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Energy Firms Lobbying to Block BLM Rule

Energy Firms Lobbying to Block BLM RuleEnergy Firms Lobbying to Block BLM Rule

Representatives of Exxon Mobil Corp., Halliburton, Chesapeake Energy Corp. and other oil and gas producers met with White House officials and urged them not to proceed with a final rule to regulate hydraulic fracturing on federal and Indian lands, Bloomberg reported.

The rule, which was proposed by the Interior Department's Bureau of Land Management (BLM) and is being vetted by the White House Office of Management and Budget, will have significant impacts on the industry.

“The BLM rule adds an unnecessary and duplicative layer of regulation on top of the already strong and stringent state regulation of hydraulic fracturing,” the document said. “This added layer will increase costs, delay permitting, and will slow domestic energy production all at the expense of the American taxpayer.”

The rule (RIN 1004-AE26) has been in the works since 2012 after increased use of fracking stoked fears of water pollution from oil and gas development. It focuses on wellbore integrity, fracking fluid chemical disclosure and issues related to flowback water, which is the water that comes out of a well along with oil or natural gas.

The rule has been under review at OMB since late August. In a concession to oil and gas companies, the Bureau of Land Management has proposed requiring drillers to disclose the chemicals they pump underground only after the work is done and through the industry-backed website FracFocus, rather than setting up a government-run disclosure system. But that decision has been battered by environmentalists who say the website is deficient. Both oil companies and environmentalists have major complaints with the rule. Oil industry leaders insist that the mandates are unneeded and would be costly.

  $1m per Well Increase

According to the API, a provision in the proposed regulation defining “usable” water “continues to be vague and overly broad” and compliance could increase costs by more than $1 million per well.

“These costs are ignored by BLM in its own analysis and calls into question the agency's entire cost analysis,” the API said in the handout. A revised version of the rule, released by the Interior Department in May 2013, represents an improvement over the initial proposed rule in 2012, the API said, adding that aspects such as the use of the online database FracFocus.org to disclose chemicals used in fracking fluid should be retained in the final version. Hydraulic fracturing, in which water, sand and chemicals are pumped under pressure to create cracks in layers of rock so that oil or gas can flow to a well, is the drilling technique that is responsible for the recent energy boom that has led the US to become the largest gas producer in the world. US oil production has increase by 65 percent in the past five years, according to Bloomberg News.

Financialtribune.com