[Federal Register Volume 82, Number 249 (Friday, December 29, 2017)]
[Rules and Regulations]
[Pages 61924-61949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-28211]



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Vol. 82

Friday,

No. 249

December 29, 2017

Part III





Department of the Interior





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Bureau of Land Management





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43 CFR Part 3160





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

Federal Register / Vol. 82 , No. 249 / Friday, December 29, 2017 / 
Rules and Regulations

[[Page 61924]]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Part 3160

[LLWO300000 L13100000 PP0000 18X]
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: Final 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 rule). With 
this final rule, the BLM is rescinding the 2015 rule because we believe 
it imposes administrative burdens and compliance costs that are not 
justified. This final rule returns the affected sections of the Code of 
Federal Regulations (CFR) to the language that existed immediately 
before the published effective date of the 2015 rule (June 24, 2015), 
except for changes to those regulations that were made by other rules 
published between the date of publication of the 2015 rule and now, and 
the phrase ``perform nonroutine fracturing jobs,'' which is not 
restored to the list of subsequent operations requiring prior approval. 
None of the changes by other rules are relevant to this rulemaking.

DATES: This final rule is effective on December 29, 2017.

FOR FURTHER INFORMATION CONTACT: Lorenzo Trimble, Acting Division 
Chief, Fluid Minerals Division, 202-912-7342, for information regarding 
the substance of this final 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 hours.

SUPPLEMENTARY INFORMATION:

Executive Summary

    Pursuant to the Mineral Leasing Act (MLA), the Federal Land Policy 
and Management Act (FLPMA), the Indian mineral leasing laws, and other 
legal authorities, the BLM is charged with administering oil and gas 
operations on Federal and Indian lands in a manner that allows for 
responsible and appropriate resource development. This final rule is 
needed to prevent the unnecessarily burdensome and unjustified 
administrative requirements and compliance costs of the 2015 rule from 
encumbering oil and gas development on Federal and Indian lands.
    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 increased 
about whether hydraulic fracturing contributes to or causes the 
contamination of groundwater sources, whether the chemicals used in 
hydraulic fracturing should be disclosed to the public, and whether 
there is adequate management of well integrity and of the ``flowback'' 
fluids that return to the surface during and after hydraulic fracturing 
operations.
    On March 26, 2015, the BLM published in the Federal Register a 
final rule entitled, ``Oil and Gas; Hydraulic Fracturing on Federal and 
Indian Lands'' (80 FR 16128) (2015 rule). The 2015 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. To achieve its 
objectives, the 2015 rule required oil and gas operators to:
     Obtain the BLM's approval before conducting hydraulic 
fracturing operations by submitting an application with information and 
a plan for the hydraulic fracturing design (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 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 website 
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)).
     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 chemical 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 rule 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)).
    For either type of variance to be approved, the variance needed to 
meet or exceed the purposes of the specific provision of the 2015 rule 
for which the

[[Page 61925]]

variance is being granted (43 CFR 3162.3-3(k)(3)).
    The 2015 rule was immediately challenged in court. The United 
States District Court for the District of Wyoming stayed the 2015 rule 
before it went into effect, and later issued a final order setting 
aside the rule, concluding that it was outside the BLM's statutory 
authority. On appeal, the United States Court of Appeals for the Tenth 
Circuit dismissed the appeal as prudentially unripe, and vacated the 
District Court's final order with instructions for the District Court 
to dismiss the case without prejudice. The plaintiffs have moved for 
rehearing or reconsideration en banc. Briefing on those petitions is 
complete. The Tenth Circuit has not yet issued its mandate to the 
District Court, and thus the 2015 rule has not gone into effect.
    Commenters and a District Court have raised doubts about BLM's 
statutory authority to regulate hydraulic fracturing operations on 
Federal and Indian lands. The BLM believes that it is not only better 
policy to rescind the 2015 rule to relieve operators of duplicative, 
unnecessary, costly and unproductive regulatory burdens, but it also 
eliminates the need for further litigation about BLM's statutory 
authority.
    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 rule, for consistency 
with the policy set forth in section 1 of the Order and, if 
appropriate, take action to lawfully suspend, revise, or rescind those 
rules that are inconsistent with the policy set forth in Executive 
Order 13783.
    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 states that the prudent 
development of these natural resources is ``essential to ensuring the 
Nation's geopolitical security.'' Section 1 finds that it is 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 that the 
policy of the United States is 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.
    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 rule.
    As directed by Executive Order 13783 and Secretarial Order No. 
3349, the BLM conducted a review of the 2015 rule. As a result of this 
review, the BLM believes that the compliance costs associated with the 
2015 rule are not justified.
    In conjunction with its review of the 2015 rule, the BLM analyzed 
the potential economic implications of implementing the 2015 rule and 
this final rule that rescinds the 2015 rule. That analysis is 
documented in the regulatory impact analysis (RIA) document that the 
BLM prepared for this final rule. As described in detail in that RIA, 
the BLM has estimated that this final rule will provide a reduction in 
compliance costs relative to the 2015 rule of up to $9,690 per well or 
approximately $14 million to $34 million per year.
    When issuing the 2015 rule, the BLM acknowledged that it already 
had ``an extensive process in place to ensure that operators conduct 
oil and gas operations in an environmentally sound manner'' and that 
``the regulations and Onshore Orders that have been in place to this 
point have served to provide reasonable certainty of environmentally 
responsible development of oil and gas resources'' (80 FR at 16133 and 
16137). However, in the RIA for the 2015 rule, while noting that many 
of the requirements of the 2015 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 2015 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.
    While the extent of the benefits that the additional assurances 
might provide are questionable, it follows that the rescission of the 
2015 rule could potentially reduce any such assurances. However, 
considering state regulatory programs, the sovereignty of tribes to 
regulate operations on their lands, and the pre-existing Federal 
regulations, the proposed rescission of the 2015 rule would not leave 
hydraulic fracturing operations unregulated.
    The BLM's review of the 2015 rule also included a review of state 
laws and regulations that found that most states are either currently 
regulating hydraulic fracturing or are in the process of establishing 
hydraulic fracturing regulations. When the 2015 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 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.\1\ 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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    \1\ 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 regulates hydraulic fracturing 
operations under 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 
rule.
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    The BLM also now believes that disclosure of the chemical content 
of hydraulic fracturing fluids to state regulatory agencies and/or 
databases

