New BLM fracking rule might defer to some state regs

Posted: May 21, 2013

Written by

Phil Taylor, E&E News PM

The Interior Department proposed a hydraulic fracturing rule today that would allow states to propose their own standards for the controversial oil and gas production technique if they can prove their regulations are as strong as federal rules.

The revised draft rules released by the Bureau of Land Management would for the first time require disclosure of chemicals injected underground on roughly 700 million acres of federal mineral estate, including about 60 million acres underlying private lands.

But the rules were immediately criticized as duplicative by Republicans and industry groups, even as they were panned by Democrats and environmental groups as grossly inadequate.

"As the president has made clear, this administration's priority is to continue to expand safe and responsible domestic energy production," Interior Secretary Sally Jewell said in a statement. "In line with that goal, we are proposing some common-sense updates that increase safety while also providing flexibility and facilitating coordination with states and tribes."

Jewell said the public needs to have "full confidence" that hydraulic fracturing, which takes place at 90 percent of the wells drilled on public lands, is occurring responsibly.

"It's good for the public, it's good for industry, and that's why we're doing this," she said.

The new rule -- the third draft that has circulated since May 2012 -- still requires companies to disclose the chemicals they use to lubricate tightly trapped oil and natural gas. But it continues to favor use of the industry-supported FracFocus website, which environmentalists have criticized as too cumbersome.

Neil Kornze, principal deputy director for BLM, said slight changes were made for how the agency determines whether a company can exempt some chemicals as trade secrets.

The new rule would not require companies to disclose fracking chemicals until after the technique has been performed, a point that is likely to irk environmental groups that have argued the public deserves knowledge of the chemicals beforehand.

While the new draft would still allow flowback fluids to be stored in lined pits, BLM is seeking comments on the cost of requiring such liquids to be stored only in closed tanks -- a key demand of environmental groups.

Interior said the new draft improves integration with current state and tribal standards and "increases flexibility" for industry.

It "revises the array of tools operators may use to show that water is being protected, and provides more guidance on trade secret disclosure, while providing additional flexibility for meeting these objectives," the agency said.

In a break from earlier proposals, the new draft also offers a "variance process" that would give deference to states and tribes whose hydraulic fracturing standards meet or exceed BLM's.

Jewell and other Interior officials said little this afternoon about which states, if any, would meet the variance requirements.

Deference to the states has been a fundamental cry of industry since hydraulic fracturing rules were first proposed in fall 2011.

While industry groups today acknowledged improvements in the new draft, they again called the rule a duplicative solution in search of a problem.

"While changes to the proposed rule attempt to better acknowledge the state role, BLM has yet to answer the question why BLM is moving forward with these requirements in the first place," said Erik Milito, director of upstream and industry operations for the American Petroleum Institute.

Barry Russell, president of the Independent Petroleum Association of America, said, "The rule solves no existing problem but creates additional burdens for independent producers and state regulators."

But Democrats and environmental groups were equally dismayed by the new rule, arguing it bowed to industry at the expense of public and environmental health.

"This new fracking rule is extremely disappointing," said Rep. Ed Markey (D-Mass.), the ranking member of the House Natural Resources Committee. "It gives oil and gas companies the freedom to frack without the proper safety protections and disclosures the American public deserve."

Sierra Club Executive Director Michael Brune said the group was "alarmed and disappointed" at the "fundamental inadequacy" of the BLM rules.

"After reviewing the draft rules, we believe the administration is putting the American public's health and well-being at risk, while continuing to give polluters a free ride," he said.

Today, the Center for American Progress said the new draft should require "maximum transparency" and disclosure of chemicals through a government website rather than one that is privately managed and backed by industry.

"Chemicals used in fracking must be disclosed to the public to the greatest extent possible," CAP's Tom Kenworthy and Jessica Goad wrote. "While it is common in states that require disclosure to allow exemptions for trade secrets held by individual companies, this exception has in some cases been stretched to become a loophole."

The rule must also require disclosure of chemicals before fracking occurs, in addition to pre- and post-drilling water testing, they said.

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