US chemical, manufacturing firms welcome fracking rule delay

22 June 2012 21:23  [Source: ICIS news]

WASHINGTON (ICIS)--US chemical producers and other major manufacturers on Friday welcomed plans by the Obama administration to postpone for two months proposed regulations on hydraulic fracturing.

The Industrial Energy Consumers of America (IECA) said that plans by the Department of the Interior, announced in early May, to regulate the crucial natural gas drilling technique known as fracking posed a risk to US energy development.

The proposed rules, put forward by the department’s Bureau of Land Management (BLM), would require drillers to disclose chemicals used in fracking operations, set mandatory standards for well-bore integrity and establish environmental control requirements for fracking fluids that flow back to the surface.

The comment period for industry and public reaction to the proposed rules was to end in about two weeks on 10 July.

But earlier this week, Wyoming Governor Matt Mead formally requested an extension of the comment period, arguing that the state has long had adequate fracking regulations in place, and that the Interior Department rules would be “duplicative, unnecessary and cumbersome”.

Apparently in reaction to Mead’s request and a wide range of industry objections to the rules and their scientific basis, White House deputy assistant Heather Zichal told a natural gas luncheon this week that the administration would extend the comment period for 60 days.

IECA president Paul Cicio said the delay was welcome because “the proposed BLM regulation of hydraulic fracturing raises significant concerns that drilling permitting will slow and that production rates will fall”.

About one-third of IECA’s member firms are petrochemical and chemical producers, with the balance made up of automotive, foods, paper and building supplies manufacturers.

Cicio said that “it is of great concern that BLM provides no supporting scientific data on hydraulic fracturing, well stimulation incidents or problems that justify new overarching regulation”.

“Without these findings, new regulations cannot be justified,” he added.

In addition to objections to the proposed BLM rules raised by IECA, a broad range of other chemical, energy and production entities have challenged the BLM plans.

Recent advances in horizontal drilling and hydraulic fracturing have produced a bonanza in US shale gas resource development, and newly abundant supplies of natural gas have restored global competitiveness for US petrochemical producers and downstream chemical makers.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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