Bloomberg News

Fracking Rules on U.S. Lands Seen by Interior as Model

February 02, 2012

Federal rules for fracking on public lands, set to be released in a few weeks, may serve as a model for states to get companies to disclose the chemicals used in the drilling process, an Obama administration official said.

The proposed federal standards will be compatible with rules already in place in states such as Wyoming and Texas, and will allow limited exemptions for “legitimate trade secrets,” David Hayes, the deputy Interior secretary, said today.

“What we expect is that the momentum that you already see in states for disclosure will be reinforced by what we do,” Hayes said in an interview at the Washington office of Bloomberg News. “Most folks would like to see an across-the-board approach to deal with these issues.”

In hydraulic fracturing, or fracking, companies inject water, sand and chemicals under high pressure thousands of feet underground to break up shale-rock formations and release trapped gas.

The U.S. Interior Department began consideration of regulations for production of natural gas and oil from shale on federal lands last year. In addition to chemical disclosures, the rules will set standards for well construction, which is the most important aspect to ensure that groundwater isn’t contaminated, he said.

Gas Reserves

The U.S. holds an estimated 2,214 trillion cubic feet of gas, enough to meet domestic demand for about a century at current consumption rates, according to the Energy Department. At least 90 percent of U.S. onshore natural-gas production comes from fracking, according to Richard Spears, vice president of the Tulsa, Oklahoma-based consulting company Spears & Associates Inc.

Federal rules governing fracking have taken on new importance following President Barack Obama’s advocacy in his State of the Union address for drilling for natural gas in shale, which he said will mean the country doesn’t have to “choose between our environment and our economy.”

In that address, Obama highlighted the Interior Department’s standards for the disclosure of the chemicals used in fracking on public lands as one way the federal government would protect the environment and reassure the public that the process is safe.

“Leading companies recognize that this is an appropriate thing to be asking,” Hayes said. Among those is Anadarko Petroleum Corp. (APC) of The Woodlands, Texas, he said.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net; Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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