American Oil and Gas Reporter - February 2018 - 31

Executive Actions

DOI Kills Frac Rule, Releases OCS Plan
WASHINGTON-The Trump administration appeared to end one saga two
days before New Year's by publishing a
final order rescinding the hydraulic fracturing regulations adopted by the Bureau
of Land Management in March 2015. It
began another saga four days after New
Year's when Interior Secretary Ryan
Zinke announced a draft proposed Outer
Continental Shelf oil and gas leasing plan
for 2019-24 that puts 90 percent of OCS
acreage on the table.
However, the secretary appeared to
walk back part of the proposed plan less
than a week later when he announced he
was withdrawing waters around Florida
from consideration, and on Jan. 24, the
state of California and a coalition of environmental groups filed lawsuits seeking
to block BLM's efforts to withdraw the
venting and flaring order.
BLM published the final rule rescinding
its 2015 fracturing regulation in the Dec.
29 Federal Register, stating, "We believe
(the fracturing rule) imposes administrative
burdens and compliance costs that are
not justified."
BLM published its fracturing regulation, titled "Oil and Gas: Hydraulic Fracturing on Federal and Indian Lands," on
March 26, 2015, which mandated disclosure of chemicals used in the fracturing
process, and created new wellbore integrity
requirements, imposed standards for storing wastes, and set notification and waiting
periods for key parts of the fracturing
process (AOGR, April 2016, pg. 54).
The rule was challenged immediately
in court by the Independent Petroleum
Association of America and the Western
Energy Alliance, who were followed a
few days later by the states of Colorado,
Wyoming, North Dakota and Utah, and
the Ute Indian Tribe. On Sept. 30 of that
year, Judge Scott W. Skavdahl in the U.S.
District Court for the District of Wyoming
enjoined BLM from enforcing the regulation, and then struck down the rule in
June 2016 (AOGR, July 2016, pg. 38).
The Obama administration appealed
Skavdahl's ruling to the U.S. Court of
Appeals for the 10th Circuit, which dismissed the case in September 2017 and
also vacated Skavdahl's June 2016 order
(AOGR, October 2017, pg. 14). Published
reports note that two days before BLM
published its order to rescind the fracturing
regulation, the 10th Circuit rejected without comment a request to rehear its September ruling.
IPAA and the Western Alliance cheered

BLM's action, calling it "a huge victory
for oil and natural gas producers operating
on federal lands."
Says IPAA President and Chief Executive Officer Barry Russell, "IPAA has
long fought . . . against an Obama-era
federal rule that was overly restrictive
and did not make hydraulic fracturing
any safer than state laws. We are pleased
that the more than five-year process now
can come to a favorable close."
Alliance President Kathleen Sgamma
adds, "It was clear from the start that the
federal rule was redundant with state regulation and (was) politically motivated
(since) the prior administration could not
point to one incident or regulatory gap
that justified the rule. The Alliance appreciates that BLM under Interior Secretary Zinke understands this rule was duplicative and has rescinded it."
Challenge The Order
California Attorney General Xavier
Becerra and eight environmental groups
led by the Sierra Club and the Center for
Biological Diversity filed separate lawsuits
challenging the BLM order in the U.S.
District Court for the Northern District
of California in San Francisco.
State of California v. U.S. Bureau of
Land Management et al contends, "BLM's
action is arbitrary and capricious because
the agency attempts to rescind a duly
promulgated rule without supplying a
reasoned basis for doing so.
"In particular, BLM failed to consider
how the final repeal would fulfill the important statutory mandates that the 'fracking rule' was designed to address, failed
to explain why it reversed course based
on the same information that it considered
when it formulated and promulgated the
rule just two years earlier, and offered a
purported justification for the final repeal
that runs counter to the evidence before
the agency," the lawsuit continues. "The
final repeal also violates the defendants'
statutory mandates to ensure the environmentally responsible development of
oil and gas resources on federal and
Indian lands."
The plaintiffs argue BLM violated the
Administrative Procedure Act and National
Environmental Policy Act as well as the
Mineral Leasing Act of 1920, Federal
Land Policy and Management Act, Indian
Mineral Leasing Act of 1938 and the Indian Mineral Development Act of 1982.
Among the arguments that the state
of California makes are that:

* The repeal order's environmental
assessment and finding of no significant
impact of repealing the fracturing rule
underestimate the effects on groundwater,
surface water and greenhouse gases.
* BLM's assertion that states adequately regulate fracturing "is contradicted
by (its) own superficial analysis of such
regulations, which shows that the fracking
rule remains more comprehensive than
the regulations in many states."
* BLM failed to consider alternative
solutions to address any deficiencies in
the fracturing rule.
OCS Leasing Proposal
Declaring that "responsibly developing
our energy resources on the Outer Continental Shelf in a safe and well-regulated
way is important to our economy and energy security," Zinke on Jan. 4 announced
a draft proposed OCS oil and gas leasing
program for 2019-2024. A 60-day comment period opened on publication of
the proposal in the Jan. 8 Federal Register.
According to the announcement, the
proposal includes more than 90 percent
of U.S. OCS acreage and more than 98
percent of undiscovered, technically recoverable oil and gas resources, compared
with the Obama administration's 201722 plan which DOI says places 94 percent
of the OCS off limits. The draft proposal
contemplates 47 potential lease sales
compared with 11 in the 2017-22 plan.
DOI says the draft proposed program
(DPP) calls for 19 sales off the coast of
Alaska, seven in the Pacific Region, 12
in the Gulf of Mexico and nine in the Atlantic Region. Specifically, DOI says:
* The DPP proposes to continue two
regionwide sales each year in the Western,
Central and Eastern Gulf of Mexico that
are not subject to congressional moratoria.
It proposes one sale each in 2023 and
2024 in the portions of the Eastern and
Central Gulf of Mexico subject to moratoria after they expire in June 2022.
* The DPP proposes three sales each
in Alaska's Chukchi and Beaufort seas,
two in the Cook Inlet, and one each in
the Gulf of Alaska, Kodiak, Shumagin,
Aleutian Arc, St. George Basin, Bowers
Basin, Aleutian Basin, Navarin Basin,
St. Matthew-Hall, Norton Basin and Hope
Basin. No sales are proposed in the North
Aleutian Basin Planning Area, which was
withdrawn by President Obama in 2014.
* The DPP proposes two sales each
FEBRUARY 2018 31



American Oil and Gas Reporter - February 2018

Table of Contents for the Digital Edition of American Oil and Gas Reporter - February 2018

Contents
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