[Federal Register Volume 82, Number 141 (Tuesday, July 25, 2017)]
[Proposed Rules]
[Pages 34464-34471]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15696]
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DEPARTMENT OF THE INTERIOR
Bureau of Land Management
43 CFR Part 3160
[LLWO300000 L13100000 PP0000 17X]
RIN 1004-AE52
Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands;
Rescission of a 2015 Rule
AGENCY: Bureau of Land Management, Interior.
ACTION: Proposed rule.
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SUMMARY: On March 26, 2015, the Bureau of Land Management (BLM)
published in the Federal Register a final rule entitled, ``Oil and Gas;
Hydraulic Fracturing on Federal and Indian Lands'' (2015 final rule).
The BLM is now proposing to rescind the 2015 final rule because we
believe it is unnecessarily duplicative of state and some tribal
regulations and imposes burdensome reporting requirements and other
unjustified costs on the oil and gas industry. This proposed rule would
return the affected sections of the Code of Federal Regulations (CFR)
to the language that existed immediately before the published effective
date of the 2015 final rule.
DATES: The BLM must receive your comments on this proposed rule or on
the supporting Regulatory Impact Analysis or Environmental Assessment
on or before September 25, 2017.
ADDRESSES: Mail: U.S. Department of the Interior, Director (630),
Bureau of Land Management, Mail Stop 2134LM, 1849 C St. NW.,
Washington, DC 20240, Attention: 1004-AE52.
Personal or messenger delivery: U.S. Department of the Interior,
Bureau of Land Management, 20 M Street SE., Room 2134 LM, Washington,
DC 20003, Attention: Regulatory Affairs.
Federal eRulemaking Portal: http://www.regulations.gov. Follow the
instructions at this Web site.
FOR FURTHER INFORMATION CONTACT: Steven Wells, Division Chief, Fluid
Minerals Division, 202-912-7143, for information regarding the
substance of this proposed rule or information about the BLM's Fluid
Minerals program. Persons who use a telecommunications device for the
deaf (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339,
24 hours a day, 7 days a week, to leave a message or question with the
above individuals. You will receive a reply during normal business
hours.
SUPPLEMENTARY INFORMATION:
I. Executive Summary
II. Public Comment Procedures
III. Background
IV. Discussion of Proposed Rule
V. Procedural Matters
I. Executive Summary
The process known as ``hydraulic fracturing'' has been used by the
oil and gas industry since the 1950s to stimulate production from oil
and gas wells. In recent years, public awareness of the use of
hydraulic fracturing practices has grown. New horizontal drilling
technology has allowed increased access to oil and gas resources in
tight shale formations across the country, sometimes in areas that have
not previously experienced significant oil and gas development. As
hydraulic fracturing has become more common, public concern has
increased about whether hydraulic fracturing contributes to or causes
the contamination of underground water sources, whether the chemicals
used in hydraulic fracturing should be disclosed to the public, and
whether there is adequate management of well integrity and the
``flowback'' fluids that return to the surface during and after
hydraulic fracturing operations.
In light of the public concern for and widespread use of hydraulic
fracturing practices, in November 2010, the BLM prepared a rule that
was intended to regulate the use of hydraulic fracturing in developing
Federal and Indian oil and gas resources. Since that time, the BLM has
published two proposed rules (77 FR 27691 and 78 FR 31636), held
numerous meetings with the public and state officials, and conducted
many tribal consultations and meetings. The final rule entitled, ``Oil
and Gas; Hydraulic Fracturing on Federal and Indian Lands,'' was
published in the Federal Register on March 26, 2015 (80 FR 16128). The
2015 final rule was intended to: Ensure that wells are properly
constructed to protect water supplies, make certain that the fluids
that flow back to the surface as a result of hydraulic fracturing
operations are managed in an environmentally responsible way, and
provide public disclosure of the chemicals used in hydraulic fracturing
fluids.
On March 28, 2017, President Trump issued Executive Order 13783,
entitled, ``Promoting Energy Independence and Economic Growth'' (82 FR
16093, Mar. 31, 2017), which directed the Secretary of the Interior to
review four specific rules, including the 2015 final rule, for
consistency with the order's objective ``to promote clean and safe
development of our Nation's vast energy resources, while at the same
time avoiding regulatory burdens that unnecessarily encumber energy
production, constrain economic growth and prevent job creation'' and,
as appropriate, take action to lawfully suspend, revise, or rescind
those rules that are inconsistent with the policy set forth in
Executive Order 13783. To implement Executive Order 13783, Secretary of
the Interior Ryan K. Zinke issued Secretarial Order No. 3349 entitled,
``American Energy Independence'' on March 29, 2017, which, among other
things, directed the BLM to proceed expeditiously in proposing to
rescind the 2015 final rule. Upon further review of the 2015 final
rule, as directed by Executive Order
[[Page 34465]]
13783, and Secretarial Order No. 3349, the BLM believes that the 2015
final rule unnecessarily burdens industry with compliance costs and
information requirements that are duplicative of regulatory programs of
many states and some tribes. As a result, we are proposing to rescind,
in its entirety, the 2015 final rule.
II. Public Comment Procedures
If you wish to comment on the proposed rule or the supporting
analyses (namely, the Environmental Assessment (EA) or the Regulatory
Impact Analysis (RIA) prepared for this proposed rule), you may submit
your comments by any of the methods described in the ADDRESSES section.
Please make your comments on the proposed rule as specific as
possible, confine them to issues pertinent to the proposed rule, and
explain the reason for any changes you recommend. Where possible, your
comments should reference the specific section or paragraph of the
proposed rule that you are addressing. The BLM is not obligated to
consider or include in the Administrative Record for the final rule
comments that we receive after the close of the comment period (see
``DATES'') or comments delivered to an address other than those listed
above (see ADDRESSES).
