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Charles Kennedy

Charles Kennedy

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Obama’s Fracking Regulations Take A Serious Hit

On September 30, a federal judge struck down the U.S. Department of Interior’s regulations on hydraulic fracturing, a blow to the Obama administration’s efforts at putting standards on the drilling practice.

A U.S. District Judge in Wyoming issued an injunction against the implementation of Interior’s rules. In March 2015, the Bureau of Land Management (part of the Interior Department) issued its final rule for fracking on public lands. Related: What Oil Investors Can Learn From Gold

According to BLM, there are over 100,000 oil and gas wells on federal lands, over 90 percent of which use fracking. “Current federal well-drilling regulations are more than 30 years old and they simply have not kept pace with the technical complexities of today’s hydraulic fracturing operations,” U.S. Secretary of the Interior Sally Jewell said in a statement when the final rules were issued in March. “This updated and strengthened rule provides a framework of safeguards and disclosure protocols that will allow for the continued responsible development of our federal oil and gas resources.” Related: Kuwaiti Oil Minister: No OPEC Meeting Before December

The fracking rules set standards on well integrity, cementing, and other technical aspects of drilling, as well as waste storage. They also require drillers to disclose the chemicals that are used in their fracking jobs, and companies would also be required to report more details on their drilling operations such as the geology and depth of preexisting wells. Related: Exxon CEO: Alaska Is Its Own Worst Enemy

However, the injunction from the U.S. District Court throws these rules into a state of limbo, unable to go into effect for now. “Congress has not authorized or delegated to the BLM authority to regulate hydraulic fracturing and, under our constitutional structure, it is only through congressional action that the BLM can acquire this authority,” the judge wrote. The federal government can appeal the court’s decision.

The court’s injunction was welcomed by the energy industry, which argued that the rules were too costly. “We are overjoyed that we are finally getting relief from the courts regarding the regulatory overreach of the Obama administration,” said Kathleen Sgamma of the Western Energy Alliance, an association of hundreds of oil and gas companies.

By Charles Kennedy of Oilprice.com

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