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Senate Energy Panel Quizzes BLM Nominee on Fracking Rule

A quartet of nominees for positions at FERC, the Energy Information Administration (EIA) and the Interior Department appeared before the Senate Energy and Natural Resources Committee Tuesday to answer questions about hydraulic fracturing (fracking) and other issues as part of their confirmation process.

The panel heard testimony from Tony Clark, who currently is chairman of the North Dakota Public Service Commission and is being considered to replace former Federal Energy Regulatory Commissioner Marc Spitzer, who stepped down in December; John Norris, a former chair of the Iowa Utilities Board who is up for renomination to FERC; Adam Sieminski, chief energy economist for Deutsche Bank, who has been nominated to be EIA administrator; and Marcilynn Burke, deputy director for policy and programs at the Bureau of Land Management (BLM), who has been nominated to be an assistant secretary of the Interior.

Senators pressed Burke for her opinion of BLM's final rule on fracking, which the agency has not yet released. A draft of the rule called for companies to reveal the trade names and purposes of fracking fluid additives and to name the specific chemicals involved and the volumes used.

"A concern I've heard from the industry in my state is that they believe it's very possible that a second permit would be required under this new rule, so there'd be one permit to get to drill in the first place, and a second permit if you wanted to proceed with hydraulic fracturing," said committee Chairman Sen. Jeff Bingaman (D-NM). "And they question the workability of this...also they question whether or not the department has the resources to staff up to deal with anything like this if this is required."

"We also have heard those concerns and are taking that into account in the drafting of the rule," Burke said. "Today I would say upwards of 90% of all new well starts on public lands involve hydraulic fracturing, so we are aware that oftentimes an operator can submit those at the same time."

Sen. Ron Wyden (D-OR) suggested that natural gas development on public lands, including fracking operations, might be used as "a kind of laboratory to develop best practices" for the industry.

"We at the department agree that hydraulic fracturing technologies and the advancements that have been made are integral to our continued ability to facilitate the expansion, exploration and development of natural gas on public land, and at the same time we know that the public has grown concerned about whether or not hydraulic fracturing may cause contamination to underground water sources," Burke said. "So in an effort to facilitate development while at the same time addressing those concerns, we have engaged in quite an extensive effort to work with industry, to work with environmental groups, to work with state regulators and regional regulators to develop what we think would be a model of rules for the regulation of well stimulation activities which include hydraulic fracturing." BLM has tried to synthesize the best elements of regulations already in place as it develops its own fracking rules, she said.

The American Petroleum Institute (API) recently called on the White House to take the lead in coordinating federal reviews of fracking with the goal of avoiding redundancy and streamlining work (see Shale Daily, March 6). A total of 10 federal agencies, including BLM, the Environmental Protection Agency (EPA), Interior's U.S. Geological Survey (USGS) and the Department of Energy, are reviewing, studying or proposing regulation of fracking, according to API.

In his fiscal 2013 budget released last month, President Obama announced a $45 million interagency effort by Interior, DOE and the EPA to assess the impact of fracking of shale (see Shale Daily, Feb. 14).

Sen. Al Franken (D-MN) on Tuesday repeated his call for the oil and gas industry to foot the bill for the $45 million cost of a proposed study of fracking to be performed by USGS (see Shale Daily, Feb. 29).

The hearing was a "slightly lively affair," but the four nominees got through it "fairly unbloodied and unbowed," said Jeff Wright, director of FERC's Office of Energy Projects, during the Natural Gas Roundtable in Washington, DC, Tuesday.

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