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such as FracFocus is more prevalent than it was in 2015 and, therefore, 
there is no continuing need for a Federal chemical disclosure 
requirement, since companies are already making those disclosures on 
most operations, either to comply with state law or voluntarily. There 
are 25 states that currently use FracFocus for chemical disclosures. 
These include seven states where the BLM has major oil and gas 
operations, including Colorado, Montana, New Mexico, North Dakota, 
Oklahoma, Texas, and Utah.
    In addition to state and tribal regulation of hydraulic fracturing, 
the BLM has several pre-existing regulations that it will continue to 
rely on, some of which are set out at 43 CFR subpart 3162 and in 
Onshore Oil and Gas Orders 1, 2, and 7. These regulations ensure that 
operators conduct oil and gas operations in an environmentally sound 
manner and also reduce the risks associated with hydraulic fracturing 
by providing specific requirements for well permitting; construction, 
casing, and cementing; and disposal of produced water.\2\ 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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    \2\ 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 rule.
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    Prior to the 2015 rule, the regulations at 43 CFR 3162.3-2(a) 
(2014) provided in pertinent part that 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 . 
. . perform nonroutine fracturing jobs . . . .'' In the proposed rule 
that preceded this final rule, the BLM offered to restore the 
regulatory text in Sec.  3162.3-2(a) regarding ``nonroutine fracturing 
jobs'' to exactly as it existed in the pre-2015 rule regulations. Those 
regulations, however, did not define ``nonroutine fracturing jobs'' or 
provide guidance to operators or BLM authorized officers on how to 
distinguish ``routine'' from ``nonroutine.'' Some of the comments that 
were submitted for the proposed rule noted this and criticized the 
regulations for being vague, confusing, and difficult for operators and 
the BLM to apply. In light of these comments, the BLM reconsidered its 
initial proposal to restore the regulation text in section 3162.3-2(a) 
requiring prior approval for ``nonroutine fracturing jobs.''
    As a result of considerable advances in oil and gas development 
technology in the last 20 years, hydraulic fracturing practices that 
would have been considered ``nonroutine'' when the BLM originally 
issued the regulations requiring prior approval for ``nonroutine 
fracturing jobs'' are now commonly utilized and considered ``routine.'' 
The combination of advances in oil and gas development technology and 
the BLM's existing authority to mitigate the potential risks of 
hydraulic fracturing operations through site-specific protective 
measures that are applied as a part of the environmental review and 
approval process at the APD stage has made post-APD approvals for 
``nonroutine fracturing jobs'' at most a very rare occurrence. In fact, 
while the BLM has not been tracking requests for approval of 
``nonroutine fracturing jobs,'' recent inquiries to BLM state offices 
have not revealed any examples of ``nonroutine fracturing'' requests or 
approvals. Thus, given that the ``nonroutine fracturing'' requirement 
has not, and does not seem to serve any purpose, and removing it from 
the regulations could reduce the potential for unproductive confusion 
or paperwork without adverse effects, the BLM has not restored the 
``nonroutine fracturing'' requirement in this final rule.
    The BLM's review of the 2015 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 since promulgation of the 2015 rule. 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 
rule 43 CFR subpart 3162 and Onshore Orders 1, 2, and 7).

I. Background
II. Discussion of the Final Rule and Comments on the Proposed Rule
III. Procedural Matters

I. Background

    The development and production of oil and gas, including hydraulic 
fracturing operations, are regulated under a framework of Federal, 
state, and local laws, and, on some tribal lands, by tribal 
regulations. Several Federal agencies implement Federal laws and 
requirements while each state in which oil and gas is produced has one 
or more regulatory agencies that administer state laws and 
requirements.
    State and local laws apply on Federal lands, except to the extent 
that they are preempted by Federal law. Federal preemption is rare, and 
is not at issue in the final rule. Accordingly, the drilling and 
completion of oil and gas wells, including hydraulic fracturing 
operations, are subject to Federal and state and local regulation on 
Federal lands. If the requirements of a state regulation are more 
stringent than those of a Federal regulation, for example, the operator 
can comply with both the state and the Federal regulation by meeting 
the more stringent state requirement.
    Tribal and Federal laws apply to oil and gas drilling and 
completion operations, including hydraulic fracturing operations, on 
tribal lands. Operators on tribal lands can comply with both tribal and 
Federal regulations governing drilling and completion requirements by 
complying with the stricter of those rules.
    Regardless of any difference in operational regulations, operators 
on Federal lands must comply with all Federal, state, and local 
permitting and reporting requirements. On Indian lands, they must 
comply with all Federal and tribal permitting and reporting 
requirements.

