Watching Government: Delay or not, comments on way

July 2, 2012
The US Department of the Interior announced June 22 that it would accept comments on its proposed onshore hydraulic fracturing regulations for another 60 days.

The US Department of the Interior announced June 22 that it would accept comments on its proposed onshore hydraulic fracturing regulations for another 60 days. Then it unofficially explained why this was not a delay when some groups characterized it as such.

The Industrial Energy Consumers of America, for example, said it was a White House decision to delay the US Bureau of Land Management's proposed rules. US manufacturers have benefited directly from low natural gas prices as a result of fracing, IECA Pres. Paul N. Cicio said.

Suggesting that the proposed regulations could slow down drilling permit approvals and make production rates fall, Cicio said, "It is of great concern that BLM provides no supporting scientific data on hydraulic fracturing, well stimulation incidents, or problems that justify new overarching regulation. Without these findings, new regulations cannot be justified."

Interior's sensitivity showed how controversial the idea of federally regulating fracing on onshore federal and tribal land has become. Deciding to extend the comment period was in no way a delay, but would simply allow more time for stakeholders to respond, one source told OGJ. "This is a common and routine step in the rulemaking process when public interest is high," he explained.

Three oil and gas associations clearly recognized this. That didn't stop them from reiterating their concerns that the proposed rules could cost their members large amounts of money.

'Extraordinarily complex'

"This proposed rule is extraordinarily complex with the potential to negatively impact exploration and production operations on these lands through redundant regulation and extended permitting time, resulting in fewer jobs and reduced revenues to the federal treasury, all for no public benefit," warned American Exploration & Production Council Pres. Bruce Thompson.

In addition to producers, a number of states also requested an extension because the proposed regulation is complex and potentially would have a negative economic impact, he noted. "The additional time will allow all parties to this conversation the opportunity to continue the dialogue and to more fully evaluate the operational, technical and economic impacts of the proposed rule and to allow for a full economic analysis," Thompson said.

Julia Bell, public and industry affairs manager for the Independent Petroleum Association of America, said IPAA previously asked US Sec. of the Interior Ken Salazar for an extension and would use the time to consult with its members about the proposed regulations.

Kathleen Sgamma, the Western Energy Alliance's vice-president of government and public affairs, called the extension a step in the right direction. BLM still hasn't acknowledged that a thorough economic analysis is required for major rules potentially costing $100 million or more, she added.

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About the Author

Nick Snow

NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.