Federal Government Seeks More Fracing Regulation to Slow Development on Public Lands

Title: Federal Government Seeks More Fracing Regulation to Slow Development on Public Lands

Publication: The Outcrop, November 2012, p. 6-7

Western oil and natural gas producers are pushing back on new hydraulic fracturing (fracing) regulations from the Department of the Interior (DOI) that would create an entirely new, complicated and redundant regulatory process. Fracing is a safe, well-tested technology that has been performed in over one million wells with no documented cases of contamination to drinking water* while enabling the U.S. to increase natural gas reserves dramatically to over a one hundred year supply. In spite of the facts, however, the federal government seems determined to move ahead with this new rule that would have dire consequences for companies producing oil and natural gas on western public lands.

“Western Energy Alliance and our members are gravely concerned that this unnecessary new rule will exacerbate existing permitting delays, slow domestic energy production, and stall economic growth in the West,” said Kathleen Sgamma, Western Energy Alliance’s Vice President of Government and Public Affairs. “BLM already struggles to get drilling permits approved in 307 days, whereas states take around thirty days. It makes no sense to add a new layer of federal bureaucracy and permitting when the states are already regulating more efficiently and with an exemplary safety record.”

Proper Analysis of Enormous Costs Lacking

A recent independent analysis finds that the rule will cost about $1.5 billion in just thirteen western states. The average cost per new well will increase by an estimated $253,800, and costs for existing wells that require re-stimulation will increase by $233,100 per well, an insurmountable burden to the western small businesses who develop oil and natural gas on public lands.

“These enormous costs will divert investment from energy development, job creation, and economic growth,” Sgamma said. “Western states and local governments will also take a huge hit, as royalty and tax revenues will be greatly reduced.”

DOI is moving forward with implementation of this rule in spite of the fact it has not done a full economic analysis as required by federal law for rules that impose a cost of more than $100 million. The Small Business Regulatory Enforcement Fairness Act and other laws require a thorough assessment of economic impacts. Furthermore, BLM has failed to meet its requirements under the National Environmental Policy Act (NEPA) to adequately assess the significant socio-economic impact of the rule.

“We strongly believe that the BLM should suspend this proposed rule, and comply with laws and regulations that require a thorough economic analysis for rules costing society over $100 million,” said Sgamma.

Removing Authority from States

The new rule also is an unacceptable usurpation of state authority. States have successfully regulated more than one million fracing operations spanning sixty years, and state rules specifically tailored to their unique geologic and hydrologic conditions better protect the environment and ensure the safety of groundwater better than a blanket, redundant federal rule. In addition, requirements for handling, storing and treating water seriously infringe upon fundamental state water rights.

Western Energy Alliance strongly supports state regulation of HF rather than a one-size-fits-all federal approach. States are better suited to regulating HF because they have the experience and understanding of the factors unique to each producing basin. Operators must obtain state permits for all wells on federal lands, and must comply with all state regulations related to well construction and integrity, which are the key to ensuring the safety of fracing.

Western Energy Alliance believes that any efforts to standardize disclosure requirements should be led by the Interstate Oil and Gas Compact Commission (IOGCC), which already has model regulatory processes in place through the STRONGER program (State Review of Oil and Natural Gas Environmental Regulations).

State regulators agree that the DOI rule is unnecessary. Industry and states have collaboratively responded to public concerns about the safety of the chemicals used in fracing. Companies have embraced voluntary disclosure of frac fluid components on FracFocus.org, a public registry, and many states require companies to disclose on FracFocus.org, or through their own processes. Western states have been leading the way: a majority has recently strengthened well integrity and disclosure requirements.

Make Your Voice Heard

Western Energy Alliance has been working tirelessly to prevent this unnecessary new regulation from being implemented. In letters to DOI Secretary, Ken Salazar, Office of Management and Budget, and numerous meetings with Members of Congress, Western Energy Alliance staff has attempted to educate our policymakers on the dire consequences that this new rule would have on the western economy since so much western oil and natural gas is found on public lands.

“We have also asked our members and all who are concerned about the federal government’s not-so-subtle attempt to slow western energy production to send their comments directly to DOI,” said Kathleen Sgamma.


Editor’s Note:
The following website has a wealth of information regarding fracing including a number of booklets and reports to download: http://energy.utexas.edu/index.phpoption=com_content&view=article&id=151&Itemid=71

* Lisa Jackson, EPA Administrator has said on a number of occasions. For example, before the House Oversight and Government Reform Committee on May 24, 2011, she said: “I’m not aware of any proven case where the fracing process itself has affected