America’s Independent Oil, Natural Gas Producers File Lawsuit Against Interior Department Over Final Hydraulic Fracturing Rule

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Neal Kirby / Jeff Eshelman
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For Immediate Release
March 20, 2015
 

Washington, D.C. – Today, the Independent Petroleum Association of America (IPAA) and Western Energy Alliance filed a lawsuit against the U.S. Secretary of the Interior and the U.S. Bureau of Land Management (BLM), challenging BLM’s issuance of regulations related to hydraulic fracturing on federal and Indian lands. The Complaint, filed in federal district court in Wyoming, characterizes BLM’s rulemaking as “a reaction to unsubstantiated concerns” and requests the regulations be set aside because the administrative record lacks the factual, scientific, or engineering evidence necessary to sustain the agency’s action. States have an outstanding record of protecting the environment and safeguarding the public. This new rule is simply another regulatory overreach by the Obama Administration that will hurt America’s oil and natural gas producers.

“From California to Pennsylvania, the oil and natural gas industry has played a critical role in reviving America’s economy and hydraulic fracturing has been the key to this revival,” said Barry Russell, President and CEO of the Independent Petroleum Association of America. “These new mandates on hydraulic fracturing by the federal government, however, are the complete opposite of common-sense. At a time when the oil and natural gas industry faces incredible cost uncertainties, these so-called baseline standards will threaten America’s economic upturn, while further deterring energy development on federal lands. America’s independent producers currently reinvest as much as 150 percent of their cash flow back into new projects here at home, investments that support not only the job-creating small businesses behind this energy revolution, but also the countless industries and consumers who benefit from affordable, secure American energy every time they drive their cars and heat their homes. Hydraulic fracturing has been conducted safely and responsibly in the United States for over sixty years. These new federal mandates will add burdensome new costs on our independent producers, taking investments away from developing new American-made energy, much-needed job creation, and economic growth. The agency needs to further engage stakeholders, adequately assess the costs, and compare the proposal to existing safeguards under state law.”

“States have been successfully regulating fracking for decades, including on federal lands, with no incident that necessitates redundant federal regulation,” said Tim Wigley, President of Western Energy Alliance. “BLM struggles to meet its current workload of leasing, environmental analysis, permitting, monitoring, inspecting, and otherwise administering the federal onshore oil and natural gas program. Yet it is undertaking an entirely new regulatory regime that it has neither the resources nor the expertise to implement.

“If anything, BLM should be delegating more to the states in recognition of their exemplary environmental and safety records, not implementing new federal red tape that is not properly justified. This is a classic case of federal overreach, with the government taking on even more control that will stifle economic growth and job creation while limiting the return to American taxpayers on the energy they all own,” concluded Wigley.

Background:

In May 2012, the U.S. Bureau of Land Management released its proposed well stimulation and hydraulic fracturing regulation for federal and Indian lands. The original intent of the rule was to ensure that the hydraulic fracturing process does not contaminate groundwater. IPAA, Western Energy Alliance, and a number of cooperating associations opposed this proposed rule because it imposed costs that are not commensurate with any benefits the rule might provide and because the proposed rule is duplicative of States’ efforts to regulate oil and natural gas. In response to the proposed rule, IPAA and Western Energy Alliance urged BLM to produce a gap analysis identifying inadequacies in existing requirements that BLM’s proposed rule would remediate, which BLM has failed to produce.

BLM received 177,000 comments from interested stakeholders in response to its original proposal. To address the shortcomings documented in those comments, in May 2013 the BLM issued a supplemental proposal. Unfortunately, the revised proposal reflected in BLM’s current rulemaking still fails to account for the facts related to hydraulic fracturing. BLM’s proposal is technically unsound and does not provide any benefits that already-existing state regulations do not currently provide. Because the revised proposal arbitrarily imposes costs without providing any corresponding benefit, IPAA, Western Energy Alliance, and numerous cooperating associations still opposed the proposed rule and respectfully requested the Obama Administration to withdraw the regulation.

In its February 2015 report, the White House Council of Economic Advisers lauded the economic and energy security benefits of the recent growth in U.S. oil and natural gas production and stated environmental regulation of hydraulic fracturing is best addressed at the State and local level, not the federal level. According to an IHS Global Insight study, onshore independent oil and natural gas producers supported over 2.1 million American jobs in 2010 while contributing $320.6 billion in economic activity, accounting for 2.2 percent of U.S. gross domestic product (GDP). A recent report from the non-partisan Congressional Budget Office also found that shale development has increased our GDP, reduced energy prices for consumers and businesses, and increased revenues to the U.S. Treasury. The Small Business & Entrepreneurship Council (SBEC) also recently reported on the benefits of increased American oil and natural gas production, made possible by hydraulic fracturing, noting that job growth in the U.S. oil and gas industry has grown in stark contrast to the rest of the U.S. economy.

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About Independent Petroleum Association of America
The Independent Petroleum Association of America (IPAA) is the leading, national upstream trade association representing oil and natural gas producers that drill 95 percent of the nation’s oil and natural gas wells. These companies account for 54 percent of America’s oil production, 85 percent of its natural gas production, and support over 2.1 million American jobs. For more information, visit www.ipaa.org.

About Western Energy Alliance
Western Energy Alliance, founded in 1974 as the Independent Petroleum Association of Mountain States, is a non-profit trade association representing more than 480 companies engaged in all aspects of environmentally responsible exploration and production of oil and natural gas in the West. More information about Western Energy Alliance is available at www.westernenergyalliance.org.