Friday, May 4, 2012

U.S. sets new rules for fracking on federal lands

(Reuters) - The Obama administration unveiled long-awaited rules on Friday to bolster oversight of "fracking" on public lands, seeking to allay environmental concerns over the technology that has spurred a boom in shale gas drilling in the United States.

The Interior Department proposal would require companies to obtain government approval to use hydraulic fracturing, or fracking, in drilling for natural gas on federal lands.

The rules would not affect drilling on private land, where the bulk of shale exploration is taking place. Still, the administration has said it hopes the rules could be used as a template for state regulators.

"Most shale plays are out of the reach of Interior," said Whitney Stanco, an analyst with the Guggenheim Washington Research Group.

A Guggenheim analysis found that only about 5 percent of shale wells drilling in the United States in the past decade occurred on federal lands.

The proposal would also require that companies disclose the fluids used in hydraulic fracturing after completing the process, which involves injecting water, sand and chemicals under the ground to extract fuel. Read More