The Interior Department’s Bureau of Land Management has made some concessions in its latest draft rule issued Thursday to avoid duplication of the states’ and tribal requirements for hydraulic fracturing (fracking) on public lands (see Daily GPI, May 17).
One such concession would continue reliance on the state and industry led development of a central point of disclosure for chemicals used in fracking. The BLM said it is working closely with the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission “so that operators may report chemicals used in hydraulic fracturing operations to BLM through the existing FracFocus.org website [hosted by the two organizations], which is already well established and used by many States.”
BLM said it understands “the database is in the process of being improved and will in the near future have enhanced search capabilities and allow for easier reporting of information.” Well operators may either report to FracFocus or BLM, but in any case the agency intends to post all the information it receives on Fracfocus, which will serve as an information site for the public.
Possibly a good sign is that both producers and environmentalists appear to be equally critical of the rule. In rulemaking it is generally understood that if neither side likes it, it may have hit that hallowed middle ground.
“At first blush, the [draft rule] appears to give producers greater flexibility in the management, permitting and reporting of fracking operations, but it does impose several new data gathering and operational responsibilities that were not” in last year’s proposed rule, said Timothy T. Chung, vice president of research for Washington, DC-based ClearView Energy Partners LLC.
The “more lenient” proposal suggests a continuation of the Obama administration’s “give a little, take a little” energy policy, he said.
Improvements in the rule were made, but it still fell short of the expectations of both oil and natural gas producers and environmental groups. “While changes to the proposed rule attempt to better acknowledge the state role, BLM has yet to answer the question [of] why BLM is moving forward with these requirements in the first place,” said Erik Milito director of upstream and industry operations for the American Petroleum Institute (API).
“The production of oil and natural gas from shale and tight sand formations is the most significant development in U.S. energy in generations. Confusing the regulatory system would stand in [the] way of economic growth, job creation and the opportunity to generate billions in revenue for federal, state and local governments,” he said.
But state rules don’t quite cut it on federal and Indian lands. In the 171-page draft fracking rule, the agency explained why a federal rule was necessary. “The BLM recognizes the efforts of some states to regulate hydraulic fracturing and seeks to avoid duplicative regulatory requirements. However, it is important to recognize that a major impetus for a separate BLM rule is that states are not legally required to meet the stewardship standards applying to public lands and do not have trust responsibilities for Indian lands under federal lands.”
The rule will be subject to a 30-day comment period, which means that the BLM could potentially finalize it in the third quarter, said Cheung. However, the time line may change.
Barry Russell, president of the Independent Petroleum Association of America, said his group plans to seek an extension of the comment period and is hoping to schedule a face-to-face meeting with BLM to discuss the new rule.
The Sierra Club said it is “alarmed and disappointed” by the “fundamental inadequacy” of the new draft rule, which it contends continues to “give polluters a free ride. “Although no amount of regulation will make fracking acceptable, the proposed BLM rules fail even to take obvious steps to make it safer. This proposal does not require drillers to disclose all chemicals being used for fracking and continues to allow trade secret exemptions for the oil and gas industry. There is no requirement for baseline water testing and no setback requirements to govern how close to homes and schools drilling can happen. The rules also continue to allow the use of toxic diesel for fracking, as well as open pits for storing wastewater,” the environmental group said.
“It’s my belief that the states are prudently regulating [fracking] and that BLM’s revised rule should closely track state regulations,” said Sen. Lisa Murkowski of Alaska, the ranking Republican on the Senate Energy and Natural Resources Committee. “Federal regulators seem to acknowledge as much by asking for comments on a process that would allow drilling companies to follow state and tribal regulations that meet or exceed those proposed by this rule.
“While I’m still reviewing the full rule, it appears BLM has addressed some of the concerns, but we still must guard against duplicative and potentially contradictory regulations,” she said.
Thomas Pyle, president of the Institute for Energy Research, called the draft rules “another power grab” by the Obama administration, which he claims is “seeking to fix a problem even former EPA Administrator Lisa Jackson said does not exist. Despite 60 years of safe hydraulic fracturing in more than one million successful wells, the Interior Department will now add another layer of sluggish bureaucracy for everyone seeking to harness the tremendous economic and energy potential on taxpayer-owned federal lands.”
The draft fracking document includes rules covering the use of an expanded set of cement evaluation tools to ensure that usable water zones have been isolated and protected from contamination, and more detailed guidance on how trade secret claims are handled. BLM said it modeled the proposed chemical disclosure rules on those now in place in Colorado. BLM also cited Wyoming, Arkansas and Texas as providing good models for disclosure and oversight of oil and gas drilling operations.
The revised draft would require use of cement evaluation logs (CEL) in the place of the originally proposed cement bond logs (CBL). “The use of the broader term of CEL is intended to allow a variety of logging methods to be used to show the adequacy of cementing, including technologies such as ultrasonic logs, variable density logs, micro-seismograms, standard CBLs, CBLs with direction receiver array, ultrasonic pulse echo technique and isolation scanners,” the revised draft said..
Saying that fracking is taking place on 90% of the public lands where drilling is ongoing, Interior Secretary Sally Jewell said the draft rules attempt to complement the efforts of states that have rules regarding fracking. “Under these proposed rules, the will work with states and Tribes that already have rules in place so we don’t introduce duplication or delays,” she said.
Anticipating concerns about regional and geological differences around the country, Jewell said the revised draft rules are flexible enough to accommodate various regional differences.
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