Comments, including names and street addresses of respondents, will
be available for public review at the address listed under ``ADDRESSES:
Personal or messenger delivery'' during regular hours (7:45 a.m. to
4:15 p.m.), Monday through Friday, except holidays.
Before including your address, telephone number, email address, or
other personal identifying information in your comment, be advised that
your entire comment--including your personal identifying information--
may be made publicly available at any time. While you can ask us in
your comment to withhold from public review your personal identifying
information, we cannot guarantee that we will be able to do so.
III. Background
Well stimulation techniques, such as hydraulic fracturing, are
commonly used by oil and natural gas producers to increase the volume
of oil and natural gas that can be extracted from oil and gas
formations. Hydraulic fracturing techniques are particularly effective
in enhancing oil and gas production from shale gas or oil formations.
Hydraulic fracturing involves the injection of fluid under high
pressure to create or enlarge fractures in the reservoir rocks. The
fluid that is used in hydraulic fracturing is usually accompanied by
proppants, such as particles of sand, which are carried into the newly
fractured rock and help keep the fractures open once the fracturing
operation is completed. The proppant-filled fractures become conduits
for fluid migration from the reservoir rock to the wellbore and the
fluid is subsequently brought to the surface. In addition to the water
and sand (which together typically make up about 99 percent of the
materials pumped into a well during a fracturing operation), chemical
additives are also frequently used. These chemicals can serve many
functions in hydraulic fracturing, including limiting the growth of
bacteria and preventing corrosion of the well casing. The exact
formulation of the chemicals used varies depending on the rock
formations, the well, and the requirements of the operator.
In 2013, the BLM estimated that about 90 percent of the
approximately 2,800 new wells on Federal and Indian lands were
stimulated using hydraulic fracturing techniques. Over the past 15
years, there have been significant technological advances in horizontal
drilling, which is now frequently combined with hydraulic fracturing.
This combination, together with the discovery that these techniques can
release significant quantities of oil and gas from large shale
deposits, has led to production from geologic formations in parts of
the country that previously did not produce significant amounts of oil
or gas.
On May 11, 2012, the BLM published in the Federal Register the
initial proposed rule entitled, ``Oil and Gas; Well Stimulation,
Including Hydraulic Fracturing, on Federal and Indian Lands'' (77 FR
27691). The BLM received over 177,000 comments on the initial proposed
rule from individuals, Federal and state governments and agencies,
interest groups, and industry representatives.
After reviewing the comments on the proposed rule, the BLM
published a supplemental notice of proposed rulemaking entitled, ``Oil
and Gas; Hydraulic Fracturing on Federal and Indian Lands,'' on May 24,
2013 (78 FR 31636). The BLM received over 1.35 million comments on the
supplemental proposed rule.
On March 26, 2015, the BLM published the final rule entitled, ``Oil
and Gas; Hydraulic Fracturing on Federal and Indian Lands'' in the
Federal Register (80 FR 16128, codified as amendments to 43 CFR 3160.0-
3, 3160.0-5, 3162.3-2, 3162.3-3, and 3162.5-2 (2015)). Although the
2015 final rule never went into effect, it nevertheless amended certain
provisions in part 3160 of the 2015 edition of Title 43 of the Code of
Federal Regulations (CFR), including the list of statutory authorities,
the definitions section, and a provision requiring operators to isolate
and protect certain waters. In addition, the 2015 final rule amended
other provisions in part 3160 of the 2015 edition of Title 43 of the
CFR, which, had they gone into effect, would have required an operator
to:
Obtain the BLM's approval before conducting hydraulic
fracturing operations by submitting an application with information and
a plan for the fracturing (43 CFR 3162.3-3(d)(4)).
Include a hydraulic fracturing application in applications
for permits to drill (APDs), or in a subsequent ``sundry notice'' (43
CFR 3162.3-3(c)).
Include information about the proposed source of water in
each hydraulic fracturing application so that the BLM can complete
analyses required by the National Environment Policy Act (NEPA) (43 CFR
3162.3-3(d)(3)).
Include available information about the location of nearby
wells to help prevent ``frack hits'' (i.e., unplanned surges of
pressurized fluids into other wells that can damage the wells and
equipment and cause surface spills) (43 CFR 3162.3-3(d)(4)(iii)(C)).
Verify that the well casing is surrounded by adequate
cement, and test the well to make sure it can withstand the pressures
of hydraulic fracturing (43 CFR 3162.3-3(e)(1) and (2) and (f)).
Isolate and protect usable water, while redefining
``usable water'' to expressly defer to classifications of groundwater
by states and tribes, and the Environmental Protection Agency, 43 CFR
3160.0-7; and require demonstrations of only 200 feet of adequate
cementing between the fractured formation and the bottom of the closest
usable water aquifer, or cementing to the surface (43 CFR 3162.3-
3(e)(2)(i) and (ii)).
Monitor and record the annulus pressure during hydraulic
fracturing operations, and report significant increases of pressure (43
CFR 3162.3-3(g)).
File post-fracturing reports containing information about
how the hydraulic fracturing operation actually occurred (43 CFR
3162.3-3(i)).
Submit lists of the chemicals used (non-trade-secrets) to
the BLM by sundry notice (Form 3160-5), to FracFocus (a public Web site
operated by the Ground Water Protection Council and the Interstate Oil
and Gas Compact Commission), or to another BLM-designated database (43
CFR 3162.3-3(i)(1)).
[[Page 34466]]
Withhold trade secret chemical identities only if the
operator or the owner of the trade secret submits an affidavit
verifying that the information qualifies for trade secret protection
(43 CFR 3162.3-3(j)).
Obtain and provide withheld information to the BLM, if the
BLM requests the withheld information (43 CFR 3162.3-3(j)(3)).
