WASHINGTON — The Obama administration is set to issue the first major federal regulations on hydraulic fracturing on Friday, with new mandates targeting oil and gas wells on public land.
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.”
Read more: New fracking rules coming
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.”
Although the measure will affect only wells on federal and Indian lands managed by the Bureau of Land Management, Jewell said Tuesday that it could provide a regulatory model for states that aren’t accustomed to drilling.
“The reality is some states are likely to have more stringent policies in place in some aspects,” Jewell said. “Other states don’t have robust policies because this is new to them.”
“If you’re in states where they have not had other oil and gas development, they may not have regulations at all,” Jewell added. “They are probably going to start with ours and then talk with other states.”