The Bureau of Land Management (BLM), an arm of the Department of the Interior (DOI), last updated its hydraulic fracturing (“fracking”) rules in 1988, before many current technologies and techniques were adopted. Now, after more than 20 years, BLM has released a set of proposed changes to the regulations, including a requirement for disclosure of the chemicals used in fracking on federal lands, and standards for gas well construction.
Currently, most fracking occurs on private lands, and is subject only to state regulations. A recent report found that only 5% of active shale wells in the past decade were on federal lands.
An earlier version of the newly proposed rule would have required developers to disclose fracking chemicals before starting a well, but the more recent version allows companies to disclose chemicals after the well is closed. The New York Times reports that industry objected to the advanced disclosure rules, arguing that the permitting process would be slowed and industry trade secrets were at risk. Government officials have defended the new ex post reporting requirement, explaining that a record of the chemicals will allow them to trace contamination regardless of when the chemicals are disclosed.
A CNBC report outlines the new rule:
All the same, some in the industry are unhappy with the new rule, which the DOI estimates will cost $11,833 per well to implement. Barry Russel of the Independent Petroleum Association of America said in a statement that “B.L.M.’s proposed regulations, which would mandate one-size-fits-all regulations on well construction and hydraulic fracturing operations on these lands, are redundant. They will undoubtedly insert an unnecessary layer of rigidity into the permitting and development process.”
Native American tribes working to encourage natural gas development on tribal lands are also frustrated by the proposed rules. In a letter to the Department of the Interior, the National Congress of American Indians requested that the regulations exclude Tribal lands until a more involved consultation process can take place.
The BLM has acknowledged the potential for regulatory overlap between the federal and state rules and said “it is the intention of the BLM to implement on public lands whichever rules, state or Federal, are most protective of Federal lands and resources and the environment.”
Are these new rules redundant? What’s the optimal role of federal regulation of shale oil and gas as domestic production moves forward?