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By Alan Kovski
The Interior Department released a revised proposed rule May 16 to govern hydraulic fracturing as a part of oil and natural gas drilling on federal and Indian lands.
The new proposal emphasizes integration with existing state and tribal standards, increases flexibility for oil and gas developers in testing a wellbore for integrity, and clarifies chemical disclosure requirements.
Where state or tribal regulations meet or exceed federal standards, compliance could be achieved by meeting the state or tribal regulations. Interior's Bureau of Land Management would work with the state or tribal officials “to craft variances that would allow technologies, processes or standards required or allowed by the State or tribe to be accepted as compliance with the rule,” according to the proposed rule.
The revised proposal, formally a supplemental notice of proposed rulemaking, will be subject to a 30-day public comment period after publication in the Federal Register.
BLM already had basic regulations for oil and gas drilling and production, but in May 2012 the agency proposed additions to those regulations after public concern developed over hydraulic fracturing. BLM pulled that proposal back and sent the revised proposal to the White House Office of Management and Budget in January ( 44 ER 234, 1/25/13).
Industry, state officials, and many Republicans in Congress described the 2012 proposal as very costly and entirely redundant, given the fact that state regulations govern all oil and gas drilling within their borders, including on federal lands.
Environmental activists and some Democrats in Congress said the rule did not go far enough in requiring chemical disclosure. They also argued that it should require storage of fracking fluids and flowback waters in containers, not open pits.
During a telephone news conference May 16, Interior Secretary Sally Jewell predicted that much of the same criticism would be heard in reaction to the revised proposal. The prediction quickly came true as groups on opposite sides issued statements.
“While the current rule is better than the first impractical rule, DOI still has not justified the rule from an economic or scientific point of view,” said Kathleen Sgamma, vice president of government and public affairs at the Western Energy Alliance, an industry group. “It continues to second guess states and tribes, and will hurt job creation and economic growth in western communities.”
“The Sierra Club is alarmed and disappointed by the fundamental inadequacy of the Bureau of Land Management's new proposed fracking regulations,” Sierra Club Executive Director Michael Brune said. “After reviewing the draft rules, we believe the administration is putting the American public's health and well-being at risk.”
No amount of regulation will make fracking acceptable, Brune added.
The earlier proposal would have required disclosure of all chemical details to BLM, which would be responsible for protecting the confidentiality of trade secrets. The revised proposal would require disclosure of chemicals but not of trade secrets. BLM would retain authority to require submission of the confidential information.
In the revised proposal, following the example of Colorado, companies would be required to provide affidavits affirming that undisclosed information is entitled to protection as trade secrets.
Trade secrets are an issue because of the chemical formulas used for additives in the fracturing fluids. Most of the fluid is water, pumped under pressure to create cracks in layers of rock so that oil or gas can flow to a well. The secondary component is sand to keep the fractures propped open, and the tertiary component is a chemical mix for such purposes as controlling the viscosity of the fluid and inhibiting rust.
Interior is proposing that chemicals can be reported directly to BLM or posted on FracFocus, a website managed by officials from state regulatory offices. But the department is inviting comment on whether a different, better reporting mechanism is needed.
“If there are better ways to do that, we are open to that,” BLM Principal Deputy Director Neil Kornze said during the telephone news conference with Jewell.
A study released by Harvard University in April faulted FracFocus for not being as useful as it should be for regulation. Kornze said FracFocus was developed as a disclosure tool, not a regulatory system.
On release of the revised proposal, Interior issued a statement saying, “The revised proposal maintains the three main components of the initial proposal: requiring operators to disclose the chemicals they use in fracturing activities on public lands; improving assurances of well-bore integrity to verify that fluids used during fracturing operations are not contaminating groundwater; and confirming that oil and gas operators have a water management plan in place for handling fluids that flow back to the surface.”
The revised proposal acknowledged that the earlier proposal was criticized as inflexible in its technical specifications for gauging the integrity of the cement lining of a well. The earlier proposal would have required submission of a cement bond log--a kind of scan of the cement lining--for approval prior to fracturing. The revised rule would require submission of a cement bond log or other type of cement scan after fracturing has occurred, unless there were problems with the cement job.
“This revised proposed rule would require use of cement evaluation logs (CELs) in the place of the originally proposed cement bond logs (CBL),” the revised proposal said. “The use of the broader term of CEL is intended to allow a variety of logging methods to be used to show the adequacy of cementing, including technologies such as ultrasonic logs, variable density logs, micro-seismograms, standard CBLs, CBLs with directional receiver array, ultrasonic pulse echo technique, and isolation scanners.”
If a state or tribe “designates some other technology to meet its requirements for hydraulic fracturing wells that is at least as effective in assuring adequate cementing, the BLM may allow use of that technology as a variance,” the new proposal said.
Cement evaluation logs would not be required on every well. In some areas, the evaluation could be conducted on a representative well, or “type well,” in an oil or gas field where the other wells have the same specifications and geologic parameters, as judged by an authorized official.
Pressure tests would be required on all wells where hydraulic fracturing is to occur.
The revised proposal clarified that the regulations would apply not only to initial fracturing of a well but also to refracturing, which can occur a few years later to revive output from a dwindling well. It specified that the rule would not apply to other types of well stimulation, including what is commonly called secondary and tertiary recovery through injection of water, steam, natural gas, or chemicals.
The revised proposal clarified and in some ways added to the reporting requirements for companies. For reporting of technical details for drilling plans prior to fracturing, BLM estimated that the details would be submitted in conjunction with an application for a permit to drill and should not add appreciably to the amount of time needed to approve a permit.
“The BLM understands the time-sensitive nature of oil and gas drilling and well completion activities and does not anticipate that the submittal of additional hydraulic fracturing-related information with [drilling permit] applications will significantly impact the timing of the approval of drilling permits,” the revised proposal said. “The BLM believes that the additional information that would be required by this rule would be reviewed in conjunction with the APD and within the normal APD processing time frame.”
The Interior Department's supplemental notice of proposed rulemaking on hydraulic fracturing on federal and tribal lands is available at http://on.doi.gov/10TauUv.
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