The public comment periods on the Bureau of Land Management’s and the Environmental Protection Agency’s new draft hydraulic fracturing rule and guidance have closed, and both agencies are now in the process of reviewing comments in advance of finalizing the rule and guidance. What is uncertain is whether or not BLM or EPA will revise their draft rule and guidance in response to public comments, and if so to what extent.
The proposed BLM rule applies to all federal and Indian lands and requires well operators to disclose the composition of their fracturing fluids, provide assurances on the integrity of well bores to ensure that fluids do not escape, and confirm companies have a water management plan in place to deal with flowback water.
The proposed rule applies to all of the 700 million subsurface federal estate acres and 56 million subsurface Indian mineral estate acres under BLM’s jurisdiction.
The proposed EPA guidance will provide EPA permit writers with guidance on issuing Underground Injection Control, or UIC, permits for hydraulic fracturing operations that use diesel fuel as a fracturing fluid additive. The EPA guidance applies only to states that do not manage underground injection where EPA issues the permits.
Both draft rules were published in the Federal Register on May 11 for a 60-day public comment period. However, BLM subsequently extended its comment period an additional 60 days with a new deadline of Sept. 10, and EPA extended its comment period 45 days to end on Aug. 23.
BLM receives 7,400 ‘substantive’ comments
At the time of the June 25 extension BLM said it had received more than 170 comments, but since the Sept. 10 closing, the agency has received approximately 158,000 comments, although most of those are duplicate comments resulting from mass mailing campaigns by special interest groups.
After sorting through the comments and eliminating duplications, BLM posted online approximately 7,400 comments it considered “substantive.” They came from a variety of stakeholders, including oil and gas companies, public and private organizations and individuals arguing both for and against the new rule.
The comments ranged from simple single sentence e-mails to lengthy and detailed letters.
BLM spokesperson Megan Crandall told Petroleum News Bakken public involvement in rulemaking is “absolutely crucial,” and that she views the large number of comments as a good thing because it shows that the public is engaged in decisions affecting public lands.
“When this all started and we put it out for public comment, we really tried to get the word out that we wanted comments from the guys working the Bakken, the guys working the rigs,” Crandall said. “Their comments are critical as well, especially the operators.”
After evaluating all of the substantive comments BLM will determine which have significant bearing on the proposed rule and will then consider whether or not any requirements should be modified.
Opposition to BLM rule
Of the industry comments reviewed by Petroleum News Bakken, all are opposed to the proposed new rule and several called for it to be withdrawn altogether.
Some of the concerns about the proposed rule voiced by industry included: it is not based on sound science or supported by scientific data; it duplicated existing regulations in many states; it will slow the already backlogged permitting process; and it imposed excessive additional costs on producers.
In a joint letter issued to BLM on Sept. 12, two days after the comment period closed, the Independent Petroleum Association of America and the Western Energy Alliance (formerly IPAMS) asked the agency to essentially scrap the proposed rule.
“We urge you to listen to, and analyze in detail, the comments of the regulated community and recommend withdrawal of the proposed rule altogether in favor of allowing states to continue their respective regulatory programs. At the very least we urge you to significantly revise the impractical, duplicative and costly requirements that would be imposed on operators should this rule be finalized and implemented,” the associations said.
“Additionally, we are concerned that the rule is a misguided attempt to address concerns with well stimulation that may be based on inaccurate or unsubstantiated claims relating to the environmental and health impacts of the processes.”
The letter was issued on behalf of 47 oil and gas organizations across the country, including the North Dakota Petroleum Council, Montana Petroleum Association and Northern Montana Oil and Gas Association.
On Sept. 10, the American Petroleum Institute issued a letter to BLM voicing opposition to the proposed rule and asked that it be withdrawn. In that letter, API said there is no scientific or technical evidence suggesting the existing regulations do not adequately assure safe and responsible hydraulic fracturing, and that the record showed no incidents of contamination have resulted from 60 years of hydraulic fracturing during which over 1.2 million wells have been fracked.
API also expressed concern that BLM did not adequately evaluate the potential effects the proposed rule will have on drilling operations, including increased costs of production, and the potential effects on the levels of oil and gas production and corresponding revenues to the U.S. Treasury.
“An increase in regulatory complexity and burden should the proposed rule be implemented in its present form is likely to increase project costs, create opportunities for additional administrative delay and uncertainty, and provide further disincentives to operators to develop these resources that the agency manages for the American people,” API said.
State regulators not adequately consulted
In a Sept. 7 letter to Department of Interior Secretary Ken Salazar, Alaska Gov. Sean Parnell, current chairman of the Interstate Oil and Gas Compact Commission, urged BLM, a part of Interior, to reconsider what IOGCC viewed as “duplicative” hydraulic fracturing regulations.
IOGCC argued that BLM did not adequately consult with state regulators in developing the new rule.
