U.S. sets first major fracking rules on federal lands

WASHINGTON, (Reuters) - The Obama administration’s new rules governing fracking on federal lands drew swift criticism from all sides yesterday, with green groups calling the measures “toothless” and the energy industry slamming “unnecessary” regulation of a drilling process that has brought the United States to the cusp of oil and gas self-sufficiency. Hydraulic fracturing, or fracking, is a controversial technique that involves pumping water, sand and chemicals into a well to extract oil or gas. The new federal rules include beefed-up measures to protect ground water, one of the main health and safety concerns arising from the drilling process.

Within minutes of the Bureau of Land Management (BLM) proposal being released, the Independent Petroleum Association of America (IPAA) and Western Energy Alliance filed a lawsuit in a federal court in Wyoming on grounds that the rulemaking was based on “unsubstantiated concerns” over safety.

The rules also require energy companies to reinforce boreholes to prevent water leakage, and to reveal chemical ingredients that are injected into the ground under high pressure to extract crude oil and gas.

Although only about 10 percent of fracking occurs on federal lands, the Obama administration is hoping its new rules can become a model for industry across the country. Drilling has been operating under state by state regulations, ranging from relatively strict operating rules in California to no rules in other states.

Interior Secretary Sally Jewell said the standards were a long-overdue update to U.S. rules for drilling on federal lands, outmoded since the widespread emergence of horizontal drilling in the past 10 years. She said they were “good for the public and good for industry.”

The administration has characterized the BLM action as a step towards balancing public health and safety concerns with regulatory certainty that should allow energy companies to proceed with responsible production. Industry groups and Republicans warned the rules would slow down the U.S. “energy renaissance.” The new standards require companies to submit detailed information about every proposed operation, including the location of faults and fractures, the depths of all usable water and the depth of estimated volume of fluid to be used.

Companies would disclose the components of the fracking fluids they use on an industry-run website called FracFocus. “A duplicative layer of new federal regulation is unnecessary,” said Eric Milito, a director at industry lobby group the American Petroleum Institute. “We urge the BLM to work carefully with the states to minimize costs and delays created by the new rules to ensure that public lands can still be a source of job creation and economic growth.” Wyoming Republican Senator John Barrasso called the BLM rules “a solution looking for a problem” since his and other western states already have regulations.

Madeleine Foot, a policy analyst at The League of Conservation Voters, praised some safety requirements in the rules, but said telling companies to use the industry-run website FracFocus failed to increase transparency about fracking practices.