On May 16, 2013, the Bureau of Land Management (BLM) proposed revised rules for hydraulic fracturing activities (or “fracking”) on public lands, nearly five months after withdrawing its original proposal under heavy criticism from all sides.1 The revised proposal makes significant changes in three key areas: (1) disclosure of chemical additives in fracking fluids, (2) approval to frack multiple wells, and (3) well integrity requirements. In many ways, the changes provide industry with greater flexibility.
Chemical Disclosure via FracFocus
A major battleground in the debate on fracking regulation is the use of the FracFocus website2 for public disclosure of chemicals added to fracking fluids. The revised proposal allows disclosure by operators directly to FracFocus, although reporting to BLM remains an option (with BLM posting any information it receives to the website).3 FracFocus was upgraded to version 2.0 on June 1. FracFocus 2.0 makes it easier for the public to search for information and allows state regulators to receive notifications when information is submitted for a well in their state.
The revised proposal mirrors the approach to trade secrets in Colorado.4 Rather than submitting trade secret information up front, operators would submit an affidavit asserting trade secret protection for certain chemical constituents. BLM could request the information to evaluate whether it does, in fact, qualify for trade secret protection.5
Note that disclosure is required for each individual well, even if BLM issues an approval to frack a group of wells (see below).6 Also, even if an operator relies on a contractor to manage disclosure, the operator is still responsible for the accuracy of the information.7 Also, BLM is requesting comments on whether operators should be able to satisfy the federal disclosure requirements by complying with state or tribal chemical disclosure requirements that meet or exceed the BLM rule.
Applying for Fracking Approval in Bulk
The revised proposal allows operators to submit one request for fracking a group of wells having the same geological characteristics, by providing information on a representative “type well.”8 This new approach has been welcomed by industry as a way to reduce the administrative burdens of the rule, but panned by the environmental community as a concession that will reduce available information and the scrutiny applied to an operator’s activities.
Well Integrity Requirements
Another area where BLM’s proposed rule would increase flexibility is the required methodology for demonstrating well integrity. To ensure adequate well cementing, the revised rule allows the use of a much broader range of technologies under the umbrella category of cement evaluation logs (CELs). The CEL must be submitted after fracking operations are complete,9 along with a monitoring report on cement operations.10 The revised proposal also requires that an operator notify the BLM within 24 hours of any indication of inadequate cementing.11 The operator would then have to demonstrate to BLM that there is adequate cement bonding at least 72 hours before fracking the well.12 This new notification requirement is designed to focus the agency’s resources on potentially problematic wells and increase oversight of cementing repairs.
Additional changes to the original proposal include the following:
- Narrowed scope. While the original proposal applied to all well stimulation activities, the revised proposal applies only to “hydraulic fracturing.”13
- Statewide variances. The revised proposal would allow BLM to jointly develop with a state a variance applicable to some or all wells in that state. Complying with the variance would be equivalent to complying with the BLM rule, as long as the variance met or exceeded the BLM provision it replaced.14 BLM says that the rule is intended to complement fracking regulations in Colorado, Wyoming, North Dakota, and Texas.15 Note, however, that a variance could only apply to operational requirements—operators would still have to go through the federal approval process.
- Flowback storage. BLM is asking for feedback on the costs and benefits of limiting flowback storage to closed tanks, indicating that the agency might consider that requirement in the future.
BLM is giving the public only 30 days to submit comments on the revised proposed rule. This is ambitious, as BLM received nearly 180,000 comments on its initial draft over a cumulative period of 120 days. The bipartisan leadership of the House Natural Resources Committee has already called for a 120-day comment period.16
Democrats are criticizing BLM for the use of FracFocus and lack of pre-fracking chemical disclosure,17 while Republicans are questioning the need for a federal rule in light of effective state regulation, calling the rule a redundant layer of red tape.18 Environmental groups are arguing that the revised proposal puts drinking water at risk19 and criticizing the trade secret exemption and lack of setbacks and baseline testing requirements.20 In the upcoming weeks, newly appointed Interior Secretary Sally Jewell faces the challenge of defending BLM’s efforts to create a “consistent, predictable regulatory framework” for fracking on public lands.