Source: Law360, January 18, 2013
By: Daniel Wilson
The U.S. Department of the Interior announced Friday that it would delay a rule designed to tighten standards on the use of chemicals in hydraulic fracturing on public lands, amid widespread criticism over the proposed regulation from both industry and environmental groups.
According to the Bureau of Land Management, a DOI unit, it will use the delay to issue an improved version of the rule, following extensive feedback from stakeholders and the public. The changes will enable greater coordination with existing state practices, maximize flexibility and ensure that hydraulic fracturing, or fracking, operators on public lands implement “best practices,” the agency claims.
“As we continue to offer millions of acres of America’s public lands for oil and gas development, it is important that the public have full confidence that the right safety and environmental protections are in place,” DOI spokesman Blake Androff said in a statement Friday.
The updated rule will keep the main components of the initial proposal, including requirements for oil and natural gas operators to disclose fluids used in the fracking process and ensure safe well construction to prevent fluids escaping, as well as a requirement to implement plans to properly dispose of wastewater that flows back to the surface, according to the BLM.
The agency had already been developing revisions to the draft rule to incorporate suggestions and respond to concerns it had received before public comments closed in September, it said. Those revisions will be submitted to the White House Office of Management and Budget next week for review, with a new draft proposal to be released within the first quarter of 2013, according to the BLM.
The American Petroleum Institute, which had been critical of the initial proposal, warily praised the decision to withdraw the rule in a statement Friday, calling it a “positive first step.”
“However, the real test will be in the substance of the re-proposal,” API CEO Jack Gerard said. “The shale energy revolution is reshaping America’s energy future. We hope the administration will … take sufficient time to review the many thoughtful comments provided by the oil and natural gas industry and others.”
The rule, first proposed in May 2012, is meant to update guidelines for fracking on public and Native American lands, which haven’t undergone a major revision since the late 1980s. It marks the government’s first attempt to require disclosure of chemicals used in fracking on those lands.
Use of the process — which involves blasting shale rock with water, sand and small amounts of chemicals — has been increasingly popular in recent years, enabling operators to unlock previously unextractable reserves of domestic natural gas and oil. The increasing use of the process has prompted a backlash, with claims of potential environmental damage and contamination of local water supplies and aquifers.
The proposal was originally open for public comment until mid-July 2012, putting the rule on track to be finalized by year end, but the comment period was extended amid a flood of feedback. The DOI eventually received more than 170,000 comments, according to the agency.
Criticism of the rule has come from a number of fronts, including industry groups, environmental groups and lawmakers from both major parties.
Republican lawmakers have argued that the proposed rule would be a major burden on industry and impede development, and should be dropped altogether, while industry groups have stated that the rule fails to take into account the constant evolution of practices within the industry and would soon be obsolete. Also, the rule’s disclosure requirements could clash with similar state requirements, putting an unfair burden on operators or making federal overview redundant, the industry groups claim.
Environmental groups and Democratic lawmakers have also been critical toward the disclosure requirements, but have instead argued that because the rule wouldn’t require operators to disclose chemicals used in the fracking process until after their operations finish, the requirements have no teeth.
–Additional reporting by Derek Hawkins and Keith Goldberg. Editing by Rebecca Flanagan.