Existing BLM Requirements--Not Affected by This Final Rule

    The BLM has an extensive process in place to ensure that operators 
conduct oil and gas operations in a safe and environmentally sound 
manner that protects resources. The following discussion provides a 
description of some of the BLM's existing processes and requirements 
that are not affected by the rescission of the 2015 rule pursuant to 
this final rule that help to ensure that the risks of oil and gas 
operations, including hydraulic fracturing, are appropriately 
minimized.
    The BLM applies a tiered decision-making approach when providing 
access for the development of Federal oil and gas resources on public 
lands. First, the BLM develops land use plans (the BLM refers to these 
plans as Resource Management Plans, or RMPs). The RMP serves as the 
basis for all land use decisions the BLM makes, including decisions to 
delineate public lands that are appropriate for oil and gas leasing. 
Establishment or revision of an RMP requires preparation of an 
environmental impact statement (EIS) in accordance with the National 
Environmental Policy Act (NEPA). In areas where lands are open for oil 
and gas leasing, the EIS prepared to support establishment or revision 
of the RMP analyzes oil and gas development related impacts that may be 
expected to

[[Page 61927]]

occur over the life of an RMP (typically 20 years). The RMP identifies 
the terms and conditions under which the BLM would allow oil and gas 
development to occur in order to protect other resource values. Those 
terms and conditions may include mitigation measures that would be 
evaluated through the EIS and are implemented as stipulations 
incorporated into oil and gas leases. If necessary, certain lands are 
closed to oil and gas leasing altogether when such use is incompatible 
with sensitive resources or other planned uses. In addition to 
compliance with NEPA, the BLM must comply with the National Historic 
Preservation Act (NHPA), the Endangered Species Act (ESA), and other 
applicable Federal laws and regulations. Once an RMP has been approved, 
the BLM makes land use decisions, including oil and gas development 
decisions, in accordance with the RMP, or any revisions or amendments 
to that RMP.
    Before oil and gas activities may occur on Federal lands, 
interested parties must obtain a lease from the BLM. Oil and gas leases 
are acquired through an auction-style sale process in which interested 
parties typically identify tracts of land that they would like to see 
leased. The BLM will conduct a preliminary evaluation to first 
determine whether the lands nominated for oil and gas leasing are under 
Federal jurisdiction and are open to leasing in accordance with the 
applicable RMP. The BLM will then conduct a second tier of NEPA 
review--typically through an EA--to address potential impacts that 
could be caused by oil and gas development within the nominated lease 
area. The NEPA review conducted at the leasing stage tiers to the EIS 
prepared for the RMP. If the BLM's analysis determines that the 
nominated tracts are suitable for leasing, the BLM would offer the 
tracts for lease during a competitive oil and gas lease sale auction. 
If any of the tracts are not bid upon during the lease sale auction, 
those tracts become available for non-competitive leasing by the first 
qualified applicant for a two year period that begins on the first 
business day following the last day of the lease sale. In addition to 
compliance with the NEPA, the BLM also complies with the NHPA and the 
ESA at the leasing stage. Upon issuance by the BLM, the lease allows 
the operator to conduct operations on the lease subject to the 
requirements of existing regulations, the lease terms and stipulations, 
and the requirement that the operator obtain BLM approval of a site-
specific Application for Permit to Drill (APD).
    When trust or restricted Indian lands are involved, the tribe or 
individual Indian mineral owner plans the uses of their own lands. They 
lease their own oil and gas resources with the consent of the 
Department of the Interior's (``DOI'' or ``the Department'') Bureau of 
Indian Affairs (BIA). Nonetheless, the BLM often serves as a 
cooperating agency during the development of the environmental review 
for such actions. Moreover, pursuant to delegations from the Secretary 
of the Interior (Secretary) and BIA regulations, the BLM regulates oil 
and gas operations on trust and restricted Indian lands, applying the 
same operating regulations that apply on Federal lands.
    The procedures followed when issuing leases to develop Indian oil 
and gas resources may be similar to, or different from, the leasing 
process used for Federal lands, depending upon a number of different 
factors. For example, when tribal oil and gas resources are leased 
under the authority of the Indian Mineral Leasing Act of 1938 (IMLA), 
the BIA typically conducts a competitive lease sale process that shares 
many similarities with the leasing process for Federal lands. In 
contrast, the Indian Mineral Development Act of 1982 (IMDA), allows 
Indian mineral owners to forego the competitive auction-style leasing 
process and negotiate directly with potential operators for agreements 
to develop their oil and gas resources.\3\ However, for both IMLA and 
IMDA authorized leases and agreements, the approval of the Indian 
mineral owner and the BIA or the DOI is required.\4\ Much like with oil 
and gas leasing actions involving Federal lands, authorizations 
pursuant to the IMLA and the IMDA to develop Indian oil and gas 
resources are subject to compliance with applicable Federal statutes, 
including NEPA. The procedures for issuing leases and other development 
agreements for Indian oil and gas resources are outlined in the BIA's 
regulations at 25 CFR parts 211 (IMLA leasing), 212 (agreements for 
allotted lands), and 225 (IMDA agreements).
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    \3\ The IMDA authorizes Indian tribes and individual Indian 
mineral owners to enter into leases, as well as other types of 
agreements, to explore for and develop their oil and gas resources. 
25 U.S.C. 2102(a). Indian allotted lands may also be leased for 
mineral development pursuant to 25 U.S.C. 396.
    \4\ In certain situations, IMDA agreements may only be approved 
by the Secretary of the Interior or the Assistant Secretary for 
Indian Affairs. See 25 U.S.C. 2103(d) and 25 CFR 225.3.
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    The BLM has existing regulations, including Onshore Oil and Gas 
Orders, to ensure that operators conduct oil and gas exploration and 
development in a safe and environmentally responsible manner that 
protects other resources. Sections 3162.3-1 and Onshore Order 1 require 
an operator to get approval from the BLM prior to drilling a well. The 
operator must submit an APD containing all of the information required 
by Onshore Order 1. This includes a completed Form 3160-3, Application 
for Permit to Drill or Re-Enter, a well plat, a drilling plan, a 
surface use plan, bonding information, and an operator certification.
    Upon receiving a drilling proposal on Federal lands, the BLM is 
required by existing section 3162.3-1(g) to post information for public 
inspection for at least 30 days before the BLM can approve the APD. The 
information must include: The company/operator name; the well name/
number; and the well location described to the nearest quarter-quarter 
section (40 acres), or similar land description in the case of lands 
described by metes and bounds, or maps showing the affected lands and 
the location of all tracts to be leased and of all leases already 
issued in the general area.
    The public can review the posted information and provide any input 
they would like the BLM to consider during the environmental analysis 
the BLM prepares prior to making a decision on the APD.
    The drilling plan provided by the operator must be in sufficient 
detail to permit the BLM to complete an appraisal of the technical 
adequacy of, and environmental effects associated with, the proposed 
project. The operator must provide geological information, including 
the name and estimated tops of all geologic groups, formations, 
members, and zones. The operator must also provide the estimated depths 
and thickness of formations, members, or zones potentially containing 
usable water, oil, gas, or prospectively valuable deposits of other 
minerals that the operator expects to encounter, and their plans for 
protecting such resources. The BLM uses this information and the BLM's 
geologists' and engineers' professional reviews to ensure that usable 
water zones are protected.
    The operator must provide minimum specifications for blowout 
prevention equipment that they will use to keep control of well 
pressures encountered while drilling. The BLM evaluates the proposed 
equipment to determine that it is adequate for anticipated pressures 
that the well may encounter in order to prevent loss of control of the 
well and potential environmental issues. The operator must provide a 
proposed casing program, including the size, grade, weight, and setting 
depth of each

