The U.S. Department of the Interior (DOI) released Friday its final rule through which the Bureau of Land Management (BLM) would implement new regulations for hydraulic fracturing activity on U.S. and federal and Indian lands.
The new rule, which will take effect in 90 days, would require oil and gas companies to validate the integrity of well construction and require companies to disclose the chemicals used in hydraulic fracturing to BLM through the website FracFocus within 30 days of completing fracturing operations on a well.
It also would ban the use of wastewater pits at drilling sites, requiring companies to use above ground tanks instead, to mitigate the impact of recovered waste fluids on air, water and wildlife. Additionally, companies would have to submit more detailed information on geology, depth and location of pre-existing wells to allow BLM to better evaluate and manage the risks of cross-well contamination with chemicals and fluids used in a fracturing operation that could result in a spill or blowout.
Secretary of the Interior Sally Jewell, who hydraulically fractured wells while working as a petroleum engineer in Oklahoma, said she understand the risk and rewards that hydraulic fracturing brings. However, existing laws governing fracking are over 30 years old, and haven’t taken into account recent technology for hydraulic fracturing and horizontal drilling, and the complexity of larger operations at greater well depths and higher pressures.
Jewell and other DOI officials described the new and updated regulation as “common sense reform” that was developed through a four-year process, with extensive involvement with industry groups, tribal groups and the public and the analysis of more than 1.5 million comments gathered during public comment period of two draft rules.
The rule “provides a framework of safeguards and disclosure protocols that will allow for the continued responsible development of our federal oil and gas resources,” said Jewell during a conference call with reporters on Friday. “As we continue to offer millions of acres of public lands for conventional and renewable energy production, it is absolutely critical the public have confidence that transparent and effective safety and environmental protections are in place.”
The rule would affect the more than 100,000 oil and gas wells that exist on federally managed lands; of the wells currently being drilled, more than 90 percent use hydraulic fracturing. BLM currently oversees approximately 700 million subsurface acres of federal lands and conducts regulatory duties for Jewell for an additional 56 million acres of Indian tribal lands across the country.
Jewell noted that the rule includes a process that allows states and tribes to request variances from provisions for which they have an equal or more protective regulation in place. This will ensure duplication is avoided while allowing for the development of more protective standards by state and tribal governments.
Provisions in the new rule are similar to or based on existing state or tribal rules and best industry practices.
“This rule was informed and shaped by the technical expertise, interests and concerns of all our partners, and builds on the work of states and tribes to ensure best practices on a nationwide basis,” said BLM Director Neil Kornze.
By working with members of the oil and gas industry, state and tribal regulators, environmental experts, and the public, BLM estimates that the new rule will cost less than one-fourth of one percent of the cost of drilling a well, based on the U.S. Energy Information Administration’s average per well cost of $5.4 million.
DOI decided to partner with FracFocus for the disclosure of public chemicals, saying that the cost of creating a new website for companies to disclosure the chemicals they used, would have been $25 million, according to estimates by the U.S. Department of Energy Advisory Board. When the rule takes effect, BLM will be FracFocus’s largest customer, and BLM will be represented on FracFocus’ board. The website has already instituted a machine readable format, and is continuing to make improvements to the chemical disclosure process.
“We feel like we have an appropriate seat at the table,” said Jewell of concerns regarding over using FracFocus as the site for mandatory disclosures. “Working together with an existing and proven system benefits everyone.”
DOI also decided to require companies not to disclose chemicals until after completions, noting that companies don’t always know which chemical mix will work when they first start working on a well, Assistant Secretary for Land and Minerals Management Janice Schneider told reporters.
The decision to ban pits and require tanks was made based on discussion with operators, through BLM found that the large majority of operators are already using tanks, and others said it wouldn’t be a substantial issue of they were required to use tanks, said Schneider.
Energy industry groups saw the rule as a “step in the wrong direction” and a duplicative rule that would impose new costs and delays on energy development without improving existing state and federal regulations.
On Friday, the Independent Petroleum Association of America and the Western Energy Alliance filed in Wyoming court a lawsuit against Jewell and BLM, calling BLM’s rulemaking “a reaction to unsubstantiated concerns”. The groups asked for the regulations to be set aside, saying that the administration lacks the factual, scientific or engineering evidence necessary to sustain the agency’s action.
“We are disappointed that the rule did not appropriately recognize the extensive regulatory structures already in place in states across the country,” said Frank J. Macchiarola, executive vice president of government affairs for America’s Natural Gas Alliance, in a March 20 press release. “State regulators have shown that they best understand the unique geological conditions that exist within their borders, and they have the expertise needed to oversee natural gas development.”
“Despite the renaissance on state and private lands, energy production on federal lands has fallen, and this rule is just one more barrier to growth,” said American Petroleum Institute (API) Director Upstream and Industry Operations Erik Milito in a March 20 press statement. API urged BLM to work with states to minimize costs and delays created by the new rule.
API did credit BLM for following the leads of states that have already adopted FracFocus.org as their preferred tool for improving the availability of fracking fluid information.
Republican Senators Lisa Murkowski (R-AK) and John Hoeven (R-N.D.) also criticized the final rule, calling it duplicative and pointing to the success of U.S. states in effectively regulating hydraulic fracturing with good environment stewardship
“This administration has already taken unprecedented steps to block development in Alaska,” said Murkowski in a March 20 statement. “Given its anti-development approach, we should expect this rule to make it even harder to produce oil and gas on federal lands. The fact remains: If Interior was half as interested in new production as it is in new regulation, our nation would be a far better place.”
Environmental group Earthworks said the BLM’s decision to ban wastewater storage pits at sites and require oil companies to test the integrity of each well to help prevent pollution are big steps, but the overall rule still leaves communities, water and climate at risk. It also continues the Obama administration’s pattern of prioritizing fossil fuel extraction over clean energy development and people’s health, said Earthworks Policy Director Lauren Pagel, in a March 20 press release.
Despite the negative reaction from elected officials and industry groups, Jewell said DOI believes the standards are essential, particularly to address public concerns about the safety of groundwater.
“We are confident that this is the right thing for the American people, and offers a basic level of protection that the public will be very comfortable with,” Jewell noted.