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House Panel Blasts BLM Director Over Frack Rule; Wyoming Sues

Less than one week after the Department of Interior (DOI) issued its long-awaited rule for hydraulic fracturing (fracking) on public and tribal lands, members of a U.S. House panel used an oversight hearing Thursday as an opportunity to grill Bureau of Land Management (BLM) Director Neil Kornze over what they perceive as the rule's shortcomings and overreach.

Meanwhile, Wyoming became the first state to challenge the new rule, after the state's attorney general’s office filed a complaint in federal district court on Thursday.

Under the rule issued last Friday (see Shale Daily, March 20), oil and gas operators will be required to use the FracFocus registry to disclose the chemicals used in fracking and use above-ground tanks to temporarily store produced water.

Although Kornze appeared before the House Subcommittee on Energy and Mineral Resources to talk about the BLM's request for $1.2 billion in the FY 2016 budget, the discussion quickly switched to the new fracking rule, which seemed to stir the ire of Democrats and Republicans alike.

“We have it under control in Colorado, and there's really bipartisan cooperation to continue looking at regulations on an ongoing basis," said Rep. Doug Lamborn (R-CO), chairman of the subcommittee. "I'm just distressed that you felt it was necessary to take over what the states were already doing a good of job of [doing]. I'm very disappointed. We've been fighting this battle for several years.

"My ranking member admits that the rule doesn't do very much; he wishes it would do more. And you've said industry is largely already doing this, so the rule wasn't even really necessary. The states are doing a good job, and where they're not you could have stepped in. I'm just very disappointed. I think this is going to cost jobs and cost energy security."

Rep. Matt Cartwright (D-PA) said he thought the rule didn't go far enough, citing loopholes in existing federal law with regard to runoff and hazardous waste from oil and gas drilling sites. He said water quality issues were of paramount importance to his constituents.

"This highlights what I see as the main problem with the new rule: You've done what you can under the authority that you have, but that's largely limited to how wells are constructed," Cartwright said. "The impact of fracking goes way beyond that, and all of these issues have to be addressed if the public is going to have any assurance that these operations are done safely.

"We can't keep leaving these complicated issues to the states. [It will] create a patchwork of regulation that only leads to a race to the bottom."

According to U.S. District Court for the District of Wyoming records, the Wyoming Attorney General's Office filed a complaint Thursday over the rule, and asked the court to set it aside. The complaint names the DOI, BLM, Kornze and DOI Secretary Sally Jewell as defendants [Case No. 2:15-cv-00043-SWS].

"The BLM's rule...exceeds the agency's statutory jurisdiction, conflicts with the Safe Drinking Water Act, and unlawfully interferes with the State of Wyoming's hydraulic fracturing regulations," the complaint said. Specifically, the state said the rule went beyond the powers granted to the DOI and BLM through the Federal Land Policy and Management Act (FLPMA) and the Mineral Leasing Act (MLA).

Moments after the rule was announced last Friday, Baker & Hostetler LLP filed a lawsuit on behalf of the Independent Petroleum Association of America (IPAA) and the Western Energy Alliance (WEA) to block the rule from taking effect, the law firm said. That lawsuit was also filed in U.S. District Court for the District of Wyoming.

"Wyoming's interest in this lawsuit is obvious," said Mark Barron, one of the attorneys representing IPAA and WEA in their case. "The state's leadership in regulating oil and gas development, and particularly the process of fracking, disproves the myth of the regulatory gap upon which DOI's final rule is premised. Wyoming's willingness to fight these regulations in federal court is evidence of the extent to which DOI's action represents regulatory overreach and an untenable infringement on state sovereignty."

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