Independent Producers File Suit Against Hydraulic Fracturing Rule

In May 2012, BLM released its proposed well stimulation and hydraulic fracturing regulation for federal and Indian lands. The original intent of the rule was to ensure that the hydraulic fracturing process does not con­taminate groundwater. IPAA, the Western Energy Alliance, and a number of cooperating associations opposed the proposed rule because it imposed costs that are not com­mensurate with any benefits the rule might provide and because the proposed rule was duplicative of states’ efforts to regulate oil and natural gas. In response to the proposed rule, IPAA and the Western Energy Alliance urged BLM to produce a gap analysis identifying inadequacies in existing requirements that its proposed rule would remediate. BLM failed to produce a gap analysis.

BLM received 177,000 comments from stake­holders in response to its original proposal. To address shortcomings documented in the comments, in May 2013 BLM issued a supplemental proposal. “Unfortunately, the revised proposal reflected in BLM’s current rulemaking still fails to account for the facts related to hydraulic fractur­ing,” the claimants assert. “BLM’s proposal is technically unsound and does not provide any benefits that existing state regulations do not currently provide. Because the revised proposal arbitrarily imposes costs without provid­ing any corresponding benefit, IPAA, Western Energy Alli­ance, and numerous cooperating associations still oppose the proposed rule and respectfully requested the Obama Administration to withdraw the regulation.”

“From California to Pennsylvania, the oil and natural gas industry has played a critical role in reviving America’s economy, and hydraulic fracturing has been the key to this revival,” said Barry Russell, president and CEO of IPAA. “These new mandates on hydraulic fracturing by the federal government, however, are the complete oppo­site of common sense. At a time when the oil and natural gas industry faces incredible cost uncertainties, these so-called baseline standards will threaten America’s economic upturn, while further deterring energy development on federal lands. America’s independent producers currently reinvest as much as 150% of their cash flow back into new projects here at home, investments that support not only the job-creating small businesses behind this energy revolution, but also the countless industries and consumers who benefit from affordable, secure American energy every time they drive their cars and heat their homes. Hydrau­lic fracturing has been conducted safely and responsibly in the United States for over 60 years. These new federal mandates will add burdensome new costs on our indepen­dent producers, taking investments away from developing new American-made energy, much-needed job creation, and economic growth. The agency needs to further engage stakeholders, adequately assess the costs, and compare the proposal to existing safeguards under state law.”