Store recovered fluids in above-ground rigid tanks of no
more than 500-barrel capacity, with few exceptions, until the operator
has an approved plan for permanent disposal of produced water (as
required by Onshore Oil and Gas Order No. 7) (43 CFR 3162.3-3(h)).
The 2015 final rule would have also authorized two types of variances:
Individual operation variances to account for local
conditions or new or different technology (43 CFR 3162.3-3(k)(1)).
State or tribal variances to account for regional
conditions or to align the BLM requirements with state or tribal
regulations (43 CFR 3162.3-3(k)(2)).
Per the 2015 final rule, the standard for approval of either type of
variance is that the variance would meet or exceed the purposes of a
specific provision in the rule (43 CFR 3162.3-3(k)(3)).
Two industry associations filed suit opposing the 2015 final rule
in the U.S. District Court for the District of Wyoming in March 2015.
Four states and a tribe also challenged the rule in the same court.\1\
The Court consolidated the cases. Six environmental groups intervened
in the case in support of the rule.
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\1\ A separate tribe filed a separate challenge to the rule in
the U.S. District Court for the District of Colorado. That case has
been settled.
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The District Court stayed the 2015 final rule prior to its
effective date. Subsequently, the District Court preliminarily enjoined
the 2015 final rule. On June 21, 2016, the District Court issued an
order setting aside the rule. The Court concluded that Congress revoked
the BLM's authority over hydraulic fracturing operations by enacting
the Safe Drinking Water Act of 1974 and the Energy Policy Act of 2005.
Wyoming v. Jewell, No. 15-cv-41 (D. Wyo. June 21, 2016).
The District Court did not address a number of additional arguments
that Petitioners raised against the 2015 final rule. Those unaddressed
arguments focused primarily on allegations that the rule was not
supported by sufficient facts or was otherwise arbitrary and
capricious. The District Court also did not expressly address the
argument of a Tribal petitioner that the BLM is precluded from
regulating oil and gas operations on Indian lands.
The Department of the Interior (``the Department'') and
environmental group intervenors appealed the District Court's decision.
Wyoming v. Zinke, No. 16-8068 (10th Cir.). The appeal concerns only the
statutory authority issues that the District Court decided. Briefing
was completed in October 2016. Before oral argument, however, the Court
of Appeals in a March 2017 order required the BLM to report whether it
had changed its position in the appeal following the Presidential
Inauguration.
Following the March 2017 order from the Court of Appeals, the
Department accelerated its review of the 2015 final rule. As previously
noted, pursuant to Executive Order 13783, the Department commenced a
review of existing energy-related regulations, which included the 2015
final rule, to determine whether changes would be appropriate to
support domestic energy production. Based upon this review, the
Department identified the 2015 final rule as being duplicative and
burdensome and, therefore, appropriate for rescission. On March 15,
2017, the Department informed the Court of Appeals that it was
preparing a notice of proposed rulemaking to rescind the rule, which it
intended to publish in the Federal Register. Shortly thereafter, the
Court of Appeals postponed oral argument, and required further briefing
on several issues regarding the effect of the present rulemaking effort
on the appeal.
If the Court of Appeals were to reverse the District Court's order
on statutory authority, the case would be remanded to the District
Court to decide the remaining issues, primarily whether the BLM
complied with the Administrative Procedure Act in the rulemaking that
resulted in the 2015 final rule.
In sum, the 2015 final rule has never gone into effect, and was set
aside by the District Court on June 21, 2016. The 2015 final rule would
not go into effect unless and until the courts decide that the rule was
properly promulgated.
In the Regulatory Impact Analysis (RIA) for the 2015 final rule,
the BLM estimated that the requirements of the 2015 final rule would
result in compliance costs to the industry of approximately $32 million
per year (and potentially up to $45 million per year). The BLM had
concluded that many of the requirements were consistent with industry
practice and similar to the requirements found in existing state
regulations, and therefore would not pose a significant new compliance
burden to the industry. However, comments received by many oil and gas
companies and trade associations representing members of the oil and
gas industry suggested that the BLM's proposed and final rules were
unnecessary and would cause substantial harm to the industry. The BLM
recognizes that the 2015 final rule would pose a financial burden to
industry if implemented.
As noted earlier, since January 2017, the President has issued
Executive Orders that necessitate the review of the BLM's 2015 final
rule. Section 7(b) of Executive Order 13783 directs the Secretary of
the Interior to review four specific rules, including the 2015 final
rule, for consistency with the policy set forth in section 1 of [the]
Order and, if appropriate, to publish for notice and comment proposed
rules to suspend, revise, or rescind those rules.
Section 1 of Executive Order 13783 states that it is in the
national interest to promote clean and safe development of United
States energy resources, while avoiding ``regulatory burdens that
unnecessarily encumber energy production, constrain economic growth,
and prevent job creation.'' Section 1 describes the prudent development
of these natural resources as ``essential to ensuring the Nation's
geopolitical security.'' Section 1 finds it in the national interest to
ensure that electricity is affordable, reliable, safe, secure, and
clean, and that coal, natural gas, nuclear material, flowing water, and
other domestic sources, including renewable sources, can be used to
produce it.
Accordingly, Section 1 of Executive Order 13783 declares it the
policy of the United States that: (1) Executive departments and
agencies immediately review regulations that potentially burden the
development or use of domestically produced energy resources and, as
appropriate, suspend, revise, or rescind those that unduly burden
domestic energy resources development ``beyond the degree necessary to
protect the public interest or otherwise comply with the law''; and (2)
to the extent permitted by law, agencies should promote clean air and
clean water, while respecting the proper roles of the Congress and the
States concerning these matters; and (3) necessary and appropriate
environmental regulations comply with the law, reflect greater benefit
than cost, when permissible, achieve environmental improvements, and
are developed through transparent processes using the best available
peer-reviewed science and economics.
