Dems hit lax fed drilling oversight

By MATTHEW DALY
Associated Press

WASHINGTON (AP) — Federal policing of oil and natural gas drilling on public lands is lax and inconsistent, with only 6 percent of violations resulting in monetary fines over 13 years, House Democrats said in a report Wednesday.

Fines over that time totaled less than $275,000, an amount that the Democratic staff of the House Natural Resources Committee characterized as little more than "pocket change" for oil and gas companies. The report said federal regulators issued no fines in the period studied, February 1998 to February 2011, in eight of the drilling states.

The report released Wednesday, said the government does little to ensure accountability or protect the environment, even as drilling on federal land has increased in recent years. The increase is driven in part by hydraulic fracturing, or "fracking," a drilling technique that has allowed companies to extract oil and gas long locked underground.

The report focuses on drilling activity that occurred on federal land in 17 states during three administrations, two Democratic and one Republican. A total of 2,025 citations for safety and drilling violations were issued to 335 companies, the report said, with 64 companies fined a total of $273,875.

"It would be an overstatement to even call these fines a slap on the wrist. For oil and gas companies making billions from drilling on America's public lands, this kind of inadequate oversight and enforcement is little more than a pin prick," said Massachusetts Rep. Edward Markey, the committee's top Democrat. Markey and Rep. Rush Holt, D-N.J., requested the report.

"American citizens and workers should feel confident that oil and gas companies are conducting business in the safest manner possible, and when they don't, that the U.S. government will step in and make sure they pay the price for their actions. This report indicates that confidence in the oversight of drilling on public lands should be limited, at best," Markey said.

The Obama administration is considering new rules for fracking at oil and gas wells on federal land.

President Barack Obama said in his State of the Union speech last month that the Interior Department will require energy companies to publicly disclose chemicals used in drilling for natural gas on public lands. Federal rules for fracking on public lands are set to be released in a few weeks.

Adam Fetcher, a spokesman for Interior Secretary Ken Salazar, said the department received the report Wednesday and will review it.

At Obama's direction, Interior is taking additional steps to ensure that domestic energy resources are developed safely and responsibly, "including measures to enhance public confidence in hydraulic fracturing on public lands, Fetcher said, referring to the new fracking rules expected in a few weeks.

"It is essential that the public have full confidence that the right safety and environmental protections are in place," Fetcher said.

Officials said several large penalties have been assessed recently against drilling companies, including a $2.1 million civil settlement last year with Denver-based Berry Petroleum Co., after an employee disabled production gauges that could have affected royalty payments on more than 150 Utah oil wells.

In fracking, millions of gallons of water, sand and chemicals are pumped into wells to break up underground rock formations, allowing oil and gas to escape. Energy companies have greatly expanded their use of fracking as they tap previously unreachable shale deposits, including the lucrative Marcellus Shale formation in Pennsylvania, New York and neighboring states.

The drilling practice has also attracted increased attention from Congress and regulators, as private groups and government agencies research whether it poses a danger to drinking water.

The report found that more than 2,000 violations were handed out by the Interior Department to oil and gas companies drilling on federal land. Of these, 549, or 27 percent, were classified by committee staff as a major environmental or safety violation. More than half the major violations stemmed from a nonfunctioning or missing blowout preventer, the same device that failed in the BP oil spill in the Gulf of Mexico, the report said.

A total of 113 major violations cited inadequate well-casing or cementing, another problem that occurred in the BP spill. Onshore, well-casing and cementing are a key defense against groundwater contamination. On at least 54 occasions, oil and gas companies began drilling on federal land before receiving formal approval to do so, the report said.

Despite those problems, monetary fines were rarely issued, the report said. In eight states — Alaska, Arkansas, Louisiana, North Dakota, Nevada, Ohio, South Dakota and West Virginia — no fines were issued for the period studied.

Thirteen companies were cited for at least 30 violations over the period studied, topped by Oklahoma-based Williams Production RMT Co., which received 98 citations and seven fines totaling $6,000.

Colorado-based Encana Oil & Gas Inc. received 63 citations and four fines totaling $11,000, while Texas-based Anadarko E & P Co. received 61 violations and one fine totaling $5,000.

(Copyright 2012 by The Associated Press. All Rights Reserved.)