WASHINGTON -- President Barack Obama's administration on Friday issued the first federal regulations for hydraulic fracturing since the drilling technique fueled a domestic energy boom, requiring extensive disclosures of the chemicals used on public land.
After years of debate and delay, the Bureau of Land Management said drillers on federal lands must reveal the chemicals they use, meet well-construction standards and safely dispose of contaminated water used in hydraulic fracturing, also known as fracking.
"This rule will move our nation forward as we ensure responsible development while protecting public land resources," Interior Secretary Sally Jewell said. "As we continue to offer millions of acres of America's public lands -- your lands -- for oil and gas development, it is critical that the public has confidence that robust safety and environmental protections are in place."
The rules had been anticipated by drillers, who oppose added regulation, and by environmentalists. Both sides had complaints with the outcome: Groups representing the oil and gas industry sued to block its implementation, and an environmental group said the regulation favored industry over public health.
The fracking boom has put the United States on track to soon become the world's largest oil and gas producer. But environmentalists fear that the technique, which involves injecting a cocktail of chemicals deep underground to break up the rocks around oil and gas deposits, could contaminate surrounding water supplies and wildlife.
Domestic production from more than 100,000 wells on public lands accounts for about 11 percent of U.S. natural-gas production and 5 percent of oil production. Fracking is used for about 90 percent of the wells on federal lands.
As the practice of fracking has soared, fights over how and whether to regulate it have broken out across the country. Some states, such as New York, have banned fracking. Others, such as Colorado, have imposed some safety regulations, and still others have no regulations on the practice.
The states have jurisdiction over drilling on private and state-owned land, where the vast majority of fracking is done in the United States. The new federal rules, by contrast, will cover only the oil and gas wells drilled on public lands, according to the Interior Department.
Still, Obama administration officials said they hope the federal rules will serve as a standard for state legislatures grappling with their own regulations.
"Current federal well-drilling regulations are more than 30 years old, and they simply have not kept pace with the technical complexities of today's hydraulic fracturing operations," Jewell said.
Jewell, who oversaw the creation of the rules, is a onetime engineer for Mobil Oil Corp., where she personally supervised fracking operations. She also was an advocate for environmental protection as chief executive of the outdoor equipment and apparel company REI.
The rules, set to take effect in three months, triggered criticism from environmental groups, which said the regulations put industry interests ahead of public health, and from congressional Republicans and the oil and gas industry, who oppose further regulation.
The Independent Petroleum Association of America and the Western Energy Alliance filed a lawsuit against the Interior Department, saying the regulations are the product of "unsubstantiated concerns," and lack evidence necessary to sustain them. The group asked in a lawsuit filed Friday in a U.S. court in Wyoming to have the new rules declared invalid.
Kathleen Sgamma, vice president for government and public affairs at the Western Energy Alliance said the regulations will greatly add to companies' costs.
"Interior's $5,000 a well cost estimate is laughable," she said.
The final rules add costs atop those estimated at $97,000 a well in the group's review of the proposed regulation, she said.
The rules will exacerbate a flight by drillers from public lands to private property governed by simpler, more predictable state regulation, according to Mark Barron, a Denver-based attorney with Baker & Hostetler LLP.
That could cost local jobs and federal revenue, said Barron, whose law firm represents the industry groups that are challenging the rule.
The new regulations don't take effect for at least 90 days, and Barron said the groups may ask for an order blocking them altogether.
The rules provide "no public benefit," Baker & Hostetler said in a statement. A provision requiring disclosure of proprietary well design and geological information is at odds with federal law, he argued.
Senate Energy and Natural Resources Committee Chairman Lisa Murkowski, R-Alaska, said Friday that the rules may "make it even harder to produce oil and gas" on public lands.
The rules add "unnecessary, duplicative red tape that will in turn make it more costly and arduous for our nation to pursue energy security," Sen. James Inhofe, an Oklahoma Republican and chairman of the Environment and Public Works Committee, said.
Inhofe on Thursday introduced legislation to keep regulation of fracking under state oversight.
Some environmental groups praised the final rules Friday because they include pressure testing each well before production begins and would require millions of gallons of wastewater be stored in tanks, rather than open pits.
"One bad apple can spoil the barrel and similarly, one bad operator can ruin an aquifer," said Kate Zimmerman, public lands policy director for the National Wildlife Federation, in a statement. "That's not a chance we are willing to take."
Other environmental groups said the rules fall short, pointing to fracking mishaps they said have led to contamination of water supplies in communities from Wyoming to Pennsylvania.
They urged the federal government to tighten its earlier plans on exemptions for chemical disclosure and the use of open pits to dispose of flow-back water.
"These rules put the interests of big oil and gas above people's health and America's natural heritage," said Amy Mall, who directs the fracking advocacy at the Natural Resources Defense Council. "The bottom line is: These rules fail to protect the nation's public lands -- home to our last wild places and sources of drinking water for millions of people."
Under the bureau's plan, drillers must disclose the chemicals they use to the industry-supported website, fracfocus.org. As a result of those filings, the bureau will become the largest consumer of that website, and will attempt to improve it so that it's of better use to the public, the agency said.
Environmental advocates said it was a mistake to rely on that website before the improvements were agreed to and in place.
"Fracfocus has said it will be making improvements, but we have concerns," Mall said.
Environmental groups also are prodding the Environmental Protection Agency and the Bureau of Land Management to issue tight restrictions on methane leaks from fracked wells, a source of greenhouse gases.
The bureau, the largest landowner in the U.S., oversees about 700 million acres of mineral rights underground. Farmers or ranchers own the surface rights on large tracts of federal land.
Information for this article was contributed by Mark Drajem, Jim Polson and Andrew Harris of Bloomberg News and by Coral Davenport of The New York Times.
A Section on 03/21/2015
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