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Interior issues new drilling rule on public land

MATTHEW DALY,Associated Press


WASHINGTON (AP) — Companies that drill for oil and natural gas on federal lands will be required to disclose publicly the chemicals used in hydraulic fracturing operations, the Obama administration said Thursday. The new "fracking" rule replaces a draft proposed last year that was withdrawn amid industry complaints that federal regulation could hinder an ongoing boom in natural gas production.

The new draft rule relies on an online database used by Colorado and 10 other states to track the chemicals used in fracking operations. FracFocus.org is a website formed by industry and intergovernmental groups in 2011 that allows users to gather well-specific data on thousands of drilling sites.

The proposed rule also sets standards for proper construction of wells and disposal of wastewater.

Fracking involves pumping huge volumes of water, sand and chemicals underground to split open rocks to allow oil and gas to flow. Improved technology has allowed energy companies to gain access to huge stores of natural gas underneath states from Wyoming to New York but has raised widespread concerns about alleged groundwater contamination and even earthquakes.

Interior Secretary Sally Jewell called the proposed rule a "common-sense update" that increases safety while also providing flexibility and improving coordination with states and Indian tribes.

Current regulations date back to 1982, when the Sony Walkman was considered cutting-edge, Jewell said.

"As we continue to offer millions of acres of America's public lands for oil and gas development, it is important that the public has full confidence that the right safety and environmental protections are in place," she said.

But environmental groups said the proposal was weaker than last year's plan and represents a nearly complete capitulation to industry, which had lobbied heavily against the earlier rule. Interior's Bureau of Land Management has held at least 11 meetings this year with industry groups as well as fracking opponents.

"Comparing today's rule governing fracking on public lands with the one proposed a year earlier, it is clear what happened: the Bureau of Land Management caved to the wealthy and powerful oil and gas industry and left the public to fend for itself," said Jessica Ennis, a spokeswoman for the environmental group Earthjustice.

The BLM appears to have settled for "shoddy protections peddled by the oil and gas industry," Ennis said.

Erik Milito, director of upstream and industry operations for the American Petroleum Institute, said the federal rule was unnecessary, since state rules and state-based tools, such as FracFocus, are already in place to ensure responsible drilling.

Changes made since last year "attempt to better acknowledge the state role," Milito said, but the Obama administration "has yet to answer the question why BLM is moving forward with these requirements in the first place."

The API and other industry groups urged the administration and Congress to take a close look at the proposed rule, which is subject to a 30-day comment period before being made final this summer.

Environmental groups said the new rule relies too heavily on FracFocus, a voluntary site that critics say has loose reporting standards and allows companies to avoid disclosure by declaring certain chemicals trade secrets. A report by Harvard Law School last month said the site is plagued by loopholes, adding that government reliance on FracFocus as a regulatory tool is "misplaced or premature."

Deputy Interior Secretary David Hayes defended the use of FracFocus, calling it a potentially valuable tool to make information on fracking operations available to the public.

"Let there be no doubt, what we are interested in is good public disclosures" of information on fracking and chemicals in drilling operations, Hayes said.

If the site does not work as well as officials hope, "we will look for another mechanism to make sure there is information available" to the public about chemicals used in fracking operations, Hayes said.

Besides Colorado, FracFocus is used by Louisiana, Mississippi, Montana, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Texas and Utah. The site and its operators don't regulate fracking in any way, but rather provide a repository for relevant information.

Jewell, who took office last month, said she expects to be criticized by both industry and environmental groups. An industry claim that federal regulation is unnecessary "ignores that fracking is taking place on an estimated 90 percent" of wells drilled on federal and Indian lands, Jewell said. Domestic production from more than 92,000 oil and gas wells on public lands accounts for about 13 percent of the nation's natural gas production and 5 percent of U.S. oil production, the Interior Department said.

Similarly, environmental groups who say "fracking is dangerous and should be curtailed full-stop" ignore that "fracking has been done safely for decades," said Jewell, a former petroleum engineer who has worked on fracked wells.

The new rule will "help ensure that human health and security are protected," she said.

The proposal includes a provision allowing the BLM to defer to states and tribes that already have standards in place that meet or exceed those proposed by the federal rule.

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