As directed by the aforementioned Executive Order, and by
Secretarial Order No. 3349, the BLM conducted a review of the 2015
final rule. As a result of this review, the BLM believes that the
[[Page 34467]]
compliance costs associated with the 2015 final rule are not justified
and it now proposes to rescind the rule.
In the RIA for the 2015 final rule, while noting that many of the
requirements of the 2015 final rule were consistent with industry
practice and that some were duplicative of state requirements or were
generally addressed by existing BLM requirements, the BLM asserted that
the rule would provide additional assurance that operators are
conducting hydraulic fracturing operations in an environmentally sound
and safe manner, and increase the public's awareness and understanding
of these operations.
It follows that the rescission of the 2015 final rule could
potentially reduce those assurances or potentially reduce public
awareness and understanding about hydraulic fracturing operations on
Federal and Indian lands. However, considering state regulatory
programs, the sovereignty of tribes to regulate operations on their
lands, and the pre-existing authorities in other Federal regulations,
the proposed rescission of the 2015 final rule would not leave
hydraulic fracturing operations entirely unregulated.
The BLM's review of the 2015 final rule included a review of state
laws and regulations which indicated that most states are either
currently regulating or are in the process of regulating hydraulic
fracturing. When the 2015 final rule was issued, 20 of the 32 states
with currently existing Federal oil and gas leases had regulations
addressing hydraulic fracturing. In the time since the promulgation of
the 2015 final rule, an additional 12 states have introduced laws or
regulations addressing hydraulic fracturing. As a result, all 32 states
with Federal oil and gas leases currently have laws or regulations that
address hydraulic fracturing operations.\2\ In addition, some tribes
with oil and gas resources have also taken steps to regulate oil and
gas operations, including hydraulic fracturing, on their lands.
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\2\ The reference to 32 states with existing Federal oil and gas
leases includes the following states: Alabama, Alaska, Arizona,
Arkansas, California, Colorado, Idaho, Illinois, Indiana, Kansas,
Kentucky, Louisiana, Maryland, Michigan, Mississippi, Montana,
Nebraska, Nevada, New Mexico, New York, North Dakota, Ohio,
Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas,
Utah, Virginia, West Virginia, and Wyoming. The State of Oregon
regulates hydraulic fracturing operations by way of its regulations
addressing ``Water Injection and Water Flooding of Oil and Gas
Properties'' (Oregon Administrative Rules [Or. Admin. R.] sec. 632-
010-0194). The State of Arizona may regulate hydraulic fracturing
operations by way of its regulations addressing ``Artificial
Stimulation of Oil and Gas Wells'' (Arizona Administrative Code
[A.A.C.] sec. R12-7-117). The State of Indiana issued ``emergency
rules'' in 2011 and 2012 that incorporated new legislation
addressing hydraulic fracturing (Pub. L. 140-2011 and Pub. L. 16-
2012) into Indiana's oil and gas regulations at 312 Indiana
Administrative Code (IAC) Article 16. For further information about
the state regulatory programs, see Sec. 2.12 of the RIA and
Appendix 1 of the EA prepared for this proposed rulemaking action.
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The BLM also now believes that disclosures of the chemical content
of hydraulic fracturing fluids to state regulatory agencies and/or
databases such as FracFocus is more prevalent than it was in 2015 and
that there is no need for a Federal chemical disclosure requirement,
since companies are already making those disclosures on most of the
operations, either to comply with state law or voluntarily. There are
23 states that currently use FracFocus for chemical disclosures. These
include six states where the BLM has major oil and gas operations,
including Colorado, Montana, North Dakota, Oklahoma, Texas, and Utah.
In addition to state and tribal regulation of hydraulic fracturing,
the BLM has several pre-existing authorities that it will continue to
rely on if the 2015 final rule is rescinded, some of which are set out
at 43 CFR subpart 3162 and in Onshore Oil and Gas Orders 1, 2, and 7.
These authorities reduce the risks associated with hydraulic fracturing
by providing specific requirements for well permitting; construction,
casing, and cementing; and disposal of produced water.\3\ By reverting
to 43 CFR subpart 3162 as it existed prior to the 2015 final rule, the
BLM would continue to require prior approval for ``nonroutine
fracturing jobs''; however, ``nonroutine fracturing jobs'' would not be
defined in 43 CFR subpart 3162 since the term was not defined before
the 2015 final rule. The BLM also possesses discretionary authority
allowing it to impose site-specific protective measures reducing the
risks associated with hydraulic fracturing.
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\3\ Additional discussion regarding Onshore Oil and Gas Orders
1, 2, and 7, and 43 CFR subpart 3162, is provided in Sec. 2.11 of
the RIA and the EA prepared for this proposed rulemaking action.
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The BLM's review of the 2015 final rule also included a review of
incident reports from Federal and Indian wells since December 2014.
This review indicated that resource damage is unlikely to increase by
rescinding the 2015 final rule because of the rarity of adverse
environmental impacts that occurred from hydraulic fracturing
operations before the 2015 final rule, and after its promulgation while
the 2015 final rule was not in effect. The BLM now believes that the
appropriate framework for mitigating these impacts exists through state
regulations, through tribal exercise of sovereignty, and through BLM's
own pre-existing regulations and authorities (pre-2015 final rule 43
CFR subpart 3162 and Onshore Orders 1, 2, and 7).
The BLM is seeking comments on the specific regulatory changes that
would be made by this proposed rule and is interested particularly in
information that would improve BLM's understanding of state and tribal
regulatory capacity in this area. Further, the BLM is seeking specific
comments on approaches that could be used under existing Federal
authorities, including what additional information could be collected
during the APD process or through sundry notices, to further minimize
the risks from hydraulic fracturing operations, particularly in states
or on tribal lands where the corresponding regulations or enforcement
mechanisms may be less comprehensive.
