Interior sets new drilling rules on public land

WASHINGTON (AP) - The Obama administration said Friday it will for the first time require companies drilling for oil and natural
gas on public and Indian lands to publicly disclose chemicals used
in hydraulic fracturing operations.

The proposed "fracking" rules also set standards for proper
construction of wells and wastewater disposal.

Interior Secretary Ken Salazar said the long-awaited rules will
allow continued expansion of drilling while protecting public
health and safety.

"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," Salazar said.

The proposed rules 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," he said.

The new rules, which have been under consideration for a year
and a half, were softened after industry groups expressed strong
concerns about an initial proposal leaked earlier this year. The
proposal would allow companies to file disclosure reports after
drilling operations are completed, rather than before they begin,
as initially proposed. Industry groups said the earlier proposal
could have caused lengthy delays.

Some environmental groups criticized the change as a cave-in to
industry, but Salazar said the rules were never intended to cause
delays, but to ensure that the public is "fully aware of the
chemicals that are being injected into the underground" by
companies seeking to produce oil and natural gas.

The Bureau of Land Management, which oversees drilling on public
lands, estimates that 90 percent of the approximately 3,400 wells
currently drilled on federal and Indian lands using hydraulic
fracturing techniques.

The rules would not affect drilling on private land, where the
bulk of shale exploration is taking place. A nationwide drilling
boom in formations such as the Marcellus Shale in the Appalachian
region and the Bakken in North Dakota and Montana, as well as in
traditional production states such as Texas, Oklahoma and
Louisiana, has led to 10-year lows in natural gas prices.

Still, Salazar said he hopes the new rules could be used as a
model for state regulators.

"We hope our leadership is followed," he said at a news

Industry groups and Republican lawmakers say federal rules are
unnecessary, arguing that states already regulate hydraulic
fracturing, in which water, sand and chemicals are in injected
underground to break up dense rock that holds oil and gas.

The industry also has complained that disclosure of chemicals
used in fracking could violate trade secrets, although Salazar said
the rule would include exemptions for specific formulas. Some of
the chemicals used in fracking include benzene, toluene,
ethylbenzene and xylene, all of which can cause health problems in
significant doses.

Critics say fracking chemicals have polluted water supplies, but
supporters say there is no proof.

Tom Amontree, executive vice president for America's Natural Gas
Alliance, an industry group, said the Obama administration "may
not fully appreciate" significant regulatory steps taken by states
such as Colorado, Texas and Wyoming to oversee hydraulic

"State regulatory bodies have repeatedly proven that they have
the understanding of their state's own unique geologic conditions,
the on-the-ground expertise needed to oversee this important work,
and most importantly, the ability to respond to rapid change,"
Amontree said. As drafted, the federal proposal would create
reporting requirements and "regulatory impediments" that could
substantially affect the ability of companies to drill on public
lands, he said.

The proposed rules will be subject to public comment for 60
days, with a final order expected by the end of the year, said Bob
Abbey, director of the land management bureau.

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