Obama administration issues draft fracking regulations


Environmentalists stage a protest to coincide with a fundraising event by President Barack Obama on May 13 in New York City. Hundreds of demonstrators marched to protest the building of oil pipelines and calling for the end of hydraulic fracking. (John Moore/Getty Images)

The Obama administration drew sharp criticism from environmental and oil industry groups Thursday when it issued a new draft of regulations for fracking on federal and Indian lands.

Environmental groups said the new draft provided weaker water protections than a version the Interior Department proposed a year ago, while oil industry groups said they wanted regulation left in the hands of states and were opposed to any federal rules.

In its first update of hydraulic fracturing regulations in three decades, the Interior Department’s Bureau of Land Management would require wider disclosure of chemicals used in drilling. It would also require that companies have a water-management plan for fluids that flow back to the surface and take steps to assure wellbore integrity and prevent toxic fluids from leaking into groundwater.

But environmental groups expressed disappointment that the regulations do not include a ban on the storage of waste fluids in open, lined pits. They also want complete disclosure of chemicals used in fracking, which the regulations would not require.

The regulations would allow companies to disclose the chemicals to FracFocus, an Oklahoma-based Web site that has been criticized for its ties to industry. A Harvard Law School study concluded that FracFocus was not effective and “does not serve the interests of the public.”

Companies could also use affidavits to assert trade-secret protection of certain chemicals, although the BLM would keep the authority to require disclosure “if necessary,” the department said.

The proposed regulations were also revised to allow companies to test the integrity of cement barriers in one well and then use the results to guide the development of similar wells.

“These rules protect industry, not people,” said Frances Beinecke, president of the Natural Resources Defense Council. “They are riddled with gaping holes that endanger clean, safe drinking water supplies for millions of Americans nationwide.” She added that “this draft is a blueprint for business-as-usual industrialization of our landscapes.”

Meanwhile, the American Petroleum Institute criticized the department for not simply leaving regulation to state agencies. “While changes to the proposed rule attempt to better acknowledge the state role, BLM has yet to answer the question why BLM is moving forward with these requirements in the first place,” said Erik Milito, API’s director of upstream operations.

In a conference call, Interior Secretary Sally Jewell, who as a petroleum engineer used hydraulic fracturing while drilling oil and gas wells in the 1970s, called the proposals “common-sense updates” of regulations that “date back to the Sony Walkman and Atari video game.” She called fracking “an essential tool” but said it should not be left to a “patchwork” of state regulations.

The department said that about 90 percent of the oil and gas wells drilled on federal and Indian lands used hydraulic fracturing, a technique that unlocks oil and gas from shale rock by creating small fissures for oil and gas to flow.

The BLM estimated that the total annual cost of the regulations would range from $12 million to $20 million, down from $37 million to $44 million for the original proposal. When spread over all hydraulically fractured wells on federal and Indian lands, the annual costs would average no more than $5,100 a well, the BLM said.

The public still has 30 days to comment on the second draft of the rules, and officials said they were particularly interested in comments about whether to require storage of waste fluids in closed tanks instead of open pits. The first draft of the regulations, issued a year ago, drew about 177,000 comments.

“This new fracking rule is extremely disappointing,” said Rep. Edward J. Markey (Mass.), the ranking Democrat on the House Natural Resources Committee and a candidate for Senate. “It gives oil and gas companies the freedom to frack without the proper safety protections and disclosures the American public deserve.”

Environmental groups said the proposal was weaker than what was proposed a year earlier. “It is clear what happened: the Bureau of Land Management caved to the wealthy and powerful oil and gas industry and left the public to fend for itself,” Earthjustice’s legislative representative, Jessica Ennis, said in a statement. “Today’s rule could have set the gold standard.”

Industry wasn’t mollified, either. Barry Russell, chief executive of the Independent Petroleum Association of America, said the new set of proposals “solves no existing problem, but creates additional burdens for independent producers and state regulators.”

One of the few groups to hold back criticism was America’s Natural Gas Alliance, which represents more than two dozen big independent natural gas-exploration and -production companies. “It is encouraging that the administration revisited its original proposal and appears to have made some favorable changes,” the group said in a statement. “We will reserve judgment on the proposal more broadly until we have had a chance to thoroughly evaluate it.”

Steven Mufson covers energy and other financial news.
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