On March 20th, following a lengthy public review process, Secretary of Interior Sally Jewell unveiled new federal regulations for hydraulic fracturing on federal lands. According to the Department of Interior, these new standards are designed to (1) improve safety, (2) protect groundwater by updating requirements for well-bore integrity, (3) ensure wastewater is disposed of properly and (4) require public disclosure by companies of chemicals. The regulations will go into effect on June 24th, 2015.
The fracking boom put the U.S. on track to be a leading producer of oil and gas, yet most of the production has taken place on private and state lands. These wells, unlike the approximately 100,000 wells on federal lands that will be impacted by the rule, are regulated at the state level.
The Obama Administration and supporters of the rule hope the new regulations will serve as a standard for state legislatures confronting their own regulatory issues. The Department of Interior (DOI) has suggested that many companies already comply with similar regulations and estimates the new regulations will come at a minimal cost. Agency estimates range between $5,500 to $11,400 per well, or approximately $32 million/year, which is less than 1% of the cost of drilling.
Opposition to the rule has come from a variety of places. Members of Congress, such as Senator John Barrasso (R-Wyo.), believe the new regulations will serve as a barrier to development, adversely impacting job opportunities, U.S. energy security and domestic energy costs. Industry officials, such as the American Petroleum Industry, claim the rule will raise the cost of development by creating a layer of federal regulations that duplicate existing state regulations. DOI has argued that a variance exemption available to states and tribes with equal or greater regimes in place addresses that concern. Environmentalists have also been critical, worrying that the website mandated to publicly disclose chemical materials, FracFocus, was created and is run by the oil and gas industry.