WASHINGTON – The U.S. Chamber’s Energy Institute today has formally asked the U.S. Bureau of Land Management (BLM) to withdraw a proposed rule that could stymie domestic oil and gas production on federal lands.
The Energy Institute this week provided public comments to BLM on a proposed rule regarding hydraulic fracturing on public and Indian lands. The comments detail significant deficiencies with the rule, including the omission of the purpose and benefits of the rule and the lack of any compliance standards, creating uncertainty and unpredictability for industry.
“In light of President Obama’s call for the continued exploration for natural gas, which is already creating jobs and stimulating economic growth, it is particularly disappointing to see BLM move forward with a rule that will do exactly the opposite,” said Karen Harbert, president and CEO of the U.S. Chamber’s Energy Institute. “BLM’s proposed rule will result in a regulatory process that is not transparent and could open the door to retroactive enforcement. This type of rule is a good example of how overreaching regulation not based on sound analysis can jeopardize investment and good paying jobs.”
The BLM rule deals exclusively with issues that are already regulated heavily by states, yet the Administration has made no effort to meaningfully survey the existing regulatory landscape before proposing the rule. In fact, despite the fact that we are now four years into the Obama Administration, the Secretary of Interior has yet to even appoint an official representative to the Interstate Oil and Gas Compact Commission (IOGCC)—a governmental organization chartered by Congress to address the exact issues that the BLM rule seeks to regulate.
“If the Department of Interior is truly interested in plugging whatever gaps may exist in the current regulatory structure, then the first thing it should do is to participate in the IOGCC to better understand the scope and effectiveness of various state regulatory regimes and mechanisms and work with the states—not against them,” said Harbert. “The fact that it has not and that BLM has failed to enunciate which gaps the proposed rule is attempting to rectify in the first place suggests that this proposal is quite premature.”
In addition, the Energy Institute outlines serious concerns with the lack of upfront standards that companies would be required to meet during the hydraulic fracturing process. BLM’s rule essentially proposes a backwards scenario in which technical data must be submitted for review after investments have been made and operation begun. Instead, the Institute calls for BLM to simply define the standards it is looking for ahead of time. Failing to do so creates risk for companies which could be faced with expensive delays should BLM retroactively decide the wells they have built do not meet its standards.
Finally, BLM’s rule does not take into account the reduced investment that will occur should it be implemented. A study by IHS Global Insight in 2009 found that increasing regulations on hydraulic fracturing has the potential to reduce the number of wells drilled by 20 percent. BLM’s economic analysis fails to capture the majority of the costs its proposed rule will generate.
To read the Energy Institute’s complete comments, click here.
The mission of the U.S. Chamber of Commerce's Institute for 21st Century Energy is to unify policymakers, regulators, business leaders, and the American public behind a common sense energy strategy to help keep America secure, prosperous, and clean. Through policy development, education, and advocacy, the Institute is building support for meaningful action at the local, state, national, and international levels.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.