IV. Discussion of Proposed Rule
As previously discussed in this preamble, the BLM proposes to
revise 43 CFR part 3160 to rescind the 2015 final rule. Although the
2015 final rule never went into effect, this proposed rule would
restore the regulations in part 3160 of the CFR to exactly as they were
before the 2015 final rule, except for any changes to those regulations
that were made by other rules published between March 26, 2015 (the
date of publication of the 2015 final rule) and now. This proposed rule
would not result in any change from current requirements because the
2015 final rule never went into effect. The following section-by-
section analysis reviews the specific changes that would be required to
return to the pre-2015 final rule regulations.
Section 3160.0-3 Authority
The BLM proposes to amend Sec. 3160.0-3 by removing the reference
to the Federal Land Policy and Management Act of 1976, as amended (43
U.S.C. 1701). The 2015 final rule added this reference as an
administrative matter. This proposed rule would return this section to
the language it contained before the 2015 final rule and would not have
any substantive impact.
Section 3160.0-5 Definitions
The BLM proposes to amend this section by removing several terms
that were added by the 2015 final rule and by restoring the definition
of ``fresh water'' that the 2015 final rule had removed. The proposed
rule would
[[Page 34468]]
remove the definitions of ``annulus,'' ``bradenhead,'' ``Cement
Evaluation Log (CEL),'' ``confining zone,'' ``hydraulic fracturing,''
``hydraulic fracturing fluid,'' ``isolating or to isolate,'' ``master
hydraulic fracturing plan,'' ``proppant,'' and ``usable water.'' The
2015 final rule used those terms in the operating regulations. If those
operating regulations are rescinded, as proposed, these terms would no
longer be necessary in this definitions section. The BLM is proposing
to restore the previous definition of ``fresh water'' to the
regulations.
Section 3162.3-2 Subsequent Well Operations
This proposed rule would amend Sec. 3162.3-2 by making non-
substantive changes to paragraph (a), which include replacing the word
``must'' with the word ``shall'', replacing the word ``combine'' with
the word ``commingling'', replacing the word ``convert'' with the word
``conversion'', and removing the language from the first sentence of
paragraph (a) that the 2015 final rule only added to more fully
describe Form 3160-5.
The proposed rule would also make non-substantive changes to
paragraph (b) of Sec. 3162.3-2, which include replacing ``using a
Sundry Notice and Report on Well (Form 3160-5)'' with ``on Form 3160-
5''.
The proposed rule would also restore ``perform nonroutine
fracturing jobs'' to the list of activities that require the authorized
officer's prior approval in Sec. 3162.3-2. The 2015 final rule removed
those words from the list because it amended Sec. 3162.3-3 to require
all hydraulic fracturing operations to be approved by the authorized
officer. This proposed rule would remove that requirement from Sec.
3163.3-3, which is discussed below.
Section 3162.3-3 Other Lease Operations
The BLM proposes to revise this section by removing language that
was added by the 2015 final rule and returning this rule to the exact
language it contained previously. The 2015 final rule made substantial
changes to this section and revised the title to read as ``Subsequent
well operations; Hydraulic fracturing.''
Paragraph (a) of this section in the 2015 final rule, as reflected
in the 2015 edition of the CFR, includes an implementation schedule
that the BLM would have followed to phase in the requirements of the
rule, had the rule gone into effect. Paragraph (b) of this section
contains the performance standard referencing Sec. 3162.5-2(d).
Paragraph (c) of this section would have required prior approval of
hydraulic fracturing operations. Paragraph (d) of this section lists
the information that an operator would have been required to include in
a request for approval of hydraulic fracturing. Paragraph (e) of this
section specifies how an operator would have had to monitor and verify
cementing operations prior to hydraulic fracturing. Paragraph (f) of
this section would have required mechanical integrity testing of the
wellbore prior to hydraulic fracturing. Paragraph (g) of this section
would have required monitoring and recording of annulus pressure during
hydraulic fracturing. Paragraph (h) of this section specifies the
requirements that would have applied for managing recovered fluids
until approval of a permanent water disposal plan. Paragraph (i) of
this section specifies information that an operator would have been
required to provide to the authorized officer after completion of
hydraulic fracturing operations. Paragraph (j) of this section
specifies how an operator could have withheld information from the BLM
and the public about the chemicals used in a hydraulic fracturing
operation. Paragraph (k) of this section describes how the BLM would
have approved variances from the requirements of the 2015 final rule.
For the reasons discussed earlier in this preamble, the BLM
believes this section of the 2015 final rule is unnecessarily
duplicative and would impose costs that would not be clearly exceeded
by its benefits and, therefore, proposes to remove these 2015 final
rule provisions and to restore the previous language of the section.
Section 3162.5-2 Control of Wells
The BLM proposes to amend paragraph (d) of this section by
restoring the term ``fresh water-bearing'' and the phrase ``containing
5,000 ppm or less of dissolved solids.'' The proposed rule would also
restore other non-substantive provisions that appeared in the previous
version of the regulations.
IV. Procedural Matters
Regulatory Planning and Review (E.O. 12866, E.O. 13563, E.O. 13771)
Executive Order 12866 provides that the Office of Information and
Regulatory Affairs within the Office of Management and Budget will
review all significant rules. The Office of Information and Regulatory
Affairs has determined that this proposed rule is significant because
it would raise similarly novel legal or policy issues.
Executive Order 13563 reaffirms the principles of Executive Order
12866 while calling for improvements in the Nation's regulatory system
to promote predictability, to reduce uncertainty, and to use the best,
most innovative, and least burdensome tools for achieving regulatory
ends. The Executive Order directs agencies to consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public where these approaches are relevant, feasible,
and consistent with regulatory objectives. Executive Order 13563
emphasizes further that regulations must be based on the best available
science and that the rulemaking process must allow for public
participation and an open exchange of ideas. We have developed this
rule in a manner consistent with these requirements.
