Interior Department’s final rules for fracking on federal land may give operators more flexibility

The revised version of the Interior Department’s rules for fracking on federal lands would provide operators with more flexibility in how they complete well testing.

The Interior Department has been in the process of crafting rules to govern the use of hydraulic fracturing—"fracking"—on lands leased from the federal government for years. The officials in charge of the process had previously put forward a draft set of regulations and have been updating them to account for feedback received during the public comment period.

On May 11, the department's Bureau of Land Management (BLM) published a revised draft of the regulatory framework that it intends to use going forward. Bloomberg News suggested that although industry stakeholders "prefer state to federal regulation, they welcomed the changes made by the Bureau of Land Management from its initial proposal last year."

The news source asserted the rule making process is being closely watched by companies in the drilling sector because fracking is now used in the completion of approximately 90 percent of the oil and gas wells that are sited on federally owned properties. While most of the oil and gas production boom sparked by fracking has taken place on privately owned lands, which will not be subject to the new BLM regulations, there is still a considerable amount of exploration and production activity taking place on public land.

According to data compiled by the BLM, on average more than 2,500 new leases were issued each year during President Obama's first term in office, while more than 4,000 applications for drilling permits were approved and more than 3,000 new wells were started. In light of these figures, it is clear that there are many industry stakeholders who stand to see their operations affected by the new fracking rules.

Testing protocols less tightly regulated compared to prior draft

In an analysis of the BLM's revised regulatory framework, Perkins Coie noted that the current version of the reporting requirements for well completion would give well operators more flexibility in the protocols they use for drill stem testing. The law firm also noted that companies would be able to request that officials grant them a waiver to vary from the federal regulations in areas where state or tribal standards are seen as meeting or exceeding those set by the BLM.

Throughout the document, the agency underscored its desire to regulate fracking "without introducing unnecessary new procedures or delays" and "avoid duplication with the requirements of states and tribes."

Despite these improvements, companies would still be required to submit a considerable amount of data regarding their expectations for specific oil and gas wells before any use of fracking would be authorized by federal officials. For instance, operators would have to furnish the BLM with:

  • An estimate of the total fluids to be used in fracturing operations
  • The maximum injection pressure
  • The volume of fluid to be recovered during flowback
  • An estimate of the length, height, direction and propagation of the fracture

Ultimately, the authors of the Perkins Coie report noted that although the "BLM's revised proposed rule addresses several concerns that arose out of its original proposal, significant issues remain" in the current draft.