White House reviewing federal frac proposals

From: Upstream Online

The US Interior Department has submitted its proposed set of rules regulating hydraulic fracturing to the White House Office of Management and Budget (OMB) for review, bringing a federal framework for the controversial drilling practice one step closer to reality.

Luke Johnson  


OMB listed the proposed rules as “received” on Wednesday on its website.

Industry groups voiced strong opposition to the proposed regulations when a draft of the proposal leaked earlier this month.

Groups like the American Petroleum Institute and the Independent Petroleum Association of America took particular issue with a proposal requiring disclosures of chemicals used in fracking.

API called mandatory disclosures “unnecessary” since many drillers and operators already voluntarily disclose the chemical makeup of their frac fluid on a website called FracFocus.

The draft rules, a copy of which was obtained by Upstream, would also allow for some exemptions if companies can prove the disclosures violate proprietary rights.

But the proposed rules go beyond just mandating chemical disclosures. They would also require operators to perform mechanical integrity tests on well casings “to not less than the anticipated treating pressure”.

Operators would also be required to monitor the annulus pressure at the wellhead and submit a continuous record of the annulus pressure during well stimulation.

According to the draft rules, operators would also have to submit a plan for sourcing and transporting all water used, including the estimated volume to be recovered and method of disposal, which must be either via a tank or lined pit.

Interior Secretary Ken Salazar said on Wednesday that the rules, which would apply only to fracking on federal lands, would add a level of consistency for operators so they do not have to deal with “a patchwork of regulations”.

He said “many in the industry” had told him that “they would rather have a standard that they can follow from state to state”.

In a letter to congressman Doc Hastings, chair of the Committee on Natural Resources, API and IPAA and disputed Salazar’s claim that industry favours federal regulations.

“Our member companies support the current state processes for regulation of hydraulic fracturing,” they wrote in the letter, adding that they oppose attempts to create “a different, costly and unnecessary new reporting process” from the FracFocus site.

“While we plan to continue to press for a FracFocus approach, we want to dispel any suggestions that there is a need for a new federal framework to address the fracturing chemical disclosure issue or to develop a national well construction model,” they continued.

“Such a framework or model would be counterproductive given the efforts by state governments to tailor regulation to local demands.”

Deputy Interior Secretary David Hayes said on Wednesday that the rules, once formally released, would differ from the draft, the Houston Chronicle reported.

Interior will also seek comment from industry and the public during a review period.

The OMB gave no timeline for when the rules would be formally unveiled.

Roughly 4.66 billion cubic feet of natural gas and about 502 million barrels of oil were produced on US public lands in fiscal year 2011, according to the Interior’s Office of Natural Resources Revenue.


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