Lately, the oil and gas industry has faced a number of challenges. For example, environmental groups have sued federal and state agencies to contest their regulatory policies for drilling operations, particularly hydraulic fracturing. In addition, environmental groups have sponsored campaigns in several states in an attempt to convince voters to adopt hydraulic fracturing bans. That said, yesterday, the oil and gas industry successfully rebuffed one of the latest challenges to hydraulic fracturing and secured a major victory in the US Senate.
The Senate voted to reject a proposed measure that would have altered the current regulatory regime by increasing federal oversight of hydraulic fracturing. Under the current regime, the Safe Drinking Water Act’s Underground Injection Control (UIC) program governs the disposal of wastewater. However, the UIC does not regulate hydraulic fracturing. In 2005, Congress adopted an energy bill in which it confirmed that regulatory regime.
If the measure had passed, the Environmental Protection Agency would likely have been empowered to regulate hydraulic fracturing. The measure was sponsored by Senator Kirsten Gillibrand, the senator for New York. The proposal was rejected by a combination of Republicans and Democrats. Whereas sixty-three senators voted against the proposal, only thirty-five senators voted in favor of it. Some commentators have suggested that the proposed measure would have disrupted the current balance between state and federal regulation of drilling operations.
Read the proposed measure.
This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713 651 3662) and Johnjerica Hodge (johnjerica.hodge@nortonrosefulbright.com or 713 651 5698) from Norton Rose Fulbright's Energy Practice Group.
