Interior floats new draft rules to regulate oil-and-gas ‘fracking’

The Interior Department floated plans Friday to regulate the controversial oil-and-gas extraction method dubbed “fracking” on federal lands, drawing quick attacks from industry groups that said the requirements aren’t needed.

Environmental groups welcomed the new oversight but called the proposal too weak.

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The long-awaited draft plan requires drillers to disclose chemicals used when employing hydraulic fracturing, the method that’s enabling an oil-and-gas production boom in a number of states but bringing concerns about water pollution alongside it.

But the plan does not require disclosure ahead of the fracking process, which environmentalists call a major gap in the proposal.

The plan from Interior's Bureau of Land Management also contains requirements on oil-and-gas well integrity to verify that fluids from the fracking process aren’t escaping into nearby water supplies, and requirements for management of large volumes of so-called flowback water.

Fracking involves high-pressure injections of water, chemicals and sand into shale formations to open seams that enable hydrocarbons to flow.

Industry groups say state oversight is sufficient.

“State regulatory bodies have repeatedly proven that they have the understanding of their state’s own unique geologic conditions, the on-the-ground expertise needed to oversee this important work, and most importantly, the ability to respond to rapid change,” said Tom Amontree, the executive vice president of America’s Natural Gas Alliance.

“The proposal as drafted would create reporting requirements, regulatory impediments and certifications that could substantially affect the ability to produce resources that are placed in the BLM's stewardship for the benefit of all Americans,” he said.

The Independent Petroleum Association of America said the rules “will undoubtedly insert an unnecessary layer of rigidity into the permitting and development process.”

Green groups including Earthjustice and the Natural Resources Defense Council said the rules don’t go far enough in some critical areas.

Earthjustice said the disclosure requirements are inadequate, noting that the disclosure is only mandated after the fracking has occurred.

“The proposed rule does not require fracking companies to disclose chemicals before they are pumped into the ground — a critical measure that would give nearby communities time to test and monitor water supplies for any fracking-related water pollution,” said the group.

The Obama administration has walked a fine line politically on oil and gas, seeking to show it’s strongly supportive of both expanded production and strong environmental protections.

Interior Secretary Ken Salazar called it a “common-sense” proposal.

“As we continue to offer millions of acres of America’s public lands for oil and gas development, it is critical that the public have full confidence that the right safety and environmental protections are in place,” Salazar said in a statement. 

“The proposed rule will modernize our management of well stimulation activities — including hydraulic fracturing — to make sure that fracturing operations conducted on public and Indian lands follow common-sense industry best practices,” he said.

Capitol Hill Republicans and Mitt Romney, the likely GOP White House nominee, have attacked White House efforts to boost regulation of fracking. 

House Natural Resources Committee Chairman Doc Hastings (R-Wash.) called the plan “duplicative” of state-level requirements and “unnecessary,” and said through an aide that he’s likely to hold a hearing on the proposal.

Interior officials say they plan to finalize the rules by the end of the year.

The rules are just one part of a wider battle over fracking occurring nationally and in individual states.

Much of the boom in oil and natural gas has been occurring on private and state lands in Pennsylvania and elsewhere, which limits the reach of the proposal, although Interior oversees huge tracts of federal lands in many states where energy production is common, such as Colorado, Wyoming and New Mexico.

The consulting firm ClearView Energy Partners, in a note Friday, said the rule would cover roughly 13 percent of U.S. natural gas production and less than six percent of onshore oil production.

But ClearView predicts that if President Obama wins another term, the administration could "pursue similar regulatory objectives to govern all fracking operations."

—This post was updated at 11:49 a.m. and 6:11 p.m.