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Trump Administration Moves to Scrap BLM Fracking Rule

Days after the Trump administration unveiled plans to repeal, review or rescind hundreds of regulations, the Interior Department's Bureau of Land Management added another to the pyre: its rule governing hydraulic fracturing (fracking) on public and tribal lands.

In a 33-page document scheduled for publication in Tuesday's edition of the Federal Register, the BLM said it plans to rescind the rule "because we believe it is unnecessarily duplicative of state and some tribal regulations and imposes burdensome reporting requirements and other unjustified costs on the oil and gas industry."

BLM said it would take public comments over its plans to rescind the rule, which was first unveiled in 2015, for 60 days after its publication.

The move follows an executive order (EO) signed by President Trump on March 28. The EO included a directive for the BLM to review, rescind or revise the fracking rule, also known as "Oil and Gas: Hydraulic Fracturing on Federal and Indian Lands." Interior Secretary Ryan Zinke also issued a secretarial order that called for the rule's review.

"Upon further review of the 2015 final rule...the BLM believes that the 2015 final rule unnecessarily burdens industry with compliance costs and information requirements that are duplicative of regulatory programs of many states and some tribes," the BLM said. "As a result, we are proposing to rescind, in its entirety, the 2015 final rule."

The BLM said a regulatory impact analysis found the rule could shoulder the oil and gas industry with at least $32 million in annual compliance costs, but the costs could potentially be as high as $45 million/year.

The rule would require oil and gas operators to use the FracFocus registry to disclose the chemicals used in fracking and use above-ground tanks to temporarily store produced water, among other things. However, U.S. District Court Judge Scott Skavdahl ruled in June 2016 that BLM does not have the authority to regulate fracking. The government subsequently filed an appeal.

Last March, the U.S. Court of Appeals for the Tenth Circuit Court in Denver gave the Trump administration one week to decide whether it wanted to continue defending the rule in court. Attorneys for the BLM said the Obama-era rule did not reflect the Trump administration's priorities and asked the court to postpone a pair of cases over the rule. The court granted the request, postponing oral arguments until Thursday.

Environmental groups, which support the rule, had urged the court to deny BLM's request. They argued that the issue of whether the BLM has the authority to regulate fracking on public lands has far-reaching consequences and should be decided by the court.

Appellees in the cases include Colorado, North Dakota, Utah and Wyoming; the Ute Indian Tribe of the Uintah and Ouray Reservation; and the Independent Petroleum Association of America (IPAA) and the Western Energy Alliance (WEA).

"The petitioners are pleased that Interior has finally recognized that the hydraulic fracturing rule published in 2015 was unnecessary to ensure that hydraulic fracturing is conducted safely and responsibly," attorney Mark Barron of Baker & Hostetler LLP representing IPAA and WEA, told NGI's Shale Dailyon Monday. "From the beginning, the rule has imposed costs on operators -- overwhelmingly small and independent operators -- without any commensurate environmental benefit. Today's action is a prudent move that promotes state sovereignty and economic integrity."

The legal dispute involves two companion cases: State of Wyoming et al v. Zinke et al [No. 16-8068] and State of Wyoming et al v. DOI [No. 16-8069].

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