The US Department of the Interior released its long-awaited proposal to regulate exploration and development of unconventional oil and gas resources on onshore public and tribal lands. The proposed rule would require public disclosure of chemicals used in hydraulic fracturing once that operation has been completed, improve regulations involving wellbore integrity, and address issues related to flowback water, US Interior Sec. Ken Salazar said.
"As we continue to offer millions of acres of America's public lands for oil and gas development, it is critical that the public have full confidence that the right safety and environmental protections are in place," Salazar told reporters during a May 4 teleconference. "The proposed rule will modernize our management of well stimulation activities—including hydraulic fracturing—to make sure that fracing operations conducted on public and Indian lands follow commonsense industry best practices."
US Bureau of Land Management Director Robert V. Abbey, who also participated, said comments on the proposal will be accepted for 60 days once it is published in the Federal Register sometime in the next week. BLM established its first fracing rules in 1982 and revised them in 1988, long before the latest fracing and horizontal drilling technologies began to be widely used, he noted. "We've adopted a flexible approach to improve reporting and oversight without complicated procedures," he said.
The proposed regulations were developed following extensive public consultations which included oil and gas producers, Salazar and Abbey emphasized. Officials from three industry associations responded critically, however.
"America's independent oil and natural gas producers are already having a tough time obtaining permits to develop federal lands," Independent Petroleum Association of America Pres. Barry Russell said. "BLM's proposed regulations, which would mandate ‘one-size-fits-all' regulations on well construction and hydraulic fracturing operations on these lands, are redundant. They will undoubtedly insert an unnecessary layer of rigidity into the permitting and development process."
Serious disadvantage
Kathleen Sgamma, vice-president of government and public affairs at the Western Energy Alliance in Denver, stated, "Since nearly every well drilled in the West requires the use of fracing, these unnecessary new rules will only discourage the production of American energy. The new BLM rules will not add commensurate environmental protection, since fracing is already heavily regulated at the state level, but will seriously disadvantage western states compared to other regions of the country."
American Petroleum Institute Upstream Director Erik Milito acknowledged that the proposal apparently contains some constructive changes, but added that API is still reviewing it. "Energy production on federal lands has a history of driving job creation, and creating significant revenue for the government," Milito said. "But this potential could be stifled by a federal regulatory program that duplicates existing state regulations. This could have a chilling effect on investment and jobs."
Salazar said the proposed rule would complement, instead of duplicate, existing state regulations while providing a template for other states which are developing their own regulations. The frac fluid disclosure provision also reflects industry input, he indicated. "People who work in oil and gas production have shown us that posting the information 30 days after the frac operation accomplishes the purpose," Salazar said. "Requiring disclosure beforehand, as some environmental groups wanted, would create unnecessary delays."
Abbey noted that proposed requirements for operators to run a cement bond log and put into place a proper flowback fluid management plan are as important as disclosing frac fluid ingredients. "As companies drill and use fracing technologies, most already do a cement bond log which documents their actions to maintain a wellbore's integrity," he said. "As important as it is to disclose fracing chemicals, it's even more important to assure that they won't leak into surface or groundwater."
"This draft rule will be commented on. But it also has been prepared with extensive outreach across the United States," Salazar said. "At the end of the day, these are commonsense rules that need to be put into place."
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