Producers, oil service companies, Native Americans and even some environmentalists agree on one point: that the Department of Interior’s Bureau of Land Management (BLM) should scrap its proposed rule overseeing hydraulic fracturing (fracking) operations on public and Indian lands and start all over again. But their reasons for requesting the do-over are entirely different.

The oil and gas industry contends that the agency rule should be jettisoned because it duplicates existing state regulation and would be costly and burdensome. A New York environmental group urged the Obama administration to go back to the drawing board and make the rule more stringent on industry. A Native American group challenged the authority of BLM to regulate oil and gas activities on Indian lands.

Halliburton Energy Services Inc. (HESI) “believes that the appropriate course for BLM is to terminate the rulemaking.” The agency has not demonstrated a need for the proposed federal rule in light of the “extensive and effective” state regulation of oil and gas activities, the Houston-based oilfield services firm said. “If BLM nevertheless proceeds to adopt rules, the bureau should rely on the existing state programs [and exempt] from the requirements of the [fracking] regulations…states that already have adopted effective oil and gas regulatory programs.”

To the extent that BLM extends its rules to states that do not have existing regulatory programs, “HESI encourages BLM to follow the states’ approach by 1) using [the website] FracFocus as the vehicle for disclosure of [fracking] chemicals used on federal lands, and 2) modifying its regulations to conform them more closely to existing state regulations, which will result in the elimination of a number of unnecessarily burdensome aspects of BLM’s proposed approach.”

At a minimum the agency should establish a process whereby operators — and/or service companies and chemical suppliers — can submit requests to BLM for advance bureau approval of trade secret protection for particular proprietary fracking products, chemicals, and/or related information before these products or chemicals are used on individual wells on federal lands, Haliburton said.

While the states allow companies to withhold trade secret information with respect to fracking fluids, the BLM’s proposed rule would not guarantee protection of proprietary information. The agency issued its fracking rule in May (see Shale Daily, May 7). Comments were due at the BLM Monday (see Shale Daily, Sept. 12).

“We believe the proposed new rule is unacceptable overreach into an area that has been successfully regulated by the states,” said Kenny Jordan, executive director of the Association of Energy Service Companies (AESC).

“For the past 60 years, states have safely regulated more than one million fracking operations…It seems unnecessary to establish a federal mandate now. State regulations are custom fit to each area’s unique geologic conditions. Local officials are better suited to manage environmental and safety issues related [to] nearby groundwater. A redundant federal rule managed from, in some cases thousands of miles away, does not seem on the face of it to be the best way to ensure the environment is protected.

“The AESC commends the agency’s efforts to protect our precious federal lands but firmly believes that the best methods to achieve that goal are those already in place at the state level. Further, we ask the BLM to suspend this proposed rulemaking until a thorough economic analysis is completed.”

Karen A. Harbert of the 21st Century Energy Institute, an affiliate of the U.S. Chamber of Commerce, urged the BLM to “withdraw the proposed rule and begin meaningful collaboration with the respective state oil and gas regulatory programs and multi-state organizations to determine whether potential regulatory gaps exists.

“If BLM does propose a new rule, it must clearly describe and assess those gaps [between state and federal regulation] and explain why BLM is the appropriate regulatory body to remedy any such gaps.”

Joesph Martens, commissioner of New York State’s Department of Environmental Conservation, urged the BLM to reject the proposed rule outright and start all over to make it stricter on industry, requiring full disclosure of all chemicals used in fracking and limiting the use of chemicals to only non-toxic and non-hazardous fluids.

The Council of Energy Resource Tribes (CERT) called on BLM to also withdraw the proposed rule and restart the rulemaking process, with greater involvement from the Bureau of Indian Affairs. The group further challenged BLM’s authority to regulate oil and gas activity on Indian lands under the Federal Land Policy and Management Act of 1976 (FLPMA).

“FLPMA mandates that the BLM is to regulate activity on ‘public lands.’ FLPMA defines ‘public lands’ as any land and interest in land owned by the United States…and administered by the secretary of the Interior through the BLM, except…lands held for the benefit of Indians, Aleuts and Eskimos,” CERT said. “Indian lands are, therefore, specifically and explicitly excluded from the BLM’s organic statute.”