Interior Releases First Federal Fracking Rule, Requires Chemical Disclosure, Safeguards

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By Tripp Baltz

March 20 — The Interior Department released a final hydraulic fracturing rule designed to require the oil and gas industry to engage in “safe, responsible drilling” on federal and tribal lands.

The first federal fracking rule—which includes requirements for wellbore integrity, public disclosure of fracking chemicals and wastewater handling and disposal—puts into place “commonsense” reforms to help define “the rules of the road for the oil and gas industry” while protecting public health and the environment, Interior Secretary Sally Jewell said March 20.

The oil and gas industry immediately challenged the rule, with the Independent Petroleum Association of America and the Western Energy Alliance filing a federal lawsuit in Wyoming, saying it is “unnecessary” and a “reaction to unsubstantiated concerns”.

The new rule is “simply another regulatory overreach by the Obama Administration that will hurt America's oil and natural gas producers,” the two groups said in a March 20 statement.

Members of Congress similarly assailed the move and introduced new legislation declaring states have exclusive authority to regulate fracking.

Environmental groups also found a lot to dislike in the final rule, although they noted it was an improvement over the proposed rule released in May 2013.

Earthworks issued a statement applauding the rule for including concrete measures to address fracking, including an effective ban on pits to store wastewater, which the group called a “big step.”

But the rule overall falls short of needed protections and “leaves communities, water and the climate at risk,” the group said. Similar comments came from other environmental groups.

Rules ‘Haven't Kept Pace.’

Still, an update to federal rules governing drilling was needed, Jewell said. “Many of the regulations on the books today haven't kept pace with advances in technology,” she said. “It's absolutely critical the public has confidence that robust safety and environmental protections are in place.”

The rule applies only to land owned by the federal government and Native American tribes, Jewell noted. The vast majority of oil and gas drilling operations in the U.S. are found on state-managed and private lands, where state rules will continue to govern, she said.

Fracking involves high-pressure injection of water, sand and chemicals into tight shale formations deep underground to release natural gas and oil trapped there. Opponents of fracking say it can harm air quality and groundwater, while industry and many state and federal regulators maintain it's safe.

Rule Requirements 

Under the rule, which will take effect 90 days after publication in the Federal Register, oil and gas producers will be required to:

• test well integrity and the strength of cement barriers between the wellbore and the water zone through which the wellbore passes;

• disclose publicly the chemicals they used in hydraulic fracturing to the Bureau of Land Management through the website FracFocus within 30 days of completing fracking operations (the requirement includes an exemption for chemicals that are trade secrets);

• store interim wastewater in covered tanks instead of lined pits to mitigate risks to air, water and wildlife; and

• take measures to reduce the risk of cross-well contamination with chemicals and fluids used in the fracturing operation.

 

The rule also requires companies to submit more detailed information on the geology, depth and location of preexisting wells to afford the BLM an opportunity to better evaluate and manage unique site characteristics.

Covered Tanks, Integrity Tests Required 

BLM Director Neil Kornze said the requirements are “commonsense measures” that represent “one-quarter of 1 percent of the cost to drill a well.”

The requirement that oil and gas wastewater be stored in covered tanks is a significant improvement over the earlier proposed rule, Lauren Pagel, policy director for Earthworks, told Bloomberg BNA March 20. Only New Mexico has a ban on using pits to store waste on an interim basis, she said.

Colorado allows the use of pits but with specific requirements and not in certain circumstances, Todd Hartman, spokesman with the state Department of Natural Resources, told Bloomberg BNA March 20.

Another important improvement concerns wellbore integrity tests, Pagel said. The earlier proposed rule had accommodated an industry request to allow testing of wells by type, meaning a producer could say “we tested a well over here, that means all these other similar wells are fine,” she said. The final rule requires testing of all wells, she said.

Use of FracFocus 

However, industry got what it wanted in the use of FracFocus, the national online frack chemical registry, which is funded in part by the Ground Water Protection Council, she said.

“Using a partially industry-funded database for a government regulation is not a step in the right direction,” Pagel said.

In releasing the rule, Jewell noted it was designed to “avoid conflict and protect areas that are too special to drill.”

Pagel said environmental groups had been asking for the rule to declare certain public lands as off-limits to drilling, but the final rule was unclear as to how a site will be determined to be “too special.”

BLM has about 35 million acres of land under lease for oil and gas drilling, the bureau said. It oversees about 700 million subsurface acres of federal mineral estate and administers some additional 56 million of acres of Indian mineral estate across the country.

To contact the reporter on this story: Tripp Baltz in Denver at abaltz@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com