U.S. rules on fracking on public lands seen costing drillers dearly

A proposed set of federal rules governing hydraulic fracturing on public lands would cost oil and gas producers in the western US at least $345 million a year in extra costs if finalized, according to industry groups. The Interior Department's Bureau of Land Management estimates the rules, which are awaiting a final seal of approval after many months in the works, would cost drillers an extra $12 million to $20 million per year. The proposed measures were scaled back from an earlier plan that would have cost explorers about twice as much. The groups said the "cost to society" of the rules would be $345 million per year extra, with an average per-well cost of $96,913. "While there are improvements in the second version of the rule, it still remains fundamentally flawed from an engineering perspective, as well as bad regulatory policy," Kathleen Sgamma, a vice president of government affairs for the Western Energy Alliance, said in a statement released on Monday in conjunction with the Independent Petroleum Association of America. "(Interior) still has not justified the rule from an economic or scientific point of view, and continues to lack the budget, staff or expertise to implement it." The WEA and IPAA said a recent economic analysis showed that requirements for enhanced casing in drilling wells accounted for nearly 90% of the extra cost...more