Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands; Rescission of a 2015 Rule, 34464-34471 [2017-15696]

Agencies

• DEPARTMENT OF THE INTERIOR
• Bureau of Land Management

[Federal Register Volume 82, Number 141 (Tuesday, July 25, 2017)]
[Proposed Rules]
[Pages 34464-34471]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15696]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3160

[LLWO300000 L13100000 PP0000 17X]
RIN 1004-AE52


Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands; 
Rescission of a 2015 Rule

AGENCY: Bureau of Land Management, Interior.

ACTION: Proposed rule.

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SUMMARY: On March 26, 2015, the Bureau of Land Management (BLM) 
published in the Federal Register a final rule entitled, ``Oil and Gas; 
Hydraulic Fracturing on Federal and Indian Lands'' (2015 final rule). 
The BLM is now proposing to rescind the 2015 final rule because we 
believe it is unnecessarily duplicative of state and some tribal 
regulations and imposes burdensome reporting requirements and other 
unjustified costs on the oil and gas industry. This proposed rule would 
return the affected sections of the Code of Federal Regulations (CFR) 
to the language that existed immediately before the published effective 
date of the 2015 final rule.

DATES: The BLM must receive your comments on this proposed rule or on 
the supporting Regulatory Impact Analysis or Environmental Assessment 
on or before September 25, 2017.

ADDRESSES: Mail: U.S. Department of the Interior, Director (630), 
Bureau of Land Management, Mail Stop 2134LM, 1849 C St. NW., 
Washington, DC 20240, Attention: 1004-AE52.
    Personal or messenger delivery: U.S. Department of the Interior, 
Bureau of Land Management, 20 M Street SE., Room 2134 LM, Washington, 
DC 20003, Attention: Regulatory Affairs.
    Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions at this Web site.

FOR FURTHER INFORMATION CONTACT: Steven Wells, Division Chief, Fluid 
Minerals Division, 202-912-7143, for information regarding the 
substance of this proposed rule or information about the BLM's Fluid 
Minerals program. Persons who use a telecommunications device for the 
deaf (TDD) may call the Federal Relay Service (FRS) at 1-800-877-8339, 
24 hours a day, 7 days a week, to leave a message or question with the 
above individuals. You will receive a reply during normal business 
hours.

SUPPLEMENTARY INFORMATION:

I. Executive Summary
II. Public Comment Procedures
III. Background
IV. Discussion of Proposed Rule
V. Procedural Matters

I. Executive Summary

    The process known as ``hydraulic fracturing'' has been used by the 
oil and gas industry since the 1950s to stimulate production from oil 
and gas wells. In recent years, public awareness of the use of 
hydraulic fracturing practices has grown. New horizontal drilling 
technology has allowed increased access to oil and gas resources in 
tight shale formations across the country, sometimes in areas that have 
not previously experienced significant oil and gas development. As 
hydraulic fracturing has become more common, public concern has 
increased about whether hydraulic fracturing contributes to or causes 
the contamination of underground water sources, whether the chemicals 
used in hydraulic 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 
hydraulic fracturing operations.
    In light of the public concern for and widespread use of hydraulic 
fracturing practices, in November 2010, the BLM prepared a rule that 
was intended to regulate the use of hydraulic fracturing in developing 
Federal and Indian oil and gas resources. Since that time, the BLM has 
published two proposed rules (77 FR 27691 and 78 FR 31636), held 
numerous meetings with the public and state officials, and conducted 
many tribal consultations and meetings. The final rule entitled, ``Oil 
and Gas; Hydraulic Fracturing on Federal and Indian Lands,'' was 
published in the Federal Register on March 26, 2015 (80 FR 16128). The 
2015 final rule was intended to: Ensure that wells are properly 
constructed to protect water supplies, make certain that the fluids 
that flow back to the surface as a result of hydraulic fracturing 
operations are managed in an environmentally responsible way, and 
provide public disclosure of the chemicals used in hydraulic fracturing 
fluids.
    On March 28, 2017, President Trump issued Executive Order 13783, 
entitled, ``Promoting Energy Independence and Economic Growth'' (82 FR 
16093, Mar. 31, 2017), which directed the Secretary of the Interior to 
review four specific rules, including the 2015 final rule, for 
consistency with the order's objective ``to promote clean and safe 
development of our Nation's vast energy resources, while at the same 
time avoiding regulatory burdens that unnecessarily encumber energy 
production, constrain economic growth and prevent job creation'' and, 
as appropriate, take action to lawfully suspend, revise, or rescind 
those rules that are inconsistent with the policy set forth in 
Executive Order 13783. To implement Executive Order 13783, Secretary of 
the Interior Ryan K. Zinke issued Secretarial Order No. 3349 entitled, 
``American Energy Independence'' on March 29, 2017, which, among other 
things, directed the BLM to proceed expeditiously in proposing to 
rescind the 2015 final rule. Upon further review of the 2015 final 
rule, as directed by Executive Order

[[Page 34465]]

13783, and Secretarial Order No. 3349, the BLM believes that the 2015 
final rule unnecessarily burdens industry with compliance costs and 
information requirements that are duplicative of regulatory programs of 
many states and some tribes. As a result, we are proposing to rescind, 
in its entirety, the 2015 final rule.

II. Public Comment Procedures

    If you wish to comment on the proposed rule or the supporting 
analyses (namely, the Environmental Assessment (EA) or the Regulatory 
Impact Analysis (RIA) prepared for this proposed rule), you may submit 
your comments by any of the methods described in the ADDRESSES section.
    Please make your comments on the proposed rule as specific as 
possible, confine them to issues pertinent to the proposed rule, and 
explain the reason for any changes you recommend. Where possible, your 
comments should reference the specific section or paragraph of the 
proposed rule that you are addressing. The BLM is not obligated to 
consider or include in the Administrative Record for the final rule 
comments that we receive after the close of the comment period (see 
``DATES'') or comments delivered to an address other than those listed 
above (see ADDRESSES).
    Comments, including names and street addresses of respondents, will 
be available for public review at the address listed under ``ADDRESSES: 
Personal or messenger delivery'' during regular hours (7:45 a.m. to 
4:15 p.m.), Monday through Friday, except holidays.
    Before including your address, telephone number, email address, or 
other personal identifying information in your comment, be advised that 
your entire comment--including your personal identifying information--
may be made publicly available at any time. While you can ask us in 
your comment to withhold from public review your personal identifying 
information, we cannot guarantee that we will be able to do so.

