On November 20, 2013, the U.S. House of Representatives approved two energy-related bills – one bill concerning hydraulic fracturing regulations on federal lands (H.R. 2728) and the second relating to applications for permits to drill (H.R. 1965). Two other energy bills are pending, one dealing with the permitting of natural gas pipelines (H.R. 1900) and the other with the standards to be used by the EPA in disseminating its report on the impacts of hydraulic fracturing on drinking water resources (H.R. 2850).

President Obama has threatened to veto at least three of these measures in the unlikely event they pass the Democratic-controlled Senate and reach his desk. The Administration believes that these bills would sabotage its environmental protection efforts.

H.R. 2728, was introduced by Bill Flores (R-TX) and approved by a vote of 235 to 187. This bill entitled “Protecting States’ Rights to Promote American Energy Security Act,” is a reaction to the Department of Interior, Bureau of Land Management’s proposed rules to regulate hydraulic fracturing on federal lands. The bill supports state-based regulations for fracking and the development of oil and gas. It would require “the Department of Interior…[to] recognize and defer to State regulations, permitting, and guidance, for all activities related to hydraulic fracturing, or any component of that process, relating to oil, gas, or geothermal production activities on Federal land…” See prior blog article dated July 30, 2013, “House subcommittee meeting on “Protecting States’ Rights to Promote American Energy Security Act.”

In a Statement of Administration Policy: H.R. 2728, the White House expressed its strong opposition to this bill, arguing that it prohibits the BLM “from ensuring that hydraulic fracturing activities taking place on Federal and Indian lands are managed in a safe and responsible manner.” The Administration points to the Mineral Leasing Act as requiring the BLM to oversee oil and gas operations on these lands. The bill is seen as undermining the DOI’s trust responsibilities to protect Indian lands and will “require BLM to defer to existing State regulations on hydraulic fracturing on Federal lands, regardless of the quality or comprehensiveness of the State regulations – thereby preventing consistent environmental protections.”

H.R. 1965, the “Federal Lands Jobs and Energy Security Act, introduced by Doug Lamborn (R-CO) was approved 228 to 192. This bill provides a strict timeline for the issuance of permits to drill by the DOI. The DOI would be required to issue or deny a permit within 30 days of receipt of the application, with some provision for a 30-day extension. The application will be “deemed approved” if the DOI has not made a decision after 60 days. According to the bill’s supporters, this legislation will “provide for onshore leasing certainty and give certainty to oil shale development for American energy security, economic development, and job creation.”

In its Statement of Administration Policy: H.R. 1965, the Administration faults the bill for undermining the nation’s energy security and for setting “an arbitrary standard for leasing in open areas over leasing on the basis of greatest resource potential…” According to the White House, this “legislation would also remove the environmental safeguards that ensure sound Federal leasing decision-making by eliminating appropriate reviews under the National Environment Policy Act and undermine public resource planning efforts that have established a balanced approach to responsible oil and gas development while providing protection valuable surface and subsistence resources…”

H.R. 1900, sponsored by Mike Pompeo (R-KS), would amend the Natural Gas Act to direct the Federal Energy Regulatory Commission (FERC) to approve or deny a certificate of public convenience and necessity for a pre-filed project within 12 months after receiving a complete application. If the agency responsible for issuing the permit or approval does not do so within 120 days after FERC issues its final environmental document, the permit or approval will take effect after 30 additional days. The White House sees this bill as forcing the agencies to make decisions based on incomplete information within “rigid, unworkable timeframes.”

H.R. 2850 was introduced by Lamar Smith (R-TX). This bill, the “EPA Hydraulic Fracturing Study Improvement Act,” requires the EPA to “adhere to” and “meet the standards and procedures for the dissemination of influential scientific, financial, or statistical information” relating to its research for its up-coming report on the impacts of hydraulic fracturing on drinking water resources. The report would be peer-reviewed to assure compliance with the EPA’s “Guidelines for Ensuring and Maximizing the Quality, Objectivity, Utility, and Integrity of the Information Disseminated by the Environmental Protection Agency.” The report would also be required to include “objective estimates of the probability, uncertainty, and consequence of each identified impact, taking into account the risk management practices of the States and industry.” The deadline for the final report would be September 30, 2016. The Administration has not yet issued a statement relating to this bill.

This post was written by Barclay Nicholson (barclay.nicholson@nortonrosefulbright.com or 713.651.3662) from Norton Rose Fulbright’s Energy Practice Group.