API, US Chamber separately question proposed federal fracing rules

Two more business associations joined US independent oil and gas producers in telling the US Bureau of Land Management that proposed hydraulic fracturing regulations would needlessly increase working costs on federal onshore lands.

BLM has not even successfully made the case that federal fracing rules are necessary, the American Petroleum Institute and the US Chamber of Commerce’s Institute for 21st Century Energy separately said in Aug. 23 filings. It was the final day on which the US Department of the Interior agency accepted comments on its revised proposal.

The Independent Petroleum Association of America and the Western Energy Alliance made similar points when they jointly submitted their comments a day earlier (OGJ Online, Aug. 22, 2013).

In API’s comments, Erik Milito, the organization’s upstream and industry operations group director, said BLM’s proposed fracing regulations address issues that present no demonstrated risks based on actual data or agency experience, and significantly conflict with existing federal and state regulations.

The proposals also exacerbate well-documented permitting and production delays, impose definitions and standards that ignore local hydrology and geology, and establish vague and conflicting guidelines that would result in annual costs ranging from $30 million to $2.7 billion, he indicated.

‘No clear benefit’

“BLM has taken steps to improve its proposal from last year, and it wisely follows the lead of states that have already adopted FracFocus to improve transparency,” Milito said. “But there is still no clear benefit to imposing additional federal rules on top of state environmental stewardship.”

Comments submitted by the Chamber’s energy institute reached a similar conclusion. “While the revised rule does reduce economic impact, the rule fails to add environmental value commensurate with the cost,” said Karen A. Harbert, the institute’s president.

“The rule adds requirements intended to reduce the risk of a contamination event; however, state regulations already protect underground sources of drinking water,” she continued. “The additive requirements of the BLM proposed rule have not been shown to further reduce risk. but the requirements clearly increase the cost of drilling wells.”

Higher costs will lead to fewer wells being drilled on federally managed onshore land, and the institute recommends that BLM withdraw its latest proposal, Harbert said.

Contact Nick Snow at nicks@pennwell.com.

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