BLM

DoI Sets Frack Regs, Industry Files Suit

March 25, 2015 in E&P Operations, Regulations by Rich Piellisch  |  No Comments

First Rules in 30 Years Call for Chemical Protections, Disclosure;
Industry Law Firm Deems the Final Rule ‘Substantively Meritless’

The White House and federal Department of the Interior are trumpeting new rules governing hydraulic fracturing, citing “a robust and transparent public process that included more than 1.5 million public comments” resulting in “commonsense standards” to replace rules that are more than 30 years old.

US-DeptOfTheInteriorThe Denver-based BakerHostetler law firm immediately sued on behalf of the Independent Petroleum Association of America and Western Energy Alliance. The firm says that “final rule is both substantively meritless and the product of a procedurally deficient rulemaking process.”

House Speaker John Boehner weighed in, blasting the Obama administration as being “so eager to appease radical environmentalists that it is regulating a process that is already properly regulated… Republicans will do all we can to protect middle-class jobs and keep our energy boom going,” Boehner said.

Regulations ‘Have Not Kept Pace with Advances in Technology’

The regulation from BLM, the federal Bureau of Land Management, affects fracking operations on federally managed and Indian lands.

Interior Secretary Sally Jewell

Interior Secretary Sally Jewell

“There are currently over 100,000 wells on federally managed lands across the country, with close to 3,000 new wells drilled each year. Of wells currently being drilled, over 90% use hydraulic fracturing,” according to a blog post by Interior Secretary Sally Jewell.

“Unfortunately,” she said, “many of the regulations on the books at the Interior Department have not kept pace with advances in technology and modern drilling methods.”

The new regulation, which is to take effect in late June, includes

  • provisions for ensuring the protection of groundwater supplies by requiring a validation of well integrity and cement barriers between the wellbore and water zones;
  • “increased transparency” by requiring companies to publicly disclose chemicals used in hydraulic fracturing to the Bureau of Land Management through the website FracFocus, within 30 days of completing fracturing operations;
  • higher standards for interim storage of recovered waste fluids from hydraulic fracturing to mitigate risks to air, water and wildlife; and
  • measures to lower the risk of cross-well contamination “by requiring companies to submit more detailed information on the geology, depth, and location of preexisting wells to afford the BLM an opportunity to better evaluate and manage unique site characteristics.”

DoI says that BLM “published both a draft rule and a supplemental draft rule, held regional forums and numerous stakeholder meetings on the proposal and reviewed more than 1.5 million public comments.”

BakerHostetler terms the new rule a “proposal,” and says it “does not attempt to govern any aspect of the hydraulic fracturing process.

‘Politically-Motivated’

“This omission suggests little more than a politically-motivated attempt to appeal to those that misrepresent ‘hydraulic fracturing,’ using the term as a proxy for all oil and gas development rather than focusing on the more accurate, and narrower, definition of the term as a well stimulation technique.”

BakerHostetler's Mark Barron

BakerHostetler’s Mark Barron

The law firm says that the new federal requirements for well integrity and disclosure duplicate existing state requirements, amounting to “administrative impediments that will complicate and frustrate oil and gas production on federal lands.”

“The rule will rob oil and gas operators of the operational flexibility needed to ensure that the environmental footprint of development is reduced to the greatest extent possible,” BakerHostetler attorney Mark Barron said in a release.

Low-Cost, Says BLM

“This rule was informed and shaped by the technical expertise, interests and concerns of all of our partners, and builds on the work of states and tribes to ensure best practices on a nationwide basis,” said BLM Director Neil Kornze.

BLM estimates the new rule will cost less than one-fourth of 1% of the cost of drilling a well, based on the Energy Information Administration’s average per-well cost of $5.4 million.

Click here for the new regulation via the Federal Register

BakerHostetler graphic shows the areas of greatest frack-related litigation in the U.S. updated January 2015

BakerHostetler graphic shows the areas of greatest frack-related litigation in the U.S. updated January 2015

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Source: Department of the Interior/BLM with HHP Insight follow-up



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