On May 11, 2012, the Bureau of Land Management (BLM) published a proposed rule to update its regulations governing oil and gas operations on public lands and Indian lands in order to regulate hydraulic fracturing (attached). The deadline for filing comments is July 10, 2012.
The proposed rule was the subject of an oversight hearing by the House Committee on Natural Resources, Subcommittee on Indian and Alaska Native Affairs, followed by the Committee taking action to exempt Indian lands from the proposed rule.
Hydraulic fracturing, a process that involves the injection of fluids under high pressure to extract oil and gas from rock formations, has become an increasingly common practice in several regions of the country. BLM estimates that, at present, fracturing is used in 90 percent of wells drilled on public and Indian lands.
The growth of this practice has been accompanied by growing public concern about impacts on the environment and on human health. As summarized by BLM, these concerns include: “whether fracturing can allow or cause contamination of underground water sources, whether the chemicals used in 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 fracturing operations.”
In addition to regulating the extraction of oil and gas on public lands, BLM also regulates oil and gas operations on trust and restricted Indian lands, exercising the authority of the Secretary of the Interior pursuant to the Indian Mineral Development Act of 1982. The existing regulations governing both public and Indian lands (43 C.F.R. part 3160) include some provision on hydraulic fracturing, provisions that have been unchanged since 1988. BLM now proposes to update these regulations to take into account the expansion in the use of hydraulic fracturing in recent years.
BLM proposes to establish the same set of standards for public lands and for Indian lands. States and tribes could establish more stringent requirements. Key features of the proposed regulations include the following:
• Fracturing (and other well “stimulation” activity) would require prior approval by BLM (which, for new wells, would be combined with the application for permit to drill);
• Wells used in fracturing would be required to meet construction standards;
• Public disclosure of chemicals used in fracturing would be required after, but not before, operations; and
• Operators would be required to have plans for managing “flowback” waters.
House Committee Action
On April 19, 2012, the House Committee on Natural Resources, Subcommittee on Indian and Alaska Native Affairs, held an oversight hearing on the BLM proposed rule on hydraulic fracturing. Representatives of seven Indian tribes and the National Congress of American Indians (NCAI) testified, and all expressed objections to the proposed regulations. Written testimony for this hearing is available at: http://naturalresources.house.gov/Calendar/EventSingle.aspx?EventID=289030. A common objection was that BLM and the Interior Department did not properly consult with tribes as required by Executive Order 13175 and Departmental policy. (In the preamble of the proposed rule, BLM refers to tribal consultation as an ongoing process and notes that four tribal consultation meetings were held in January 2012, but it is apparent that quite a lot of work had been done on the proposed rule prior to those meetings.) Several tribal witnesses objected to BLM’s proposal to apply standards developed for public lands to Indian lands. One witness, representing the Eastern Shoshone Tribe of the Wind River Reservation, where fracturing has been linked to contamination of ground water, questioned the ability of BLM to enforce compliance with the new rule and called for a stronger regulatory role for tribes. Another witness, representing the Turtle Mountain Band of Chippewa Indians, testified that the Tribe has banned fracturing on its reservation until it can be proven that it can be done without any impacts to water and it meets the Tribe’s environmental laws. Nevertheless, the Tribe still objected to the proposed rule, regarding it as an intrusion on tribal sovereignty.
On May 16, 2012, the House Committee on Natural Resources marked up HR 3973, the Native American Energy Act. See our General Memorandum 12-054 (April 20, 2012). At the mark up, the Committee adopted by voice vote an amendment offered by Representative Young (R-AK) which would exempt Indian lands from rules governing hydraulic fracturing unless a tribe first consents to the rules.
Please let us know if we may provide additional information on the proposed regulations or assistance in preparing comments.