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Focus on Regulation

Agencies Focus on Hydraulic Fracturing: DOI Proposes Rule; EPA Publishes Guidance


 Last week, the Bureau of Land Management (BLM) in the Department of the Interior (DOI) published a proposed rule that would revise certain regulations related to oil and gas development on public and Indian lands to add requirements for hydraulic fracturing operations.   Comments on the proposed rule can be submitted to BLM until July 10, 2012.  

BLM’s proposed chemical disclosure rule would require operators to

  1. disclose to the public, after completion of the hydraulic fracturing activity, the chemicals used during the activity;
  2. confirm that wells utilized for fracturing operations meet appropriate construction standards; and
  3. develop appropriate plans for managing and disposing of flowback water from fracturing operations.

According to BLM, the proposed rule is modeled upon existing rules in several states, would complement these states’ efforts and would integrate disclosed data into the existing FracFocus.org website.  Given that state hydraulic fracturing rules apply to operations on federal lands, there are concerns this proposed rule would create a conflict by duplicating state regulation.  Additionally, under the proposed rule, operators engaging in hydraulic fracturing would be required to prepare cement bond logs and undertake pressure testing to ensure the integrity of all casing before fracturing operations begin.  Currently, the preparation of cement bond logs on surface casing is an optional practice.  Finally, BLM proposes that operators store flowback fluids in tanks or lined pits only, and contemplates that BLM may impose additional conditions on permits to drill, as necessary, to ensure protection of the environment and other resources from flowback fluids.

Agencies are honing in on hydraulic fracturing.  A day before BLM released its proposed rule, EPA published draft permitting guidance for Class II wells using diesel fuel in oil and gas hydraulic fracturing.  The draft guidance is intended to clarify the Safe Drinking Water Act (SDWA) permitting requirements that apply to hydraulic fracturing operations using diesel fuel.  Pursuant to the 2005 Energy Policy Act, hydraulic fracturing operations are exempted from SDWA underground injection control (UIC) permitting unless diesel fuel is used as a fracturing fluid.  According to the draft guidance, permits for oil and gas hydraulic fracturing using diesel fuels are available through the SDWA UIC Class II Program, the well class for oil and gas activities.  Comments can be submitted to EPA on or before July 9, 2012.