Scott Streater, E&E reporter
Published: Thursday, September 13, 2012
The U.S. Chamber of Commerce has added its voice to the growing chorus of business and industry groups calling on the Obama administration to withdraw a proposed rule regulating hydraulic fracturing on federal land.
The U.S. Chamber this week submitted comments to Bureau of Land Management acting Director Mike Pool stating that the new fracking regulations will hamper domestic energy production and stifle economic development as the nation continues to recover from the worst economic slump since the Great Depression.
Calling the proposed rule "deficient in several ways," the U.S. Chamber says BLM has not stated why the new regulation is needed or demonstrated that there is a regulatory gap that needs to be filled, which is "the minimum one would expect from the agency before proposing regulations, and without such a minimal foundation, it is premature to propose this rule," according to the comments submitted by the Institute for 21st Century Energy, the chamber's energy policy arm.
"The Institute urges BLM to withdraw the proposed rule and begin meaningful collaboration with the respective state oil and gas regulatory programs and multi-state organizations to determine whether potential regulatory gaps exist," according to the comments written by Karen Harbert, the Institute's president and CEO. "If BLM does propose a new rule, it must clearly describe and assess those gaps and explain why BLM is the appropriate regulatory body to remedy any such gaps. BLM must also craft compliance requirements that provide industry with predictability and certainty."
If not, the county will blow "a rare opportunity" to secure its energy independence and stimulate the sluggish economy, Harbert writes, pointing in her comments to a 2009 study by IHS Global Insight that found increasing regulations on hydraulic fracturing has the potential to reduce the number of wells drilled by 20 percent.
"The proposed rule contains serious flaws," Harbert concluded. "The Institute believes the proposed rule should be withdrawn."
The U.S. Chamber's comments are the latest in the ongoing debate over the proposed fracking rule released last spring. Among other things, the rule would require disclosure of chemicals used in hydraulic fracturing, as well as add requirements to prove that wells will not leak and that excess water can be managed.
A coalition of oil and gas industry trade groups, including the Independent Petroleum Association of America and the American Petroleum Institute, have submitted comments to BLM asking the agency to withdraw the proposed rule (E&ENews PM, Sept. 10). Meanwhile, a coalition of national environmental groups submitted comments this week criticizing the proposal for not doing more to protect natural resources on public lands (EnergyWire, Sept. 12).
Monday was the last day to formally comment on BLM's proposed rule.
Fracking is the technique of injecting water, sand and chemicals underground at high pressure to create fissures in tight rock formations and allow gas and oil to flow freely to the surface. The technique, combined with advances in horizontal drilling, has opened up huge oil and gas reserves from Pennsylvania to Texas that would otherwise be inaccessible.
Though the industry has used fracking for decades, massive drilling in shale formations -- particularly in New York and Colorado -- has sparked public fears that the chemicals used in the fracking process could contaminate drinking water supplies. U.S. EPA is currently studying whether fracking endangers drinking water.
The chamber has been heavily involved in promoting hydraulic fracturing, this summer launching a "Shale Works for US" campaign using television ads and outreach efforts to local business and community groups to counter the drumbeat of public concern over the potential air- and water-quality impacts of shale gas development associated with fracking (EnergyWire, July 19).
For example, in Ohio the campaign is promoting the fact that tapping the Marcellus Shale formation has the potential to create more than 65,000 jobs and pump nearly $5 billion into the state's economy.
"In light of President Obama's call for the continued exploration for natural gas, which is already creating jobs and stimulating economic growth, it is particularly disappointing to see BLM move forward with a rule that will do exactly the opposite," Harbert said in a separate statement released yesterday.
Harbert also said BLM has shown little interest in working with industry on the matter, and she chastised the Interior Department for not participating in the Interstate Oil and Gas Compact Commission (IOGCC) -- a governmental organization chartered by Congress to address issues such as fracking.
Interior Secretary Ken Salazar has yet to appoint an official representative to the IOGCC, according to the chamber.
"If the Department of Interior is truly interested in plugging whatever gaps may exist in the current regulatory structure, then the first thing it should do is to participate in the IOGCC to better understand the scope and effectiveness of various state regulatory regimes and mechanisms and work with the states -- not against them," she said in the statement. "The fact that it has not and that BLM has failed to enunciate which gaps the proposed rule is attempting to rectify in the first place suggests that this proposal is quite premature."
Click here to read the U.S. Chamber's comments.
Streater writes from Colorado Springs, Colo.