House passes bill to thwart federal fracturing regs

WASHINGTON _ The House of Representatives on Wednesday passed legislation to thwart federal regulation of hydraulic fracturing in what was the first major congressional vote on the process that is credited with unlocking new oil and gas supplies nationwide.

The legislation would block the Interior Department from regulating hydraulic fracturing anywhere states already have existing rules governing the process, just as the executive agency moves to finalize new mandates for wells on public lands. The Bureau of Land Management’s proposed new regulations would be the first major update of 30-year-old standards, setting baseline requirements for well design, water management plans and disclosure of chemicals used at the sites.

Although the measure passed on a mostly party line vote of 235-187, it divided oil-patch Democrats, including Houston’s Gene Green and Laredo’s Henry Cuellar.

Cuellar, whose congressional district includes the Eagle Ford formation, where companies are employing hydraulic fracturing to extract oil and natural gas, said a state-based approach to oversight makes sense, given widely differing geology across the United States.

“We need to enable states to regulate their own land because they know it better and not create a federal one-size-fits-all approach,” Cuellar said. “This bill will untangle redundant regulations as states have created their own regulations that address well design, location, water quality, emissions, wildlife protection and health and safety.”

But Green said that while state agencies have done a good job overseeing fracturing so far, the federal government should also play a role on public lands under its control. The Bureau of Land Management’s proposal would apply only to drilling on public lands, not private property.

“I would not support the federal government regulating the development of natural gas or the practice of hydraulic fracturing on state or private lands,” he said. But, Green added, “I cannot support the idea of legislation that would prevent the federal government from regulating federal lands. That is what this bill is asking us to do.”

The  fracturing process involves pumping water, sand and chemicals underground to open the pores of dense rock formations and free the oil and gas trapped within. In the current domestic drilling boom, energy companies are taking advantage of both the hydraulic fracturing process and horizontal drilling to extract crude and gas from plays including the Eagle Ford, the Bakken formation in North Dakota and the Marcellus Shale in the northeast.

No existing federal regulations focus squarely on hydraulic fracturing, and a 2005 law specifically exempted the process from scrutiny under the Safe Drinking Water Act. The well completion process is mostly overseen by states, but to widely varying degrees.

Rep. Peter DeFazio, D-Oregon, noted the disparity. “Some states require comprehensive pressure tests of the casing (which is) essential, particularly if you’re going through the water table to get to the gas. Some states don’t require that,” he said.

While some states require drillers to contain fluids that flow back to the surface from their underground wells, others allow the liquids to be stored in open pits, DeFazio noted.

While chemical disclosure requirements also vary greatly from state to states; the Bureau of Land Management would allow companies to use a industry-supported registry known as FracFocus to reveal information about some of the materials they pump underground.

DeFazio, who criticized the federal proposal as not stringent enough, said the mandates are unlikely to blunt the current “gold rush” and would help protect the oil and gas industry from catastrophic accidents, like the 2010 blowout of BP’s Macondo well in the Gulf of Mexico.

“Just one Macondo in this industry — one well that blows out in a large aquifer or some other disaster — and this whole thing is going to come grinding to a halt and you’re going to see a strong push back for strong regulations,” DeFazio said.

The federal government has estimated the proposed rule would hike costs by as much as $5,011 per well, but an industry-commissioned study concluded that the added cost would be about $97,000.
Environmentalists warn about potential water contamination from hydraulic fracturing chemicals and underground leaks of methane from poorly secured wells. Other concerns center on methane emissions tied to the extraction and transportation of natural gas.

But bill sponsor Rep. Bill Flores, R-Texas, insisted that “there is no demonstrated need for the federal government to waste taxpayer money by duplicating and complicating state efforts.”

“The only reason for the federal government to get involved is to placate those who oppose the shale energy revolution and the jobs boom that has come with it,” he added.

Lawmakers voted 142-276 to reject a DeFazio amendment that would have blocked foreign exports of all natural gas produced on public lands, amid new government approvals for companies to liquefy the fossil fuel and sell it abroad.

Proponents of  exporting liquefied natural gas said the margin showed growing support in Congress for exports.

On the underlying bill, just two Republicans — New York Rep. Chris Gibson and New Jersey Rep. Jon Runyan — crossed party lines to vote no. Ultimately 12 Democrats voted to support the bill, including Cuellar and Rep. Sheila Jackson-Lee, D-Houston.

The legislation is one in a trio of energy-related measures advanced by House Republican leaders this week. Earlier Wednesday, the House voted 228-192 to pass legislation that would accelerate the government’s permitting of oil and gas projects on federal lands.

On Thursday, the chamber is set to consider legislation that would force the Federal Energy Regulatory Commission to make decisions on proposed natural gas pipelines within a year. The White House has issued veto threats against all three GOP-backed measures, and none is expected to advance in the Democrat-controlled Senate.

But all serve to put the House on record on key energy policy debates ahead of next year’s election and give congressional Republicans a forum for criticizing Obama administration policies they say are holding back domestic oil and gas development.