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Daines presses Obama administration to abandon federal fracking rule; MT Senator Alan Olson speaks out against rule in Natural Resources hearing

 Congressman Steve Daines today called on the Obama administration to abandon its recent proposals to impose costly and burdensome federal regulations on hydraulic fracturing, which hold serious threats to oil and gas production in eastern Montana.

In a letter to Department of Interior Secretary Sally Jewell, Daines shared his concerns that the Department of Interior’s proposed rule on hydraulic fracturing would negatively impact the current and future economic development in Montana.

Daines’ letter may be found here.

“In Montana, we rely on our natural resources for energy and mineral development, and we understand that acting safely and responsibly is the only option when exploring and producing these resources,” Daines stated. “Hydraulic fracturing is critical for Montana to maximize our energy potential. Without hydraulic fracturing, many of Montana’s wells would not be economical, risking a loss of at least $4 billion worth of oil and $350 million of state revenues.”

Daines also noted the duplicative nature of the federal regulation, given the current success of state authority to regulate hydraulic fracturing.

“State regulators are best equipped to adequately implement and enforce fracturing regulations according to each state’s respective geology—not a bureaucrat in Washington,” Daines stated.“Another layer of federal bureaucratic red tape will only slow down current production as many of these proposed procedures in the BLM hydraulic fracturing rule duplicate state requirements and good business practices that are already in use.”

The Bureau of Land Management estimates that the proposed regulation has the potential to cost $11,000 per well drilled in order to comply with the rule, while other estimates amount to $260,000 per well.  Aggregate costs for new permits and well work overs resulting from this rule range from $1.499 billion to $1.615 billion annually.

This morning at a Natural Resources Committee oversight hearing titled “DOI Hydraulic Fracturing Rule: A Recipe for Government Waste, Duplication and Delay,” Daines was also joined by Montana State Senator Alan Olson (R-Roundup), who testified before the committee about the potential impact of the Department of Interior’s proposed regulations on oil and gas development in Montana.

Video of Daines’ introduction and Olson’s remarks may be downloaded here. Olson’s full written testimony, as prepared for delivery, is available here.

“States have successfully regulated more than 1.2 million hydraulic fracturing (HF) operations spanning sixty years; new federal mandates are not necessary given their exemplary safety record,”Olson stated during his testimony.“State rules specifically tailored to each state’s unique geologic and hydrologic conditions better protect the environment and groundwater than a one-size-fits-all federal rule.”

“These intrusions by the federal government into actions that the States already adequately regulate will also cost taxpayers millions in additional expenses,” Olson continued.“These unnecessary, redundant regulations will cost industry over a billion dollars in additional expenses, it will drive up the costs of inputs for transportation fuels, and it will reduce revenues to Federal, State and Local governments.”

Olson serves as the Chairman of the Montana Senate Energy and Telecommunications Committee.  He works as a field representative for Sanjel and previously served for 19 years as a field inspector for the Montana Board of Oil and Gas Conservation.

“The proposed federal hydraulic fracturing rule is a big concern for many folks in my home state of Montana. That is why I would like to warmly welcome Senator Alan Olson from Roundup, Montana,”Daines stated as he introduced Olson to the Committee.“He has extensive firsthand experience in the oil and gas industry. He also understands from the perspective of a state agency the importance of ensuring hydraulic fracturing is done responsibly. He is a true testament to the importance of hydraulic fracturing to the development of energy resources in the state of Montana.”

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