Obama administration issues fracing rules for federal lands

MARK DRAJEM

WASHINGTON, D.C. (Bloomberg) -- The Obama administration issued the first federal regulations for fracing 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 on Friday said drillers on federal lands must reveal the chemicals they use, meet certain well construction standards, and safely dispose of contaminated water that flows back from fraced wells.

The oil and gas industry said the rule isn’t necessary because state regulations already govern hydraulic fracturing.

“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 rule from the Interior Department agency had been closely watched by drillers because the standards will become a model for state regulations. Domestic production from more than 92,000 wells on public lands accounts for about 11% of U.S. natural-gas production and 5% of oil production.

Fracing Wells

Hydraulic fracturing is a technique in which water, chemicals and sand are shot underground to free oil or gas from rock. It is used for about 90% of the wells on federal lands.

“Despite the renaissance on state and private lands, energy production on federal lands has fallen, and this rule is just one more barrier to growth,” Erik Milito, director of upstream operations for the American Petroleum Institute in Washington, said in a statement.

Environmental groups such as the Natural Resources Defense Council say fracing mishaps have led to contamination of local water wells in communities from Wyoming to Pennsylvania. They urged BLM to tighten its earlier plans on exemptions for chemical disclosure and the use of open pits to dispose of flowback water.

They are also prodding the Environmental Protection Agency and BLM to issue tight restrictions on methane leaks from fraced wells, a source of greenhouse gases.

BLM, 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.