BLM rescinds Obama-era fracking rule
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January 05, 2018
BLM rescinds Obama-era fracking rule

The Department of the Interior’s Bureau of Land Management (BLM) has issued a final rule formally rescinding its own 2015 regulations amending environmental requirements covering hydraulic fracturing (fracking) on public land. The current BLM contends that the Obama-era amendments are unnecessary because the preexisting federal regulations in conjunction with state regulations are sufficient to ensure that fracking is conducted in an environmentally safe manner.

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The rescission rule comports with President Donald Trump’s March 2017 Executive Order, which instructs the secretary of the Interior to review and, if necessary, rescind four rules, including the 2015 rule, which encumber domestic energy development or impose unnecessary costs on companies seeking to develop federal energy resources. The BLM estimates that the rescission rule will provide a reduction in compliance costs relative to the 2015 rule of up to $9,690 per well or approximately $14 million to $34 million per year.

Regs lagged behind technology

The 2015 rule expanded existing BLM regulations applicable to fracking. At that time, the BLM conceded that the preexisting rules were thorough and did provide protections to the environment. However, the BLM was concerned that the program had not kept pace with rapid industry developments, particularly regarding chemical formulas used in fracking fluids. The top environmental risk associated with fracking is the potential for toxic fracking fluids leaching into groundwater used as sources of drinking water. Accordingly, the 2015 regulations included new requirements for well operators to report their fracking chemicals either to the BLM or to FracFocus, a publicly accessible Internet site run by the Ground Water Protection Council and Interstate Oil and Gas Compact Commission. Also added to the regulations was a requirement that companies claiming trade secret protection for their fracking formulas had to submit an affidavit to the BLM verifying that the information qualifies for trade secret protection.

Chemical disclosure

The BLM says it now believes the concerns about public disclosure of fracking chemicals that prompted part of the 2015 rule are being addressed by the states. States have the authority to regulate oil and gas (O&G) drilling on public land within their borders provided the regulations are at least as stringent as BLM’s and are not preempted by BLM requirements.

“Disclosure of the chemical content of hydraulic fracturing fluids to state regulatory agencies and/or databases such as FracFocus is more prevalent than it was in 2015 and, therefore, there is no continuing need for a federal chemical disclosure requirement, since companies are already making those disclosures on most operations, either to comply with state law or voluntarily,” the BLM states.

There are 25 states that currently use FracFocus for chemical disclosures. These include Colorado, Montana, New Mexico, North Dakota, Oklahoma, Texas, and Utah, where the BLM has major O&G operations.

State programs

Moreover, the BLM says its review of state laws and regulations found that most states are either currently regulating or are in the process of establishing entire hydraulic fracturing regulatory programs.

“When the 2015 rule was issued, 20 of the 32 states with currently existing Federal oil and gas leases had regulations addressing hydraulic fracturing,” states the BLM. “In the time since the promulgation of the 2015 rule, an additional 12 states have introduced laws or regulations addressing hydraulic fracturing. As a result, all 32 states with federal oil and gas leases currently have laws or regulations that address hydraulic fracturing operations.”

The 2015 rule also increased the stringency of provisions affecting other aspects of fracking that concern environmental and public health groups as well as some communities near fracking operations. Those provisions included more rigorous requirements for cement used to isolate drilling from the surrounding environment and added restrictions on produced water from the drilling operation. These and all other new requirements in the 2015 rule have been rescinded, and effective the date of the final rule, all BLM’s regulations affecting fracking revert to what they were before the 2015 rule was promulgated.

Court actions

The 2015 rule was vacated in June 2015 by a federal district court judge in Wyoming. That decision was overturned by the 10th Circuit Court of Appeals, but the 10th Circuit agreed to refrain from issuing a mandate to the district court—which would have made the 2015 rule effective—until the BLM had the time to issue its rescission rule. With publication of that rule, the 10th Circuit can issue its mandate without causing the 2015 rule to take effect.    

The rescission rule was published in the December 29, 2017, FR.

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