http://fuelfix.com/blog/2015/03/19/feds-to-impose-hydraulic-fractur...

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, set 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 in a speech Tuesday. “Some have already labeled these baseline, proven standards as overly burdensome to industry. I think most Americans would call them common sense.”

When first devised, the measure’s focus was 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 waste water 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 the groups announced for 2015 were expanding record searches and “reducing the number of 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.

Related story: Report finds problems in FracFocus

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 non-profit 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 non-profit entity goes away? Where did the data go? Who owns it?”

Environmentalists also have raised concerns with the number of trade secrets 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.

Waste water plans

Amy Mall, a senior policy analyst with the Natural Resources Defense Council, said companies should be barred from storing fracturing waste water in open-air pits, which can leak and overflow, said

But industry representatives have argued against requirements for storage tanks, which could increase their footprint at the site as well as their costs.

Stakeholders also are eager for details about a proposed variance that would allow state regulations to take precedence if they match or exceed what Interior requires.

While environmentalists warn that a liberal waiver would be a wide loophole, industry officials fear that the provision could create a new opening for litigation instead of a valuable exemption for Wyoming and other states that have tough drilling regulations in place.

Industry representatives have sought changes to a proposal in the 2013 draft that would force them to repair or pump more cement into wells based on subjective indicators from cement evaluation logs conducted at the sites.

That could cause more harm than good, possibly “compromising the integrity of the well,” said Dan Naatz, vice president of federal resources for the Independent Petroleum Association of America.

Fundamentally, oil industry officials say BLM’s expected requirements are unnecessary — and would only hike 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,” IPAA’s Naatz said. “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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http://www.bloomberg.com/news/articles/2015-03-20/u-s-sets-first-fr...

U.S. Sets First Fracking Standards in More Than 30 Years

(Bloomberg) -- The Obama administration issued the first federal regulations for fracking since the drilling technique fueled a domestic energy boom, requiring extensive disclosures of the chemicals used on public land.

After years of debate and delay, the Bureau of Land Management on Friday said drillers on federal lands must reveal the chemicals they use, meet certain well construction standards and safely dispose of contaminated water that flows back from fracked wells. The oil and gas industry said the rule isn’t necessary because state regulations already govern hydraulic fracturing.

“This rule will move our nation forward as we ensure responsible development while protecting public land resources,” Interior Secretary Sally Jewell said. “As we continue to offer millions of acres of America’s public lands -- your lands -- for oil and gas development, it is critical that the public has confidence that robust safety and environmental protections are in place.”

The rule from the Interior Department agency had been closely watched by drillers because the standards will become a model for state regulations. Domestic production from more than 92,000 wells on public lands accounts for about 11 percent of U.S. natural-gas production and 5 percent of oil production.

Fracking Wells

Fracking, or hydraulic fracturing, is a technique in which water, chemicals and sand are shot underground to free oil or gas from rock. It is used for about 90 percent of the wells on federal lands.

“Despite the renaissance on state and private lands, energy production on federal lands has fallen, and this rule is just one more barrier to growth,” Erik Milito, director of upstream operations for the American Petroleum Institute in Washington, said in a statement.

Environmental groups such as the Natural Resources Defense Council say fracking mishaps have led to contamination of local water wells in communities from Wyoming to Pennsylvania. They urged BLM to tighten its earlier plans on exemptions for chemical disclosure and the use of open pits to dispose of flowback water.

They are also prodding the Environmental Protection Agency and BLM to issue tight restrictions on methane leaks from fracked wells, a source of greenhouse gases.

BLM, the largest landowner in the U.S., oversees about 700 million acres of mineral rights underground. Farmers or ranchers own the surface rights on large tracts of federal land.

To contact the reporter on this story: Mark Drajem in Washington atmdrajem@bloomberg.net

To contact the editors responsible for this story: Jon Morgan atjmorgan97@bloomberg.net Steve Geimann

http://www.nationaljournal.com/energy/obama-administration-unveils-...