Executive Order 13771 (82 FR 9339, Feb. 3, 2017) requires Federal
agencies to take proactive measures to reduce the costs associated with
complying with Federal regulations. Consistent with Executive Order
13771, we have estimated the cost savings for this proposed rule to be
$14-$34 million per year from the 2015 final rule. Therefore, this
proposed rule is expected to be a deregulatory action under Executive
Order 13771.
After reviewing the requirements of this proposed rule, we have
determined that it will not have an annual effect on the economy of
$100 million or more or adversely affect in a material way the economy,
a sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or state, local, or tribal
governments or communities.
Regulatory Flexibility Act
This proposed rule will not have a significant economic effect on a
substantial number of small entities under the Regulatory Flexibility
Act (RFA) (5 U.S.C. 601 et seq.) The RFA generally requires that
Federal agencies prepare a regulatory flexibility analysis for rules
subject to the notice and comment rulemaking requirements under the
Administrative Procedure Act (5 U.S.C. 500 et seq.), if the rule would
have a significant economic impact, either detrimental or beneficial,
on a substantial number of small entities (See 5 U.S.C. 601-612).
Congress enacted the RFA to ensure that government regulations do not
unnecessarily or disproportionately burden small entities. Small
entities include small businesses, small governmental jurisdictions,
and small not-for-profit enterprises.
[[Page 34469]]
The BLM reviewed the Small Business Administration (SBA) size
standards for small businesses and the number of entities fitting those
size standards as reported by the U.S. Census Bureau in the Economic
Census. The BLM concluded that the vast majority of entities operating
in the relevant sectors are small businesses as defined by the SBA. As
such, the proposed rule would likely affect a substantial number of
small entities.
Although the proposed rule would likely affect a substantial number
of small entities, the BLM does not believe that these effects would be
economically significant. The proposed rule is a deregulatory action
that would remove all of the requirements placed on operators by the
2015 final rule. Operators would not have to undertake the compliance
activities, either operational or administrative, that are outlined in
the 2015 final rule, except to the extent the activities are required
by state or tribal law, or by other pre-existing BLM regulations.
The BLM conducted an economic analysis which estimates that the
average reduction in compliance costs would be a small fraction of a
percent of the profit margin for small companies, which is not a large
enough impact to be considered significant. For more detailed
information, see section 5.3 of the Regulatory Impact Analysis (RIA)
prepared for this proposed rule. The current draft RIA has been posted
in the docket for the proposed rule on the Federal eRulemaking Portal:
http://www.regulations.gov.
Small Business Regulatory Enforcement Fairness Act
This rule is not a major rule under 5 U.S.C. 804(2), the Small
Business Regulatory Enforcement Fairness Act. This rule will not have
an annual effect on the economy of $100 million or more.
This rule will not cause a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions. This rule will not have significant
adverse effects on competition, employment, investment, productivity,
innovation, or the ability of U.S.-based enterprises to compete with
foreign-based enterprises.
This rule is a deregulatory action that would remove all of the
requirements placed on operators by the 2015 final rule. Operators
would not have to undertake the compliance activities, either
operational or administrative, that would have been required solely by
the 2015 final rule. The screening analysis conducted by the BLM
estimates the average reduction in compliance costs would be a small
fraction of a percent of the profit margin for companies, which is not
large enough to: have significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises; cause
a major increase in costs or prices for consumers, individual
industries, Federal, State, or local government agencies, or geographic
regions; or have an annual effect on the economy of $100 million or
more.
Unfunded Mandates Reform Act
This rule will not impose an unfunded mandate on State, local, or
tribal governments, or the private sector of more than $100 million per
year. The rule will not have a significant or unique effect on State,
local, or tribal governments or the private sector. The proposed rule
is a deregulatory action, which contains no requirements that would
apply to State, local, or tribal governments or to the private sector.
A statement containing the information required by the Unfunded
Mandates Reform Act (UMRA) (2 U.S.C. 1531 et seq.) is not required for
the rule. This rule is also not subject to the requirements of section
203 of UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments, because it contains
no requirements that apply to such governments, nor does it impose
obligations upon them.
Takings (E.O. 12630)
This rule will not affect a taking of private property or otherwise
have taking implications under Executive Order 12630. A takings
implication assessment is not required. This rule is a deregulatory
action that would remove all of the requirements placed on operators
solely by the 2015 final rule and therefore would impact some
operational and administrative requirements on Federal and Indian
lands. All such operations are subject to lease terms which expressly
require that subsequent lease activities be conducted in compliance
with subsequently adopted Federal laws and regulations. This rule
conforms to the terms of those leases and applicable statutes and, as
such, the rule is not a government action capable of interfering with
constitutionally protected property rights. Therefore, the BLM has
determined that the proposed rule would not cause a taking of private
property or require further discussion of takings implications under
Executive Order 12630.
Federalism (E.O. 13132)
Under the criteria in section 1 of Executive Order 13132, this rule
does not have sufficient federalism implications to warrant the
preparation of a federalism summary impact statement. A federalism
impact statement is not required.
The proposed rule will not have a substantial direct effect on the
states, on the relationship between the Federal Government and the
states, or on the distribution of power and responsibilities among the
levels of government. It would not apply to states or local governments
or state or local governmental entities. The rule would affect the
relationship between operators, lessees, and the BLM, but it does not
directly impact the states. Therefore, in accordance with Executive
Order 13132, the BLM has determined that this proposed rule does not
have sufficient federalism implications to warrant preparation of a
Federalism Assessment.
Civil Justice Reform (E.O. 12988)
This rule complies with the requirements of Executive Order 12988.