III. Background

    Well stimulation techniques, such as hydraulic fracturing, are 
commonly used by oil and natural gas producers to increase the volume 
of oil and natural gas that can be extracted from oil and gas 
formations. Hydraulic fracturing techniques are particularly effective 
in enhancing oil and gas production from shale gas or oil formations. 
Hydraulic fracturing involves the injection of fluid under high 
pressure to create or enlarge fractures in the reservoir rocks. The 
fluid that is used in hydraulic fracturing is usually accompanied by 
proppants, such as particles of sand, which are carried into the newly 
fractured rock and help keep the fractures open once the fracturing 
operation is completed. The proppant-filled fractures become conduits 
for fluid migration from the reservoir rock to the wellbore and the 
fluid is subsequently brought to the surface. In addition to the water 
and sand (which together typically make up about 99 percent of the 
materials pumped into a well during a fracturing operation), chemical 
additives are also frequently used. These chemicals can serve many 
functions in hydraulic fracturing, including limiting the growth of 
bacteria and preventing corrosion of the well casing. The exact 
formulation of the chemicals used varies depending on the rock 
formations, the well, and the requirements of the operator.
    In 2013, the BLM estimated that about 90 percent of the 
approximately 2,800 new wells on Federal and Indian lands were 
stimulated using hydraulic fracturing techniques. Over the past 15 
years, there have been significant technological advances in horizontal 
drilling, which is now frequently combined with hydraulic fracturing. 
This combination, together with the discovery that these techniques can 
release significant quantities of oil and gas from large shale 
deposits, has led to production from geologic formations in parts of 
the country that previously did not produce significant amounts of oil 
or gas.
    On May 11, 2012, the BLM published in the Federal Register the 
initial proposed rule entitled, ``Oil and Gas; Well Stimulation, 
Including Hydraulic Fracturing, on Federal and Indian Lands'' (77 FR 
27691). The BLM received over 177,000 comments on the initial proposed 
rule from individuals, Federal and state governments and agencies, 
interest groups, and industry representatives.
    After reviewing the comments on the proposed rule, the BLM 
published a supplemental notice of proposed rulemaking entitled, ``Oil 
and Gas; Hydraulic Fracturing on Federal and Indian Lands,'' on May 24, 
2013 (78 FR 31636). The BLM received over 1.35 million comments on the 
supplemental proposed rule.
    On March 26, 2015, the BLM published the final rule entitled, ``Oil 
and Gas; Hydraulic Fracturing on Federal and Indian Lands'' in the 
Federal Register (80 FR 16128, codified as amendments to 43 CFR 3160.0-
3, 3160.0-5, 3162.3-2, 3162.3-3, and 3162.5-2 (2015)). Although the 
2015 final rule never went into effect, it nevertheless amended certain 
provisions in part 3160 of the 2015 edition of Title 43 of the Code of 
Federal Regulations (CFR), including the list of statutory authorities, 
the definitions section, and a provision requiring operators to isolate 
and protect certain waters. In addition, the 2015 final rule amended 
other provisions in part 3160 of the 2015 edition of Title 43 of the 
CFR, which, had they gone into effect, would have required an operator 
to:
     Obtain the BLM's approval before conducting hydraulic 
fracturing operations by submitting an application with information and 
a plan for the fracturing (43 CFR 3162.3-3(d)(4)).
     Include a hydraulic fracturing application in applications 
for permits to drill (APDs), or in a subsequent ``sundry notice'' (43 
CFR 3162.3-3(c)).
     Include information about the proposed source of water in 
each hydraulic fracturing application so that the BLM can complete 
analyses required by the National Environment Policy Act (NEPA) (43 CFR 
3162.3-3(d)(3)).
     Include available information about the location of nearby 
wells to help prevent ``frack hits'' (i.e., unplanned surges of 
pressurized fluids into other wells that can damage the wells and 
equipment and cause surface spills) (43 CFR 3162.3-3(d)(4)(iii)(C)).
     Verify that the well casing is surrounded by adequate 
cement, and test the well to make sure it can withstand the pressures 
of hydraulic fracturing (43 CFR 3162.3-3(e)(1) and (2) and (f)).
     Isolate and protect usable water, while redefining 
``usable water'' to expressly defer to classifications of groundwater 
by states and tribes, and the Environmental Protection Agency, 43 CFR 
3160.0-7; and require demonstrations of only 200 feet of adequate 
cementing between the fractured formation and the bottom of the closest 
usable water aquifer, or cementing to the surface (43 CFR 3162.3-
3(e)(2)(i) and (ii)).
     Monitor and record the annulus pressure during hydraulic 
fracturing operations, and report significant increases of pressure (43 
CFR 3162.3-3(g)).
     File post-fracturing reports containing information about 
how the hydraulic fracturing operation actually occurred (43 CFR 
3162.3-3(i)).
     Submit lists of the chemicals used (non-trade-secrets) to 
the BLM by sundry notice (Form 3160-5), to FracFocus (a public Web site 
operated by the Ground Water Protection Council and the Interstate Oil 
and Gas Compact Commission), or to another BLM-designated database (43 
CFR 3162.3-3(i)(1)).

[[Page 34466]]

     Withhold trade secret chemical identities only if the 
operator or the owner of the trade secret submits an affidavit 
verifying that the information qualifies for trade secret protection 
(43 CFR 3162.3-3(j)).
     Obtain and provide withheld information to the BLM, if the 
BLM requests the withheld information (43 CFR 3162.3-3(j)(3)).
     Store recovered fluids in above-ground rigid tanks of no 
more than 500-barrel capacity, with few exceptions, until the operator 
has an approved plan for permanent disposal of produced water (as 
required by Onshore Oil and Gas Order No. 7) (43 CFR 3162.3-3(h)).

