U.S. Senate subcommittee members on Thursday took turns criticizing the federal Bureau of Land Management's (BLM) new rule for hydraulic fracturing (fracking) on federal and tribal lands as unnecessary and an example of federal government overreach during a hearing in Washington, DC. The new requirements are set to take effect June 24.
High-production states, such as North Dakota, Wyoming and Colorado, have pushed back on the BLM new rule and warned that production will suffer on federal/tribal lands (see Shale Daily, April 18; April 14, 2014).
BLM Director Neil Kornze was on the hot seat for more than an hour as part of a panel that included two critics of the new federal fracking rules: Wyoming Oil/Gas Supervisor Mark Watson and the Western Energy Alliance's (WEA) Kathleen Sgamma. Both answered questions from subcommittee members affirming that the BLM rules have and will discourage oil and natural gas production on federal and Native American lands.
Sgamma, WEA vice president for government and public affairs, said the fundamental question hanging over the BLM fracking rule is "whether we as a nation want to encourage continued responsible energy development on the vast, multiple-use public lands, or do we want to shut it down?"
At one point in response to a senator's question, Watson said the new BLM rule will actually be less transparent than Wyoming's current state regulations governing fracking. In this regard, Kornze did not argue the point, adding that the federal agency currently has a "very old [information] system using paper files in most offices."
BLM is working on an electronic, online permit application system it hopes to have operational by the end of the year, Kornze said.
Subcommittee Chair John Barrasso (R-WY) and other members kept raising questions about why BLM concluded a federal fracking rule is needed when states with substantial oil/gas production already have regulations in place. "In addition to the [fracking] rule, the Obama administration plans to issue three other major rules for oil/gas on federal lands," Barrasso said in opening remarks.
The fracking regulations combined with the other plans "put Wyoming and the West at an even greater disadvantage to other areas of the country," Barrasso said.
In response to questioning by Sen. Steve Daines (R-MT), Kornze conceded that in some cases, such as Wyoming, Colorado and others, state regulations regarding fracking are tougher than BLM's standards.
"We in Montana updated our fracking rules in 2011, and we have some of the most robust chemical disclosure rules in the country," Daines said. "Why does the federal government have a better way to do it?"
The BLM head said the agency wants to sit down with each state and identify differences, if any, between the federal and state regulations. "My guess is that if you do have one of the most forward-looking disclosure rules, then our rule will not change the standards you [in Montana] have to follow." He reiterated that the federal agency has a responsibility to the entire nation, however.
"Since l981, BLM has updated 37 different oil and gas regulations, so to us, updating on a nationwide scale is nothing new," Kornze said. "Some states are ahead of us, but there is nothing fundamentally different about the rule and how it will work." He said about 25 states have no rules in place on fracking.
Wyoming's chief oil/gas regulator, Watson, said so far BLM hasn't imposed any fracking rules, so the state has imposed its rules on federal and tribal lands in the past five years.
Kornze tried to assure the skeptical senators that the BLM rules on fracking are "not onerous and are common sense" approaches. Montana's Daines said his constituents "don't believe it" when federal officials say something is not onerous.
Sen. Mike Lee (R-UT) asked why a national standard is necessary after BLM's Kornze said that no states were found to be inadequate in terms of their oversight of fracking. Kornze said only about half of the states that have oil/gas on federal and tribal lands have established fracking rules.
Kornze said that when state standards exceed BLM standards in certain areas, the state standards will apply rather than that part of the new fracking rule on federal/tribal lands.
Lee said the BLM rules concern him because he thinks they are "a solution in search of a problem," contending that the BLM chief did not cite a single problem with a single state's regulations.