This story was updated at 5:15 p.m.

The Interior Department today announced it will be revising a controversial draft rule to regulate hydraulic fracturing, the oil and gas production technique used at 90 percent of wells drilled on public lands.

Interior's Bureau of Land Management next week will send the changes to the White House for review and will later release a new proposal for public comment in the first quarter of 2013.

The changes indicate that the rule that drew widespread concern from oil and gas groups, Western governors, and Republican lawmakers after it was released last May is continuing to evolve and will likely not be finalized for several more months.

Interior Secretary Ken Salazar early next week is scheduled to hold a closed-door meeting with officials from major oil and gas companies -- including Apache Corp., ConocoPhillips Co., Anadarko Petroleum Corp., Williams Cos. and Statoil ASA -- to discuss federal regulatory issues, a source said.

It is unclear what changes are being proposed, but Interior said the new rule will still require disclosure of the chemicals companies inject underground, in addition to beefed-up standards ensuring wells do not leak and that wastewater is properly managed.

"As we continue to offer millions of acres of America's public lands for oil and gas development, it is important that the public have full confidence that the right safety and environmental protections are in place," Interior spokesman Blake Androff said. "The BLM is making improvements to the draft proposal in order to maximize flexibility, facilitate coordination with state practices and ensure that operators on public lands implement best practices."

News that Interior was considering changes to its fracturing rule was praised by Jack Gerard, president of the American Petroleum Institute.

"We welcome the administration's decision to reconsider the rules, which we requested, as a positive first step," Gerard said in a statement this afternoon. "However, the real test will be in the substance of the re-proposal. We hope the administration will recognize the strong oversight provided by existing state and federal regulations and take sufficient time to review the many thoughtful comments provided by the oil and natural gas industry and others."

Oil and gas groups complained that the rule would increase the cost of drilling on public lands, gum up the permitting process and duplicate regulations already overseen by states.

But environmentalists, including many Democrats in Congress, have insisted BLM's rules had not been updated since the 1980s, even as the use of fracturing for shale gas and oil rapidly expanded.

"There is consensus that the oil and gas industry should have to comply with the same environmental laws as other industries, that our clean air and clean water should be protected, and that enforcement should be tough," Amy Mall, senior policy analyst with New York-based Natural Resources Defense Council, wrote in a blog post last week, citing polls showing a majority of the public supports tough fracturing regulations.

BLM's draft rule last May would have required companies to disclose the chemicals they use within a month of a fracturing job, rather than before the well is stimulated as proposed by environmentalists (Greenwire, May 4, 2012).

BLM estimated the initial rule would cost operators $11,833 per well, a small portion of the overall cost to drill, though an industry-commissioned report by John Dunham & Associates argued the rule would cost drillers about 25 times that much.

BLM said its new revisions to the rule were informed by the more than 170,000 comments it received on the proposal.

Hydraulic fracturing, in which up to millions of gallons of water are injected at high pressures underground to create new seams for oil and gas, is credited with spurring production booms in North Dakota, Pennsylvania and Texas and helping reduce imports of foreign crude.