As producers turned up the volume on their opposition to the federal government's regulation of hydraulic fracturing (fracking) on public lands, they caught a break in the long-awaited proposed rule that Interior Department's Bureau of Land Management (BLM) issued Friday.
Unlike a draft that was issued in February, the proposed rule would require producers to disclose chemicals used during fracking operations on public and Native American lands only after the operations have been completed. The initial draft would have required the reporting of information on the fluids at least 30 days before a well stimulation could begin, which producers said would have delayed drilling operations (see Shale Daily, Feb. 6).
Interior Secretary Ken Salazar responded to criticism, mostly from environmentalists, of the department's decision not to require advance disclosure of fracking chemicals from producers. "We will achieve our objective with the rule that allows the disclosure to be made after the hydraulic fracturing because the chemicals will be posted on fracfocus.org, which is open to the public.
"Requiring the information before the fracking occurred would have caused, in our view, [production] delays that were not necessary, and we are with this proposal still maintaining our focus on the objective...[that the] American public is fully aware of the chemicals that are being injected into the underground," he said.
The rule includes "appropriate protections" for disclosing proprietary fracking chemicals, but producers will have to meet a "very high bar" for their chemicals to be deemed proprietary, said Salazar.
In addition to requiring the reporting of fracking chemicals, the proposed rules would require operators to assure the BLM of wellbore integrity -- that chemicals used in their wells during fracking operations are not escaping. Specifically it would require a producer to conduct a cementing bond log to ensure that cement is adhering solidly to the outside of the wellbore casing, thus ensuring wellbore integrity.
Producers also would need to confirm that they have a water management plan in place for the handling of fracking fluids that flow back to the surface following drilling operations.
Fracking has triggered a boom in shale gas development, and along with it have come environmental and safety concerns. "The extension of the practice has caused public concern about whether fracturing can allow or cause the contamination of underground water sources, whether the chemicals used in fracturing should be disclosed to the public, and whether there is adequate management of well integrity and the 'flowback' fluids that return to the surface during and after fracturing operations," the 81-page proposed rule said.
The American Petroleum Institute (API), which represents major oil and gas producers, said the BLM proposal appeared to contain changes that are favorable to industry. "While it appears constructive changes have been made, we are still reviewing the new proposal to see how the agency addressed the various concerns that we've raised," said Erik Milito, API upstream director.
Independent producers slammed the proposal. "America's independent oil and natural gas producers are already having a tough time obtaining permits to develop federal lands. BLM's proposed regulations, which would mandate one-size-fits-all regulations on well construction and hydraulic fracturing operations on these lands, are redundant. They will undoubtedly insert an unnecessary layer of rigidity into the permitting and development process," said Barry Russell, CEO of the Independent Petroleum Association of America (IPAA).
"IPAA believes that BLM's decision to utilize fracfocus.org [in the proposed rule], the chemical registry website that has been crucial to strong state-based regulatory regimes, is the appropriate choice, but the administration should recognize state success throughout the regulatory process and rely on it," he said. Operators conducting fracking operations voluntarily enter chemical data into the public website www.fracfocus.org.
A number of states -- Colorado, Oklahoma, Texas, Louisiana, North Dakota, Montana, Pennsylvania and Wyoming -- have their own requirements for the reporting of fracking chemicals, according to Salazar. He believes the BLM proposal will be a "good template" for the rest of the nation.
"I think this [BLM proposal] will be the role model that will be followed," he said. BLM Director Bob Abbey said the proposal was designed to "complement" state activities.
Noting that despite new technological developments, fracking rules have not been updated since 1988, Bruce Baizel of Earthworks' Oil and Gas Accountability Project said the new rules "create consistent minimum requirements for chemical disclosure, wellbore integrity and waste disposal, among other aspects of the process."
"National public lands need national standards. As the largest manager of oil and gas resources in the United States, the BLM can -- and should -- be a model for all oil and gas operations," Baizel said. "The BLM has an opportunity to join with the more responsible states in moving toward a future where the oil and gas production industry develops these resources in ways that reduce threats to public health and the environment and that respect the quality of life in local communities."
However, John Podesta, chairman of the Center of American Progress, said the proposed rule "denies the public the information necessary to assuage public health concerns. DOI has the opportunity and obligation to model best practices for development of this natural resource on public lands. Disclosure after the fact not only jeopardizes public health but also effectively cuts the public out of discussions that affect their communities."
Podesta also said the disclosure of chemicals should be available on a public, government website rather than a website created by industry.
America's Natural Gas Alliance (ANGA) had a different view, saying BLM's rules are duplicative of state regulations. "We will be doing a thorough review of the proposal but at first glance it indicates that the Department of Interior and, in particular, the Bureau of Land Management, may not fully appreciate the significant regulatory steps already undertaken by states such as Colorado, Texas, Wyoming and others to oversee the safe and responsible development of natural gas through the use of hydraulic fracturing," said ANGA Executive Vice President Tom Amontree.
"The proposal as drafted would create reporting requirements, regulatory impediments and certifications that could substantially affect the ability to produce resources that are placed in the BLM's stewardship for the benefit of all Americans," he said.
At the forefront of the environmental fight to stop fracking, the Sierra Club said it would work closely with the Obama administration to ensure that it implements the "toughest safeguards possible to rein in irresponsible practices" on public lands. Specifically, the group said it wants the administration to reconsider the advance public disclosure requirement for fracking operations to ensure fracking waste does not contaminate public lands or waters.
Salazar said he believes there's a "very good chance" the proposed rule will be finalized by the end of the year. It will be put out for public comment for 60 days.