Written Testimony for 'The Future of Hydraulic Fracturing on Federally Managed Lands'

The Bureau of Land Management's rule for hydraulic fracturing on federal lands ("Oil and Gas; Hydraulic Fracturing on Federal Indian Lands," or the "HF Rule"), issued in March 2015 after two drafts and extensive comment, takes a modest approach to regulating some of the impacts of oil and gas development on these lands. It requires, inter alia, more testing of wells to ensure that they were properly lined ("cased") and cemented and remedial action where cementing was inadequate; testing of the wells to ensure well integrity prior to hydraulic fracturing; storage of fracturing flowback waste in tanks rather than pits, with exceptions; and disclosure of the fracturing chemicals and water sources used, among other disclosures. The rule, which primarily requires information disclosure and not substantive operational changes, falls squarely within BLM's statutory authority under the agency's organic act, the Federal Land Policy and Management Act, and under the Mineral Leasing Act, among other acts. FLPMA directs BLM to manage public lands and resources for multi-use development, including "a combination of balanced and diverse resource uses," and it is an express policy of Congress to protect "water resource . . . values" on federal lands under FLPMA. Further, the MLA directs BLM to regulate "in the interest of conservation of surface resources" and prohibits the waste of oil and gas resources. Under these acts, regulations issued by BLM's predecessors in 1920 required operators to submit information on the kind, length, and size of well casing used and to correct conditions causing damage to other oil and gas and water-bearing formations. Similarly, a 1942 regulation allowed BLM's predecessor to require operators to notify USGS of a plan prior to well stimulation (including prior to the injection of water and other substances into the well) and to require operator submittal of a casing program. Casing and cementing protect both surface and underground water and avoid waste of oil and gas if installed properly, and flowback tanks help prevent spills of fracturing waste, thus protecting surface soil and water and underground water resources that could be impacted by wastes seeping through soil. Further, other federal statutes do not preclude BLM from regulating oil and gas development and fracturing under FLPMA, the MLA, and other acts. The Safe Drinking Water Act exempts non-diesel fracturing from SDWA regulation only "[f]or purposes of this part," and the legislative history expressly states that Congress did not "intend any of the provisions of this bill [the SDWA] to repeal or limit any authority" of BLM's predecessor. BLM does not base its authority to regulate oil and gas development or fracturing on the SDWA, relying instead on its responsibilities under FLPMA, the MLA, and other acts. Contrary to suggestions made in North Dakota's and Utah's challenges to the HF Rule, nor do the states rely on their SDWA regulatory primacy when they regulate the drilling and fracturing of oil and gas wells. States rely on SDWA authority only to regulate disposal wells, and they rely on police powers/public welfare authority to regulate drilling and fracturing. The HF Rule does not impact states' regulatory primacy under the SDWA to regulate underground injection wells for the disposal of oil and gas wastes, and it does nothing to prevent states from regulating oil and gas drilling and fracturing more stringently than the HF Rule "floor." Finally, the HF Rule is more stringent than many state regulations -- most western states do not require tanks for the storage of flowback, for example -- and where it is less stringent than state regulations, states remain free to regulate above the federal BLM floor without having to receive a variance or any other permission from BLM. Despite the seemingly modest nature of the rule and the apparently strong statutory support for the rule, the United States District Court for the District of Wyoming postponed the effective date of the rule pending the court's ruling on states' and industry's motions for preliminary injunction. The Southern Ute Indian Tribe has also filed a complaint.