- Associated Press - Tuesday, June 23, 2015

CASPER, Wyo. (AP) - New federal rules for oil and gas development on federal lands, including one that would require disclosure of chemicals used in hydraulic fracturing, now won’t take effect until at least mid-August after a judge on Tuesday told the U.S. Bureau of Land Management to disclose more information about how it developed the standards.

The last-minute stay by U.S. District Judge Scott Skavdahl suspends requirements described by two petroleum industry groups as extremely costly and by four states as poison to their fossil-fuel-reliant economies.

Skavdahl was at least somewhat receptive to those arguments in a lawsuit against the BLM filed by Colorado, North Dakota, Utah, Wyoming, the Western Energy Alliance and the Independent Petroleum Association of America. He issued the stay six hours before the rules were set to take effect.

Meantime, he gave the BLM a month to submit documents detailing its rule-making process.

“This is too important of an issue for me to make short shrift of it,” Skavdahl said.

He pledged to rule by mid-August on a request to suspend the rules while the lawsuit moves ahead.

The stay is just the first of a likely long process of legal skirmishing over the rules, said North Dakota Attorney General Wayne Stenehjem.

“It really, I think, emphasized these rules aren’t ready for prime time,” Stenehjem said.

It’s good Skavdahl is taking time to carefully consider the rules when state rules for oil and gas development have proven effective, Gov. Matt Mead said in a statement.

“The rules proposed by the Bureau of Land Management add no environmental benefit to Wyoming. They would only add another layer of unnecessary bureaucracy and cost to industry,” Mead said.

The BLM will honor the stay and process applications for permits to drill on federal land and mineral estate under the pre-existing rules for now, said Interior Department spokeswoman Jessica Kershaw.

Skavdahl specifically asked for more details about the rules’ potential cost. While the BLM has estimated the rules would cost just a few thousand dollars per well at most, North Dakota estimated the rules would cost $300 million a year in lost tax and royalty revenue amid a slowdown in development.

Wyoming and Utah made similar arguments.

“Developers will flee Utah as a simple cost-avoidance measure, both during the weakened oil market and after,” attorneys for Utah argued in court documents.

The rules would cost the oil and gas industry an additional $11,000 to $97,000 per well, according to the filing.

But BLM attorney David Carson pointed out that state oil and gas development regulations - such as Wyoming’s, which were enacted in 2010 and are said to be stricter than the new BLM rules - have had no such effect.

“It’s all just entirely speculative,” Carson said. “It just makes no sense that suddenly operators, in the next six months, will run to other states.”

The rules would require petroleum developers to disclose the chemical products they use to facilitate fracking through a national online database. Fracking involves pumping large volumes of water mixed with fine sand and chemicals into wells to crack open deposits and aid the flow of oil and gas.

Other new rules include requiring pressure testing of newly installed well bores.

Six environmental groups have sided with the federal government in the case, arguing strong standards are needed protect water, wildlife and federal lands.


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