Parnell said IOGCC consulted with producers and learned that the federal permitting process takes several months longer than processing permits with states, and argued that adding the new rule will further delay the federal process.
Parnell also said implementation of the new rule will add an additional burden on an already understaffed BLM.
IOCGG is a multi-state government agency representing 30 U.S. states whose goal is to help member states efficiently and safely maximize oil and gas resources as well as protects the rights of states to manage their own oil and gas resources.
NRDC wants rule to do more
But there is equally strong support for the proposed rule. In addition to the comments it formally submitted to BLM, the National Resources Defense Council released a statement on Sept. 12 saying it doesn’t believe the proposed new rule goes far enough.
“While we fully support BLM’s efforts to update its rules regarding chemical disclosure, mechanical integrity, and waste water handling,” NRDC said, “there are many additional improvements that must be made to BLM’s rules to address the full range of environmental and human health risks associated with well stimulation.”
The organization’s statement went on to identify areas in which it wants to see improvement: placing sensitive areas off-limits to oil and gas development; developing more appropriate setbacks; pre-fracturing disclosure of chemical additives; baseline water testing; development of stronger well construction rules; and new regulations for wastewater management, including a prohibition on pits and impoundments.
NGWA recognizes fracking a mature technology but….
The National Ground Water Association said it “recognizes that hydraulic fracturing of oil and gas wells is a mature technology and has been a widespread practice for many decades.”
And, “while no widespread water quality or quantity issues have been definitively documented that are attributable to hydraulic fracturing and related activities at oil and gas well sites, there have been isolated cases where faulty casing installations (including poor cement bonds) or poor management of materials/chemicals at the surface are suspected as having negatively impacted groundwater, surface water or water wells.”
This, the organization “encourages the development of best practices, policies, and regulations based on a scientific understanding of the relevant underlying issues, and supports additional studies, as needed, so that practices are based on sound science.”
Want stronger controls to manage methane
While not directly related to the requirements of the proposed BLM rule, the Center for Biological Diversity, the Western Environmental Law Center and the Clean Air Task Force jointly filed a petition on Sept. 11 with BLM asking for stronger controls to manage methane during drilling or fracking.
“Today’s petition calls on the BLM to require that oil- and gas-drilling operators install readily available pollution-control measures that would reduce methane gas leaked into the atmosphere during the drilling process,” their statement said.
Even though BLM sorted out most of the repetitive or duplicative comments, Petroleum News Bakken found considerable duplication among the comments supporting the proposed rule by private individuals, in particular a duplicate comment submitted on behalf of the National Parks Conservation Association.
Cost and possible application to private land of concern
In its evaluation of benefits and costs, BLM estimates implementation of the new rule will result in an additional cost to operators of $11,526 per well. However, a private evaluation of impacts to operators commissioned by the Independent Petroleum Association of America and Western Energy Alliance estimates the cost per well at $253,839 per well, a 22-fold difference.
That study, conducted by John Dunham & Associates, and economic research firm, estimates the total aggregate costs for western states, including both new permits as well as workovers, will range between approximately $1.5 billion and $1.6 billion annually. In addition, the study found that as the proposed rule is written it could potentially apply to private land in addition to the federal and Indian lands to which it is intended to apply. The results of the study are attached to the IPAA/Western Energy Alliance Sept. 10 letter.
EPA guidance for diesel goes beyond reality
EPA issued a draft guidance that will provide EPA permit writers with guidance on issuing UIC permits for hydraulic fracturing operations that use diesel fuel as a fracturing fluid additive. Diesel fuel is sometimes used to control viscosity in fracking fluids.
Under the 2005 Energy Policy Act, hydraulic fracturing fluids are exempt from the provisions of the Safe Drinking Water Act unless the fluids contain diesel fuel, and in states where EPA has underground injection control authority, operators using fracking fluids that contain diesel fuel must obtain an EPA Class II UIC permit. Those states are Arizona, Florida, Hawaii, Iowa, Kentucky, Pennsylvania, Michigan, Minnesota, New Your, Tennessee and Virginia.
One of the controversies with the draft guidance is how diesel fuel is defined. Specifically, the guidance provides multiple descriptions of diesel fuel that some opponents argue is vague and actually broadens the scope of the guidance beyond what is generally considered diesel fuel.
In a letter to EPA Acting Assistant Administrator Nancy Stoner, Continental Resources Senior Vice President and General Counsel Eric Eissenstat asked EPA to withdraw the proposed rule because it “purports to regulate substances that are not diesel fuel, as that term is commonly understood, and as it was defined by the EPA in its Clean Air Act regulations.”
In addition, Eissenstat said the proposed rule is “substantively flawed because it imposes a cumbersome and time-intensive permitting process under the UIC on hydraulic fracturing.” He recommended that instead of pursuing the new rule, EPA defer to state agencies.
