Fracking rules rile Canadians
Energy companies launch lawsuit demanding U.S. drops regulations
Just two hours after U.S. President Barack Obama’s administration introduced new regulations for companies fracking for oil and gas on federal lands, an industry association representing a number of Canadian energy companies filed a lawsuit in Wyoming demanding the government drop the new rules.
U.S. Secretary of the Interior Sally Jewell said Friday morning that existing hydraulic fracturing regulations “have not kept pace” with changes in the American oil industry, in which fracking is now used to produce oil and gas from 90 per cent of new wells.
Fracking is an extraction technique energy companies use to create pressure in wells by pumping high volumes of water mixed with chemical compounds down the well. The technique has become a hot-button issue in the U.S. over concerns the process can contaminate groundwater at the same time as the practice has led to surging American oil production and an energy boom leading up to, and contributing to, the recent collapse in global oil prices.
Jewell said the new rules, which apply only to oil and gas wells drilled on federal and Native American land, are long overdue.
The U.S. Bureau of Land Management (BLM) receives 5,000 drilling applications every year on those lands. If every one of those wells were drilled, that would mean the new regulations would affect 15 per cent of the roughly 35,000 wells drilled in the U.S. every year.
Opponents of the new rules, however, say many states already have tougher laws in place.
“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’s not properly justified,” said Tim Wigley, president of the Western Energy Alliance, which counts Calgary-based Encana Corp., Baytex Energy Corp. and Crescent Point Energy Corp. among its more than 400 members.
The Western Energy Alliance and the Independent Petroleum Association of America (IPAA) filed a lawsuit in federal district court in Wyoming demanding that the U.S. Department of the Interior and the Bureau of Land Management abandon the rules the two federal organization had jointly announced in a conference call just two hours earlier.
IPAA president and CEO Barry Russell said the new regulations also “add burdensome new costs on our independent producers” and threaten economic growth.
The new regulations, which won’t come into effect for three months, require companies to disclose the chemicals in their fracking fluid on a disclosure site called Frac-Focus.
The new rules also require energy companies to cement the lining of their wells to avoid contaminating the groundwater surrounding the well. Companies must also store their fracturing fluids and the water used in their operations in above-ground storage tanks rather than lined pits dug nearby.
Alberta Energy Regulator spokesman Ryan Bartlett said Friday that some of the regulations introduced by the Department of the Interior are already in place in Alberta.
Bartlett said operators in Alberta are required to disclose the chemicals used in their fracking operations on FracFocus.ca, and they have been required to cement a steel lining in their well bores since 1990.
However, he said, operators are still allowed to store their frack fluid in lined pits, subject to AER approval.