Obama Administration Unveils Controversial Fracking Standards

GOP senators waste no time introducing bill to block the rules.

A gas flare, created when excess flammable gases are released by pressure valves during natural gas and oil drilling, rises out of the ground in North Dakota.(Andrew Burton/Getty Images)

March 20, 2015 The Obama administration on Friday released highly-anticipated federal regulations on fracking, the controversial drilling technique at the heart of America's energy boom.

The rules are intended as a safeguard against water contamination near drill sites where chemicals are injected into shale rock to unleash oil and natural gas. They arrive as part of a broader unilateral push by the administration to shore up Obama's environmental legacy while the White House touts the benefits of fracking and fossil fuels.

The standards, crafted by the Interior Department, are sure to face pushback from all sides. Environmental groups say the regulations fall short of what is needed to stave off environmental damage from fracking. The oil and gas industry, meanwhile, views the rule as the latest example of administration action to hinder America's energy boom.

Republican senators wasted no time on Friday fighting back against the regulations. A slate of senators, including Senate Majority Leader Mitch McConnell and Environment and Public Works Committee Chairman Sen. Jim Inhofe introduced a bill Thursday evening that would block the rule, stating instead that states have the sole authority to regulate fracking on federal lands. 

Interior Secretary Sally Jewell responded to the GOP attack during a call with reporters on Friday, saying that she expects "that these rules will in fact stick." "We believe that these standards are essential and that it is our charge to oversee them," Jewell said, adding: "We're confident right now that we're doing the right thing for the American people." 

Under the regulations, companies will be required to disclose chemicals used for fracking. New standards will take effect for well integrity, aimed at heading off leaks that could compromise the quality of ground and drinking water. The oil and gas industry will also need to draw up plans to safely manage the discharge of water from drill sites.

Ultimately, however, the reach of the rule will be limited. The standards apply only to fracking on public lands, which accounts for just a small portion of drilling activity. America's energy boom has largely taken place on state and private lands out of reach of the administration.

A series of peer-reviewed scientific studies have linked fracking to groundwater contamination. The Environmental Protection Agency's own analysis of the impact of fracking on drinking water is expected to be released as a draft later this year.

The oil and gas industry is adamant that safety standards would be better left to the states. And fracking supporters claim that excessive regulation could derail America's booming energy sector.

Republicans in Congress have vowed to take steps to roll back what they say is the Obama administration's regulatory overreach. Much of the GOP's ire has so far focused on landmark regulations to curb carbon pollution from power plants and a slate of other environmental regulations targeting smog and other pollutants. Regulations aimed at fracking, however, will likely provide fresh fodder for Republican attack.

The rule has been years in the making, and its winding path to completion and multiple delays underscore the political difficulty the Obama administration faces as it promotes the domestic energy boom while trying to reduce its environmental harms.

Then-Interior Secretary Ken Salazar first announced that his agency would craft a plan to require disclosure of fracking chemicals in late 2010, but a draft regulation did not surface until mid-2012. However, Interior pulled back the draft plan in early 2013, and floated a second version in May of that year.

By unlocking fossil fuel reserves trapped in shale rock, fracking has sparked the current windfall in domestic oil and natural gas production. As a result, the U.S. has surpassed Russia as the largest producer of both oil and natural gas.

Obama credits fracking with spurring the American economy and curbing the nation's reliance on foreign oil, suggesting that natural gas can act as a "bridge fuel" to keep turbines turning while the nation's share of electricity from renewables steadily grows.

At the same time, however, the administration has pulled a series of levers to tighten safety and environmental standards for the drilling technique. Additional regulations to limit the release of methane, a potent greenhouse gas, from drill sites are expected to be unveiled before the president leaves office.

This story is breaking and will be updated.

Ben Geman and Jason Plautz contributed to this article.

http://www.forbes.com/sites/christopherhelman/2015/03/20/feds-unlea...

