March 19, 2015
First major federal fracturing regulations to be issued; environmentalists say they’re not enough
By Jennifer A. Dlouhy, Energy Reporter, Houston Chronicle  

WASHINGTON – The Obama administration is set to issue the first major federal regulations on hydraulic fracturing on Friday, with new mandates targeting oil and gas wells on public land.

The Interior Department rule reflects years of work by regulators seeking to balance environmental interests and economic imperatives in setting baseline standards for the way wells are constructed and stimulated for oil and gas production.

But the final version, to be unveiled Friday by Interior’s Bureau of Land Management, according to stakeholders familiar with the timeline, is unlikely to appease environmentalists who have argued for strong protections, or oil industry leaders who insist well-tailored state rules are better than one-size-fits-all federal mandates.

“The rule will include measures to protect our nation’s groundwater – requiring operators to construct sound wells, to disclose the chemicals they use, and to safely recover and handle fluids in the process,” Interior Secretary Sally Jewell said Tuesday in a speech. “Some have already labeled these baseline, proven standards as overly burdensome to industry. I think most Americans would call them common sense.”

Although the measure affects only wells on federal and Indian lands managed by the bureau, Jewell said she hoped it will provide a baseline floor of requirements for states that aren’t accustomed to drilling.

When first devised, the measure had its focus on hydraulic fracturing, a well stimulation process that involves pumping water, sand and chemicals underground to open the pores of oil-and-gas bearing rock so those hydrocarbons can flow out. It has been broadened with time to include mandates on the construction and cementing of wells and the ways wastewater flowing out of a well should be managed and stored.

Although the final details are still under wraps, Jewell has already signaled the rule will hew closely to a May 2013 draft proposal.

It is expected to yield to the demands of oil companies by allowing them to disclose the chemicals they pump underground through an industry-backed database known as FracFocus, even though the move will at least temporarily violate an executive order on government transparency.

That directive, issued by President Barack Obama in May 2013, explicitly says government data should be machine-readable – not embedded in PDFs that must be downloaded individually, as is currently the case with reports on FracFocus. Machine-readable data can be more easily aggregated and analyzed.

The Ground Water Protection Council and the Interstate Oil and Gas Compact Commission announced plans in February to improve the registry, including allowing data to be publicly extracted in a machine-readable format. Other features they announced for 2015 were expanding record searches and reducing “human errors in disclosures.”

Interior Department officials previously signaled they would seek such improvements if FracFocus were made the registry of choice for the Bureau of Land Management – joining a growing group of states that are requiring companies to file chemical reports with the service. The move also responds to a Department of Energy advisory board’s conclusions last year about shortcomings with the site.

Lack of leverage?

But John Amos, president of the advocacy group SkyTruth, said he fears federal regulators are pinning their hopes – and new regulations – on unenforceable promises from a non-government entity.

“I’m concerned the government would have little to no leverage over the implementation details and the effectiveness of those upgrades,” Amos said. Even if the promised improvements are made, Amos said, there are concerns about the registry’s capacity, longevity and archiving of old, uncorrected reports.

“Aside from all the substantive failings that we’ve repeatedly documented, you’ve got this small nonprofit entity in charge of curating, managing and publishing this contentious, nationally significant data set,” Amos said. “It’s not that a small non-profit can’t do a good job, but what are the accountability mechanisms and what happens if that nonprofit entity goes away? Where did the data go? Who owns it?”

Environmentalists also have raised concerns with the number of trade secret claims used to shield chemical information in the reports filed with FracFocus. Companies make the claims, and under current practice, FracFocus does not arbitrate them.

Beyond chemical disclosure, the final rule is set to lay out requirements for managing waste water at wells, including fracturing fluids that return to the surface and produced water that springs from the formation itself.

Amy Mall, a Natural Resources Defense Council analyst, said companies should be barred from storing fracturing wastewater in open pits, which can leak and overflow.

‘Repetitive paperwork’

But industry representatives have argued against requirements for storage tanks, which could increase their footprint at the site as well as their costs. Fundamentally, oil industry officials say the Bureau of Land Management’s expected requirements are unnecessary – and would only increase costs of wells on public lands (possibly $97,000 more per well, according to one Western Energy Alliance analysis) without any clear environmental benefit.

“I think it’s going to be a lot of repetitive paperwork, with very little benefit for the environment,” said Dan Naatz, vice president of federal resources for the Independent Petroleum Association of America. “It’s going to make it harder to operate on federal lands, it’s going to slow it down and it’s just going to provide additional litigation pathways to make it harder to operate on federal lands.”

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