New hydraulic fracturing rules being developed by the Obama administration will drive oil and gas development from federal lands, a panel of industry and state officials said in their prepared testimony to a House committee Wednesday.
The rules will create hundreds of thousands of dollars in new costs for each well, add an estimated 100 days to the already drawn-out federal permitting process and will force companies to comply with many rules twice due to stringent state rules already in place, the officials' prepared testimony for a House Natural Resources Committee hearing said.
"The added red tape will divert investment away from energy development, job creation, and economic growth into redundant federal regulation," John Byrom, president of New Mexico oil and gas company DJ Simmons, said in the testimony.
While Wednesday's hearing was stacked with witnesses opposed to federal fracking rules, Representative Rush Holt, a New Jersey Democrat, took aim at the Obama administration for weakening the proposed rule in the face of industry lobbying.
Holt, who said the rule was necessary to "guarantee a minimal level of safety and environmental protection," said he fears the new rule "won't be strong enough." The Interior Department is expected to weaken disclosure rules for chemical and well construction techniques, Holt said.
He said a strong federal rule was needed since fracking regulations "vary widely" by state.
The Interior Department's Bureau of Land Management will issue a proposed rule regulating the use of hydraulic fracturing on public lands in "a matter of weeks," Interior Secretary Sally Jewell said last week. The rule, which has been delayed for a year, will replace a previous BLM rules which faced broad industry criticism.
The new rule is expected to require the disclosure of chemicals used in fracking, among other elements, but witnesses at Wednesday's hearing called the rule costly and unnecessary.
The rule is "duplicative" and "redundant," Montana State Senator Alan Olson, the chairman of the state's Senate Energy and Telecommunications Committee, said in the prepared testimony, adding that fracking regulations are better left to the states.
"State rules specifically tailored to each state's unique geologic and hydrologic conditions better protect the environment and groundwater than a one-size-fits-all federal rule," said Olson, a former service operator with Halliburton and oil and gas inspector with Montana's Department of Natural Resources.
"This is a state's rights issue," said Lynn Helms, director of the North Dakota Industrial Commission's Department of Mineral Resources.
Helms said states which have adopted "comprehensive" fracking rules, such as North Dakota, should be exempt from the federal rule.
Olson said the new rule could add 100 days to the federal permitting process, which already takes an average of 228 days, compared to 30 days at the state level. He pointed to an estimate that the new rule could cost nearly $254,000 per well, well above the BLM's $11,000 per well estimate.
"These additional rules will make federal lands that much more unattractive," Olson said.
In addition, federal officials will struggle to enforce these new rules amid government budget cuts and staffing decreases, witnesses said. Interior "already struggles to meet its current oil and natural gas program leasing, environmental analysis, permitting, monitoring and inspecting obligations," Byrom with DJ Simmons said.
Representative Doc Hastings, a Washington Republican and the committee's chairman, said the rule "will not work" in the current fiscal climate. "At a time when the Department is canceling lease sales, federal dollars and resources should not be spent duplicating state regulations, especially when states already have guidelines in place that are effective and successful," Hastings said in the prepared testimony.
