17 May 2013

Updated draft rules for hydraulic fracturing deserve the chance to work

Written by Jim Pierobon

Complaints by both sides over the Obama administration’s newly updated draft rules regulating the hydraulic fracturing of shale natural gas and oil on public and Indian lands signals the Interior Department has found enough common ground to raise the bar — albeit slightly — on drilling operations.

Because the updated draft rules would only apply to public and Indian-owned lands, their impact may be minimal on private lands, especially in states that have their own – and in some cases – tougher rules. But they effectively set a notable precedent. Industry and environmentalists know that, which is why they were quick to comment on the original draft last year and the updated draft released Thursday.

A major focus of the draft rules, spread over 171 pages, is the increasingly important role for the industry-sponsored chemical registry web site at FracFocus.org. The Obama Administration appears comfortable enough with letting it become the principal means of disclosing certain facts about hydraulic fracturing, or “fracking.” But questions remain whether it is up to the task. As fracking evolves, can it offer enough transparency about the drilling fluids being used and thus pose a threat to the environment, especially water supplies?

From where I write along with my time reporting on and then helping the energy industry communicate its facts, industry deserves the opportunity to prove FracFocus.org and drilling operations generally can be trusted enough unless there is a serious accident due to non-disclosure or operator error. Any major accident should send regulators back to the drawing board.

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This app is on FracFocus.org, which is operated for industry by the Ground Water Protection Council and Interstate Oil and Gas Compact Commission.

If FracFocus.org misses a relevant disclosure that it should have captured and the absence of such harms humans and/or the environment, any trust in it and the rules set to be promulgated by the Interior Department’s Bureau of Land Management, will likely be lost possibly for a long time. Here’s to hoping industry does not let that happen.  It now has an added incentive to step up under the ever-increasing scrutiny and produce the natural gas the country and the world need.

Texas and Colorado, two hotbeds of hydraulic fracturing, previously selected FracFocus.org to be their chemical registries. That kind of momentum is hard to argue with. Will it be better than a government-run system?  For the foreseeable future, I think the answer to that has to be yes. It’s FracFocus’ opportunity to lose.

My guess is the reputation of Department of Interior Secretary Sally Jewell, whose official biography states was trained as petroleum engineer and started her career with Mobil Oil Corp. in the oil and gas fields of Oklahoma, depends on whether FracFocus.org succeeds, or not.

After 177,000 public comments, a lot of interested parties are watching the rules process carefully.  If you haven’t yet, see this stinging assessment by the Harvard Environmental Law Policy Initiative. It asserts that relying on FracFocus to aid in regulatory compliance in some states has “serious flaws.”  Among them, FracFocus allows companies to disclose late without penalties. It also claims there is no review of the accuracy of disclosures by FracFocus. In addition: there is an “overly broad standard” that gives companies sole discretion to determine when to assert trade secrets, which allows them to withhold the identity and amount of the chemicals used.

A flurry of initial media reports are ferreting different provisions of the new draft rule. Two citations:

From the FuelFix.com by the Houston Chronicle:  Companies will be required to have water management plans for handling fluids the flow back to the surface. This because those fluids can become contaminated with naturally occurring radioactive substances underground.

From The New York Times:  Companies will be allowed to keep some components of their drilling fluids secret. And the rule will permit companies to run well integrity tests on one representative well rather than all wells in a field where the geology and well construction techniques are similar.

Predictably, many environmental activists cried foul. While that may be their job, to do so without recommending a better solution undermines their credibility. It risks making them irrelevant to the rules process.

For those that did supply specific comments, perhaps more progress can be made before the updated rule is made final 30 days after the updated rule is published in the Federal Register, probably today or Monday.

Let’s briefly dissect perhaps the most outspoken critic of hydraulic fracturing, Sierra Club President Michael Brune. Brune said he believes “the administration is putting the American public’s health and well-being at risk, while continuing to give polluters a free ride” and that “no amount of regulation will make fracking acceptable.”

That in my mind is overreaching on its face. But read on and Brune argues the draft rules “ignore the recommendations” of the Secretary of Energy’s shale gas advisory subcommittee. In 2011, the advisory subcommittee called for more transparency and environmental safeguards, full public chemical disclosure and pollution monitoring than is contained in the newly proposed rule, according to Brune.

Specifically, Brune asserts there is “no requirement for baseline water testing and no setback requirements to govern how close to homes and schools drilling can happen. The new rules also continue to allow the use of toxic diesel fuel for fracking, as well as open pits for storing wastewater — two practices that we know to be environmentally hazardous.”

If you’ve never read a report on a well using hydraulic fracturing, here’s a primer from FracFocus.org.

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