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Draft Federal Rules on “Fracking”

By Paula Cotter, NAAG Energy & Environment Counsel

Paula Cotter, Environment Project Director and Chief Counsel

On May 4, the U.S. Secretary of Interior released draft rules governing the use of “fracking” on public lands controlled by the Bureau of Land Management (BLM) and Indian lands. The word “fracking” is the common term for induced hydraulic fracturing. In that process, pressurized fluid is injected through a rock formation, increasing the fractures in it to stimulate more productive extraction of natural gas and oil. The widespread adoption of “fracking,” in conjunction with horizontal drilling, has allowed for extraction from formations that were previously unprofitable, but it has raised concerns about underground contamination, surface contamination, and water use. The rules, which had been leaked to the media earlier in the year, will become “proposed rules” and published at some point in the Federal Register. The public, the states, and the regulated community will then have a 60-day period to submit comments.

The draft rules reflect the efforts of the Department of Interior to meet the multiple goals that drive its work in managing federal lands. Under the Federal Land Policy Management Act, the BLM is directed to manage the lands under its stewardship in consonance with a series of policy goals. The two policies specifically cited in the draft rules are “… that management be on the basis of multiple use…” and that “… public lands be managed in a manner that will protect the quality of scientific, scenic, historical, ecological, environmental, air and atmospheric, water resource, and archaeological values…”

While the rules are nationwide in scope, they would not regulate all “fracking” activities in the United States. The rules would apply to reserves of oil and gas under federally-owned land, to national wildlife refuges and to certain other federal property. In the draft rules, the BLM estimates that it controls 700 million acres of subsurface mineral estate and 56 million acres of Indian mineral estate. The effect of the draft rules will be strongest in the west, where public lands make up a greater proportion of the area than in the east.

States derive income from the oil and gas extracted from federal lands, and of course the health, safety and environment of their citizens is directly affected by the activities on federal lands within their boundaries. As a result states also have multiple interests in how the rules would play out. Moreover, some states have rules in effect now that govern “fracking” procedures. In the background material issued with the draft rules, BLM indicates that its intent is to implement whichever set of rules is more protective—the state or federal rules. The background statement also calls for comments on the draft rules to address how to avoid duplication.

There are several primary new provisions in the draft rules that the Department has rolled out. First, the rules would require public disclosure of the chemicals used in the “fracking” process after it is completed. The underlying concern is that the chemicals added to water for various purposes in the process will ultimately leak out into either rock layers near the formations which the oil and gas are being extracted, or leak out near the surface as the “fracking” and well installation take place. The purpose of making the chemicals and their trade names available to the public is to allow testing for those specific substances in the event of suspected contamination. Oil and gas drillers have objected to such disclosure because of trade secret concerns. Environmentalists have objected to the timing of the disclosure, arguing that it is necessary to know before the stimulation chemicals are added so that background testing can establish whether the specific ingredient has contaminated the area. Currently, some of the information on additives used on private land is disclosed on a website known as FracFocus.org, a joint project of the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission. BLM is working to integrate information that would be required to be disclosed under the new rules with the FracFocus.org data.

Another significant aspect of the draft rules is a requirement that well operators conduct successful mechanical integrity tests of the wellbore prior to injecting fluids to stimulate production by fracturing. The point is to avoid unplanned releases that could be caused by weakness in the casing, if it fails during the “fracking” process. Finally, the draft rules would call for an increased emphasis on having an adequate plan for dealing with fracturing fluids that flow back to the surface of the ground. The rules would allow operators to use either lined pits or tanks, in order to protect the public lands from spills and leaks of the fluids that have been returned to the surface. BLM specifically identifies this area as possibly overlapping with state requirements. Some state laws and regulations address such flowback requirements, and BLM states its desire to be consistent but not duplicative.

State Attorneys General will most probably review the draft regulations carefully to determine if there are conflicts between the federal proposal and state requirements, if there are duplicative requirements, and for the overall effect of the draft rules.

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