The 2015 final rule would have also authorized two types of variances:
     Individual operation variances to account for local 
conditions or new or different technology (43 CFR 3162.3-3(k)(1)).
     State or tribal variances to account for regional 
conditions or to align the BLM requirements with state or tribal 
regulations (43 CFR 3162.3-3(k)(2)).

Per the 2015 final rule, the standard for approval of either type of 
variance is that the variance would meet or exceed the purposes of a 
specific provision in the rule (43 CFR 3162.3-3(k)(3)).
    Two industry associations filed suit opposing the 2015 final rule 
in the U.S. District Court for the District of Wyoming in March 2015. 
Four states and a tribe also challenged the rule in the same court.\1\ 
The Court consolidated the cases. Six environmental groups intervened 
in the case in support of the rule.
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    \1\ A separate tribe filed a separate challenge to the rule in 
the U.S. District Court for the District of Colorado. That case has 
been settled.
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    The District Court stayed the 2015 final rule prior to its 
effective date. Subsequently, the District Court preliminarily enjoined 
the 2015 final rule. On June 21, 2016, the District Court issued an 
order setting aside the rule. The Court concluded that Congress revoked 
the BLM's authority over hydraulic fracturing operations by enacting 
the Safe Drinking Water Act of 1974 and the Energy Policy Act of 2005. 
Wyoming v. Jewell, No. 15-cv-41 (D. Wyo. June 21, 2016).
    The District Court did not address a number of additional arguments 
that Petitioners raised against the 2015 final rule. Those unaddressed 
arguments focused primarily on allegations that the rule was not 
supported by sufficient facts or was otherwise arbitrary and 
capricious. The District Court also did not expressly address the 
argument of a Tribal petitioner that the BLM is precluded from 
regulating oil and gas operations on Indian lands.
    The Department of the Interior (``the Department'') and 
environmental group intervenors appealed the District Court's decision. 
Wyoming v. Zinke, No. 16-8068 (10th Cir.). The appeal concerns only the 
statutory authority issues that the District Court decided. Briefing 
was completed in October 2016. Before oral argument, however, the Court 
of Appeals in a March 2017 order required the BLM to report whether it 
had changed its position in the appeal following the Presidential 
Inauguration.
    Following the March 2017 order from the Court of Appeals, the 
Department accelerated its review of the 2015 final rule. As previously 
noted, pursuant to Executive Order 13783, the Department commenced a 
review of existing energy-related regulations, which included the 2015 
final rule, to determine whether changes would be appropriate to 
support domestic energy production. Based upon this review, the 
Department identified the 2015 final rule as being duplicative and 
burdensome and, therefore, appropriate for rescission. On March 15, 
2017, the Department informed the Court of Appeals that it was 
preparing a notice of proposed rulemaking to rescind the rule, which it 
intended to publish in the Federal Register. Shortly thereafter, the 
Court of Appeals postponed oral argument, and required further briefing 
on several issues regarding the effect of the present rulemaking effort 
on the appeal.
    If the Court of Appeals were to reverse the District Court's order 
on statutory authority, the case would be remanded to the District 
Court to decide the remaining issues, primarily whether the BLM 
complied with the Administrative Procedure Act in the rulemaking that 
resulted in the 2015 final rule.
    In sum, the 2015 final rule has never gone into effect, and was set 
aside by the District Court on June 21, 2016. The 2015 final rule would 
not go into effect unless and until the courts decide that the rule was 
properly promulgated.
    In the Regulatory Impact Analysis (RIA) for the 2015 final rule, 
the BLM estimated that the requirements of the 2015 final rule would 
result in compliance costs to the industry of approximately $32 million 
per year (and potentially up to $45 million per year). The BLM had 
concluded that many of the requirements were consistent with industry 
practice and similar to the requirements found in existing state 
regulations, and therefore would not pose a significant new compliance 
burden to the industry. However, comments received by many oil and gas 
companies and trade associations representing members of the oil and 
gas industry suggested that the BLM's proposed and final rules were 
unnecessary and would cause substantial harm to the industry. The BLM 
recognizes that the 2015 final rule would pose a financial burden to 
industry if implemented.
    As noted earlier, since January 2017, the President has issued 
Executive Orders that necessitate the review of the BLM's 2015 final 
rule. Section 7(b) of Executive Order 13783 directs the Secretary of 
the Interior to review four specific rules, including the 2015 final 
rule, for consistency with the policy set forth in section 1 of [the] 
Order and, if appropriate, to publish for notice and comment proposed 
rules to suspend, revise, or rescind those rules.
    Section 1 of Executive Order 13783 states that it is in the 
national interest to promote clean and safe development of United 
States energy resources, while avoiding ``regulatory burdens that 
unnecessarily encumber energy production, constrain economic growth, 
and prevent job creation.'' Section 1 describes the prudent development 
of these natural resources as ``essential to ensuring the Nation's 
geopolitical security.'' Section 1 finds it in the national interest to 
ensure that electricity is affordable, reliable, safe, secure, and 
clean, and that coal, natural gas, nuclear material, flowing water, and 
other domestic sources, including renewable sources, can be used to 
produce it.
    Accordingly, Section 1 of Executive Order 13783 declares it the 
policy of the United States that: (1) Executive departments and 
agencies immediately review regulations that potentially burden the 
development or use of domestically produced energy resources and, as 
appropriate, suspend, revise, or rescind those that unduly burden 
domestic energy resources development ``beyond the degree necessary to 
protect the public interest or otherwise comply with the law''; and (2) 
to the extent permitted by law, agencies should promote clean air and 
clean water, while respecting the proper roles of the Congress and the 
States concerning these matters; and (3) necessary and appropriate 
environmental regulations comply with the law, reflect greater benefit 
than cost, when permissible, achieve environmental improvements, and 
are developed through transparent processes using the best available 
peer-reviewed science and economics.
    As directed by the aforementioned Executive Order, and by 
Secretarial Order No. 3349, the BLM conducted a review of the 2015 
final rule. As a result of this review, the BLM believes that the

