Today, the U.S. Bureau of Land Management released its long-awaited updates of its rules for hydraulic fracturing in oil and gas development. It’s about time. As BLM Director Neil Kornze has put it: “The portfolio of oil and gas wells overseen by the BLM has expanded at the same time that drilling has become more complex.” Despite the fact that new, more risky unconventional methodologies and technologies have been in use for over a decade to access oil and gas in shales, BLM’s rules have not been updated in over three decades. In the meantime there has been a boom in unconventional oil and gas development, particularly in shales. As the debate over BLM’s rules raged on—these regulatory changes have been in the works since 2011 with release of two drafts in 2012 and 2013 – over 6,000 drilling permits have been approved without these rules.
So why is this rule important?
- BLM is charged with the stewardship of a vast number of acres of public lands. BLM manages 245 million acres of land and 700 million acres of split estate;
- BLM oversees more than 100,000 wells;
- 11 percent of US natural gas and 6 percent of US oil are produced from BLM managed wells;
- In 2014, BLM offered 5.7 million acres up for lease through 26 lease sales;
- Currently BLM is leasing 24 million acres of land, an area the size of Florida, for oil and gas development;
- 3,769 onshore drilling permits were approved by BLM in FY 2014;
- 2,544 BLM managed wells were actually drilled in 2014.
With this rule, BLM has made a number of improvements to the decades-old regulations that should be applauded. However there is much more to be done. Here’s the good and the bad:
- Flowback fluid must now be stored in tanks rather than pits. Still, it remains critical that operators take care with tanks to avoid leaks and spillage of fluids on site and in transit;
- In addition the new rules establish a requirement for well integrity tests on every well drilled on public lands.
- The rule allows exemption of wells in states that demonstrate they will satisfy the objective of the regulation. We are concerned that BLM will allow some states to use weak rules as justification for exempting wells within their borders;
- The rule does not make sensitive environmental areas or communities off-limits to fracking, or even protect them with buffer or setback rules;
- Acid stimulation is not covered;
- The rule exempts disclosure of frack fluid chemicals based on industry’s trade secret arguments, leaving public regulators and emergency responders with inadequate information if there were a chemical emergency or if a public health problem develops near sites;
While this rule is long overdue, it is clear that BLM has much ground to make up if it hopes to fully address the new world of oil and gas development.
Now all eyes turn back to BLM as it is slated to release another draft rule for dealing with the massive waste of natural gas on federal lands through venting and flaring. The so-called “Waste” rule could effectively deal with wasted resources and lost royalties and reduce methane and other air pollution. We are hopeful that the upcoming Waste Rule will not suffer the same delays and shortcomings these new hydraulic fracturing rules did.