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Final Rule on Hydraulic Fracturing Released

Posted By Ariel Hill-Davis, Friday, March 20, 2015

The U.S. Department of the Interior's Bureau of Land Management (BLM) released its final rule on the use of hydraulic fracturing to recover oil and natural gas on federal and Indian lands.  The BLM originally published a proposed in on May 11, 2012, but given significant public interest it published a supplemental notice and request for comments on May 24, 2013.  While the final rule has yet to be published in the Federal Register, an advance copy is available for viewing here. The final rule will become effective 90 days after publication in the Federal Register.

According to the final rule, the rule "fulfills the goals of the initial proposed rule:  To ensure that wells are properly constructed to protect water supplies, to make certain that the fluids that flow back to the surface as a result of hydraulic fracturing operations are managed in an environmentally responsible way, and to provide public disclosure of the chemicals used in hydraulic fracturing fluids.  The rule also:  (1) Improves public awareness of where hydraulic fracturing has occurred and the existence of other wells or geologic faults or fractures in the area, as well as communicates what chemicals have been used in the fracturing process; (2) Clarifies and strengthens existing rules related to well construction to ensure integrity and address developments in technology; (3) Aligns requirements with state and tribal authorities with regard to water zones that require protection; and (4) Provides opportunities to coordinate standards and processes with individual states and tribes to reduce costs, increase efficiencies, and promote the development of more stringent standards by state and tribal governments."

"Key changes to the final rule include:  (1) The allowable use of an expanded set of cement evaluation tools to help ensure that usable water zones have been isolated and protected from contamination; (2) Replacement of the "type well" concept to demonstrate well integrity with a requirement to demonstrate well integrity for all wells; (3) More stringent requirements related to claims of trade secrets exempt from disclosure; (4) More protective requirements to ensure that fluids recovered during hydraulic fracturing operations are contained; (5) Additional disclosure and public availability of information about each hydraulic fracturing operation; and (6) Revised records retention requirements to ensure that records of chemicals used in hydraulic fracturing operations are retained for the life of the well."

"The final rule also provides opportunities for the BLM to coordinate standards and processes with individual states and tribes to reduce administrative costs and to improve efficiencies."

The House and Senate Republicans have already come out in opposition to BLM's final rule. The GOP stance is this new rule will stifle the boom in energy development in the United States and create unnecessary costs for energy companies.

Relatedly, Senator James Inhofe (R-OK) introduced S. 828 yesterday, to clarify that a state has the sole authority to regulate hydraulic fracturing on federal land within the boundaries of the state.  Neither a summary nor the text of the bill are available at this time.  The bill was referred to the Committee on Energy and Natural Resource.

According to the Wall Street Journal, federal lands account for about 11% of the natural gas and 5% of the oil that the U.S. consumes.  The Journal notes that drilling on private or state-owned lands won't be subject to the regulations.  However, part of the federal government's goal is to create national standards for hydraulic fracturing that states and companies can adopt.  The Journal reports that some analysts feel the rules won't be unduly burdensome, perhaps contributing less than 0.5% to average well costs.

Tags:  BLM  Congress  DOI  energy  fracking  hydraulic fracturing  natural gas  Regulations 

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