[[Page 34467]]

compliance costs associated with the 2015 final rule are not justified 
and it now proposes to rescind the rule.
    In the RIA for the 2015 final rule, while noting that many of the 
requirements of the 2015 final rule were consistent with industry 
practice and that some were duplicative of state requirements or were 
generally addressed by existing BLM requirements, the BLM asserted that 
the rule would provide additional assurance that operators are 
conducting hydraulic fracturing operations in an environmentally sound 
and safe manner, and increase the public's awareness and understanding 
of these operations.
    It follows that the rescission of the 2015 final rule could 
potentially reduce those assurances or potentially reduce public 
awareness and understanding about hydraulic fracturing operations on 
Federal and Indian lands. However, considering state regulatory 
programs, the sovereignty of tribes to regulate operations on their 
lands, and the pre-existing authorities in other Federal regulations, 
the proposed rescission of the 2015 final rule would not leave 
hydraulic fracturing operations entirely unregulated.
    The BLM's review of the 2015 final rule included a review of state 
laws and regulations which indicated that most states are either 
currently regulating or are in the process of regulating hydraulic 
fracturing. When the 2015 final rule was issued, 20 of the 32 states 
with currently existing Federal oil and gas leases had regulations 
addressing hydraulic fracturing. In the time since the promulgation of 
the 2015 final rule, an additional 12 states have introduced laws or 
regulations addressing hydraulic fracturing. As a result, all 32 states 
with Federal oil and gas leases currently have laws or regulations that 
address hydraulic fracturing operations.\2\ In addition, some tribes 
with oil and gas resources have also taken steps to regulate oil and 
gas operations, including hydraulic fracturing, on their lands.
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    \2\ The reference to 32 states with existing Federal oil and gas 
leases includes the following states: Alabama, Alaska, Arizona, 
Arkansas, California, Colorado, Idaho, Illinois, Indiana, Kansas, 
Kentucky, Louisiana, Maryland, Michigan, Mississippi, Montana, 
Nebraska, Nevada, New Mexico, New York, North Dakota, Ohio, 
Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, 
Utah, Virginia, West Virginia, and Wyoming. The State of Oregon 
regulates hydraulic fracturing operations by way of its regulations 
addressing ``Water Injection and Water Flooding of Oil and Gas 
Properties'' (Oregon Administrative Rules [Or. Admin. R.] sec. 632-
010-0194). The State of Arizona may regulate hydraulic fracturing 
operations by way of its regulations addressing ``Artificial 
Stimulation of Oil and Gas Wells'' (Arizona Administrative Code 
[A.A.C.] sec. R12-7-117). The State of Indiana issued ``emergency 
rules'' in 2011 and 2012 that incorporated new legislation 
addressing hydraulic fracturing (Pub. L. 140-2011 and Pub. L. 16-
2012) into Indiana's oil and gas regulations at 312 Indiana 
Administrative Code (IAC) Article 16. For further information about 
the state regulatory programs, see Sec.  2.12 of the RIA and 
Appendix 1 of the EA prepared for this proposed rulemaking action.
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    The BLM also now believes that disclosures of the chemical content 
of hydraulic fracturing fluids to state regulatory agencies and/or 
databases such as FracFocus is more prevalent than it was in 2015 and 
that there is no need for a Federal chemical disclosure requirement, 
since companies are already making those disclosures on most of the 
operations, either to comply with state law or voluntarily. There are 
23 states that currently use FracFocus for chemical disclosures. These 
include six states where the BLM has major oil and gas operations, 
including Colorado, Montana, North Dakota, Oklahoma, Texas, and Utah.
    In addition to state and tribal regulation of hydraulic fracturing, 
the BLM has several pre-existing authorities that it will continue to 
rely on if the 2015 final rule is rescinded, some of which are set out 
at 43 CFR subpart 3162 and in Onshore Oil and Gas Orders 1, 2, and 7. 
These authorities reduce the risks associated with hydraulic fracturing 
by providing specific requirements for well permitting; construction, 
casing, and cementing; and disposal of produced water.\3\ By reverting 
to 43 CFR subpart 3162 as it existed prior to the 2015 final rule, the 
BLM would continue to require prior approval for ``nonroutine 
fracturing jobs''; however, ``nonroutine fracturing jobs'' would not be 
defined in 43 CFR subpart 3162 since the term was not defined before 
the 2015 final rule. The BLM also possesses discretionary authority 
allowing it to impose site-specific protective measures reducing the 
risks associated with hydraulic fracturing.
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    \3\ Additional discussion regarding Onshore Oil and Gas Orders 
1, 2, and 7, and 43 CFR subpart 3162, is provided in Sec.  2.11 of 
the RIA and the EA prepared for this proposed rulemaking action.
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    The BLM's review of the 2015 final rule also included a review of 
incident reports from Federal and Indian wells since December 2014. 
This review indicated that resource damage is unlikely to increase by 
rescinding the 2015 final rule because of the rarity of adverse 
environmental impacts that occurred from hydraulic fracturing 
operations before the 2015 final rule, and after its promulgation while 
the 2015 final rule was not in effect. The BLM now believes that the 
appropriate framework for mitigating these impacts exists through state 
regulations, through tribal exercise of sovereignty, and through BLM's 
own pre-existing regulations and authorities (pre-2015 final rule 43 
CFR subpart 3162 and Onshore Orders 1, 2, and 7).
    The BLM is seeking comments on the specific regulatory changes that 
would be made by this proposed rule and is interested particularly in 
information that would improve BLM's understanding of state and tribal 
regulatory capacity in this area. Further, the BLM is seeking specific 
comments on approaches that could be used under existing Federal 
authorities, including what additional information could be collected 
during the APD process or through sundry notices, to further minimize 
the risks from hydraulic fracturing operations, particularly in states 
or on tribal lands where the corresponding regulations or enforcement 
mechanisms may be less comprehensive.