[[Page 61928]]

casing string. The BLM engineers evaluate the proposed casing to ensure 
that it is being set at proper depths to protect other resources, 
including usable water. The BLM engineers also ensure that the casing 
size and strength is sufficient for the depths at which it will be set, 
and the pressures that the well will encounter.
    The operator must provide information regarding the proposed 
cementing program. This includes the amount and types of cement the 
operator will use for each casing string, and the expected top of 
cement for each casing string. The cement is critical for the isolation 
and protection of usable water since it is the cement that establishes 
a barrier outside the casing between any hydrocarbon bearing zones and 
usable water zones. The proposed cementing program is the first step 
for this protection. The BLM engineers evaluate the proposed cementing 
program to ensure that the volume and strength of the cement is 
adequate to achieve the desired protections.
    The operator must include in the drilling plan information 
regarding their proposed drilling fluid. The operator must provide the 
type and characteristics of the proposed circulating medium for 
drilling each well bore section, including the quantities and types of 
mud the operator will maintain, and the monitoring equipment the 
operator will utilize on the circulating system. The BLM engineers 
review this information to ensure that the drilling fluid system and 
additives will be compatible and not detrimental to all usable water 
and prospectively valuable mineral zones that the well bore may 
encounter. The operator must also provide their proposed testing, 
logging, and coring procedures. This may include resistivity, gamma 
ray, spontaneous potential, caliper, and neutron logs as well as cement 
evaluation logs. The BLM reviews the proposed logging suite and 
determines if the operator will need to run any additional logs to 
provide additional downhole information.
    The operator's drilling plan must address the expected bottom-hole 
pressure and any anticipated abnormal pressures, temperatures, or 
potential hazards that the well may encounter. Hazards may include lost 
circulation zones, hydrogen sulfide zones, or faults and fractures. The 
operator must also include a plan for mitigating such hazardous. The 
BLM geologists review this information to determine if any other 
anticipated hazards exist. The BLM engineers review this information to 
ensure the proposed mitigation to address any anticipated hazards is 
adequate.
    The operator must include in its drilling plan any other 
information regarding the proposed operation that it would like the BLM 
to consider. This might include, but is not limited to, the directional 
drilling plan for deviated or horizontal wells, which would provide the 
proposed wellbore path. The BLM engineers review the proposed 
directional plan to ensure there will not be any potential issues with 
existing wells.
    The operator's APD must also include a surface use plan of 
operations, or the equivalent required by another surface management 
agency. The surface use plan must contain sufficient details of the 
proposed surface use to provide for safe operations, adequate 
protection of the surface resources, groundwater, and other 
environmental components. The operator must also describe any Best 
Management Practices (BMP) they plan to use. BMPs are state-of-the-art 
mitigation measures applied to oil and natural gas drilling and 
production to help ensure that operators conduct energy development in 
an environmentally responsible manner. BMPs can protect water, 
wildlife, air quality, or landscapes. The BLM encourages operators to 
incorporate BMPs into their plans.
    The operator's surface use plan should follow the BLM's Surface 
Operating Standards and Guidelines for Oil and Gas Exploration and 
Development, which is commonly referred to as The Gold Book.\5\ The BLM 
developed The Gold Book to assist operators by providing information on 
the requirements for obtaining permit approval and conducting 
environmentally responsible oil and gas operations.
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    \5\ The Gold Book is available on the BLM's website, at: https://www.blm.gov/programs/energy-and-minerals/oil-and-gas/operations-and-production/the-gold-book.
---------------------------------------------------------------------------

