by Taylor Darby, a 2013 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech School of Law.
In what could be called a second bite at the apple, the Department of Interior has released a revised draft proposal regarding hydraulic fracturing on all public and Indian lands. An initial proposal was released in 2012 but was subsequently withdrawn following criticism from both sides of this debate, including oil and gas associations as well as environmental groups. The proposal flatly states that “[t]he estimated cost range[s] from $12 million to $20 million per year,” while also admitting that the cost variance reflects the “uncertainty about the generalization of costs across all hydraulic fracturing operations.” (43 CFR 3160). Criticisms remain the same with regards to the “uncertain” costs, as well as for the regulation’s purpose and rationale to begin with.
Released on May 16th,the DOI’s new proposal gives the Bureau of Land Management (“BLM”) vast control to ensure “that hydraulic fracturing operations . . . follow certain best practices.” 43 CFR 3160. These “certain best practices” include three objectives aimed to ease “public concern” from the expansion of hydraulic fracturing: (1) public disclosure of chemicals used; (2) wells used meet appropriate construction standards; and (3) requiring operators to have a plan to manage flowback waters. The regulations are “designed to reduce the environmental and health risk that can be posed by hydraulic fracturing operations. . .” 43 CFR 3160. Essentially, this shows that this costly proposal is driven by “public concerns” rather than actual harm and actual risk.
Most states with shale “plays” have already moved forward with balanced fracturing regulation, leaving many to wonder why BLM is trying to implement such regulations at all. Erik Milito, director of upstream operations for the American Petroleum Institute, provides that “[s]tates have led the way in regulating hydraulic fracturing operations while protecting communities and the environment for decades . . . [w]hile changes to the proposed rule attempt to better acknowledged the state role, BLM has yet to answer the question why [it] is moving forward with these requirements in the first place.”
It may appear that these regulations are on the right track, but they merely frustrate, complicate, and duplicate already existing state regulations while failing to provide an adequate solution. Barry Russell, President of Independent Petroleum Association of America, points out that “the rule solves no existing problem, but creates additional burdens for independent producers and state regulators . . . If [DOI] believes there are gaps in state regulations of oil and gas, [it] should work with the states to implement changes rather than imposing a costly and burdensome rule on independent producers.”
The regulations proposed are limited in scope and cover only about a tenth of the country’s onshore oil and gas production – a “small sliver” of the country’s land under the DOI’s control. But regardless of this proposed regulation’s scope, the implications themselves are far reaching – they fracture the door open for additional federal regulations to apply on private lands.