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Frackers will have fairly benign regulatory environment: Analyst

A ruling by a federal judge that blocked the Obama administration's rules for hydraulic fracturing has set a very comfortable precedent for oil and gas companies, David Deckelbaum, analyst and director at KeyBanc Capital Markets, said Wednesday.

"They are going to have a fairly benign regularly environment going forward," Deckelbaum said in an interview with CNBC's "Power Lunch."

U.S. District Judge Scott Skavdahl ruled Tuesday that the Bureau of Land Management can't set rules for fracking because Congress has not authorized it to do so.

The Obama administration on Wednesday said the decision prevents regulators from using "21st-century standards" to ensure that oil and gas operations are conducted safely on public lands.

The ruling only affects about 10 percent of production in the United States because the administration's requirements had only applied to federal and tribal lands, Deckelbaum pointed out.

Had the proposal been allowed to stand, it would have increased average well costs by about $100,000, he said.

"It could have shaved a couple of percent off returns and really slowed this potential recovery."

—The Associated Press contributed to this report.