Don't Freak Over Feds' New Fracking Rules

The Bureau of Land Management announced today that it would impose some new rules on the hydraulic fracturing of oil and gas wells on federal lands. The new rule prohibits operators from storing fracking wastewater in open pits and orders them to test the integrity of well bores to ensure that no water or hydrocarbons can leak out underground. They also must disclose within 30 days of a fracking operation what chemicals they included in their operation. The rules are scheduled to go into effect in June.

“I’ve personally fracked wells, so I understand the risk as well as the reward,” said Interior Sec. Sally Jewell. “We owe it to our kids to get this right.”

 
 

Jewell used to work for Mobil in the oil and gas industry in Oklahoma in the early 1980s, long before she became CEO of outdoor outfitter REI. That said, the history of fracking goes back much further than Jewell’s experience. Halliburton HAL +3.25% is believed to have invented hydraulic fracturing in the late 1940s, early 1950s. At first, wells were fracked by blasting oil down them.

Things have changed a little since then.

The American Oil And Gas Boom depends on hydraulic fracturing to crack hydrocarbons out of tough, nearly impermeable rock. Thanks to the combination of fracking and directional drilling, the industry has nearly doubled domestic oil production in the past six years to more than 9 million barrels per day. Natural gas production has likewise increased from 24 trillion cubic feet in 2004 to 31 trillion cubic feet in 2014. This has helped America save more than $100 billion a year that otherwise would have gone to import higher-priced energy from the rest of the world.

As important as fracking has been to the Boom, federal lands haven’t. Last year BLM lands gave up 541 million barrels of oil and about 2.4 trillion cubic feet of natural gas — a lot, but far from the lion’s share of the growth we’ve seen in recent years. In 2013 oil production from Federal lands was up 1%, according to the Institute for Energy Research. It was up 21% from non-Federal lands. In the same year natgas production from Federal lands was down 10%, while it was up 3% from non-Federal lands.

SOLAR GOOD, FRACKING BAD: Department of Interior Secretary Sally Jewell, talks to reporters about the year-round sunny weather that will provide for the new 550-megawatt Desert Sunlight Solar Farm during a dedication ceremony for the facility on February 9, 2015 in Desert Center, California. The photo-voltaic solar farm is one of the world’s largest of its kind, sitting on 3,800 acres of federal land in Riverside County. (Photo by Marcus Yam/Los Angeles Times via Getty Images)

As Sen. Lisa Murkowski said in a statement today, the dramatic increase in American oil and gas production “has occurred almost exclusively on state and private lands as companies have avoided federal areas because of permitting delays and other roadblocks.”

The BLM manages 700 million acres of minerals, of which 35 million are leased for oil and gas, of which 13 million are currently producing from about 100,000 well bores. Drillers have plenty of opportunity elsewhere, so it will be little surprise if oil and gas operators decide to shun federal lands for future drilling campaigns.

This is all to say that people shouldn’t get too bent out of shape over some new rules governing Federal lands. Whatever President Obama and Sally Jewell are calling for is not going to materially derail oil and gas production. Jewell says that any added costs should amount to less than 1% of the cost of drilling and fracking the average well (1% would be roughly $80,000 on an $8 million well).

Naturally, oil companies will try to block the rules. To that end, the Western Energy Alliance and the Independent Petroleum Association of America filed suit today in U.S. District Court in Wyoming requesting that the court kibosh the new rule on the grounds that it doesn’t do anything new to govern the fracking process and largely duplicates existing state laws.

“Independent producers operate in a responsible manner that protects the nation’s public lands, but the rule BLM has promulgated provides no public benefit. Requiring oil and natural gas operators to file repetitive paperwork with multiple government agencies will not prevent or remediate environmental harm,” said Mark Barron, attorney with BakerHostetler, which filed the suit. “To the contrary, if implemented the rule will rob oil and gas operators of the operational flexibility needed to ensure that the environmental footprint of development is reduced to the greatest extent possible.”

So the feds may call this a “final rule,” but you can be sure it ain’t over yet.

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