IV. Discussion of Proposed Rule

    As previously discussed in this preamble, the BLM proposes to 
revise 43 CFR part 3160 to rescind the 2015 final rule. Although the 
2015 final rule never went into effect, this proposed rule would 
restore the regulations in part 3160 of the CFR to exactly as they were 
before the 2015 final rule, except for any changes to those regulations 
that were made by other rules published between March 26, 2015 (the 
date of publication of the 2015 final rule) and now. This proposed rule 
would not result in any change from current requirements because the 
2015 final rule never went into effect. The following section-by-
section analysis reviews the specific changes that would be required to 
return to the pre-2015 final rule regulations.

Section 3160.0-3 Authority

    The BLM proposes to amend Sec.  3160.0-3 by removing the reference 
to the Federal Land Policy and Management Act of 1976, as amended (43 
U.S.C. 1701). The 2015 final rule added this reference as an 
administrative matter. This proposed rule would return this section to 
the language it contained before the 2015 final rule and would not have 
any substantive impact.

Section 3160.0-5 Definitions

    The BLM proposes to amend this section by removing several terms 
that were added by the 2015 final rule and by restoring the definition 
of ``fresh water'' that the 2015 final rule had removed. The proposed 
rule would

[[Page 34468]]

remove the definitions of ``annulus,'' ``bradenhead,'' ``Cement 
Evaluation Log (CEL),'' ``confining zone,'' ``hydraulic fracturing,'' 
``hydraulic fracturing fluid,'' ``isolating or to isolate,'' ``master 
hydraulic fracturing plan,'' ``proppant,'' and ``usable water.'' The 
2015 final rule used those terms in the operating regulations. If those 
operating regulations are rescinded, as proposed, these terms would no 
longer be necessary in this definitions section. The BLM is proposing 
to restore the previous definition of ``fresh water'' to the 
regulations.

Section 3162.3-2 Subsequent Well Operations

    This proposed rule would amend Sec.  3162.3-2 by making non-
substantive changes to paragraph (a), which include replacing the word 
``must'' with the word ``shall'', replacing the word ``combine'' with 
the word ``commingling'', replacing the word ``convert'' with the word 
``conversion'', and removing the language from the first sentence of 
paragraph (a) that the 2015 final rule only added to more fully 
describe Form 3160-5.
    The proposed rule would also make non-substantive changes to 
paragraph (b) of Sec.  3162.3-2, which include replacing ``using a 
Sundry Notice and Report on Well (Form 3160-5)'' with ``on Form 3160-
5''.
    The proposed rule would also restore ``perform nonroutine 
fracturing jobs'' to the list of activities that require the authorized 
officer's prior approval in Sec.  3162.3-2. The 2015 final rule removed 
those words from the list because it amended Sec.  3162.3-3 to require 
all hydraulic fracturing operations to be approved by the authorized 
officer. This proposed rule would remove that requirement from Sec.  
3163.3-3, which is discussed below.

Section 3162.3-3 Other Lease Operations

    The BLM proposes to revise this section by removing language that 
was added by the 2015 final rule and returning this rule to the exact 
language it contained previously. The 2015 final rule made substantial 
changes to this section and revised the title to read as ``Subsequent 
well operations; Hydraulic fracturing.''
    Paragraph (a) of this section in the 2015 final rule, as reflected 
in the 2015 edition of the CFR, includes an implementation schedule 
that the BLM would have followed to phase in the requirements of the 
rule, had the rule gone into effect. Paragraph (b) of this section 
contains the performance standard referencing Sec.  3162.5-2(d). 
Paragraph (c) of this section would have required prior approval of 
hydraulic fracturing operations. Paragraph (d) of this section lists 
the information that an operator would have been required to include in 
a request for approval of hydraulic fracturing. Paragraph (e) of this 
section specifies how an operator would have had to monitor and verify 
cementing operations prior to hydraulic fracturing. Paragraph (f) of 
this section would have required mechanical integrity testing of the 
wellbore prior to hydraulic fracturing. Paragraph (g) of this section 
would have required monitoring and recording of annulus pressure during 
hydraulic fracturing. Paragraph (h) of this section specifies the 
requirements that would have applied for managing recovered fluids 
until approval of a permanent water disposal plan. Paragraph (i) of 
this section specifies information that an operator would have been 
required to provide to the authorized officer after completion of 
hydraulic fracturing operations. Paragraph (j) of this section 
specifies how an operator could have withheld information from the BLM 
and the public about the chemicals used in a hydraulic fracturing 
operation. Paragraph (k) of this section describes how the BLM would 
have approved variances from the requirements of the 2015 final rule.
    For the reasons discussed earlier in this preamble, the BLM 
believes this section of the 2015 final rule is unnecessarily 
duplicative and would impose costs that would not be clearly exceeded 
by its benefits and, therefore, proposes to remove these 2015 final 
rule provisions and to restore the previous language of the section.

Section 3162.5-2 Control of Wells

    The BLM proposes to amend paragraph (d) of this section by 
restoring the term ``fresh water-bearing'' and the phrase ``containing 
5,000 ppm or less of dissolved solids.'' The proposed rule would also 
restore other non-substantive provisions that appeared in the previous 
version of the regulations.

