BLM takes cues from the Colorado Oil and Gas Conservation Commission with proposed rules for hydraulic fracturing chemical disclosure


Here’s the release from Governor Hickenlooper’s office (Eric Brown):

The U.S. Bureau of Land Management announced today new hydraulic fracturing regulations for oil and gas development on BLM-administered public lands. The rules include chemical disclosure regulations similar to those developed and implemented in Colorado. “We are pleased that the Bureau of Land Management modeled its disclosure requirements for fracturing fluids after the Colorado rule, which is the most protective and transparent in the country as it requires the disclosure of the chemicals as well as their purpose and concentrations,” Hickenlooper said. The federal rules affect activity on BLM lands, but the Colorado regulations still apply. Like the Colorado rule that took effect April 1, 2012:

· The BLM rule will require disclosure of fracturing fluids, including each chemical and additive trade name and purpose, as well as the concentration of each ingredient.

· Limited trade secret protection is provided.

· The BLM rule requires mechanical integrity testing and cement bond logs to ensure well integrity, as well as reporting on volume of fracturing fluids, proppants, chemicals and water, pressures, volume of recovered flowback fluid and methods used for managing and disposing of the flowback fluids.

Here’s the release from the U.S. Deparment of Interior (Adam Fetcher/Megan Crandall):

In support of President Obama’s all-of-the-above energy strategy, and the Obama administration’s goal of continuing to expand responsible oil and gas production, Secretary of the Interior Ken Salazar today announced the release of a proposed rule to require companies to publicly disclose the chemicals used in hydraulic fracturing operations on public and Indian lands, with appropriate protections for proprietary information.

Currently, there is no specific requirement for operators to disclose these chemicals on federal and Indian lands, where approximately 90 percent of the wells drilled use hydraulic fracturing to greatly increase the volume of oil and gas available for production. The proposed rule would require public disclosure of chemicals used during hydraulic fracturing after fracturing operations have been completed.

This common-sense measure, which builds on the preliminary input received from the public, industry, tribal representatives, and other stakeholders, supports the continued development of America’s abundant oil and gas resources on federal and Indian lands by taking steps to ensure public confidence in well stimulation techniques and technologies, including hydraulic fracturing. It is also in line with steps that some states have already taken, requiring operators to disclose the chemicals they use in activities on state lands.

The draft rule, which can be viewed here along with economic analysis and an appendix, also contains two additional, commonsense measures to ensure development continues safely and responsibly:

Improving assurances on well-bore integrity to verify that fluids used in wells during fracturing operations are not escaping; and
Confirming that oil and gas operators have a water management plan in place for handling fracturing fluids that flow back to the surface.
Already, technological advancements like hydraulic fracturing have allowed development of previously uneconomic natural gas and oil deposits. In fact, since 2008, U.S. oil and natural gas production has increased each year. In 2011, U.S. crude oil production reached its highest level in 8 years, and U.S. natural gas production grew in 2011 as well – the largest year-over-year volumetric increase in history – easily eclipsing the previous all-time production record set in 1973. Overall, oil imports have been falling since 2005, and oil import dependence declined from 57 percent in 2008 to 45 percent in 2011 – the lowest level since 1995.

During the first three years of the Obama Administration combined, federal oil production has increased by 13 percent and total natural gas production from onshore public lands has increased by six percent, compared with totals from 2006-2008. This proposed rule will strengthen the requirements for hydraulic fracturing performed on federal and Indian lands in order to build public confidence and protect the health of American communities, while ensuring continued access to the important resources that make up our energy economy.

“As the President has made clear, this administration’s energy strategy is an all-out effort to boost American production of every available source of energy,” said Secretary Salazar. “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. The proposed rule will modernize our management of well stimulation activities – including hydraulic fracturing – to make sure that fracturing operations conducted on public and Indian lands follow common-sense industry best practices.”

The measures contained in the draft rule are consistent with the goals first outlined by Secretary Salazar in November 2010 during a forum on hydraulic fracturing on public lands to examine best practices to ensure that natural gas on federal and Indian lands is developed in a safe and environmentally responsible manner.

In developing the proposed rule, Interior’s Bureau of Land Management (BLM) sought feedback from a wide range of sources, governments, industry, members of the public and other interested stakeholders.

Under the Department’s unique relationship with Indian tribes, BLM began formal tribal consultations in January 2012 – including outreach, communication and substantive discussions – with tribal governments about the proposed rule’s ongoing development, in the spirit of trust, respect and shared responsibility in providing tribal governments an expanded role in informing federal policy that impacts Indian lands. Consultation with tribal leaders remains ongoing and will continue throughout the rulemaking process.

Once the proposed rule is published in the Federal Register, a 60-day public comment period will begin, during which the public, governments, industry and other stakeholders are encouraged to provide their input.

“The BLM recognizes the importance of all domestic energy sources to the welfare and security of this nation,” said BLM Director Bob Abbey. “The proposed rule will move our nation forward as we ensure responsible development while protecting public land resources.”

Current BLM regulations governing hydraulic fracturing operations on public lands are more than 30 years old and were not written to address modern hydraulic fracturing activities.

The proposed rule seeks to maximize flexibility, minimize duplication and complement ongoing efforts in some states to regulate fracturing activities by providing a consistent standard across all federal and Indian lands and making reported information easily accessible to the public. For instance, the BLM is working closely with the Ground Water Protection Council and the Interstate Oil and Gas Commission in an effort to integrate the disclosure called for in the proposed rule with the existing program known as FracFocus.

Also in line with President Obama’s April 13 Executive Order to coordinate the efforts of federal agencies responsible for overseeing domestic natural gas development, the proposed rule released today received important interagency feedback.

Recent technology and operational improvements in extracting unconventional oil and gas resources have increased drilling activities across the country. The sharp rise in domestic production has improved U.S. energy security and created jobs, and as with any resource the administration is committed to ensuring that we continue to leverage these resources on federal and Indian lands safely and responsibly.

The proposed rule would apply to BLM-managed mineral estate, including 700 million subsurface acres of federal estate and 56 million subsurface acres of Indian mineral estate.

More coverage from The Grand Junction Daily Sentinel (Dennis Webb):

The proposal would update hydraulic fracturing rules that are more than 30 years old and don’t address modern-day fracturing activity. It also includes rules designed to ensure fracturing fluids don’t escape along well bores, and are properly handled upon their return to the surface…

The BLM measure would include a trade-secret exemption, as in the case of Colorado’s. And as with Colorado’s rule, disclosure wouldn’t have to occur until after fracturing takes place.

Critics say advance disclosure is needed in order to know what chemicals to test for to compare groundwater conditions before and after fracking.

“Communities shouldn’t have to wait for that information until after the deed is done. We hope the agency will strengthen this proposal before it becomes final,” Amy Mall, senior policy analyst at the Natural Resources Defense Council, said in a statement.

Barry Russell, president and chief executive officer of the Independent Petroleum Association of America, said in a release, “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.”

The proposal is subject to a 60-day public comment period.

More oil and gas coverage here and here.

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