Summary: The Depart of the Interior recently released its final rule on hydraulic fracturing on public and tribal lands. Because many states have no comprehensive fracking regulation in place, the federal rule will become the only governing authority in many parts of the country. However, several groups recently filed suit against the Department over the validity of the rule.

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By Bennett E. Resnik

On March 20, 2015 Secretary Sally Jewell of the Department of Interior held a press conference on the Bureau of Land Management’s final rule on hydraulic fracturing on public and tribal lands. Secretary Jewell was joined by Janice Schneider, Assistant Secretary for Land and Minerals Management and Neil Kornze, Director of the Bureau of Land Management (BLM).

The safe development of energy resources on public lands has been a topic of great debate. BLM’s proposed rule was the first update to federal oil and gas regulations since the 1980’s. The highly anticipated final rule from BLM is a reflection on the Obama Administration’s continued commitment to an all-of-the-above approach to domestic energy production.

Secretary Jewell, having personally hydraulically fractured wells over 30-years ago stated, “We need to update our regulations to make sure they keep up with evolving technologies.” Secretary Jewell further mentioned that the rule was a four-year effort with 210 days of public comments, having analyzed over 1 million comments in the production of the final rule. The Secretary stressed that the rule only applies to public and tribal lands, with many Americans likely agreeing that these regulations are “commonsense.”

Janice Schneider went into more detail on the consultations and meetings with tribal governments, states, and industry representatives. BLM currently has oil and gas leases in 32 states. Schneider mentioned that the rule sets “commonsense baseline standards.” It was further mentioned that  will continue to work with states and tribal governments concerning variances.

Neil Kornze discussed the more technical portions of the rule. Kornze stated, “The key goal of this rule was to protect water.” Regarding chemicals used in hydraulic fracturing, BLM’s rule requires FracFocus, as many in industry currently use. On average, Kornze continued, these costs consist of 1/4 of 1% for costs to complete the well. Secretary Jewell stated that when these rules go into effect, BLM will become the largest contributor to FracFocus. As a result, BLM will have a seat at the table in determining the future of the FracFocus system.

Regarding the indirect impact on state regulations, Secretary Jewell stated “There are a number of states that have no fracking regulations where there are public oil and gas activity…these may be the only standards they have.” Secretary continued, “For states that do not have regulations right now, they will look hard on the federal regulations we put out there.” Many parts of the final rule are currently being implemented by operators in certain states. That being said, BLM’s rule could potentially impede growth of hydraulic fracturing on public lands.

Some are of the opinion that HF1 from American Petroleum Institute does the necessary job of outlining standards and best practice for operations and are encouraged to see BLM taking this publication into account in crafting their regulations. Though HF1 includes cementing and casing guidelines, industry takes the stance that cementing operations are part of drilling operations and should not be confused with hydraulic fracturing – as it purportedly has been. Cement reports are already submitted to state regulatory agencies which illustrates, among other aspects of the final rule, the duplication of state requirements and therefore are either unnecessary or would place additional burdens on operators. Furthermore, as the final rule states, BLM “eliminates the use of “type wells” in demonstrating well integrity, and requires that specified best practices be used and demonstrated for all wells, not just a sample well.” This could very well impose undue delays, costs, and procedures on operators.

The Independent Petroleum Association of America and Western Energy Alliance have filed suit against the Department of Interior. The petition for review of final agency action states that “BLM’s rulemaking represents a reaction to unsubstantiated concerns and the administrative record lacks the factual, scientific, or engineering evidence necessary to sustain the agency’s final rule.” One can see how they are concerned that BLM ruled on water management related matters prior to the release of EPA’s study of hydraulic fracturing and its potential impact on drinking water resources.

For more information on BLM’s rule, click here. To review the final rule, click here.

 

BL is a J.D. candidate at Vermont Law School. He has worked in both public and private arenas, focusing on federal and state energy and environmental regulation, government affairs, and domestic public policy matters. Bennett received his B.A. in Political Science from James Madison University and a Certificate in Energy Innovation and Emerging Technologies from Stanford University.

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