The Interior Department's Bureau of Land Management (BLM) has been in the process of developing new regulations to govern the use of hydraulic fracturing—"fracking"—on federal lands for several years.
As we discussed in a previous post, the newest version of the BLM rule does provide more flexibility to companies than its previous proposal, specifically with regard to the protocols they use for drill stem testing. However, in a review of the regulatory framework, analysts at Perkins Coie wrote that although the "BLM's revised proposed rule addresses several concerns that arose out of its original proposal, significant issues remain" in the final draft.
A public comment period for the BLM's proposed regulations ended last week, prompting the Oil and Gas Journal's Nick Snow to review some of the reactions from industry stakeholders. Particular reservations have been expressed by the Independent Petroleum Association of America (IPAA). In a press release, the organization's president, Barry Russell, asserted that federal intervention in the energy sector is redundant and threatens to restrain growth.
"Together with state regulators and local environmental groups, the US oil and gas industry has secured the great benefits of the shale revolution, while protecting the environment and strengthening local communities," Russell said. "The U.S. Department of the Interior should not be in the business of undermining this progress."
Russell added that the BLM's action "undercuts states' authority to regulate energy production, a realm in which they have been successful for decades." Furthermore, he asserted that the compliance costs facing the industry would be "colossal" and the "bureaucratic burden" on companies would "discourage independent producers from exploring for oil and gas on federal lands."