After meeting with regional officials from the federal Bureau of Land Management (BLM) in Denver on Wednesday, North Dakota's chief regulator for oil and natural gas production, Lynn Helms, said he is convinced that there will be BLM rules covering hydraulic fracturing (fracking) on federal lands (see Shale Daily, May 17).
Helms, the director of the North Dakota Department of Mineral Resources (DMR), said it is a certain that the rules are coming, and he is convinced that parts of them will drive up the cost of oil and gas production.
Helms said the BLM officials with whom he met did not give any specifics on the possible timing for the fracking rules, but he said, "it seems very certain now that something will come out." A comment period on draft rules ends Friday (Aug. 23).
The issue has been bubbling in Congress generally along partisan lines, which surfaced most recently during the confirmation hearing of new Interior Department Secretary Sally Jewell, who has a mechanical engineering degree, understands fracking and has fracked wells herself (see Shale Daily, July 18; March 8).
At an energy industry conference in Houston on Wednesday, Energy Information Administration Deputy Director Howard Gruenspecht during a presentation made the assertion that very little of the nation's shale gas and oil treasury lies under federal lands (see Shale Daily, Aug. 16).
Helms said he is concerned about the impact of energy development on federal grasslands and specifically the Fort Berthold Indian Reservation in North Dakota, which accounts for 25% of the state's current production. However, he conceded that BLM officials have promised there will be some variances to the rules that will be permitted. He thinks that is good, but getting the variances may take awhile.
"They made it sound very certain that there are going to be the hydraulic fracturing rules. There will be a process for states to seek variances," he said.
The lack of action by the majority of the 30 states with oil/gas resources and federal lands has helped push BLM to draft the rules, said Helms, adding that resource-rich states like Wyoming, Texas and North Dakota were the first three states to adopt their own fracking and chemical disclosure rules. Thirteen states, including North Dakota, have established fracking rules, he said.
"There are a couple of areas in the proposed rules where there is significant 'overreach' by the federal agency," Helms said. "It will require extra rig time and logging on every well. It is going to be extensive and slow down the drilling process by as much as 10% on every single well."
Calling the proposed rules broad and comprehensive, Helms said the BLM proposal mirrors the set of rules North Dakota already has in place. "I think it can be something we can work through over time and achieve variances, but that will be a slow process."
Delving into the details, Helms said the BLM standards have an "enormous focus" on water and a very broad definition called "useable water." So there is a lot of verbiage in the rules designed to identify where frack water comes from and where any flowback water eventually goes, he said.
"Even more so, there are all sorts of requirements about running data logs on each well with detailed measurements of the cementing of the casings in a well," Helms said. "Industry and state regulators already recognize that the current requirement in the proposed rule is impractical because you would have to shut the well down for three days, let the cement cure, and then plug in all the data called for."
Helms said he and others are working very hard to get this part of the BLM draft rules changed.