Obama Administration Makes Two Regulatory Moves On Oil, Gas Operations

June 2012, Vol. 67 No. 6

Asked whether the API would ask the BLM to withdraw the proposed rule, Gerard did not answer directly. He said the API would continue to work with the White House and the BLM and look closely at the proposed rule. "But at the end of the exercise, we have to answer a fundamental question. That is: 'what is the need for these regulations?'" He pointed out that EPA Administrator Lisa Jackson said the week before there was no evidence of groundwater contamination from fracking, and allegations of contamination in specific places have been found to be hollow. Rather than concerning itself with a new layer of federal fracking rules, Gerard emphasized that the federal government “ought to be spending its time modifying oil and gas permitting rules.'"

He noted that Secretary of the Interior Salazar had just approved a permit for Anadarko to drill over 3,600 natural gas wells in Utah’s Uinta Basin. It took DOI six years to approve that permit, Gerard stated. "North Dakota can issue a permit in 14 days," he continued. "The federal government should be looking at those models."

FERC Approves Facilities For LNG Export
Fracking also has reared its head as an issue in the debate over U.S. exports of LNG. That debate took the next step forward when the Sierra Club filed a protest with the Department of Energy on April 18, two days after the Federal Energy Regulatory Commission, acting in the DOE's wake, approved the first construction permit at an existing LNG facility for modifications needed to export U.S. natural gas in the form of LNG. The FERC approved the first such application on April 16 approving a Sabine Pass Liquefaction LLC and Sabine Pass LNG L.P (Louisiana) application to build a liquefaction project in two stages, each consisting of two LNG process trains with a liquefaction capacity of an estimated 4.0 mtpa.

The DOE had separately approved exports from Sabine Pass in 2011. "The DOE has a responsibility to protect American families from the damaging side-effects of LNG exports," said Michael Brune, executive director of the Sierra Club. "There is no doubt that LNG exports will mean more dangerous fracking."

The Sierra Club is also opposing an application from Maryland's Cove Point LNG terminal to build a liquefaction facility. Construction is expected to begin in 2014, with an in-service date in 2017, pending receipt of necessary approvals, negotiating binding terminal service agreements with the shippers and successful completion of engineering studies.