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Utah is going to join Wyoming's legal challenge of new federal fracking rules on public and tribal lands, Gov. Gary Herbert announced Monday on the eve of his Energy Summit.
Herbert believes the regulations will illegally inhibit oil and gas development in the state.
"There is no question the practice of hydraulic fracturing should be regulated in order to ensure protection of the environment," Herbert said at the annual business meeting of the Interstate Oil and Gas Compact Commission. "However, adoption of the proposed rule would create an inconsistent, costly and inefficient regulatory system that provides no additional environmental protection or public safety than is offered by programs already enforced by the state."
Last March, the U.S. Department of Interior adopted the rules to more closely regulate the drilling practice known has hydraulic fracturing, or fracking, in which chemically treated water is injected into hydrocarbon-rich formations.
The rules, which take effect in June and were finalized after three years of public involvement, set requirements for handling wastewater, ensuring well integrity and disclosure of the chemical used.
Fracking has spurred a cross-country oil and gas boom in domestic production by freeing hydrocarbons that would otherwise be unrecoverable.
But environmentalists are concerned fracking fluids and hydrocarbons could escape the well bores and contaminate groundwater.
Some groups applauded the rules, yet argued they didn't go far enough. "Companies are already complying with stronger rules in some places, so it is economically and technically feasible to comply. If the states aren't going to do it, the [Bureau of Land Management] is the right agency to do it," said Amy Mall, a policy analyst with the Natural Resources Defense Council. "In this case, the BLM is the manager of the land. It's fulfilling its duty in ensuring that its rules protect public lands and water flowing under those public lands."
But the fracking rules exceed the BLM's authority, violate the federal Safe Drinking Water Act and interfere with state efforts to regulate fracking, according to the lawsuit filed in U.S. District Court in Cheyenne the day the rules were announced. North Dakota and Colorado have already joined the suit.
"This is yet another unfortunate example of federal regulatory overreach," Herbert said. "The only thing this rule will achieve is more red tape, more delays, fewer jobs and less revenue for both Utah and the federal treasury."
The governor's announcement coincided with his designation of this week as Utah Energy Development Week, and his Energy Summit is set to open Wednesday at the Salt Palace Convention Center.
Environmental groups plan to use the occasion to blast what they describe as Herbert's agenda to promote dirty fossil fuels. Thursday morning, protesters will greet summit attendees with a "fire-barrel protest" and Salt Lake Community College students will stage a noon "zombie march" from the Gallivan Center to the conference center to highlight the dangers of tar sands mining.
The fracking rules, which apply to 700 million acres of minerals managed by the BLM and 56 million acres of tribal land, require wastewater to be stored in enclosed tanks, lined pits and beefed-up well casings to ensure fluids do not escape into the ground, particularly into formations that harbor drinking water.
While the BLM estimated it would cost $12,000 per fracked well to comply with the guidelines, Utah officials say it could cost somewhere between $97,000 and $253,000 per well.
That's an annual price tag of $243 million for Utah's oil and gas industry. "Considering the high cost of the idling of equipment, the cost of delays waiting for cement to cure for cement bond logs, and any other delays waiting for BLM approvals, the cost of this rule is significantly higher than BLM's estimated cost of $37-$44 million per year," Cody Stewart, the governor's energy advisor, wrote in his comment on the draft rules back in 2012.
The Utah Division of Oil, Gas and Mining has successfully regulated fracking for years, officials contend. Current state rules allow fracking flowback water to be injected into disposal wells, stored in evaporation ponds or decontaminated for re-use in other jobs.
"We have not had a problem in Utah," Stewart said. "It's a redundant, excessive law. It will have a much broader impact in Western public lands states. It puts us at its disadvantage."
In the face of soft oil prices, drilling in Utah has dropped off steeply. There are four active drill rigs in Utah — down from 18 a year-and-a-half ago, according to Lee Peacock, executive director of the Utah Petroleum Association.
"We think the fracking rule will make it worse," Peacock said. "It is not helpful to the environment and will be costly to comply with."
On the disclosure end, the rule relies on FracFocus.org, an online database used by at least 16 states to track the chemicals used in fracking. Industry and intergovernmental groups set up the site to allow users to gather well-specific data on thousands of drilling sites. But the database is incomplete and many companies choose not to disclose specific chemicals.
Under the new rules, companies must disclose the chemicals they use within 30 days of the fracking operation.
"The administration is trying to improve transparency with better disclosure of the chemicals used and how much water. Right now there is nothing governing how, why or when a company can claim a trade secret and they do it routinely," said Mary Greene of the Environmental Integrity Project.
"The public does not know what is being put down these wells," added Greene. "These are measures the states should be encouraged to adopt. It should be viewed as an opportunity for industry to showcase their risk-mitigation strategy and allay public concerns about the chemicals used."