New Federal Regulations for Fracking on Public Lands in Line with but Narrower than Draft EO100 Fracking Standards

March 26, 2015 | Written by Josh Garrett

U.S. Interior Secretary Sally Jewell, who announced the federal rule for hydraulic fracturing on federal and Indian lands on a conference call on March 20th.

Last week, the U.S. Department of Interior (DOI) issued new regulations for oil and gas operations that use hydraulic fracturing (fracking) on federal and Indian lands. The announcement came just four days after EO published its draft EO100 for Shale Oil and Gas standards, a supplement to the foundational EO100 Standard, for operations that use fracking. Both announcements were significant and novel steps toward making fracking operations safer for people and the environment, but each takes a unique approach and applies to a different scope of impacts from shale development and fracking. How are they alike and how are they different? We took an initial look at the DOI’s fracking rule (which falls under the purview of its sub-agency, the Bureau of Land Management or BLM), and came up with some answers to those questions.

First, it’s important to note that the BLM rule is the first time the U.S. federal government has created new regulations specifically for oil and gas operations that use fracking. Fracking and associated activities are exempt from certain federal environmental laws like the Safe Drinking Water Act, and are regulated primarily at the state level. These state regulations vary widely in their stringency and scope, so the first nationwide regulations on shale development and fracking could prove valuable in making disparate state rules more consistent. However, the new rule only applies to lands owned by the federal government and lands owned by Indian tribes. While these areas are substantial—according to the DOI, there are currently 95,000 oil and gas wells on federal land—they only account for about 10 percent of U.S. oil and gas development. The other 90 percent--about 900,000 wells--takes place on private land. The EO standards for shale development and fracking are by design broadly applicable and international. Once finalized, they will serve, in combination with EO100 Standard, as the criteria for certifying responsibly-operated shale development sites, whether those sites are on public or private land, inside or outside of the U.S. Like the BLM rule, the EO100 for Shale Oil and Gas is the first of its kind: a set of voluntary standards developed independently of the oil and gas industry, but with the consultation of diverse stakeholders, including industry veterans. The current EO100 for Shale is a draft version in the second week of a 60-day public comment period, with a final version expected in July of this year; the DOI rule is the final version (the product of almost three years of public comment and revision) that goes into effect in 90 days.

The DOI rule regulates fracking and shale development activities in three areas: well integrity, wastewater management, and chemical disclosure. The draft EO100 also includes standards in these areas, and the content of the two documents in these categories is similar:

  • Both require site operators to ensure the “integrity” (resistance to cracks and leaks) of the cement casing around the vertical portion of shale wells; both require testing to monitor well integrity. Well integrity is the best protection against shale wells contaminating aquifers, as they sometimes pass through these underground sources of drinking water and strong cement casings are essential to keeping fracking fluids and natural gas separated from aquifers.
  • Both call for chemical-laden fracking fluids and wastewater to be stored in closed tanks instead of open pits.
  • Both require the public disclosure of chemicals used in fracking operations
  • Both require underground mapping to locate fault lines near drilling sites to help reduce the risk of and possibly prevent earthquakes caused by fracking and the underground injection of wastewater for disposal.

While the BLM rule addresses leading environmental concerns associated with shale development and fracking, it does not cover social concerns—impacts on communities from shale development operations and related activities. In contrast, the EO100 for Shale Oil and Gas does include social standards, following the framework of the EO100 Standard. A few examples of EO100 for Shale social performance standards:

  • Community engagement: operators are required to engage with communities near shale development sites and consult with them on the risks presented by shale drilling, appropriate setbacks (space between existing buildings and shale wells), and expected economic impacts like job creation.
  • Traffic: operators must consider how truck traffic will affect community roads and existing traffic patterns; operators adjust activity schedules to reduce traffic congestion .
  • Indigenous Peoples’ rights: operators developing shale resources on or near Indigenous Peoples’ lands (like Indian reservations) obtain Free, Prior, and Informed Consent (FPIC) from indigenous communities for water use, transport of hazardous chemicals, and wastewater disposal on their territories.

As governmental regulation, the BLM rule is much more detailed and specific in the three areas it applies to, while the voluntary standards of the EO100 for Shale apply to a broader range of development impacts and are less specific in their requirements.

Whatever their differences and similarities, the EO100 for Shale Oil and Gas standards and the BLM rule for fracking on federal and Indian Lands are both important milestones in the process of developing clear and consistent standards for responsible shale development. Far from being competing standards, the two have great potential to guide and complement each other in the quest to make fracking and shale development that’s happening today and will happen tomorrow safer for people and the environment.