    The operator's surface use plan must include information regarding 
existing roads they plan to use to access the proposed well location 
and must explain how they will improve or maintain existing roads. The 
surface use plan must also include the operator's plan for any new 
access roads they plan to build. The operator must design roads based 
upon the type of road, the safety requirements, traffic 
characteristics, environmental conditions, and the type of vehicles 
that will use the road. The proposed road description must include: 
Road width, maximum grade, crown design, turnouts, drainage and ditch 
design, on-site and off-site erosion control, revegetation of disturbed 
areas, location and size of culverts and/or bridges, fence cuts and/or 
cattleguards, major cuts and fills, source and storage of topsoil, and 
the type of surface materials that the operator will use.
    The operator must include a map showing all known wells, regardless 
of well status (producing, abandoned, etc.) within a one-mile radius of 
the proposed location. The BLM uses this information to ensure the 
proposal does not conflict with any current surface use. The BLM uses 
this well information to identify any potential downhole conflicts or 
issues between the existing wells and the proposed well. If the BLM 
does identify conflicts, the BLM will require the operator to modify 
their proposal or to submit plans to mitigate the issue.
    The operator must include a map or diagram that shows the location 
of all production facilities and lines they will install if the well is 
successful (i.e., a producing well), as well as any existing 
facilities. This would include all buried oil, water, or gas pipelines 
and all overhead and buried power lines. The BLM reviews this 
information to identify any potential conflicts with the proposed 
facilities.
    The operator must include in their surface use plan information 
concerning the water supply, such as rivers, creeks, springs, lakes, 
ponds, and wells that the operator plans to use for drilling the well. 
This may or may not be the same source of water the operator plans to 
use for their hydraulic fracturing operations. The BLM does not 
regulate water usage, but the BLM does use the information about water 
supply in conducting the environmental analysis of the APD. The BLM 
uses the information to determine if the operator must obtain any 
additional approvals such as a right-of-way across Federal lands that 
may be necessary for the transport of water.
    The operator must include a written description of the methods and 
locations it proposes for safe containment and disposal of each type of 
waste material (e.g., cuttings, garbage, salts, chemicals, sewage, 
etc.) that results from drilling the proposed well. The narrative must 
include plans for the eventual disposal of drilling fluids and any 
produced oil or water recovered during testing operations. The operator 
must describe plans for the construction and lining, if necessary, of 
the reserve pit.
    The surface use plan must include the character, intended use, and 
source of all construction materials, such as sand, gravel, stone, and 
soil material. The operator must identify the location and construction 
method and materials from

[[Page 61929]]

