On Friday, May 6, 2012, the U.S. Department of the Interior’s Bureau of Land Management (BLM) announced the release of proposed rules that would regulate several key aspects of hydraulic fracturing operations on public lands and Indian lands.  The proposed rules, which have not yet been published in the Federal Register, address several key issues:  (1) public disclosure of chemicals used in the fracturing process; (2) well-bore construction integrity, to prevent fluids from escaping the well; and (3) handling of flowback fluids that return to the surface during and after fracturing operations.

BLM’s existing hydraulic fracturing regulations can be found at 43 C.F.R. Part 3162.   These regulations were established in 1982 and last revised in 1988, long before modern hydraulic fracturing technologies became widely used.  BLM proposes to revise its existing hydraulic fracturing regulations and add a new section 3162.3-3 (the existing section 3162.3-3 would be retained and renumbered).  Many aspects of BLM’s proposal derive from recommendations made in final report issued on November 18, 2011 by the Department of Energy (DOE) Advisory Board’s Natural Gas Subcommittee.  The final report can be found on the Department of Energy’s web site at http://www.shalegas.energy.gov.  BLM also noted that its proposed rule is consistent with the American Petroleum Institute’s (API) guidelines for well construction and well integrity (see API Guidance Document HF 1, Hydraulic Fracturing Operations—Well Construction and Integrity Guidelines, 1st Ed., Oct. 2009).

With respect to chemical disclosure, the proposed rules would require operators to disclosure the chemicals used in the fracturing process to the BLM within 30 days after completing fracturing operations.  The disclosure report must contain, among other things, the actual amount of water used and recovered from each well.  It must also identify each additive used in fracturing fluids by its trade name, its CASRN number, its concentration, and its purpose(s).  Trade secret protection would be available under the proposed rules pursuant to existing federal laws providing such protection.  According to the proposal, BLM plans to post the publicly-disclosed information on a public web site; BLM is working with the Ground Water Protection Council to determine whether the disclosure can be integrated into FracFocus.org, which several states currently use for their chemical disclosure requirements.

BLM’s prior approval would be required under the new rules for all well stimulation activities, generally in connection the Bureau’s existing approval process for general well drilling activities.  Operators also will be required to submit cement bond logs before fracturing operations begin.  The running of cement bond logs on surface casing, which is currently an optional practice, would now be required for new wells.  Existing wells would require pressure testing prior to fracturing to ensure the integrity of all casings at maximum pressure during operation.  Finally, operators would be required to identify the estimated volume and composition of flowback water; how flowback fluids will be managed (including information as to any pits, ponds, or tanks to be used); and intended disposal or reuse of the flowback.

A public comment period will run for sixty (60) days after publication of the proposed rules in the Federal Register.  This blog will continue to monitor BLM’s proposal and provide additional information as BLM considers public comments.