More specifically, this rule meets the criteria of section 3(a), which
requires agencies to review all regulations to eliminate errors and
ambiguity and to write all regulations to minimize litigation. This
rule also meets the criteria of section 3(b)(2), which requires
agencies to write all regulations in clear language with clear legal
standards.
Consultation With Indian Tribes (E.O. 13175 and Departmental Policy)
The Department strives to strengthen its government-to-government
relationship with Indian tribes through a commitment to consultation
with Indian tribes and recognition of their right to self-governance
and tribal sovereignty. We have evaluated this rule under the
Department's consultation policy and under the criteria in Executive
Order 13175 and we have found that this proposed rule includes policies
that could have tribal implications.
If the proposed rule is implemented, oil and gas operations on
tribal and allotted lands would not be subject to the procedures or
standards in the 2015 final rule. The BLM believes that rescinding the
2015 final rule will assist in preventing Indian lands from being
viewed by oil and gas operators as less attractive than non-Indian
lands due to unnecessary and burdensome compliance costs, thereby
preventing economic harm to Indian tribes and
[[Page 34470]]
allottees that could have resulted from implementation of the 2015
final rule. However, other resources on those lands might have
benefited from the risk reduction intended by the 2015 final rule.
Although the states with significant Federal oil and gas resources
have regulatory programs addressing hydraulic fracturing operations,
the oil and gas producing Indian tribes have not as uniformly
promulgated regulatory programs to address hydraulic fracturing.
In light of this, the BLM is seeking comments regarding the effects
of the proposed rescission of the 2015 final rule on tribes, individual
allottees, and Indian resources. As discussed below, the BLM will be
consulting with interested tribes on those topics, but also requests
comments providing information about existing or proposed tribal
regulation of hydraulic fracturing operations, the economic and
environmental impacts of the proposed rescission of the 2015 final rule
as it would apply to Indian lands, and whether all or any parts of the
2015 final rule should continue to apply on Indian lands.
The BLM is engaging potentially interested tribes to consult on a
government-to-government basis and discuss the proposed rule. Initial
tribal outreach letters for the proposed rule invite tribes to provide
written comments and/or discuss, either during in-person meeting(s) or
by other means, the proposed rule. The responses to the aforementioned
initial tribal outreach letters will help to identify what future
actions the BLM will take as part of its tribal consultation efforts
for the proposed rule.
Paperwork Reduction Act
The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3521) provides
that an agency may not conduct or sponsor, and a person is not required
to respond to, a ``collection of information,'' unless it displays a
currently valid control number (44 U.S.C. 3512). Collections of
information include requests and requirements that an individual,
partnership, or corporation obtain information, and report it to a
Federal agency (44 U.S.C. 3502(3); 5 CFR 1320.3(c) and (k)). If this
proposed rule is promulgated and the 2015 final rule is rescinded,
there will be no need to continue the information collection activities
that the OMB has pre-approved under control number 1004-0203.
Accordingly, if the 2015 final rule is rescinded, the BLM will request
that the OMB discontinue that control number.
National Environmental Policy Act
The BLM has prepared an environmental assessment (EA) to determine
whether this rule would have a significant impact on the quality of the
human environment under the National Environmental Policy Act of 1969
(NEPA) (42 U.S.C. 4321 et seq.). If the final EA supports the issuance
of a Finding of No Significant Impact (FONSI) for the rule, the
preparation of an environmental impact statement pursuant to the NEPA
would not be required.
The current draft of the EA and a draft FONSI have been placed in
the file for the BLM's Administrative Record for the proposed rule at
the BLM 20 M Street address specified in the ``ADDRESSES'' section. The
current draft EA and draft FONSI have also been posted in the docket
for the proposed rule on the Federal eRulemaking Portal: http://www.regulations.gov. The BLM invites the public to review these
documents and suggests that anyone wishing to submit comments on the
draft EA and FONSI should do so in accordance with the instructions
contained in the ``Public Comment Procedures'' section above.
Effects on the Energy Supply (E.O. 13211)
This rule is not a significant energy action under the definition
in Executive Order 13211. A statement of Energy Effects is not
required. Section 4(b) of Executive Order 13211 defines a ``significant
energy action'' as ``any action by an agency (normally published in the
Federal Register) that promulgates or is expected to lead to the
promulgation of a final rule or regulation, including notices of
inquiry, advance notices of rulemaking, and notices of rulemaking:
(1)(i) That is a significant regulatory action under Executive Order
12866 or any successor order, and (ii) is likely to have a significant
adverse effect on the supply, distribution, or use of energy; or (2)
that is designated by the Administrator of [OIRA] as a significant
energy action.''
Since the proposal is a deregulatory action and would reduce
compliance costs, it is likely to have a positive effect, if any, on
the supply, distribution, or use of energy, and not a significant
adverse effect. As such, we do not consider the proposed rule to be a
``significant energy action'' as defined in Executive Order 13211.
Clarity of This Regulation
We are required by Executive Orders 12866 (section 1(b)(12)), 12988
(section 3(b)(1)(B)), and 13563 (section 1(a)), and by the Presidential
Memorandum of June 1, 1988, to write all rules in plain language. This
means that each rule must:
(a) Be logically organized;
(b) Use the active voice to address readers directly;
(c) Use common, everyday words and clear language rather than
jargon;
(d) Be divided into short sections and sentences; and
(e) Use lists and tables wherever possible.
If you feel that we have not met these requirements, send us
comments by one of the methods listed in the ADDRESSES section. To
better help us revise the rule, your comments should be as specific as
possible. For example, you should tell us the numbers of the sections
or paragraphs that you find unclear, which sections or sentences are
too long, the sections where you feel lists or tables would be useful,
etc.
