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The comment period for the U.S. Bureau of Land Management’s (BLM’s) proposed regulation on well completions and hydraulic fracturing operations closed Aug. 2. As was predictable with such a far-reaching, complex and frankly unnecessary regulation, the comments filed by the industry, and opponents, expressed frustration and concern with the rule’s structure.
The joint industry comments filed by IPAA and the Western Energy Alliance (WEA) on behalf of themselves, and 46 additional state and national oil and gas industry trade associations, came quickly to the crux of the matter:
“Sixteen months into the rulemaking process, BLM remains unable to provide a supportable reason to impose its additional layer of regulations on top of those laws states already enforce. For the high cost this rule will impose on the industry—$345 million per year—what benefit will the public receive? For the disincentive this rule will create, to invest in federal and tribal oil and gas leases, to whom will the tribes and the taxpayers turn for the lost leasing and royalty revenue? BLM has been unable to answer these questions. BLM should recognize that states are already regulating hydraulic fracturing admirably. The only imperative to adopt this rule is an arbitrary desire ‘to do something.’”
Yes, the desire to “do something” is an ever-present factor in the justification of federal regulation of all industries, not just oil and gas. I’ve personally been involved in working regulatory matters for a variety of industry companies for two decades now, and have seen this dynamic repeated over and over, in a wide variety of federal regulatory efforts.
The only real justification is political in nature, whereby a given presidential administration has a need to respond to the wishes of various special interest groups, who played a major role in getting them elected in the first place. It’s a poor motivation for regulatory action.
Think about it this way: If not for politics, what other motivation is there for this regulatory action by the BLM? The rule contains a requirement, that oil and gas operators disclose chemical and other contents in the fluids that they use in operations on federal lands. Fair enough, but pretty much every state with any significant federal lands inside its borders already has its own laws and/or regulations containing similar requirements for all wells drilled, including wells on federal lands. These requirements are already working quite well.
So what is the driving need for the federal government to now come in and increase everyone’s costs, and add time delays with a duplicate set of reporting requirements? It’s hard to see what that would be, other than the political desire to placate the administration’s supporters.
The rule also contains a whole suite of provisions designed to regulate how wells are completed, including new, costly requirements related to casing and cementing. Again, the states already regulate these processes quite effectively, most having done so for decades. Can the BLM point to a rash of casing or cement job failures on federal lands, or significant failures in state oversight of well completions as a justification for the provisions? Of course not. But they can point to “fears” and “concerns” raised by anti-development conflict groups, whose fundraising efforts depend on their ability to create a never-ending procession of “fears” and “concerns.” Are these fears and concerns, in and of themselves, valid justification for such a wide-reaching, costly new rulemaking? BLM apparently thinks so.
Jewell provides no help. Ironically, new Interior Secretary Sally Jewell, who has personal experience in the oil and gas industry, made a very valid point, several weeks back, in response to a question about this pending regulation: “One thing that’s clear to me from my own experiences is that one size doesn’t fit all,” said Jewell.
But the Secretary’s own experiences were not enough to override the politically-driven bureaucratic inertia behind this new rulemaking. Her department has delivered a “one size fits all” rule that will override state regulations that are far more suited to address each state’s specific formations and operational practices.
If administration officials thought that this rule would please the anti-development groups that contributed millions of dollars to the President’s two election campaigns, they were mistaken. Representatives of groups like the Natural Resources Defense Council (NRDC) and Sierra Club issued scathing rebukes of the rule last week, and others, like ClimateProgress, even accused the BLM of being in bed with “big oil” and the American Legislative Exchange Council (ALEC):
“While administration officials suppress the facts, the Bureau of Land Management (BLM) has proposed a set of rules that will allow fracking (sic) on 600 million acres of federal land. According to the Natural Resources Defense Council, the proposed rules ‘give industry a free pass.’ In fact, DeSmogBlog has detailed how the BLM rules mirror plans developed by the Exxon Mobil-funded American Legislative Exchange Council (ALEC).
The Bureau of Land Management is accepting public comments until August 23 on the administration’s proposed set of rules. The climate and progressive advocacy organizations, Forecast the Facts and Daily Kos, have launched a petition calling on President Obama to ban fracking on federal lands. A coalition of groups opposing the BLM rules plans to deliver the petition in a rally going from LaFayette Park to BLM headquarters on August 22 in Washington, DC.”
All of which should go to show administration officials the folly of politically-driven regulatory efforts: In the end, you wind up with a lousy regulation that pleases no one, and accomplishes little. 
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