Department of the Interior Releases Draft Rule for Hydraulic Fracturing on Public and Tribal Lands

On May 4th, the Department of the Interior released a draft rule which would require the disclosure of chemicals used in the hydraulic fracturing process for extracting oil and natural gas, establish minimum criteria for well-bore integrity, and address the management and disposal of waste water for oil and gas drilling operations on federal and tribal lands.

Within the Department of Interior, the Bureau of Land Management (BLM) is responsible for overseeing more than 750 million subsurface acres of the federal and tribal mineral estates. According to the BLM, the changes contained in the draft rule were developed partly “…in response to recommendations put forward by the Secretary of Energy Advisory Board in 2011.” BLM also notes that “…current BLM regulations governing hydraulic fracturing operations on public lands are more than 30 years old and were not written to address modern hydraulic fracturing activities.” At present, roughly 90 percent of wells drilled on federal and tribal lands utilize hydraulic fracturing in order to increase the volume of oil and natural gas flowing from the well.

The draft rule covers three key aspects of the oil and gas production process:

1. Well-bore integrity. The draft rule would require operators to submit maximum expected well pressure data to BLM along with wellbore design specifications so that a determination can be made to ensure that the wellbore design will be able to withstand the pressures applied during the hydraulic fracturing process. In addition, the draft rule would require operators to perform mechanical integrity tests on the well prior to stimulation and implement monitoring procedures during stimulation.
2. Disclosure of chemicals utilized in the hydraulic fracturing process. Operators typically use a variety of chemicals and proppants in order to complete the well. These materials hold the fractures open in the hydrocarbon-containing formation deep underground, which helps to increase the quantity of oil and natural gas that can be recovered. The draft rule would require operators to provide BLM with detailed information about the chemical composition of the fluids used to stimulate the well after the well is completed. This information would then be posted on a public database similar to FracFocus.org (FracFocus.org is a database established by industry to voluntarily disclose chemicals used in the hydraulic fracturing process).
3. Management of water that returns of the surface. Under the draft rule, operators would be required to store water that returns to the surface (typically referred to as “flowback” or “produced water”) in storage tanks or lined pits. Produced water can contain chemicals and naturally occurring salts that, if handled improperly, can pose hazards.

In the draft rule, BLM identifies reporting requirements and state regulations of hydraulic fracturing as an area where they are actively seeking public comment on “…how best to avoid duplication of requirements under this proposed rule with existing state requirements.” The rule is open for public comment for the 60 day period following publication of the draft rule in the Federal Register on May 11, 2012.

Interested in learning more about shale gas production? Click here to read a report from the BPC Energy Board, Shale Gas: New Opportunities, New Challenges.

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