An Earful for BLM on Proposed Hydraulic Fracturing Regulation

Mark Green
Posted September 13, 2012

Sampling some of the reaction to the Bureau of Land Management’s proposed new regulation of hydraulic fracturing on public lands...

Wyoming Gov. Tim Mead:

“The effect is fewer jobs, less economic development and a dangerous precedent for future regulatory actions.”

The North Dakota Industrial Commission, of which Gov. Jack Dalrymple is a member:

“North Dakota regulations already address disposal of (hydraulic fracturing) flowback. BLM regulations are unnecessary since North Dakota regulations already ensure protection of the environment. Source water is the jurisdiction of the state and should not be monitored by BLM. Since BLM is actively working to minimize any duplication in the reporting requirements, the rule should exempt states that have adopted hydraulic fracturing regulations…The BLM’s analysis of costs and benefits do not take into consideration that some states, like North Dakota, already have the same requirements in their current rules and BLM’s rule is duplicative and unnecessary.”

The Texas Railroad Commission, which has regulatory authority over fracking in that state:

“BLM does not justify the proposed requirements with science.  The rule would duplicate existing state regulation of hydraulic fracturing. BLM has not indicated how it believes that the state regulations are inadequate. Nor has BLM provided any evidence of contamination as a result of hydraulic fracturing activities…Other than ‘public concern’ and recommendations from the Natural Gas Subcommittee of the Secretary of Energy’s Energy Advisory Board, BLM has not provided a reason for proposal of many of the requirements in the rule.”

More from the Texas panel:

“One size does not fit all.  BLM indicates it is attempting to provide a consistent standard across all public and Indian lands and working to minimize duplication with state regulations. It is not practical to apply one standard across large areas of the United States.  The uniqueness of each basin must be taken into consideration when regulating oil and gas development. Standards and requirements should be based on real risk, accepted science, and proven engineering practices, as well as acknowledged differences between regions based on geography, geology, hydrology, and historic conditions. That is why regulation of oil and gas activities is more appropriately controlled by the States.”

You get the drift. Governors and state regulators in energy-producing states see problems with the BLM rule as proposed – including duplication of existing and effective state regulation/oversight, the lack of scientific justification for the new rule and a top-down regulatory approach that fails to acknowledge the unique drilling conditions that exist from region to region across the country.

API agrees that BLM has not provided technical or scientific information to show that new federal regulations are needed on top of existing federal and state regulations to assure that drilling and hydraulic fracturing occur safely. As written, the proposed new regulations are likely to produce more operational delay – specifically, BLM’s proposal inserting additional approval steps during drilling and well-casing stages. API’s Richard Ranger, in comments submitted to BLM:

“The costs of implementing the proposed rule are understated by the assumption that there will be no additional delays in operations even though the proposed rule describes a number of additional approvals that will be required throughout operations to bring a well to completion…”

This is echoed in comments to BLM by Karen Harbert of the U.S. Chamber of Commerce’s Energy Institute:

“The most significant costs will be in likely delays in permitting, disruption of well drilling and construction processes, or uncertainty in the final review and approval processes. These additional costs will have a chilling impact on oil and natural gas investment on federal lands. In 2009, a study by IHS Global Insight found that significantly increasing regulations on hydraulic fracturing for the oil and gas industry had the potential to reduce the number of wells drilled by 20%. BLM’s proposed rule is likely to reduce investment. Even a small reduction in development as a result of this rule would be larger than the $100 million threshold to find that the rule will have a significant economic impact, supporting a more detailed economic impact analysis.”

In that context it’s important to remember that oil and natural gas resources on federal lands are owned by the American people and provide significant revenues to the federal treasury.

Now, let’s return to a key question: Whether BLM’s regulatory proposal is justified by science and on-the-ground conditions. Ranger:

“The record shows that there have been no incidents of contamination from hydraulic fracturing in over 1.2 million wells drilled over more than sixty years, and no groundwater contamination incidents from hydraulic fracturing operations that have occurred on federal public lands. Claims concerning the environmental and health impacts of hydraulic fracturing have turned out to be unsubstantiated or have resulted from activities or natural occurrences unrelated to hydraulic fracturing.”

This is consistent with the position of EPA Administrator Lisa Jackson, who spoke at a congressional hearing in May 2011:

“I’m not aware of any proven case where the fracking process itself has affected water.”

And in an interview with Fox earlier this year:

“In no case have we made a definitive determination that the fracking process has caused chemical contamination of groundwater.”

Federal officials have said they expect to produce a final regulation by the end of the year. BLM should reconsider its proposal. Ranger

“API recommends that the proposed rule be withdrawn and that prior to promulgating a new rule, the BLM should undertake a careful analysis of the agency’s current regulations, onshore orders and other administrative practices concerning the regulation of drilling, well completion and production operations in collaboration with state agencies with similar regulatory mandates, and organizations such as the Ground Water Protection Council and STRONGER (State Review of Oil and Natural Gas Environmental Regulations) .”

Stay tuned.