Interior Department Proposes New Fracking Rule on Public Lands

Yesterday, the Obama Administration announced a new rule from the Department of Interior to regulate the process of hydraulic fracturing, or fracking, on federal lands. The relaunch of the rule was made after Interior pulled back its original proposal in 2012 after receiving 177,000 public comments. According to an Interior press release, the updated draft proposal will be subject to a new 30-day public comment period on the notice of proposed rulemaking. 

The proposal drew immediate criticism from both environmental and industry groups, with the former suggesting they were not stringent enough in requiring greater disclosure of the chemicals used in the fracking process and the later representing oil and gas operations who find the new potential requirements redundant and unnecessary due to existing state regulations. Under the new proposed rules, oil and natural gas operations would be required to disclose the chemicals they use to stimulate and frack wells on federal lands as well as a new verification requirement that fracking fluids are being prevented from seeping into groundwater. In addition, the new rule includes a mandate that operators have a management plan for dealing with the large amounts of "flowback", which is essentially a wastewater byproduct of drilling fluids, generated after fracking wells. In an effort to mitigate criticisms from industry, the Administration proposal would allow operations to use the reporting standards of  FracFocus (which is managed by the Ground Water Protection Council and Interstate Oil and Gas Compact Commission) to meet chemical disclosure requirements. FracFocus has been the preferred avenue of disclosure by industry, but it has been criticized by environmental groups for protecting too many proprietary components of the fracking fluids themselves. The Executive Director of the Sierra Club, Michael Brune, said in a statement "Although no amount of regulation will make fracking acceptable, the proposed BLM rules fail even to take obvious steps to make it safer. This proposal does not require drillers to disclose all chemicals being used for fracking and continues to allow trade-secret exemptions for the oil and gas industry."

According to the Department of Interior, roughly 90 percent of wells drilled on federal and Indian lands use hydraulic fracturing, however, "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."

Industry groups like API and the Western Energy Alliance have noted their approval for the changes made in the original rule, however, they question the policy or scientific need to create a new regulatory model when they believe states are safely and effectively regulating the fracking process today. A Congressional critic of the Administration's actions, House Natural Resources Chairman Doc Hastings, believes the economic impact of the previous BLM federal rules could have added $200,000 to $375,000 in additional costs to drill a well and that the new proposal will add an additional layer of expensive red tape. These and other critics suggest the federal permitting process is too drawn out, subject substantial legal challenges, and adds unnecessary development costs. For instance, receiving federal permits to drill can take between 180 and 290 days to obtain and receiving a permit to drill on private land in states like North Dakota can be secured in a matter of weeks.