Energy firms seek limited US fracturing rules

A group of upstream oil companies met with administration officials to lobby for less stringent federal regulations on hydraulic fracturing activities on federal land, saying the proposed rules are too expensive and will curb oil and gas production.

Several US upstream oil companies, including ExxonMobil, Chevron, Hess, Marathon and Occidental, as well as industry lobbying organization the American Petroleum Institute (API), met the administration officials on 6 October to discuss the US Bureau of Land Management's proposed fracturing rules. The proposed BLM rule would require companies drilling on BLM or tribal land to list which chemicals are used in fracturing fluid, as well as to test and monitor the integrity of wells.

An API handout accompanying a White House Office of Management and Budget (OMB) public notice of the meeting says the rules are "unnecessary and duplicative" and will "increase costs, delay permitting, and slow domestic energy production." The handout also says BLM's proposed rule violates several executive orders by not including an appropriate assessment of its economic effects.

BLM initially proposed its fracturing rule in 2012, but proposed a revised rule in May 2013. The revised rule allows permit holders to use FracFocus, a public database that producers and operators use to volunteer the chemical composition of fracturing fluid, to meet disclosure requirements. The revised rule also allows statewide variances to be issued in states with regulations that are equal to or more restrictive than the federal rules.

API said that though the revised rule improved on the 2012 proposed rule, the rule should be changed further. Specifically, the rule requires setbacks and other protections for "usable water," but relies on an excessively broad definition of usable water that would require companies to protect undrinkable water supplies, a considerable expense. The rule also should be changed to use cement performance standards as the baseline for determining whether a well is adequately safe, API said.

The White House Office of Management and Budget's (OMB) unified agenda indicates that it was scheduled to approve BLM's final rule in September. OMB approval is the final step in the regulatory review process before a federal agency publishes a rule.

jh/tdf

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