BLM draft rules for fracking on US-owned land call for full disclosure

Washington (Platts)--3Feb2012/332 pm EST/2032 GMT

Shale oil and natural gas producers using hydraulic fracturing on US government-owned land will be required to fully disclose to the Bureau of Land Management the composition of their fracking fluids, but will be offered some protection for trade secrets, according to a copy of draft rules.

In addition to disclosing both the ingredients and trade names of substances used in fracking fluids, the proposed regulations would require operators to detail each chemical in the mix (without association to a brand name compound) and the amount injected during hydraulic fracturing. A copy of the draft regulations was obtained by Platts on Friday.

Operators proposing to frack on federal lands would be required to disclose "the complete chemical makeup of all materials used in the proposed stimulation fluid without regard to original source additive [brand name product]," the draft rules said. "For each chemical, the operator must provide the Chemical Abstracts Service number as well as the percentage by mass."

BLM's proposal also calls for operators to predict how much fracking fluid and water they will use on each well when they apply for their permit, then provide a follow-up report when the well is stimulated.

In addition, the proposed rules would require operators to identify the soure of the fracking water and to detail how they plan to dispose of it and how they actually did dispose of it.

In addition, the proposed regulations require a series of tests to ensure well bores maintain their integrity.

Operators must request an exemption from public disclosure when making their full report, according to the draft, and cite the applicable federal law allowing the exemption. Operators also must inform the federal officer authorizing the fracking whether state law requires more disclosure than required by the federal application.

The Department of Interior, BLM's parent agency, confirmed that the copy obtained by Platts is current, but cautioned the rules are preliminary and must undergo a complete rulemaking process, including public comment.

Agency spokesman Adam Fetcher said Interior has been moving toward "requiring public disclosure of chemicals used in fracking, with appropriate protections for trade secrets, improving assurances on well-bore integrity so we know fluids going into the well aren't escaping and making sure companies have a water management plan in place for fluids that flow back to the surface."

"We will continue to gather public input throughout this process to ensure that the disclosure rule enhances public confidence," Fetcher said.

Independent Petroleum Association of America's spokesman Jeff Eshelman said that while his group is still studying the leaked draft, it already has questions about how much BLM was listening to industry.

"Regarding disclosure, we believe that the FracFocus website, created and administered by state regulators, remains the best option for disclosure," Eshelman said.

"The federal government does not need to create a new, additional disclosure process when one that works is already in place," Eshelman said. "FracFocus should, at least, be considered by Interior as a starting point and we have no indication that such consideration is taking place."

Participation in the FracFocus well-by-well data base of fracking operations is voluntary. The database and website were assembled by state water regulators through their national organization, the Groundwater Protection Council.

-- Bill Holland, bill_holland@platts.com

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