all anticipated ancillary facilities such as camps, airstrips, and 
staging areas. This information will be used to assess the 
environmental impacts of the proposed operations.
    The operator must include a diagram of the proposed well site 
layout. The layout must show the location and orientation of the 
following: The proposed drill pad, the reserve pit/blooie line/flare 
pit location, access road entry points, and the reserve pit showing all 
cuts and fills, the drilling rig, any dikes and ditches to be 
constructed, and topsoil and/or spoil material stockpiles.
    The operator must submit a plan for the surface reclamation or 
stabilization of all disturbed areas. The plan must address interim 
(during production) post-drilling reclamation for the area of the well 
pad not needed for production, as well as final abandonment of the 
location. The plan must include, as appropriate, the following: 
Configuration of the reshaped topography, drainage systems, segregation 
of stockpiles, surface disturbances, backfill requirements, proposals 
for pit closures, redistribution of topsoil, soil treatments, seeding 
or other steps to reestablish vegetation, weed control, and practices 
necessary to reclaim all disturbed areas, including any access roads 
and pipelines.
    If the BLM does not manage the surface, the surface management 
agency must approve the surface use plan according to their respective 
regulations and guidance documents.
    The APD must provide proof of adequate bond coverage as required by 
existing 43 CFR 3104.1 for Federal lands and by 25 CFR 211.24, 212.24, 
and 225.30, for Indian lands. These regulations require the operator or 
the lessee to have an adequate bond in place prior to the BLM's 
approval of the APD. If the BLM determines that the current bond amount 
is not sufficient, the BLM can require additional bond coverage. The 
BLM determines the need for bond increases by considering the 
operator's history of previous violations, the location and depth of 
wells, the total number of wells involved, the age and production 
capability of the field, and any unique or unusual conditions in the 
planned drilling operations or in the surrounding environment.
    Upon receipt of a complete APD, the BLM will schedule an onsite 
inspection with the operator. The purpose of the onsite inspection is 
for the BLM and operator to further identify site-specific resource 
concerns and requirements not originally identified during the 
application stage. Prior to, or in conjunction with, the onsite 
inspection, the BLM or other surface management agency will advise the 
operator if any special inventories or studies are required, such as 
for cultural resources or threatened and endangered species.
    The onsite inspection team will include the BLM, a representative 
of any other surface management agency, the operator or permitting 
agent, and other parties associated with planning work on the project, 
such as the operator's principal dirtwork contractor, agency resource 
specialists, surveyors, and pipeline or utility company 
representatives. When the onsite inspection is on private surface, the 
BLM will invite the surface owner to attend. The purpose of the onsite 
inspection is to discuss the proposal; determine the best location for 
the well, road, and facilities; identify site-specific concerns and 
potential environmental impacts associated with the proposal; and 
discuss the conditions of approval (COA) or possible environmental 
BMPs. If the BLM identifies resource conflicts, the BLM has the 
authority to require the operator to move surface facilities to 
locations that would reduce resource impacts while still allowing 
development of the leased minerals.
    After the BLM has reviewed the operator's proposed plans and 
conducted the onsite inspection, the BLM will prepare an environmental 
impacts analysis document in conformance with the requirements of NEPA, 
and the Department of the Interior's regulations. The extent of the 
environmental analysis process and the time period for issuance of a 
decision on the APD will depend upon the complexity of the proposed 
action and resulting analysis, the significance of the environmental 
effects disclosed, and the completion of appropriate consultation 
processes. In each case, the environmental analysis considers 
environmental concerns and resource issues in the area, including those 
the BLM or operator identified during the onsite inspection, such as 
potentially impacted cultural resources, endangered species, surface 
water, ground water, and other natural resources. A group of resource 
specialists conduct the analysis. The composition of the team depends 
on the resource issues in that area and any resource issues that the 
BLM or operator identified during the onsite inspection. The resource 
specialists may include petroleum engineers, geologists, natural 
resources specialists, wildlife biologists, archeologists, 
hydrologists, soil scientists, botanists, recreation specialists, range 
management specialists, and realty specialists.
    The environmental analysis may be conducted for a single well, a 
group of wells, or for an entire field. The public is welcome to 
provide input to the BLM for inclusion in the analysis. The BLM posts 
notices of all Federal APDs for public inspection in the authorizing 
office and on the internet. For large projects, such as field 
development environmental assessments or environmental impact 
statements, the BLM will go through public scoping and will issue a 
draft analysis for public comment prior to completing the final 
analysis and issuing a decision.
    The environmental analysis will identify potential impacts from the 
proposed action. The BLM will develop any necessary COAs to mitigate 
those potential impacts. If the BLM identifies unacceptable impacts, 
the BLM will ask the operator to modify its proposal, or the BLM may 
deny the application. The BLM will attach the COAs to the approved APD. 
The operator must follow the approved plan and all COAs.
    Upon BLM's approval of an APD, the operator may commence drilling 
of the well. In addition to the approved plan and the COAs attached to 
the APD, the operator must also comply with the requirements of Onshore 
Order 2. Onshore Order 2 details the BLM's uniform national minimum 
standards of performance expected from operators when conducting 
drilling operations on Federal and Indian lands. Many of the 
requirements of Onshore Order 2 ensure the protection of usable water. 
Onshore Order 2 defines ``isolating'' as ``using cement to protect, 
separate, or segregate usable water and mineral resources'' and 
``usable water'' as ``generally those waters containing up to 10,000 
ppm of total dissolved solids.''
    Onshore Order 2 requires that the operator conduct the proposed 
casing and cementing programs as approved to protect and/or isolate all 
usable water zones, lost circulation zones, abnormally pressured zones, 
and any prospectively valuable deposits of minerals. It requires that 
the operator determine the casing setting depths based on all relevant 
factors, including: Presence/absence of hydrocarbons; fracture 
gradients; usable water zones; formation pressures; lost circulation 
zones; other minerals; or other unusual characteristics. It also 
requires the operator to report all indications of usable water.
    Onshore Order 2 requires the operator to run centralizers on the 
bottom 3 joints of surface casing to help ensure the casing is centered 
in the drilled hole prior to cementing. This helps to ensure wellbore 
integrity. It also requires the operator to cement the surface casing

[[Page 61930]]

