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Agenda Shows BLM Frack Rule on Track, But Others Delayed

The Bureau of Land Management (BLM) appears on track to finalize a rule governing hydraulic fracturing (fracking) on federal land by the end of the month, but proposed rules by other agencies within the Department of Interior (DOI) and the U.S. Department of Environmental Protection (EPA) face delays, according to the Obama administration's latest Unified Agenda, released Friday.

Proposed rules covering blowout preventers, the Arctic, royalty payments, flaring and venting all appear headed for delays into 2015 and, in some cases, 2016. Outside the DOI, the Securities and Exchange Commission (SEC) has delayed a controversial proposed rule under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which would require the disclosure of foreign payments for oil and natural gas development.

"At first blush, the new agenda...appears to fulfill our expectation that [President Obama] might take a greener turn in his 'give a little, take a little' energy policy during his final two years in office," analysts at ClearView Energy Partners LLC told their clients in a note Monday.

As this administration’s term winds toward the exit at the end of 2016 the pressure is on to complete action on key issues. Typically, there is a rush to finalize federal rules and directives as the takeover by a new administration draws closer.

According to the latest agenda, the BLM will take final action on a rule to regulate fracking on public and Indian land in November (see Shale Daily, Nov. 27, 2013). An extended public comment period for a supplemental notice of proposed rulemaking (NPRM) ended on Aug. 23.

"The final rule would provide for disclosure to the public of chemicals used in hydraulic fracturing on public land and Indian land, strengthen regulations related to well-bore integrity, and address issues related to recovered water," the BLM said. "This rule is necessary to provide useful information to the public and to assure that hydraulic fracturing is conducted in a way that adequately protects the environment.

In response to the Deepwater Horizon incident, DOI's Bureau of Safety and Environmental Enforcement (BSEE) had planned to issue a proposed rule to upgrade regulations for designing, manufacturing and repairing blowout preventers in March (see Daily GPI, Nov. 27, 2013). But the latest Unified Agenda says an NPRM will be issued in February 2015, followed by final action in July 2015.

BSEE and another DOI agency, the Bureau of Ocean Energy Management (BOEM), are jointly promulgating regulations to govern oil and gas operations on the Alaska Outer Continental Shelf. The agenda says both agencies still anticipate issuing an NPRM this month, but final action is not expected until October 2015.

The agenda says BLM will have an advanced NPRM on the royalty rate for new federal onshore competitive oil and gas leases completed by December. Meanwhile, an NPRM for a separate proposed rule at BLM "to limit the waste of vented and flared gas" is expected in April 2015, with final action to follow one year later, in April 2016 (see Shale Daily, May 15).

Another DOI agency, the U.S. Fish and Wildlife Service, is to take final action on designating critical habitat for the Gunnison Sage Grouse this month, and for a bi-state distinct population segment for the Greater Sage-Grouse in March 2015 (see Daily GPI, Sept. 10).

At the EPA, one issue that has been debated for years is lurching forward. A rulemaking on effluent limitations guidelines and standards -- specifically, for pretreatment standards for wastewater from unconventional oil and gas drilling -- is expected in February 2015, with a final rule issued in March 2016 (see Shale Daily, Nov. 18, 2011).

A rulemaking on the EPA's proposed hazardous air pollutants (HAP) risk from oil and gas wells is planned for May 2015, with a final rule to follow in May 2016. Rules were first promulgated in 2012, but the agency received several petitions to reconsider, clarify and amend them (see Shale Daily, Dec. 30, 2011). "At this time we are evaluating potential issues to reconsider," EPA said in the agenda. Similar petitions brought the EPA to reconsider rules covering New Source Performance Standards (NSPS); an NPRM will be unveiled in May 2015, with a final rule in June 2016.

Also at EPA, a proposed rulemaking to revise Subpart W of the Petroleum and Natural Gas Systems source category of the Greenhouse Gas Reporting Rule is expected in December, with a final rule issued in October 2015 (see Daily GPI, April 17, 2013). Meanwhile, a proposed rulemaking for defining "source terms within the Prevention of Deterioration (PSD) and Nonattainment New Source Review (programs as they apply to the oil and gas extraction industry" is expected by May 2015.

The SEC's proposed rule governing the disclosure of "payments made to foreign governments or the federal government for the purpose of commercial development of oil, natural gas or minerals" was vacated and remanded to the commission by the U.S. District Court for the District of Columbia in July 2013. According to the agenda, the SEC now plans to issue an NPRM in October 2015.

Oxfam America, an international relief and development organization, sued the SEC in September for delaying the rule.

"The SEC remains bound by the statutory deadline to produce a rule 270 days after the enactment of the Dodd-Frank Act. It has now been out of compliance with that deadline for a total of three years," Isabel Munilla, senior policy advisor for Oxfam, said in a statement Monday. "Investors with more than $6 trillion in assets, and more than 500 civil society groups from around the world have written to the SEC calling on the prompt release of a strong rule.

"Other markets like the UK are moving quickly ahead, leaving the U.S., and U.S. companies, far behind. These rules are more important than ever, as new oil, gas and mineral development quickly expands in places like Burma, Kenya, Cambodia, and in the Gulf of Mexico -- meaning millions of dollars in payments will be shrouded in secrecy."

Elsewhere, according to the agenda, the Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) is planning to unveil a proposed rule on amending and clarifying hazardous materials regulations in August 2015. The review comes after concerns over the flammability of Bakken Shale oil and a series of railcar accidents (see Shale Daily, July 24May 7). PHMSA will also issue an NPRM on oil spill response plans for high-hazard flammable trains in August 2015.

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