IV. Procedural Matters

Regulatory Planning and Review (E.O. 12866, E.O. 13563, E.O. 13771)

    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs within the Office of Management and Budget will 
review all significant rules. The Office of Information and Regulatory 
Affairs has determined that this proposed rule is significant because 
it would raise similarly novel legal or policy issues.
    Executive Order 13563 reaffirms the principles of Executive Order 
12866 while calling for improvements in the Nation's regulatory system 
to promote predictability, to reduce uncertainty, and to use the best, 
most innovative, and least burdensome tools for achieving regulatory 
ends. The Executive Order directs agencies to consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public where these approaches are relevant, feasible, 
and consistent with regulatory objectives. Executive Order 13563 
emphasizes further that regulations must be based on the best available 
science and that the rulemaking process must allow for public 
participation and an open exchange of ideas. We have developed this 
rule in a manner consistent with these requirements.
    Executive Order 13771 (82 FR 9339, Feb. 3, 2017) requires Federal 
agencies to take proactive measures to reduce the costs associated with 
complying with Federal regulations. Consistent with Executive Order 
13771, we have estimated the cost savings for this proposed rule to be 
$14-$34 million per year from the 2015 final rule. Therefore, this 
proposed rule is expected to be a deregulatory action under Executive 
Order 13771.
    After reviewing the requirements of this proposed rule, we have 
determined that it will not have an annual effect on the economy of 
$100 million or more or adversely affect in a material way the economy, 
a sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or state, local, or tribal 
governments or communities.

Regulatory Flexibility Act

    This proposed rule will not have a significant economic effect on a 
substantial number of small entities under the Regulatory Flexibility 
Act (RFA) (5 U.S.C. 601 et seq.) The RFA generally requires that 
Federal agencies prepare a regulatory flexibility analysis for rules 
subject to the notice and comment rulemaking requirements under the 
Administrative Procedure Act (5 U.S.C. 500 et seq.), if the rule would 
have a significant economic impact, either detrimental or beneficial, 
on a substantial number of small entities (See 5 U.S.C. 601-612). 
Congress enacted the RFA to ensure that government regulations do not 
unnecessarily or disproportionately burden small entities. Small 
entities include small businesses, small governmental jurisdictions, 
and small not-for-profit enterprises.

[[Page 34469]]

    The BLM reviewed the Small Business Administration (SBA) size 
standards for small businesses and the number of entities fitting those 
size standards as reported by the U.S. Census Bureau in the Economic 
Census. The BLM concluded that the vast majority of entities operating 
in the relevant sectors are small businesses as defined by the SBA. As 
such, the proposed rule would likely affect a substantial number of 
small entities.
    Although the proposed rule would likely affect a substantial number 
of small entities, the BLM does not believe that these effects would be 
economically significant. The proposed rule is a deregulatory action 
that would remove all of the requirements placed on operators by the 
2015 final rule. Operators would not have to undertake the compliance 
activities, either operational or administrative, that are outlined in 
the 2015 final rule, except to the extent the activities are required 
by state or tribal law, or by other pre-existing BLM regulations.
    The BLM conducted an economic analysis which estimates that the 
average reduction in compliance costs would be a small fraction of a 
percent of the profit margin for small companies, which is not a large 
enough impact to be considered significant. For more detailed 
information, see section 5.3 of the Regulatory Impact Analysis (RIA) 
prepared for this proposed rule. The current draft RIA has been posted 
in the docket for the proposed rule on the Federal eRulemaking Portal: 
https://www.regulations.gov.

Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule will not have 
an annual effect on the economy of $100 million or more.
    This rule will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions. This rule will not have significant 
adverse effects on competition, employment, investment, productivity, 
innovation, or the ability of U.S.-based enterprises to compete with 
foreign-based enterprises.
    This rule is a deregulatory action that would remove all of the 
requirements placed on operators by the 2015 final rule. Operators 
would not have to undertake the compliance activities, either 
operational or administrative, that would have been required solely by 
the 2015 final rule. The screening analysis conducted by the BLM 
estimates the average reduction in compliance costs would be a small 
fraction of a percent of the profit margin for companies, which is not 
large enough to: have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises; cause 
a major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies, or geographic 
regions; or have an annual effect on the economy of $100 million or 
more.

Unfunded Mandates Reform Act

    This rule will not impose an unfunded mandate on State, local, or 
tribal governments, or the private sector of more than $100 million per 
year. The rule will not have a significant or unique effect on State, 
local, or tribal governments or the private sector. The proposed rule 
is a deregulatory action, which contains no requirements that would 
apply to State, local, or tribal governments or to the private sector. 
A statement containing the information required by the Unfunded 
Mandates Reform Act (UMRA) (2 U.S.C. 1531 et seq.) is not required for 
the rule. This rule is also not subject to the requirements of section 
203 of UMRA because it contains no regulatory requirements that might 
significantly or uniquely affect small governments, because it contains 
no requirements that apply to such governments, nor does it impose 
obligations upon them.

Takings (E.O. 12630)

    This rule will not affect a taking of private property or otherwise 
have taking implications under Executive Order 12630. A takings 
implication assessment is not required. This rule is a deregulatory 
action that would remove all of the requirements placed on operators 
solely by the 2015 final rule and therefore would impact some 
operational and administrative requirements on Federal and Indian 
lands. All such operations are subject to lease terms which expressly 
require that subsequent lease activities be conducted in compliance 
with subsequently adopted Federal laws and regulations. This rule 
conforms to the terms of those leases and applicable statutes and, as 
such, the rule is not a government action capable of interfering with 
constitutionally protected property rights. Therefore, the BLM has 
determined that the proposed rule would not cause a taking of private 
property or require further discussion of takings implications under 
Executive Order 12630.

Federalism (E.O. 13132)

    Under the criteria in section 1 of Executive Order 13132, this rule 
does not have sufficient federalism implications to warrant the 
preparation of a federalism summary impact statement. A federalism 
impact statement is not required.
    The proposed rule will not have a substantial direct effect on the 
states, on the relationship between the Federal Government and the 
states, or on the distribution of power and responsibilities among the 
levels of government. It would not apply to states or local governments 
or state or local governmental entities. The rule would affect the 
relationship between operators, lessees, and the BLM, but it does not 
directly impact the states. Therefore, in accordance with Executive 
Order 13132, the BLM has determined that this proposed rule does not 
have sufficient federalism implications to warrant preparation of a 
Federalism Assessment.

Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of Executive Order 12988. 
More specifically, this rule meets the criteria of section 3(a), which 
requires agencies to review all regulations to eliminate errors and 
ambiguity and to write all regulations to minimize litigation. This 
rule also meets the criteria of section 3(b)(2), which requires 
agencies to write all regulations in clear language with clear legal 
standards.

Consultation With Indian Tribes (E.O. 13175 and Departmental Policy)

    The Department strives to strengthen its government-to-government 
relationship with Indian tribes through a commitment to consultation 
with Indian tribes and recognition of their right to self-governance 
and tribal sovereignty. We have evaluated this rule under the 
Department's consultation policy and under the criteria in Executive 
Order 13175 and we have found that this proposed rule includes policies 
that could have tribal implications.
    If the proposed rule is implemented, oil and gas operations on 
tribal and allotted lands would not be subject to the procedures or 
standards in the 2015 final rule. The BLM believes that rescinding the 
2015 final rule will assist in preventing Indian lands from being 
viewed by oil and gas operators as less attractive than non-Indian 
lands due to unnecessary and burdensome compliance costs, thereby 
preventing economic harm to Indian tribes and

[[Page 34470]]

allottees that could have resulted from implementation of the 2015 
final rule. However, other resources on those lands might have 
benefited from the risk reduction intended by the 2015 final rule.
    Although the states with significant Federal oil and gas resources 
have regulatory programs addressing hydraulic fracturing operations, 
the oil and gas producing Indian tribes have not as uniformly 
promulgated regulatory programs to address hydraulic fracturing.
    In light of this, the BLM is seeking comments regarding the effects 
of the proposed rescission of the 2015 final rule on tribes, individual 
allottees, and Indian resources. As discussed below, the BLM will be 
consulting with interested tribes on those topics, but also requests 
comments providing information about existing or proposed tribal 
regulation of hydraulic fracturing operations, the economic and 
environmental impacts of the proposed rescission of the 2015 final rule 
as it would apply to Indian lands, and whether all or any parts of the 
2015 final rule should continue to apply on Indian lands.
    The BLM is engaging potentially interested tribes to consult on a 
government-to-government basis and discuss the proposed rule. Initial 
tribal outreach letters for the proposed rule invite tribes to provide 
written comments and/or discuss, either during in-person meeting(s) or 
by other means, the proposed rule. The responses to the aforementioned 
initial tribal outreach letters will help to identify what future 
actions the BLM will take as part of its tribal consultation efforts 
for the proposed rule.

Paperwork Reduction Act

    The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3521) provides 
that an agency may not conduct or sponsor, and a person is not required 
to respond to, a ``collection of information,'' unless it displays a 
currently valid control number (44 U.S.C. 3512). Collections of 
information include requests and requirements that an individual, 
partnership, or corporation obtain information, and report it to a 
Federal agency (44 U.S.C. 3502(3); 5 CFR 1320.3(c) and (k)). If this 
proposed rule is promulgated and the 2015 final rule is rescinded, 
there will be no need to continue the information collection activities 
that the OMB has pre-approved under control number 1004-0203. 
Accordingly, if the 2015 final rule is rescinded, the BLM will request 
that the OMB discontinue that control number.

National Environmental Policy Act

    The BLM has prepared an environmental assessment (EA) to determine 
whether this rule would have a significant impact on the quality of the 
human environment under the National Environmental Policy Act of 1969 
(NEPA) (42 U.S.C. 4321 et seq.). If the final EA supports the issuance 
of a Finding of No Significant Impact (FONSI) for the rule, the 
preparation of an environmental impact statement pursuant to the NEPA 
would not be required.
    The current draft of the EA and a draft FONSI have been placed in 
the file for the BLM's Administrative Record for the proposed rule at 
the BLM 20 M Street address specified in the ``ADDRESSES'' section. The 
current draft EA and draft FONSI have also been posted in the docket 
for the proposed rule on the Federal eRulemaking Portal: https://www.regulations.gov. The BLM invites the public to review these 
documents and suggests that anyone wishing to submit comments on the 
draft EA and FONSI should do so in accordance with the instructions 
contained in the ``Public Comment Procedures'' section above.

Effects on the Energy Supply (E.O. 13211)

    This rule is not a significant energy action under the definition 
in Executive Order 13211. A statement of Energy Effects is not 
required. Section 4(b) of Executive Order 13211 defines a ``significant 
energy action'' as ``any action by an agency (normally published in the 
Federal Register) that promulgates or is expected to lead to the 
promulgation of a final rule or regulation, including notices of 
inquiry, advance notices of rulemaking, and notices of rulemaking: 
(1)(i) That is a significant regulatory action under Executive Order 
12866 or any successor order, and (ii) is likely to have a significant 
adverse effect on the supply, distribution, or use of energy; or (2) 
that is designated by the Administrator of [OIRA] as a significant 
energy action.''
    Since the proposal is a deregulatory action and would reduce 
compliance costs, it is likely to have a positive effect, if any, on 
the supply, distribution, or use of energy, and not a significant 
adverse effect. As such, we do not consider the proposed rule to be a 
``significant energy action'' as defined in Executive Order 13211.

Clarity of This Regulation

    We are required by Executive Orders 12866 (section 1(b)(12)), 12988 
(section 3(b)(1)(B)), and 13563 (section 1(a)), and by the Presidential 
Memorandum of June 1, 1988, to write all rules in plain language. This 
means that each rule must:
    (a) Be logically organized;
    (b) Use the active voice to address readers directly;
    (c) Use common, everyday words and clear language rather than 
jargon;
    (d) Be divided into short sections and sentences; and
    (e) Use lists and tables wherever possible.
    If you feel that we have not met these requirements, send us 
comments by one of the methods listed in the ADDRESSES section. To 
better help us revise the rule, your comments should be as specific as 
possible. For example, you should tell us the numbers of the sections 
or paragraphs that you find unclear, which sections or sentences are 
too long, the sections where you feel lists or tables would be useful, 
etc.

