Interior Department Proposes Fracking Regulations

May 2012 // ABA Energy Litigation Section: News and Developments

The Department of the Interior’s Bureau of Land Management (BLM) on Friday issued proposed regulations for the hydraulic fracturing—also called fracking—of oil and natural gas on federal and Indian lands. The proposed regulations largely follow the recommendations of the influential report issued last year by the Department of Energy’s Shale Gas Production Subcommittee. SeeGovernment Studies May Determine the Future of Fracking Regulation, Nov. 21, 2011. In a press release, Secretary Salazar stated that “it is critical that the public have full confidence that the right safety and environmental protections are in place. The proposed rule will modernize our management of well stimulation activities—including hydraulic fracturing—to make sure that fracturing operations conducted on public and Indian lands follow common-sense industry best practices.” Interior Releases Draft Rule Requiring Public Disclosure of Chemicals Used in Hydraulic Fracturing on Public and Indian Lands, May 4, 2012.

The BLM’s proposed regulations would (1) require the public disclosure of all chemicals used in fracking fluids, with an exception for trade secrets; (2) strengthen regulations related to well-bore integrity; and (3) address issues related to flowback water. In a change from the BLM’s original position, the chemicals in fracking fluids would not need to be disclosed until after drilling begins. The disclosed information is expected to be posted on a public website, possibly the website already used by several states. To protect trade secrets and confidential business information, an operator could apply for an exemption from public disclosure, but the operator would be required to identify specific information and explain why it should not be publicly disclosed. If the BLM disagrees, it would be required to give the operator 10-business-days’ notice before releasing the information to the public.

The proposed regulations also seek to ensure well-bore integrity and ensure the safe handling of the water used in fracking. Before fracking occurs, operators would be required to submit cement-bond logs, perform mechanical-integrity testing, and submit a geological report on the rock surrounding the well. They would also be required to disclose specific information about the water source to be used, the type of materials (proppants) to be injected into the fractures to keep them open, the range of anticipated pressures to be used, and the estimated total volume of fluid to be used; describe the proposed handling of recovered fluids, including the estimated volume of fluid to be recovered, the proposed methods of managing the recovered fluids, and the proposed disposal method; and ensure that the facilities needed to process or contain the flowback water are available on location. Finally, operators would be required to certify in writing that they have complied with all federal, tribal, state, and local laws, including permit and notice requirements, related to fracking.