Among its comments in opposition to the draft guidance, the North Dakota Petroleum Council said the definition of diesel fuel in the guidance is too broad, a complaint voiced by many opponents to the guidance including the North Dakota Industrial Commission, or NDIC, which is comprised of the state’s governor, attorney general and agriculture commissioner.
NDIC took exception with several other provisions in the draft rule, including EPA’s contention that hydraulic fracturing can be regulated under EPA’s UIC program.
“Trying to fit hydraulic fracturing using diesel fuels into the Class II Program is inappropriate,” NDIC said in a June 25 letter.
And how the draft guidance will affect states that currently issue UIC permits is another controversial issue.
The North Dakota Department of Health said in an Aug. 23 letter to EPA that it is concerned the proposed guidance could interfere with established state regulations and activities.
“EPA must assure states that any guidance will not become a requirement of a state’s underground injection control (UIC) program, or impact the performance evaluation of any state that has primacy for UIC programs,” the department said.
Tribes not consulted by EPA
The Three Affiliated Tribes of the Fort Berthold Reservation Chairman Tex Hall said in his comments that there had been a lack of consultation with the tribes as EPA developed the draft guidance.
Hall also said hydraulic fracturing in the deep wells on the reservation occurs far below the water table. “Without proof that this Guidance is necessary to protect against an identified threat to the environment, deep well HF on the Reservation should be exempt from the additional burdens that the proposed Guidance would impose,” Hall said.
In his closing comments, North Dakota Petroleum Council President Ron Ness said “NDPC, along with the oil and gas industry of North Dakota, supports regulatory oversight grounded in scientific analyses and supported by rigorous research and evidentiary data. Guidance or regulation adopted prematurely, without proper evidence based on arguments services only to raise undue public concern in the United States and across the globe while slowing down development that will lead to economic recovery that benefits all of us.”
Supporters say EPA guidance doesn’t go far enough
But, like BLM rule, there is support for the draft EPA guidance with supportive comments coming from organizations, including the Center for Biological Diversity, as well as from hundreds of individuals. A number of supportive comments maintained that the draft guidance do not go far enough in protecting drinking water supplies and called for the complete ban of diesel fuel in fracking fluid. While Petroleum News Bakken was not able to review all of the comments on the draft EPA guidance, it viewed scores of comments submitted by private individuals which all contained the following statement: “The EPA should follow the recommendation of the U.S. Department of Energy’s Secretary of Energy Advisory Board and prohibit the use of diesel fuel - a known carcinogen and public health risk - in fracturing fluids in gas and oil drilling across the United States.” Other supportive comments complained that the definition of diesel fuel in the draft guidance is not broad enough.
All together EPA posted 2,735 comments online, and this number represents the total number of comments the agency received, which accounts for the duplicity observed by Petroleum News Bakken in many of the comments.
In a statement issued when it extended the public comment period, EPA said that the recommendations in the draft rule “may change based on the comments we receive on the draft publication and this will be reflected in the final guidance.” Petroleum News Bakken was not able to get a timeframe from EPA as to when the agency plans to make a final decision on the draft guidance.
Access to the rules and comments
The proposed rule can be accessed on BLM’s website, and the comments can be found by accessing the U.S. government’s regulations website at http://www.regulations.gov, and typing “BLM-2012-0001” in the search window.
The proposed EPA guidance is available on that agency’s website, and comments on the EPA rule can be found at the same government regulations website and typing “EPA-HQ-OW-2011-1013” in the search window.
Hydraulic Fracturing
In its simplest form, hydraulic fracturing in oil and gas production is the process of injecting water and sand into oil or gas formations under high pressure to fracture the formation thereby increasing permeability so trapped oil and gas can be extracted. The high pressure water injection fractures the formation and the sand, known as a proppant, supports the fractures and prevents them from collapsing when the pressure is released.
First developed in the 1940s, hydraulic fracturing has not only been used for oil and gas reservoir stimulation, but it has also been used to enhance production in water supply wells. In the years since a number of technological advances have been made, including the use of materials such as ceramics instead of sand as proppants; and the use of various chemical additives for such purposes as controlling fluid viscosity, reducing friction in piping, and inhibiting corrosion. However, these additives make up a small portion of fracturing fluids with typical mixtures being 98 percent to 99 percent water and proppant.
Hydraulic fracturing is exempt from federal regulation under the Energy Policy Act of 2005 and companies are not required to disclose the composition of their fracturing fluids, although in recent years a number of companies have voluntarily done so.
The use of chemical additives has become controversial over concern that fracturing fluids could potentially impact drinking water supplies, although API said in its comments to BLM on the proposed new hydraulic fracturing rule that there is no evidence that such cross-contamination has ever resulted from hydraulic fracturing, while NGWA said “no widespread water quality or quantity issues have been definitively documented … (but) there have been isolated cases where faulty casing installations (including poor cement bonds) or poor management of materials/chemicals at the surface are suspected as having negatively impacted groundwater, surface water or water wells.”
—Mike Ellerd
