Shale Daily / NGI All News Access

House Bill Bars Interior from Enforcing Federal Frack Rules

The House Natural Resources Committee Wednesday voted out a bipartisan bill that would prohibit the Department of Interior from enforcing federal hydraulic fracturing (fracking) regulations.

By a vote of 23-15 the bill, sponsored by Rep. Bill Flores (R-TX), cleared the panel and is now headed to the House floor. In addition to limiting the Obama administration's ability to impose duplicative regulations on fracking on federal lands, the House committee approved an amendment offered by Rep. Markwayne Mullin (R-OK) to protect tribal nations from being forced to follow federal fracking regulations on their lands.

The legislation (H.R. 2728), the Protecting States' Rights to Promote American Energy Security Act, would bar Interior from enforcing federal fracking regulations in any states that already have regulations and it recognizes states' authority to regulate the activity.

Even opponents of fracking have been hard pressed to cite the negative impacts of fracking on groundwater and/or air, which for years has been regulated by states without incident. Nevertheless, Interior in May unveiled a federal draft rule related to fracking on public lands. The draft made some concessions to industry, including it would continue reliance on the state and industry-led development of a central point of disclosure for chemicals used in fracking.

Interior's Bureau of Land Management (BLM) said it is working closely with the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission "so that operators may report chemicals used in hydraulic fracturing operations to BLM through the existing FracFocus.org website [hosted by the two organizations], which is already well established and used by many states."

In a separate Senate hearing Wednesday addressing the principles for energy tax reform, Sen. Jerry Moran (R-KS) called for the increased use and modernization of master limited partnerships (MLPs) to spur production of renewable fuels, as well conventional and unconventional oil and gas.

"These are efficient structures for raising capital," and the oil and gas industry has successfully used MLPs over the years, he said. MLPs most recently fueled the shale development, Moran told a Senate Finance Committee subcommittee.

Sen. Chris Coons (D-DE) and Moran have introduced legislation to level the energy playing field by giving investors in renewable-energy projects access to a decades-old tax advantage now available only to investors in fossil fuel-based energy projects.

Will Coleman, a partner with OnRamp Capital in San Francisco, CA, said that continued innovation in technology is critical for future oil and natural gas development. "If we are to remain competitive, we need more Bakken Shales."

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