Interior releases updated hydraulic fracturing draft rule for public, Indian lands

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WASHINGTON, D.C., May 17, 2013 -- As part of the Obama Administration's strategy to support safe and responsible domestic energy production, the Department of the Interior announced on 5/16 the release of an updated draft proposal that would establish commonsense safety standards for hydraulic fracturing on public and Indian lands.

Following the release of an initial draft proposal in 2012, Interior received extensive feedback, including over 177,000 public comments that helped inform the updated draft proposal. The new proposal maintains important safety standards, improves integration with existing state and tribal standards, and increases flexibility for oil and gas developers. The updated draft proposal will be subject to a new 30-day public comment period.

"As the President has made clear, this administration's priority is to continue to expand safe and responsible domestic energy production. In line with that goal, we are proposing some commonsense updates that increase safety while also providing flexibility and facilitating coordination with states and tribes," said Secretary of the Interior Sally Jewell. "As we continue to offer millions of acres of America's public lands for oil and gas development, it is important that the public has full confidence that the right safety and environmental protections are in place." 

Approximately 90 percent of wells drilled on Federal and Indian lands use hydraulic fracturing, but the Bureau of Land Management's (BLM) current regulations governing hydraulic fracturing operations on public lands are more than 30 years old and were not written to address modern hydraulic fracturing activities. The revised proposed rule will modernize BLM's management of hydraulic fracturing operations, and help to establish baseline environmental safeguards for these operations across all public and Indian lands.

The updated draft proposal maintains the three main components of the initial proposal: requiring operators to disclose the chemicals they use in fracturing activities on public lands; improving assurances of well-bore integrity to verify that fluids used during fracturing operations are not contaminating groundwater; and confirming that oil and gas operators have a water management plan in place for handling fluids that flow back to the surface.

Building on preliminary input from key stakeholders and recommendations from the Secretary of Energy's Advisory Board in 2011, the BLM proposed a draft rule in 2012 that took into account technologies already in use by companies to protect water resources, and existing methods for improving transparency through disclosure of the chemicals used in fracturing fluids.  

The updated draft proposal addresses many of the more than 177,000 public comments that the BLM received during the initial 120-day public comment period that ended last fall, as well as other feedback received during eight forums and other meetings held with representatives of American Indian tribes.

"We know from experience that hydraulic fracturing and horizontal drilling methods can be used safely and effectively, employing many of the best management practices reflected in this draft rule," said BLM Principal Deputy Director Neil Kornze. "Our thorough review of all the comments convinced us that we could maintain a strong level of protection of health, safety, and the environment while allowing for increased flexibility and reduced regulatory duplication."

The supplemental proposal revises the array of tools operators may use to show that water is being protected, and provides more guidance on trade secret disclosure, while providing additional flexibility for meeting these objectives.

While the revised draft seeks to establish baseline environmental safeguards across all public and Indian lands, it also complements efforts of several states that are regulating hydraulic fracturing, including Colorado, Wyoming, North Dakota, and Texas. The proposal includes a variance process that allows for deferring to states and tribes that already have standards in place that meet or exceed those proposed by this rule.  

Although the BLM is not proposing a material change in the provision that allows hydraulic fracturing flowback fluids to be stored either in tanks or in lined pits, the BLM is seeking comments on the costs and benefits of requiring flowback fluids to only be stored in closed tanks.

The Obama Administration has made expansion of domestic oil and gas production a priority, while ensuring that it takes place safely and responsibly. Domestic production from more than 92,000 oil and gas wells on public lands accounts for about 13 percent of the nation’s natural gas production and 5 percent of its oil production. The BLM administers approximately 700 million acres of onshore mineral estate owned by the Federal government and has trust responsibilities for about 56 million acres of Indian lands.

Once comments on the updated draft have been collected and analyzed, the BLM expects to issue a final rule that will ensure that operators apply proven cost-effective safety and environmental protection processes when engaging in hydraulic fracturing on public and Indian lands.

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