The Obama administration enacted its first federal regulations for hydraulic fracturing techniques used on shale beds, potentially raising costs on the beleaguered fracking industry and putting additional pressure on energy-related exchange traded funds.

The Bureau of Land Management announced drillers on federal  lands are required to reveal chemicals used, meet well construction standards and adhere to safe disposal of contaminated water, Bloomberg reports.

The new rules will affect large energy players like Exxon Mobil (NYSE: XOM), Continental Resources (NYSE: CLR) and Sanchez Energy (NYSE: SN). With oil prices plunging over 60% since last year’s high, the industry is already struggling, reports Ed Carson for Investor’s Business Daily.

For instance, the Energy Select Sector SPDR (NYSEArca: XLE), which includes a hefty 15.6% position in XOM, has declined 10.4% over the past year. Additionally, the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEArca: XOP), which includes a 1.9% SN component and 1.4% in CLR, has plunged 30.4%. [Seasonal Trends May Not Help Oil ETFs This Time Around]

Moreover, as energy companies scrap new oil projects and cut down on capital expenditures, drilling services providers like Baker Hughes (NYSE: BHI), Halliburton (NYSE: HAL) and Schlumberger (NYSE: SLB) have also tightened their belts. The Market Vectors Oil Service ETF (NYSEArca: OIH), which has 20.5% SLB, 12.4% HAL and 5.8% BHI, has declined 30.6% over the past year. The iShares U.S. Oil Equipment & Services ETF (NYSEArca: IEZ), which includes SLB 21.5%, HAL 10.0% and BHI 8.1%, decreased 29.5% over the past year. [Oil Playing a Dirge for Energy Services ETFs]

Subscribe to our free daily newsletters!
Please enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events.