Flexibility in fracing reg seen still an open question

Increased flexibility for operators remains an open question in a revised proposal for federal regulation of hydraulic fracturing, according to a May 23 legal update by Roger W. Patrick of the law firm Mayer Brown.

“Many features of the revised proposal purport to give industry more flexibility,” Patrick said of the May 16 supplemental notice of proposed rulemaking by the Bureau of Land Management (OGJ Online, May 17, 2013). “The proof of that pudding will lie in the final version, the resources allocated to its implementation, and its application in the field (including coordination with other requirements such as the National Environmental Policy Act).”

The BLM still would be adding “its own layer of requirements to state and tribal regulations to address a risk that BLM itself terms ‘largely unknown’ and to realize benefits that are challenging to quantify,” Patrick said.

BLM received more than 177,000 comments on its original proposal and decided to issue a new draft instead of proceeding to a final rule.

Key changes

Here, according to Patrick, are some of the key changes:

• The BLM is narrowing the scope of the proposed rule to focus on hydraulic fracturing, not other “well stimulation” activities such as acidizing.

• The definition of “usable water” expressly lists zones that are deemed included and deemed excluded.

• The revised proposal would require a hydraulic fracturing application to include the estimated fracture direction, length, and height, including the fracture propagation plotted on a map. Fracture direction similarly would be included in the post-completion report.

• Operators would be able to show usable water zones are isolated by running a cement evaluation log (CEL), which may include any of a class of tools such as ultrasonic imagers, variable density logs, and microseismograms as well as cement bond logs (CBLs). The CEL would be submitted to BLM after fracturing, unless problems are identified. Under the initial proposal, the BLM would have required submittal of a CBL for approval prior to fracturing.

• Originally, the BLM would have required a CBL on each casing in a hydraulically fractured well that protects usable water. The revised proposal would give operators the option of running a CEL on a “type well” that would be used as a model for completions in a field with similar geology.

• Any indication of inadequate cementing would need to be reported to the BLM within 24 hr, with written confirmation within 48 hr.

• Chemical information could be reported directly to the BLM or through the FracFocus.org website.

• For trade secrets, the BLM modeled the revised proposal on Colorado’s procedures. Operators would be able to submit an affidavit to establish that certain information, including identities of the chemicals in hydraulic fracturing fluids and their maximum concentrations, is exempt from disclosure. Such information would be submitted to the BLM only at the bureau’s request.

• The revised proposal contains a procedure for operators to request a variance, which could be field-wide, basin-wide, or statewide. Further, the BLM plans to enter formal agreements with states and tribes to minimize duplicative agency efforts.

Other elements

BLM is retaining the right to request additional information during the approval process—on the grounds that it provides flexibility to regulate operations “over a broad range of geologic and environmental conditions,” Patrick said.

Mechanical integrity tests (MITs) still would be performed prior to fracturing. As in the original proposal, flowback fluids would be managed in tanks or lined pits; however, the BLM is reserving authority to require other protective measures.

For now, the bureau is rejecting several enhancements that requested in comments. For example, the revised proposal does not require baseline water testing or up-front disclosure of specific chemicals proposed for fracturing. Nor does it expressly include leak detection or double liners for impoundments, although the bureau is requesting comments on those potential additions.

BLM is accepting comments on the entire revised proposal. The comment deadline is likely to be 30 days after the proposal appears in the Federal Register. More time is a possibility; Reps. Doc Hastings (R-Wash.) and Ed Markey (D-Mass.) have jointly asked for a 120-day comment period.

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