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Thursday, May 30, 2013

fracking news

On May 16, 2013, the Bureau of Land Management (BLM) released a Supplemental Notice of Proposed Rulemaking and Request for Comment regarding hydraulic fracturing on BLM-administered public and Indian lands (Revised Proposed Rule). This Revised Proposed Rule was issued in response to comments on the initial draft Proposed Rulepublished on May 11, 2012 (Initial Proposed Rule). The BLM received over 177,000 comments on the Initial Proposed Rule. The impetus for this proposed rule is the increasing incursion of drilling and development activity in populated areas, which has raised public awareness and intensified regulatory scrutiny of hydraulic fracturing. This issue, coupled with the fact that BLM’s hydraulic fracturing regulations are outdated (established in 1982 and last updated in 1988), has caused the BLM to conclude that there is a need to revise its regulations to “modernize” BLM’s management of hydraulic fracturing operations and create a “uniform” national standard for operations on BLM-managed oil and gas resources.
The Initial Proposed Rule required operators to (1) disclose to the public the chemicals used in hydraulic fracturing, after the fracturing operation is completed; (2) confirm that wells used in fracturing operations meet appropriate construction standards to ensure well-bore integrity; and (3) require operators to employ appropriate plans for managing flowback waters from fracturing operations. In addition to these three main components — which remain in the Revised Proposed Rule — the Revised Proposed Rule also requires the use of an expanded set of cement evaluation tools (rather than cement bond logs) to ensure that water resources are being protected and provides more detailed guidance on disclosure requirements, modeling Colorado’s rule, which adopts FracFocus as the disclosure medium and entitles operators to trade secret protections. Furthermore, the Revised Proposed Rule would allow operators to seek a variance from the BLM rules allowing deference to states and tribes that already have standards in place that meet or exceed those proposed by this rule in order to reduce administrative costs, eliminate duplication, and improve efficiency.  Significantly, the variances would apply only to operational activities, including monitoring and testing technologies, and do not apply to the actual approval process for obtaining a permit to drill from the BLM.