Today the Bureau of Land Management (BLM) issued its much anticipated proposed rules to regulate hydraulic fracturing on public and Indian land. The rule, which has been delayed for the past several months as the Bureau conducted tribal consultations and made last minute changes, imposes three major categories of new requirements on hydraulically fractured oil and gas wells on public and Indian land: (1) disclosure requirements; (2) standards related to well-bore integrity; and (3) obligations related to flowback and other water management plans.
The disclosure requirements represent a marked change from BLM’s earlier approach. Notably, prior draft versions of the rule would have required a report disclosing all additives of the proposed hydraulic fracturing fluid to be made available at least 30 days before the commencement of operations. Today’s proposed rule makes clear that disclosure of stimulation fluid information – which includes the additive trade name, purpose, Chemical Abstracts Service Registry Number, and the percent mass of each ingredient used in the stimulation operation – will be required only after the fracturing operation has taken place. The proposed rule, which contains trade secret protections, notes that the approach is similar to that adopted recently by the Colorado Oil and Gas Conservation Commission Rule 205A.b2ix-xii. Interestingly, the proposal states that BLM “intends to place this information on a public web site” and that it is “working with” the Ground Water Protection Council to integrate this information into the FracFocus.org website, but does not expressly require using FracFocus.
Prior to fracturing activities at new and certain already-permitted wells, operators will be required to submit well stimulation information for BLM approval. This information includes, among other things, the submission of mechanical integrity test results, cement bond logs, geological descriptions, proposed measured depths of all occurrences of usable water, and plans regarding various engineering designs. The proposed rule will require ongoing monitoring, recordkeeping, and notification requirements, including a full submission to BLM of the fracturing activity results within thirty (30) days of its completion.
Regarding water management, the proposed rule will require, prior to drilling, the submission of proposed methods of handling recovered fluids, and the proposed disposal methods of recovered fluid. Storage of all fluid must be in tanks or lined pits, which is consistent with earlier drafts of the rule. Operators will be required to report certain water-related information in connection with the fracturing activity, including the actual total volume of fluid used, surface pressure at the end of each stage pumped, the rate at which the fluid was pumped at the completion of each stage, and other information regarding the handling of fluids. Finally, the proposal contains the option for requesting a variance from the minimum standards of the regulation.
BLM estimates the average cost of the rule per stimulation to be $11,833 (in 2013 dollars), with an overall cost range of $37 to $44 million per year, and an estimated benefit range from $12 to $50 million per year. Comments on the rule will be due 60 days following publication in the Federal Register, which has not yet occurred.