Fred R. Conrad/The New York Times
A natural gas well in Pennsylvania. The industry objected to a proposal requiring chemicals to be disclosed 30 days before drilling.
By JOHN M. BRODER
Published: May 4, 2012
WASHINGTON — The Obama administration on Friday issued a proposed rule governing hydraulic fracturing for oil and gas on public lands that will for the first time require disclosure of the chemicals used in the process.
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But in a significant concession to the oil industry, companies will have to reveal the composition of fluids only after they have completed drilling — a sharp change from the government’s original proposal, which would have required disclosure of the chemicals 30 days before a well could be started.
The pullback on the rule followed a series of meetings at the White House after the original regulation was proposed in February. Lobbyists representing oil industry trade associations and individual major producers like ExxonMobil, XTO Energy, Apache, Samson Resources and Anadarko Petroleum met with officials of the Office of Management and Budget, who reworked the rule to address industry concerns about overlapping state regulations and the cost of compliance.
Production of domestic oil and natural gas has surged in recent years as hydraulic fracturing and horizontal drilling have opened new fields and allowed renewed production from formations that had seemed depleted.
President Obama has strongly endorsed the new production as a boon to the economy and energy security. And the president, under intense criticism of his energy policies from Republicans and oil industry officials as he faces a re-election contest, has recently taken steps to ease government regulation of oil operations.
In its original proposal that oil companies disclose the chemicals they intend to use in drilling before starting a well, the Interior Department was seeking to address the concerns of landowners and communities about potential pollution of groundwater.
But the industry objected, saying that the additional paperwork would slow the permitting process and potentially jeopardize trade secrets. The government then agreed to allow companies to reveal the contents of drilling fluids after the operation had been completed.
Interior Department officials said that having a record would allow scientists to trace any future contamination and that it did not matter whether the fluids were disclosed before or after drilling.
Last month Mr. Obama ordered the creation of an interagency task force to streamline federal regulation of natural gas drilling, and the Environmental Protection Agency issued revised air quality rules for oil and gas wells that gave drillers extra time to comply and lowered their costs. Industry officials praised both moves.
The draft rule affects drilling operations on the 700 million acres of public land administered by the Bureau of Land Management, as well as 56 million acres of Indian lands. The Interior Department estimates that 90 percent of the 3,400 wells drilled each year on public and Indian lands use hydraulic fracturing, commonly known as fracking, in which large volumes of water, sand and chemicals are injected under high pressure into shale rock formations to stimulate the flow of oil and gas.
The process has raised concerns about contamination of groundwater, well integrity and the treatment of the tainted water that flows out of wells during and after fracking operations.
A majority of the 13,000 wells drilled each year by fracking are on private lands and thus fall primarily under state regulation, as they have for 60 years. Although rules and the rigor of enforcement vary from state to state, there have been efforts in recent years to standardize reporting under government and industry bodies like the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission.
The federal government’s rules regarding oil and gas fracturing on public lands were last revised in 1988, before many modern techniques were adopted. The states where much of the activity takes place on public and private lands — including Arkansas, Colorado, North Dakota, Texas and Wyoming — have updated their rules and require disclosure of fracking chemicals at a Web site called FracFocus.
The new federal rule seeks to integrate the state and federal reporting efforts, although environmental and citizen groups say the state database is difficult to use.
The new regulation also broadens the definition of waters to be protected during drilling operations from “fresh waters” to “usable waters,” encompassing water used for construction, agriculture and other purposes.
The Interior Department said that the rule imposed few new regulatory requirements that were not already being met at the state level and that it would not slow the granting of drilling permits. Barry Russell, president of the Independent Petroleum Association of America, said that companies were already having trouble getting permission to drill on public land.
Referring to the Bureau of Land Management, Mr. Russell said in a statement: “B.L.M.’s proposed regulations, which would mandate one-size-fits-all regulations on well construction and hydraulic fracturing operations on these lands, are redundant. They will undoubtedly insert an unnecessary layer of rigidity into the permitting and development process.”
