The Obama administration is set to unveil major new regulations on hydraulic fracturing, the controversial method of extracting oil and gas, possibly as soon as Tuesday.
The proposed regulation is expected to be more lenient to the oil and gas industry than a draft rule issued last year by the Interior Department, reflecting heavy lobbying by fossil fuel companies, as well as President Obama’s desire to support the nation’s recent boom in natural gas development—and the jobs that come with it.
“We have observed that over the past few years, the administration has shifted toward a more favorable opinion of the value of natural gas to the economy and the nation’s energy security,” said Richard Ranger, a senior policy adviser at the American Petroleum Institute. “We think we’re being heard, but the proof will be in the pudding.”
Environmentalists say they expect to be disappointed by the proposal and fear it won’t do enough to protect sensitive water supplies in communities around oil and gas wells.
“Industry has been very effective throughout this process in getting the rule tailored to the way they would like to see it.… Clearly this is an administration that is very pro-natural gas,” said Frances Hunt, a senior Washington representative of the Sierra Club.
Over the past five years, hydraulic fracturing—commonly known as “fracking”—has transformed the nation’s energy landscape. The process involves fracturing the land over an oil or gas deposit and injecting at high pressure a cocktail of water and chemicals to unlock the reserves.
The fracking revolution has opened up vast new supplies of oil and gas in states like North Dakota, putting the U.S. on track to be the world’s largest oil producer in the coming decades. It has created thousands of jobs. Thanks to fracking, North Dakota now has the nation’s lowest unemployment rate, at 3.3 percent. The glut of cheap new domestic natural gas has also fueled a manufacturing renaissance. In last year’s State of the Union speech, Obama cited a study concluding that the natural-gas boom could create 650,000 jobs.
But fracking is also fraught with problems. Many people fear that it contaminates water tables. And while the process is often regulated at the state level, there are no federal regulations to limit fracking’s impact on water supplies. Lawsuits have popped up around the country as states and communities push to create local bans on the practice.
Last year, the Interior Department issued its first draft regulations aimed at protecting water supplies from fracking chemicals.
The oil and gas industry pushed back hard against the rule, which received more than 177,000 public comments and signatures—“a stunning amount of input,” said one Interior Department official.
In response, the administration agreed to revisit the language. Since then, oil and gas companies have lobbied aggressively to loosen the requirements. This year, Interior’s Bureau of Land Management has held 11 meetings with industry as well as opponents of fracking.
The forthcoming rules are expected to reflect the companies’ desire for less regulation.
For example, last year’s draft rule required that companies disclose the blend of chemicals used to open up a well before they commence fracking. But a draft of the new rule says that companies don’t have to disclose the chemicals they use until after the wells have been drilled. The industry argues the chemical mixes are proprietary and that revealing them would put them at a competitive disadvantage. The new rule is expected to allow exemptions from disclosure of proprietary information.
“We’ve gone from more complete information, pre-fracking, to more limited information, post-fracking,” said Hunt of the Sierra Club. “From a public health and confidence perspective, the trend line is going in the wrong direction.”
Last year’s draft also required companies to perform analyses of the integrity of the cement lining in all the wells they drill. But industry lobbyists complained that that process would be too expensive and time-consuming. A draft of the new rule indicates that companies will now only have to complete analyses from one sample well at each site, rather than every well.
“Those cement jobs are individual jobs. They can be done well or poorly,” Hunt said.
Oil and gas companies, which oppose any new federal regulation at all, say the rules are more than sufficient to ensure safe drilling and may still slow the fracking boom. “We believe the states are doing an effective job regulating in this space,” said Ranger of the API. “Federal permitting will further complicate and delay issuance of permits.… Our concerns are about the time required for a permit review and the uncertainty factor for companies.”
Another industry official who has met with the Obama administration said, “I don’t think they want to shut down fracking for this reason: the unbelievable number of jobs associated with it. [White House energy adviser] Heather Zichal understands that without hydraulic fracturing, that doesn’t happen.”
On Wednesday, Interior Secretary Sally Jewell told reporters that the Obama administration has not bowed to industry pressure to weaken the rule.
“They are taking the best science that’s available,” she said, according to E&E Daily. “They are looking at historical practices, they are looking at modern technologies and how they are being used, and coming out with regulations that address all of those things and do it in the most scientifically justifiable way.”