Author

    The principal authors of this rule are Justin Abernathy, Senior 
Policy Analyst, BLM, Washington Office; James Tichenor, Economist, BLM, 
Washington Office; Ross Klein, (Acting) Natural Resource Specialist, 
BLM, Washington Office; Subijoy Dutta, Lead Petroleum Engineer, BLM, 
Washington Office; Jeffrey Prude, Petroleum Engineer/Oil and Gas 
Program Lead, BLM, Bakersfield Field Office; and James Annable, 
Petroleum Engineer, BLM, Royal Gorge Field Office; assisted by Charles 
Yudson of the BLM's division of Regulatory Affairs and by the 
Department of the Interior's Office of the Solicitor.

    Dated: July 21, 2017.
Katharine S. MacGregor,
Acting Assistant Secretary, Land and Minerals Management.

List of Subjects in 43 CFR Part 3160

    Administrative practice and procedure, Government contracts, 
Indians-lands, Mineral royalties, Oil and gas exploration, Penalties, 
Public lands-mineral resources, Reporting and recordkeeping 
requirements.

    For the reasons stated in the preamble, and under the authorities 
stated below, the Bureau of Land Management proposes to amend 43 CFR 
part 3160 as follows:

PART 3160--ONSHORE OIL AND GAS OPERATIONS

0
1. The authority citation for part 3160 continues to read as follows:

    Authority: 25 U.S.C. 396d and 2107; 30 U.S.C. 189, 306, 359, and 
1751; 43 U.S.C.

[[Page 34471]]

1732(b), 1733, and 1740; and Sec. 107, Pub. L. 114-74, 129 Stat. 
599, unless otherwise noted.

Subpart 3160--Onshore Oil and Gas Operations: General

0
2. Revise Sec.  3160.0-3 to read as follows:


Sec.  3160.0-3   Authority.

    The Mineral Leasing Act, as amended and supplemented (30 U.S.C. 181 
et seq.), the Act of May 21, 1930 (30 U.S.C. 301-306), the Mineral 
Leasing Act for Acquired Lands, as amended (30 U.S.C. 351-359), the Act 
of March 3, 1909, as amended (25 U.S.C 396), the Act of May 11, 1938, 
as amended (25 U.S.C. 396a-396q), the Act of February 28, 1891, as 
amended (25 U.S.C. 397), the Act of May 29, 1924 (25 U.S.C. 398), the 
Act of March 3, 1927 (25 U.S.C. 398a-398e), the Act of June 30, 1919, 
as amended (25 U.S.C. 399), R.S. Sec.  441 (43 U.S.C. 1457), the 
Attorney General's Opinion of April 2, 1941 (40 Op. Atty. Gen. 41), the 
Federal Property and Administrative Services Act of 1949, as amended 
(40 U.S.C 471 et seq.), the National Environmental Policy Act of 1969, 
as amended (40 U.S.C. 4321 et seq.), the Act of December 12, 1980 (94 
Stat. 2964), the Combined Hydrocarbon Leasing Act of 1981 (95 Stat. 
1070), the Federal Oil and Gas Royalty Management Act of 1982 (30 
U.S.C. 1701), the Indian Mineral Development Act of 1982 (25 U.S.C. 
2102), and Order Number 3087, dated December 3, 1982, as amended on 
February 7, 1983 (48 FR 8983) under which the Secretary consolidated 
and transferred the onshore minerals management functions of the 
Department, except mineral revenue functions and the responsibility for 
leasing of restricted Indian lands, to the Bureau of Land Management.
0
3. Amend Sec.  3160.0-5 by removing the definitions of ``annulus,'' 
``bradenhead,'' ``Cement Evaluation Log (CEL),'' ``confining zone,'' 
``hydraulic fracturing,'' ``hydraulic fracturing fluid,'' ``isolating 
or to isolate,'' ``master hydraulic fracturing plan,'' ``proppant,'' 
and ``usable water,'' and by adding the definition of ``fresh water'' 
in alphabetical order to read as follows:


Sec.  3160.0-5  Definitions.

* * * * *
    Fresh water means water containing not more than 1,000 ppm of total 
dissolved solids, provided that such water does not contain 
objectionable levels of any constituent that is toxic to animal, plant 
or aquatic life, unless otherwise specified in applicable notices or 
orders.
* * * * *

Subpart 3162--Requirements for Operating Rights Owners and 
Operators

0
4. Amend Sec.  3162.3-2 by revising the first sentence of paragraph (a) 
and revising paragraph (b) to read as follows:


Sec.  3162.3-2   Subsequent well operations.

    (a) A proposal for further well operations shall be submitted by 
the operator on Form 3160-5 for approval by the authorized officer 
prior to commencing operations to redrill, deepen, perform casing 
repairs, plug-back, alter casing, perform nonroutine fracturing jobs, 
recomplete in a different interval, perform water shut off, commingling 
production between intervals and/or conversion to injection. * * *
    (b) Unless additional surface disturbance is involved and if the 
operations conform to the standard of prudent operating practice, prior 
approval is not required for routine fracturing or acidizing jobs, or 
recompletion in the same interval; however, a subsequent report on 
these operations must be filed on Form 3160-5.
* * * * *
0
5. Revise Sec.  3162.3-3 to read as follows:


Sec.  3162.3-3   Other lease operations.

    Prior to commencing any operation on the leasehold which will 
result in additional surface disturbance, other than those authorized 
under Sec.  3162.3-1 or Sec.  3162.3-2, the operator shall submit a 
proposal on Form 3160-5 to the authorized officer for approval. The 
proposal shall include a surface use plan of operations.
0
6. Amend Sec.  3162.5-2 by revising the heading and first sentence of 
paragraph (d) to read as follows:


Sec.  3162.5-2  Control of wells.

* * * * *
    (d) Protection of fresh water and other minerals. The operator 
shall isolate freshwater-bearing and other usable water containing 
5,000 ppm or less of dissolved solids and other mineral-bearing 
formations and protect them from contamination. * * *

[FR Doc. 2017-15696 Filed 7-24-17; 8:45 am]
 BILLING CODE 4310-84-P