U.S. Announces Compromise on Fracking Disclosure

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WASHINGTON -- The Obama administration on Friday issued a proposed rule governing hydraulic fracturing for oil and gas on public lands that will for the first time require disclosure of the chemicals used in the process.

But in a significant concession to the oil industry, companies would have to reveal the composition of fluids only after the drilling of a well is completed, not before, a sharp change from the government's original proposal, which would have required disclosure of the chemicals 30 days before a well could be started.

The weakening of the rule followed a series of meetings at the White House after the original regulation was proposed in February. Lobbyists representing oil industry trade associations and individual major producers like ExxonMobil, XTO Energy, Apache, Samson Resources and Anadarko Petroleum met with officials of the Office of Management and Budget, who reworked the rule to address industry concerns about overlapping state regulations and the cost of compliance.

Production of domestic oil and natural gas has surged in recent years as the use of hydraulic fracturing and horizontal drilling has opened new fields and allowed renewed production from formations that had seemed depleted.

President Obama has strongly endorsed the new production as a boon to the economy and energy security. And the president, facing re-election under intense criticism of his energy policies from Republicans and oil industry officials, has recently taken steps to ease government regulation of oil operations.

In its original proposal that oil companies disclose the chemicals they intended to use in drilling at least 30 days before starting a well, the Interior Department was seeking to address the concerns of landowners about potential pollution of groundwater.

But industry objected, saying that the additional paperwork would slow the permitting process and potentially jeopardize trade secrets. The government then agreed to allow companies to reveal the contents of drilling fluids after the fracking has already been carried out.

Last month, the president ordered the creation of an interagency task force to streamline federal regulation of natural gas drilling, and the Environmental Protection Agency issued revised air quality rules for oil and gas wells that gave drillers extra time to comply and lowered their costs. Industry officials praised both moves.

Ken Salazar, the interior secretary, said in a statement that the rule was part of the administration's overall energy strategy.

"As we continue to offer millions of acres of America's public lands for oil and gas development, it is critical that the public have full confidence that the right safety and environmental protections are in place," Mr. Salazar said. "The proposed rule will modernize our management of well stimulation activities -- including hydraulic fracturing -- to make sure that fracturing operations conducted on public and Indian lands follow common-sense industry best practices."

Friday's rule affects drilling operations on the 700 million acres of public land administered by the Interior Department's Bureau of Land Management as well as 56 million acres of Indian lands. The agency estimates that 90 percent of the 3,400 wells drilled each year on public and Indian lands use hydraulic fracturing, commonly known as fracking, in which large volumes of water, sand and chemicals are injected under high pressure into shale rock formations to stimulate the flow of oil and gas.

The process has raised concerns about contamination of groundwater, well design and the storage of the tainted water that flows out of wells during and after fracking operations.

The bureau's rules regarding oil and gas fracturing were last revised in 1988, before many modern techniques and drilling fluid formulas were adopted. The states where much of the activity takes place on public and private lands -- including Colorado, Wyoming, Arkansas, Texas and North Dakota -- have updated their rules and require disclosure of fracking chemicals on a Web site called FracFocus.

The new federal rule seeks to integrate the state and federal reporting efforts, although environmental and citizen groups say the state database is difficult to use.

The new regulation also broadens the definition of waters to be protected during drilling operations from "fresh waters" to "usable waters," encompassing water used for construction, agriculture and other purposes.

The Interior Department said that the rule imposed few new regulatory burdens that are not already being met at the state level and that the reporting requirements would not slow the granting of drilling permits.


This article originally appeared in The New York Times.


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