back to the surface either during the primary cement job or by remedial 
cementing. Cementing the surface casing back to the surface ensures 
that all usable water zones behind the surface casing are isolated and 
protected. Onshore Order 2 requires the operator to wait until the 
cement for all casing strings achieves a minimum of 500 psi compressive 
strength at the casing shoe prior to drilling out the casing shoe. It 
requires the operator to use top plugs during cementing operations to 
reduce contamination of the cement by displacement fluid. It requires 
the operator to use a bottom plug or other acceptable technique, such 
as a preflush fluid, inner string cement method, etc., to help isolate 
the cement from contamination by the mud fluid being displaced ahead of 
the cement slurry. By using proper cementing techniques such as these, 
the operator can complete the cement job as planned and thus protect 
usable water.
    Onshore Order 2 requires the operator to pressure test the casing 
prior to drilling out the casing shoe. This test ensures the integrity 
of the casing. Onshore Order 2 requires the operator to conduct a 
pressure integrity test of each casing shoe on all exploratory wells, 
and on that portion of any well approved for a 5000 psi blowout 
preventer. The operator must conduct this test before drilling 20 feet 
of new hole. The pressure test ensures the integrity of the cement 
around the casing shoe.
    Onshore Order 2 identifies the minimum requirements for blowout 
prevention equipment and the minimum standards for testing the 
equipment. Proper sizing, installation, and testing of the blowout 
prevention equipment ensures that the operator maintains control of the 
well during the drilling process, which is necessary for protection of 
usable water zones.
    The BLM conducts inspections of drilling operations to ensure that 
operators comply with the Onshore Order 2 drilling regulations, the 
approved APD, and the associated COAs. The BLM drilling inspections 
consist of two general types of inspections: Technical and 
environmental. The BLM petroleum engineering technicians conduct 
technical inspections of the drilling operations, such as witnessing 
the running and cementing of the casing, witnessing the testing of the 
blowout prevention equipment, and detailed drilling rig inspections 
that include review of documentation such as the third party cementing 
job ticket, which describes the cementing operation including the type 
and amount of cement used, the cement pump pressures, and the 
observation of cement returns to the surface, if applicable. Through 
witnessing the operation or the review of the documentation, the BLM 
inspectors verify that the drilling operations are conducted in 
accordance with the approved plan and that no wellbore issues exist. 
The BLM natural resource specialists conduct environmental inspections 
of drilling operations. The environmental inspections focus primarily 
on the surface use portion of the approved APD. This includes 
inspection of the access road, the well pad, and any pits. While the 
BLM does not have the budget or personnel available to inspect every 
drilling operation as it is occurring on Federal and Indian minerals, 
the BLM conducts inspections in accordance with an annual strategy to 
ensure compliance with the regulations, lease stipulations, COAs for 
the plan, and permits.
    As described above, the BLM has numerous processes and requirements 
to ensure that operators conduct oil and gas exploration and 
development in an environmentally responsible manner that protects 
mineral and other resources.
    Within 30 days after the operator completes a well, the operator is 
required by Section IV(e) of Onshore Order 1 to submit to the BLM a 
Well Completion or Recompletion Report and Log (Form 3160-4), which 
provides drilling and completion information. This includes the actual 
casing setting depths and the amount of cement the operator used in the 
well along with information regarding the completion interval, such as 
the top and bottom of the formation, the perforated interval, and the 
number and size of perforation holes. The operator is required to 
submit copies of all electric and mechanical logs, including any cement 
evaluation logs, which the operator ran on the well prior to conducting 
completion operations. The BLM reviews this information to ensure that 
the operator set the casing and pumped the cement according to the 
approved permit.
    Once a well goes into production, water is often produced with the 
oil and gas. The produced water tends to be of poor quality and is not 
generally suitable for drinking, livestock, or other uses without 
treatment and, therefore, must be disposed of properly. Onshore Oil and 
Gas Order 7 (Order 7) regulates the disposal of produced water. Under 
Onshore Order 7, operators must apply to the BLM for authorization to 
dispose of produced water by injecting the water into a suitable 
formation, by storing it in pits, or by other methods approved by the 
BLM. If the disposal is into injection wells, the operator must obtain 
approval under the Safe Drinking Water Act's Underground Injection 
Control (UIC) program that is administered by the Environmental 
Protection Agency (EPA). In many states, the EPA has granted primary 
enforcement authority for the UIC program to the state agency 
responsible for oil and gas development. If the water will be stored in 
pits, the BLM requires specific design standards to ensure the water 
does not contaminate the environment or pose a threat to public health 
and safety.
    After a well has been drilled and completed, the BLM continues to 
inspect the well until it has been plugged and abandoned and the 
surface has been rehabilitated. During the production phase of the 
well, the BLM inspections focus on two primary issues: Production and 
the environment. The Federal Government (for Federal leases) or an 
Indian tribe or individual Indian allottee (for Indian leases) receives 
a royalty on the oil and gas removed or sold from the lease based on 
the volume, quality, and value of the oil and gas. Royalties from 
Federal leases are shared with the state as provided by statute. 
Production inspections are done to ensure the volume and quality of the 
oil and gas is accurately measured and properly reported. Environmental 
inspections are done to ensure that well pads and facilities are in 
compliance with regulations, Onshore Orders, and approved permits. 
Environmental inspections include ensuring that pits are properly 
constructed, maintained, and protected from wildlife; identifying 
leaking wells or pipelines; ensuring that the wellsite and facilities 
are properly maintained; and ensuring that proper erosion controls and 
rehabilitation measures are in place.
    When a well has reached the end of its economic life, Federal 
regulations require it to be plugged and abandoned to prevent oil and 
gas from leaking to the surface or contaminating water bearing zones or 
other mineral zones. 43 CFR 3162.3-4. Well abandonment can be requested 
by the operator or required by the BLM. In either case, the operator 
must submit a proposal for well plugging, including the length, 
location, type of cement, and placement method to be used for each 
plug. Onshore Order 2 contains minimum requirements for well plugging. 
The operator must also submit a plan to rehabilitate the surface once 
the well has been plugged. The goal of surface rehabilitation is to 
remove obvious visual evidence of the pad and to promote the long-term 
stability of the site and vegetation.

