Federal Regulations Will Restrict Energy Development on America’s Public Lands

May 4, 2012

Duplicative Interior Regulations Will Cost Western Jobs & Investment

(DENVER)- Western Energy Alliance warned today that new rules announced by the Bureau of Land Management (BLM) will slow western energy development with redundant regulations on hydraulic fracturing (fracing), further disadvantage public and tribal lands, and divert much needed jobs, revenue, and economic activity from western states and local communities.

These new rules are duplicative with current state regulations, which have successfully regulated fracing for over sixty years, including on public lands, without any incidence of contamination of underground drinking water. Western Energy Alliance strongly supports state regulation of fracing rather than a one-size-fits-all federal approach.

"Western energy producers already face excessive bureaucratic hurdles when developing American energy on public lands," said Kathleen Sgamma, Vice President of Government and Public Affairs. "Since nearly every well drilled in the West requires the use of fracing, these unnecessary new rules will only discourage the production of American energy."

"The new BLM rules will not add commensurate environmental protection, since fracing is already heavily regulated at the state level, but will seriously disadvantage western states compared to other regions of the country," said Sgamma.

Currently, state and federal permitting functions have many areas of overlap, and these rules will increase that redundancy. However, while states take on average thirty days to process a permit, BLM takes 298 days. The rules announced today will only increase that permitting inefficiency. These unnecessary delays will further increase energy costs and divert limited resources from investment that grows the economy.

"We believe BLM's economic analysis is inadequate," Sgamma said. "BLM claims to derive benefits of $12 to $50 million from reduced risk, yet since states are already ensuring safety and there have been no incidents on public lands, those benefits are overstated while the costs are grossly underestimated. Western Energy Alliance estimates that the costs will be about $127.2 million annually, and could range as high as $175.7 million. Since that exceeds the $100 million threshold for a major rule, we believe BLM needs to slow down and do a full economic analysis."

Key Facts:

  • Operators are already required to obtain state permits for all wells on federal lands, and must comply with all state regulations related to well construction and integrity.
  • States are better suited to ensuring the safety of fracing since they have the experience and understanding of the geology, hydrology, infrastructure, and other factors unique to each producing basin.
  • State regulators agree: the Ground Water Protection Council (GWPC), a body of state water quality regulators, environmental groups and industry, works hard to ensure state regulations are strong and protective of water quality. The Interstate Oil and Gas Compact Commission (IOGCC), a body of state oil and gas commissioners, works hard to ensure state regulatory programs are protective of the environment. IOGCC and EPA's STRONGER (State Review of Oil and Natural Gas Environmental Regulations) program reviews state regulations on an ongoing basis to ensure they properly regulate well construction, wellbore integrity, and other key components of fracing safety.
  • Industry and states have collaboratively responded to public concerns about the safety of the chemicals used in fracing. Companies have embraced voluntary disclosure of frac fluid components on FracFocus.org, a public registry, and many states require companies to disclose on FracFocus.org, or through their own processes. Western states have been leading the way: a majority have recently strengthened well integrity and disclosure requirements.
  • At a time of decreasing budgets and staff, BLM does not have the expertise and resources to implement a full new regulatory regime redundant with state efforts.
  • There have been no incidents on public lands that justify new federal regulations. The rush for new BLM regulations is especially premature, as EPA's scientific study to determine if federal fracing regulations are required is not yet complete. BLM should not move forward with regulations in advance of the science.
  • BLM has failed to transparently engage tribes and the oil and natural gas industry in the development of the rules. Tribes have publicly expressed concerns about the lack of a true consultation process.1 The rules would disproportionally impact tribes that rely on revenue from oil and natural gas development to sustain and grow their economies.


About Western Energy Alliance
Western Energy Alliance, founded in 1974 as the Independent Petroleum Association of Mountain States, is a non-profit trade association representing 400 companies engaged in all aspects of environmentally responsible exploration and production of oil and natural gas in the West. More information on Western Energy Alliance and its members is available at www.westernenergyalliance.org.

1 Examples include letters from the Three Affiliated Tribes of Ft., Berthold in North Dakota and the Ute Indian Tribe in Utah.