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News & Flashes

BLM Rescinds 2015 Hydraulic Fracturing Rule 01-02-2018

On December 29, 2017, the Bureau of Lang Management (“BLM”) issued a final rule (the “Rescission”) rescinding in its entirety the agency’s 2015 final rule regulating hydraulic fracturing activities on Federal and Indian lands (the “2015 Rule”). The 2015 Rule (link to 2015 white paper on fracking website) included a comprehensive set of well-bore integrity requirements, standards for the interim storage of recovered waste fluids, mandatory notifications and waiting periods for key parts of the fracturing process, and chemical disclosure requirements. However, these requirements had not yet taken effect as a result of a stay issued in connection with the ongoing judicial challenges to the 2015 Rule. Pursuant to the Rescission, BLM’s hydraulic fracturing regulations (43 CFR Part 3160) in effect prior to effective date of the of 2015 Rule (June 24, 2015) will now govern hydraulic fracturing activities on Federal and Indian lands going forward, effective immediately. 

In the preamble to the Rescission, BLM explains that rescission of the 2015 Rule is preferable to the 2015 Rule because it will “relieve operators of duplicative, unnecessary, costly and unproductive regulatory burdens.”  Specially, BLM estimates the Rescission will result in savings of $9,690 in compliance costs per well. The preamble further explains that the agency reviewed incident reports associated with hydraulic fracturing activities on Federal and Indian lands since December 2014 and found a “rarity of adverse environmental impacts that occurred from hydraulic fracturing operations since promulgation of the 2015 [R]ule.”  BLM concludes in the preamble that the BLM’s own pre-existing regulations, coupled with state/tribal oversight and regulations, mitigate such risks. 

The preamble also explains that the Rescission “eliminates the need for further litigation about BLM’s statutory authority.”  In litigation challenging the 2015 Rule, the District Court for the District of Wyoming concluded (link to June 22, 2016 frack flash) that regulating hydraulic fracturing activities was outside the BLM’s statutory authority. Although the United States Court of Appeals for the Tenth vacated the District Court’s final order, plaintiffs in that case have moved for rehearing or reconsideration en banc. These proceedings are pending, and it remains to be seen what effect the Rescission will have with respect to the continuing litigation regarding the 2015 Rule. 

While the Rescission is effective immediately, judicial challenges to the Rescission are likely. Read the Rescission in full here.

BLM Finalizes Postponement of Waste Prevention Rule 12-13-2017

On December 8, 2017, the Bureau of Land Management (“BLM”) published a final rule (the “Postponement”) postponing certain requirements of the 2016 Waste Prevention Rule (“Waste Prevention Rule”) for one year. BLM’s Postponement reflects the completion of BLM’s latest effort to delay the requirements of the Waste Prevention Rule after a court in the Northern District of California vacated BLM’s previous attempt to postpone the effective dates of the rules through alternative procedures. 

BLM’s Waste Prevention Rule, initially promulgated in November 2016, covers a number of methane emissions sources associated with oil and gas production activities on federal lands, including natural gas emissions from venting or flaring, gas leaks from equipment and facilities located at the well site, and well drilling and completions. While the Waste Prevention Rule called for operators to submit “waste minimization” plans by January 2017, the Rule’s leak detection and recovery, emission reduction, and reporting requirements were scheduled to go into effect on January 17, 2018. BLM issued a proposed rule in October 2017 proposing to extend the Waste Prevention Rule’s January 2018 effective dates to January 2019. The proposed rule was open to public notice and comment for a 30-day period concluding November 6, 2017. The Postponement formally promulgates the October 2017 proposed rule, extending the Waste Prevention Rule’s original January 17, 2018 effective dates to January 17, 2019. 

The Postponement is currently in effect, but remains subject to judicial challenge in the future. Any such future judicial challenge could also raise a prospective stay of the Postponement, which could bring the original 2016 Waste Prevention Rule deadlines back into effect pending the court’s resolution of the judicial challenge to the Postponement. Meanwhile, a separate legal challenge to the validity of the 2016 Waste Prevention Rule brought by several industry groups and states remains pending in Western Energy Alliance et al. v. Secretary of the U.S. Dep’t of the Interior et al, Case No. 16-cv-00280 in the U.S. District Court for the District of Wyoming. In that case, the Federal Respondents have filed a Motion to Dismiss, or, in the alternative, for a Stay of Proceedings in light of the Postponement.

DRBC Proposed Rule Would Ban High-Volume Hydraulic Fracturing 12-01-2017

On November 30, 2017, the Delaware River Basin Commission (“DRBC”) published a proposed rule that, if finalized, would prohibit “high-volume hydraulic fracturing” within the Delaware River Basin.  The proposed rule reflects the DRBC’s conclusion that “high volume hydraulic fracturing poses significant, immediate and long-term risks to the development, conservation, utilization, management, and preservation of the water resources of the Delaware River Basin.”  The Delaware River Basin extends into four northeastern states and includes seventeen counties in Eastern Pennsylvania, many of which lie above the Marcellus Shale formation.

The proposed rule defines “high-volume hydraulic fracturing” as fracturing operations that use “a combined total of 300,000 or more gallons of water during all stages in a well completion . . . whether the water is fresh or recycled and regardless of the chemicals or other additives mixed with the water.”  This definition is likely to capture most hydraulic fracturing operations.   For example, the preamble to proposed rule states that the average hydraulically fractured natural gas well in the nearby Susquehanna River Basin injected 4.3 million gallons of water from 2008-2013; similarly, the preamble cites the United States Environmental Protection Agency’s 2016 hydraulic fracturing study, which concluded that the median volume of water used per well fracturing event in Pennsylvania between January 2011 and February 2013 was 4.18 million gallons.

In addition to the proposed ban on high-volume hydraulic fracturing, the proposed rule would also discourage the exportation of waters from the Delaware River Basin “to support hydraulic fracturing outside the Basin,” require an assessment of alternatives before allowing the importation of produced water into the Delaware River Basin, and require DRBC approval for produced water treatment within the Delaware River Basin.

The DRBC is accepting comments on the proposed rule through February 28, 2018 at 5 PM.  In addition, the DRBC will convene a series of public hearings on the proposed rule on January 23, 2018 in Waymart, Pennsylvania and on January 25, 2018 in Philadelphia, Pennsylvania.  Read the proposed rule in full here.

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