Bureau of Land Management hits the news
No changes have been made to regulations regarding oil & gas operations on federal land since the early 1980s. And prior to that there was only the Natural Gas Act of 1938, which stipulates nothing about drilling or production. By corollary, there have never been regulations specific to the use of hydraulic fracturing, a treatment now used on 90% – or 92,000 – wells drilled on federal land. Just this week, however, the Bureau of Land Management (BLM) advanced a proposal to establish federal oversight to fracking on public lands. This means that unless states or tribes establish regulatory frameworks that meet or exceed the US standard, or unless the BLM specifically defers to state standards, the federal government will set the regulatory infrastructure on federal land fracking sites. Some have expressed discontent – is the federal government reclaiming control from states? Others smirk; most states already have far more regulations in place than what the federal government requires and so still retain most control.
Oil & gas development on public lands
This graphic displays, in red, all of the land owned by the federal government in the United States. The fracking controversy first hit the media in the midst of the Marcellus Shale boom, most of which is privately owned. It’s a bit ironic, then, that a conversation about fracking on public land has only just begun – fracking has been used in about 90% of the wells drilled on federal lands and 13% of U.S natural gas production comes from those federal wells. Now that public knowledge and attention toward hydraulic fracturing has expanded West where the technology has already been practiced extensively on federal lands, the BLM has come under pressure to update regulations on oil & gas development. This regulatory framework will obviously affect states with shale gas reserves and the most public land:
States with largest % of federally owned land:
- Alaska 87.1%
- Nevada 85.1%
- Idaho 63.7 %
- Utah 63.6%
- Wyoming 49.5%
- Oregon 48.7 %
- California 46.4%
- Arizona 43.1%
How much federal land is leased for oil and gas?
In 1988, of the 460 million acres of federally owned land in the U.S, 66.7 million acres were under lease for oil and gas exploration. That’s 14.4% of federal land set aside for oil and gas in the late 1980s. In 2012, only 37.8 million acres of land are under lease for oil and gas exploration or development. Take a look at this table to see the fluctuations between 1988-2012 in the quantity of land under lease by oil & gas. Then compare those figures with the gradual increase in producing acreage. The distinction is important. The oil & gas sector may lease a sizable chunk of land for exploration and not find anything – indeed, only 10% of leases issued are ever subject to exploratory drilling. Conversely, companies may not produce when it is costly to do so or when prices are bad.
Nonetheless, over the years the amount of federal acres successfully producing oil or gas has overall grown at a steady rate, with a huge leap in 2008 to 14.5 million producing acres and back to 12.5 million acres in 2012. If the recent statistics offered up by Bloomberg are correct, then about 11.3 million acres of federal land are being fracked and 4 million acres are under exploration.
Old laws, new drilling technology
The axiom that governed the use of federal land for nearly half a century was designated “multi-use” land management, inscribed in the Mineral Leasing Act of 1920, but referring mainly to economical uses – agriculture and mineral extraction. Across the 60s and 70s, a series of acts were made to protect noneconomical values, the Wilderness Act of 1964 and The Endangered Species Act of 1973, to name a few. Conflicts over land escalated during this period, which revealed an ostensible need for redress, management, and reclamation of the environmental impacts involved in the use and production of various resources. These concerns coalesced into the 1976 Federal Land Policy & Management Act along with the National Forest Management Act. Following this legislation was a specific act called the Federal Onshore Oil & Gas Leasing Reform Act. Deliberation over this piece of legislation, which would outline the process for authorizing leases of federal land to oil & gas development, spanned 1979-1987.
Land use impact assessments
The authorization process involves four parts: planning, leasing, exploration, and development (or the granting of permits to drill production wells). Unsurprisingly, the most difficult aspect of authorization was the first step – the land use plan, involving a maximum period of 15 years to assess environmental and health impacts. Legislators agreed that because the most significant impacts would occur a few decades after the issuance of a land plan, it was both difficult to assess what those impacts are and what process should exist for preserving public safety/health in the event that unacceptable impacts of oil & gas activities were disclosed. Although only 1/4 of total leases and 1/5 of total acreage under federal lease are in producing status, were there to be adverse impacts discovered, the federal government could not simply retract leases – even if it were to compensate companies. For these reasons, impact assessments would matter very little.
Selling before gauging impact?
Impact assessment problems were further compounded by the rate at which federal land was being leased without regards to the land use plan:
The frequency of oil and gas lease sales and the large number of lease tracts in each sale diminish the land management agencies’ ability to conduct adequate site-specific analysis at the leasing stage. (Committee on Onshore Oil and Gas Leasing, 1989)
Sure enough, 80,000 oil and gas leases were in force before land use plans were generated or enforced. Development of oil and gas between the late 1980s and now may thus be inconsistent with present notions of the acceptable level of environmental impact. As more federal land moves from exploration to production of natural gas, combined with the explicit use of hydraulic fracturing on these producing lands, it is no wonder that there has been agitation over regulations that haven’t been updated since 1989.
Changes in BLM regulations on oil & gas
The BLM’s recent proposal to touch up and revisit the regulatory framework for oil & gas activities – particularly fracking – on federal land may leave most control with states and reservations that formulate their own frameworks. So far, the updates contain the following:
…requires operators to disclose the chemicals they use in fracking on public or tribal land, verify that fluids are not contaminating groundwater and confirm that management plans are in place for handling fluids that flow back to the surface. (Navajo Times)
It’s still too soon to tell; a period of 60 days for public comment will ensue until final drafts are agreed upon. In 2011, the BLM sold nearly 1 million more acres of public land for oil and gas leases. It is unclear whether or not current lessees will be bound by new regulations and federal oversight. Where do state regulations apply on federal lands? The USDA Forest Service, after-all, was granted the authority to make decisions and implement regulations on oil & gas leases on Natural Forest System lands.
More or less fracking on federal lands?
We may not see a huge increase in fracking and gas production on federal lands. While natural gas production has increased by 40% on non-federal lands since 2007, it has fallen by 33% on federal lands. Interested citizens should ask their representatives which regulations (state or fed) apply to federal lands near them, and should also keep an eye on current and future administration’s energy policies.