Oil & Gas Industry Groups Sue over U.S. Fracking Rules

 

In what could be the start of a broad industry assault on the rules, the Independent Petroleum Association of America (IPAA) and Western Energy Alliance sued the U.S. Interior Department. Other industry groups and companies are expected to follow suit.

 

The new regulations would require companies to provide data on the chemicals used in hydraulic fracturing, or fracking, and to take steps to prevent leakage from oil and gas wells on federally owned land. They do not cover wells on private land.

 

Fracking, involves injection of large amounts of water, sand and chemicals underground at high pressure to extract fuel.

 

The groups described the rules, under development for nearly four years, as "arbitrary and unnecessary burdens" for industry and asked the U.S. District Court for the District of Wyoming to throw out the rules.

 

Courts typically give the government great deference when it comes to determining the need for regulations of this nature, setting a high bar for the groups involved in this case to overcome, said Thomas Lorenzen, of law firm Dorsey and Whitney.

 

"Industry really has to establish ... that there was no reasonable basis for the government to conclude that there is a threat here unaddressed by state regulations," said Lorenzen, who served as an assistant chief in the Justice Department from 2004 to 2013.

 

Environmentalists have charged that fracking, which helped unleash the shale oil and gas boom, pollutes the air and fouls drinking water supplies. Oil and gas industry supporters counter that the practice has been done safely for decades.

 

Interior's rules represent "a reaction to unsubstantiated concerns" and are "contrary to the law," IPAA and Western Energy Alliance said in their lawsuit.

 

The groups argued the regulations were unnecessary because they largely duplicate standards already imposed by states.

 

Represented by BakerHostetler, the groups also raised concerns that the rules' disclosure requirements would force companies to reveal confidential engineering design information that is protected under federal public records laws.

 

The case is Independent Petroleum Association of America et al v. Jewell et al, U.S. District Court for the District of Wyoming, No. 15-cv-00041. 

 

(Reporting by Ayesha Rascoe; Editing by Kevin Drawbuagh and David Gregorio)