Author
The principal authors of this rule are Justin Abernathy, Senior
Policy Analyst, BLM, Washington Office; James Tichenor, Economist, BLM,
Washington Office; Ross Klein, (Acting) Natural Resource Specialist,
BLM, Washington Office; Subijoy Dutta, Lead Petroleum Engineer, BLM,
Washington Office; Jeffrey Prude, Petroleum Engineer/Oil and Gas
Program Lead, BLM, Bakersfield Field Office; and James Annable,
Petroleum Engineer, BLM, Royal Gorge Field Office; assisted by Charles
Yudson of the BLM's division of Regulatory Affairs and by the
Department of the Interior's Office of the Solicitor.
Dated: July 21, 2017.
Katharine S. MacGregor,
Acting Assistant Secretary, Land and Minerals Management.
List of Subjects in 43 CFR Part 3160
Administrative practice and procedure, Government contracts,
Indians-lands, Mineral royalties, Oil and gas exploration, Penalties,
Public lands-mineral resources, Reporting and recordkeeping
requirements.
For the reasons stated in the preamble, and under the authorities
stated below, the Bureau of Land Management proposes to amend 43 CFR
part 3160 as follows:
PART 3160--ONSHORE OIL AND GAS OPERATIONS
0
1. The authority citation for part 3160 continues to read as follows:
Authority: 25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and
1751; 43 U.S.C.
[[Page 34471]]
1732(b), 1733, and 1740; and Sec. 107, Pub. L. 114-74, 129 Stat.
599, unless otherwise noted.
Subpart 3160--Onshore Oil and Gas Operations: General
0
2. Revise Sec. 3160.0-3 to read as follows:
Sec. 3160.0-3 Authority.
The Mineral Leasing Act, as amended and supplemented (30 U.S.C. 181
et seq.), the Act of May 21, 1930 (30 U.S.C. 301-306), the Mineral
Leasing Act for Acquired Lands, as amended (30 U.S.C. 351-359), the Act
of March 3, 1909, as amended (25 U.S.C 396), the Act of May 11, 1938,
as amended (25 U.S.C. 396a-396q), the Act of February 28, 1891, as
amended (25 U.S.C. 397), the Act of May 29, 1924 (25 U.S.C. 398), the
Act of March 3, 1927 (25 U.S.C. 398a-398e), the Act of June 30, 1919,
as amended (25 U.S.C. 399), R.S. Sec. 441 (43 U.S.C. 1457), the
Attorney General's Opinion of April 2, 1941 (40 Op. Atty. Gen. 41), the
Federal Property and Administrative Services Act of 1949, as amended
(40 U.S.C 471 et seq.), the National Environmental Policy Act of 1969,
as amended (40 U.S.C. 4321 et seq.), the Act of December 12, 1980 (94
Stat. 2964), the Combined Hydrocarbon Leasing Act of 1981 (95 Stat.
1070), the Federal Oil and Gas Royalty Management Act of 1982 (30
U.S.C. 1701), the Indian Mineral Development Act of 1982 (25 U.S.C.
2102), and Order Number 3087, dated December 3, 1982, as amended on
February 7, 1983 (48 FR 8983) under which the Secretary consolidated
and transferred the onshore minerals management functions of the
Department, except mineral revenue functions and the responsibility for
leasing of restricted Indian lands, to the Bureau of Land Management.
0
3. Amend Sec. 3160.0-5 by removing the definitions of ``annulus,''
``bradenhead,'' ``Cement Evaluation Log (CEL),'' ``confining zone,''
``hydraulic fracturing,'' ``hydraulic fracturing fluid,'' ``isolating
or to isolate,'' ``master hydraulic fracturing plan,'' ``proppant,''
and ``usable water,'' and by adding the definition of ``fresh water''
in alphabetical order to read as follows:
Sec. 3160.0-5 Definitions.
* * * * *
Fresh water means water containing not more than 1,000 ppm of total
dissolved solids, provided that such water does not contain
objectionable levels of any constituent that is toxic to animal, plant
or aquatic life, unless otherwise specified in applicable notices or
orders.
* * * * *
Subpart 3162--Requirements for Operating Rights Owners and
Operators
0
4. Amend Sec. 3162.3-2 by revising the first sentence of paragraph (a)
and revising paragraph (b) to read as follows:
Sec. 3162.3-2 Subsequent well operations.
(a) A proposal for further well operations shall be submitted by
the operator on Form 3160-5 for approval by the authorized officer
prior to commencing operations to redrill, deepen, perform casing
repairs, plug-back, alter casing, perform nonroutine fracturing jobs,
recomplete in a different interval, perform water shut off, commingling
production between intervals and/or conversion to injection. * * *
(b) Unless additional surface disturbance is involved and if the
operations conform to the standard of prudent operating practice, prior
approval is not required for routine fracturing or acidizing jobs, or
recompletion in the same interval; however, a subsequent report on
these operations must be filed on Form 3160-5.
* * * * *
0
5. Revise Sec. 3162.3-3 to read as follows:
Sec. 3162.3-3 Other lease operations.
Prior to commencing any operation on the leasehold which will
result in additional surface disturbance, other than those authorized
under Sec. 3162.3-1 or Sec. 3162.3-2, the operator shall submit a
proposal on Form 3160-5 to the authorized officer for approval. The
proposal shall include a surface use plan of operations.
0
6. Amend Sec. 3162.5-2 by revising the heading and first sentence of
paragraph (d) to read as follows:
Sec. 3162.5-2 Control of wells.
* * * * *
(d) Protection of fresh water and other minerals. The operator
shall isolate freshwater-bearing and other usable water containing
5,000 ppm or less of dissolved solids and other mineral-bearing
formations and protect them from contamination. * * *
[FR Doc. 2017-15696 Filed 7-24-17; 8:45 am]
BILLING CODE 4310-84-P