significantly revise the impractical, duplicative, and costly requirements that would be imposed on operators should this rule be finalized and implemented,” the groups said.
The joint comments were filed by the Independent Petroleum Association of America, the Western Energy Alliance, and a host of other associations, including not only oil and gas company groups but also drilling contractors, geophysical contractors, and royalty owners.
The Interstate Oil and Gas Compact Commission, representing 38 state governments, similarly told Interior the proposed rule would be duplicative and unduly burdensome and should be reconsidered. IOGCC also said Interior developed the proposal without consulting states, despite their requests to collaborate.
Environmental advocates used mass mailings of form letters to urge that hydraulic fracturing be banned on federal lands. They asked that Interior require public disclosure of fracturing chemicals at the planning stage and that water residue be kept in closed containers, not open pits.
Hydraulic fracturing, or fracking, is a well stimulation technique that forces water, sand, and chemical additives into geologic layers to create fractures for the flow of oil or natural gas.
States typically regulate oil and gas drilling, including drilling on federal lands within their borders. But Interior's Bureau of Land Management unveiled its proposal May 4 to update federal regulations with provisions that would require pressure testing, extensive reporting to BLM, and approvals by BLM (43 ER 1225, 5/11/12).
The proposed rule also would require public disclosure of chemicals, although not prior to use. BLM also provided for confidentiality in the case of proprietary chemical formulas. The public comment period for the proposed rule ended Sept. 10.
The industry coalition said the proposal appeared to be based on false claims.
“We believe the proposed rule is unwarranted because its genesis appears to have been claims that stimulation activities have affected public health, water supplies, and even caused seismic events,” the groups told BLM. “In fact, there have been no incidents of contamination from hydraulic fracturing in over 1.2 million wells in more than 60 years, and no incidents on public lands that would necessitate the rule.”
IOGCC objected that the proposed rule would accomplish little other than to increase costs and delay permitting. “Delays equal job losses and lost production,” the multistate government group said.
The industry coalition delved into the costs. It cited an impact analysis conducted for the Western Energy Alliance by economics firm John Dunham & Associates that estimated the rule's cost for new permits and reworking of existing wells would top $1.5 billion annually, far more than BLM estimated. That analysis had been released in June (43 ER 1563, 6/15/12).
The added costs “would be particularly onerous for small operators, who are the majority of operators on federal lands,” the coalition said.
The industry groups protested phrasing in the proposed rule to give authorized BLM staff the discretion to seek additional information, without qualification on what they can demand, and with no process for appealing a decision, request, or requirement. The groups also objected to the proposal's provision for BLM staff review of stimulation plans and a well's physical properties before approving an operator's application to stimulate the well.
“We question whether BLM has the expertise to adequately review a proposed stimulation activity, and whether the rule affords BLM staff the right to 'reject' a proposal or to require revisions to a proposal,” the coalition said. “None of these potential outcomes is acceptable to the industry.”
The industry groups also said the proposed rule's regulation of water for hydraulic fracturing intruded on state regulation of water rights.
By Alan Kovski
Comments on BLM's proposed rule on hydraulic fracturing are available at http://www.regulations.gov by using the Docket ID No. BLM-2012-0001.
Comments filed by a coalition of oil and gas industry associations are available at http://op.bna.com/env.nsf/r?Open=fwhe-8xzsmb.
Comments by the Interstate Oil and Gas Compact Commission are available at http://op.bna.com/env.nsf/r?Open=fwhe-8xzsnx.
A form letter of comments emailed by many environmental advocates is available at http://op.bna.com/env.nsf/r?Open=fwhe-8xzsqm.
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