[[Page 61931]]

    The BLM inspects both well plugging and surface restoration. Well 
plugging inspections are done to ensure the plugs are set into the 
wellbore as approved by the BLM. The inspector will witness the depth 
and volume of cement used in each plug as well as the physical 
verification of the top of each plug. When an operator has complete 
surface restoration, it will notify the BLM. The BLM will send surface 
protection specialists to ensure the restoration is adequate. Once the 
BLM is satisfied with the restoration efforts, the BLM will approve the 
operator's Final Abandonment Notice.

II. Discussion of the Final Rule and Comments on the Proposed Rule

    On July 25, 2017, the BLM proposed to rescind the 2015 final rule 
because we believed that rule was unnecessarily duplicative of state 
and some tribal regulations and imposed burdensome reporting 
requirements and other unjustified costs on the oil and gas industry. 
The 60-day comment period for that proposed rule (the 2017 proposed 
rule) ended on September 25, 2017 (82 FR 34464).

Discussion of Comments by Topic

Water Quality
    Many commenters state that the 2017 proposal, if finalized, will 
have negative impacts on water quality and public health. Commenters 
state that science has shown that hydraulic fracturing can be injurious 
to the natural landscape as well as to human health and safety. 
Commenters state that one danger from hydraulic fracturing is 
contamination of surface water by toxic chemicals that leach off site. 
Another is that the fluids may leak from the well into underground 
aquifers. Commenters assert that contamination on Federal and tribal 
land runs off Federal lands into the water systems that we use and 
seeps into the groundwater we drink.
    The BLM has reviewed incident reports from Federal and Indian wells 
since December 2014. This review indicated that resource damage is 
unlikely to increase by rescinding the 2015 rule because of the rarity 
of adverse environmental impacts that occurred from hydraulic 
fracturing operations before the 2015 rule, and after its promulgation 
while the 2015 rule was not in effect. The BLM believes that the 
appropriate framework for mitigating these impacts is through the 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 review and 
approval of the APDs requires compliance with those existing 
authorities and regulations to ensure protection of the water 
resources, and the local environment.
    Multiple commenters claim that hydraulic fracturing is a dangerous 
practice that can contaminate our air and water, while contributing to 
the release of greenhouse gases. One commenter states that, as the base 
of scientific knowledge regarding risks from hydraulic fracturing 
continues to develop, the evidence continues to build that hydraulic 
fracturing and shale and tight gas development processes pose a wide 
range of risks to human health and the environment. Another commenter 
asserts that no amount of regulation can make hydraulic fracturing 
safe, but that rescinding or weakening the recently updated rules only 
puts our shared resources at greater risk. Further, the commenter 
states that the updated rules are long overdue and simply lay out basic 
standards to follow. Commenters state that the 2015 rule was enacted 
after years of review and should not be weakened or repealed. 
Commenters state that rescinding the 2015 rule would put our Federal 
lands at risk by repealing our first line of defense against 
groundwater contamination.
    The BLM initiated the development of the hydraulic fracturing rule 
in 2010 in response to public concerns. Relatively few states had any 
regulations on hydraulic fracturing at that time. In light of this, a 
BLM regulation covering wellbore integrity and usable water protection 
seemed appropriate at that time. Since promulgation of the 2015 rule, 
however, many states have updated their regulations to address 
hydraulic fracturing operations. The BLM now believes that the 2015 
rule is duplicative of the states' and some tribal regulations, as well 
as some of the BLM's own pre-existing regulations and authorities (pre-
2015 rule 43 CFR subpart 3162 and Onshore Orders 1, 2, and 7), and is 
not necessary.
    Some commenters are concerned that hydraulic fracturing affects the 
availability of water resources. These commenters describe that once 
water is used for hydraulic fracturing, it cannot be returned to the 
water table and that water is a precious resource that should not be 
depleted in this fashion.
    Recycling and reuse of flowback fluids from ongoing hydraulic 
fracturing operations is currently practiced in many states, but the 
majority of recovered fluids are still injected into disposal wells 
regulated under the Safe Drinking Water Act (SDWA). The 2015 rule, 
however, would not have mandated reuse or recycling. Therefore, 
rescinding the 2015 rule will not affect demands on water supplies or 
the reuse or recycling of recovered fluids.
    One commenter states that, although incidents of contamination of 
groundwater from hydraulic fracturing are not frequent, due in part to 
improvements in technology, they have occurred in locations that raise 
concern about the adequacy of protection. In response to comments that 
list examples of studies that find no linkages between hydraulic 
fracturing and groundwater contamination, one comment points to the 
work of a former U.S. EPA scientist linking hydraulic fracturing with 
groundwater contamination. The commenter adds that not all laboratory 
tests have shown contamination of groundwater in areas of hydraulic 
fracturing because standard laboratory tests do not always test for 
exotic, highly water-soluble chemicals used in hydraulic fracturing.
    The referenced study suggested that water wells in Pavillion, WY 
were contaminated with hydraulic fracturing wastes that had been stored 
in unlined pits dug into the ground. The BLM has several existing 
requirements, some of which are set out at 43 CFR subpart 3162 and in 
Onshore Oil and Gas Orders 1, 2, and 7, that allow it to mitigate the 
risks associated with oil and gas operations, including any risks to 
groundwater from hydraulic fracturing operations. The BLM also 
possesses discretionary authority allowing it to impose site-specific 
protective measures reducing the risks associated with hydraulic 
fracturing. The BLM Authorized Officers follow the BLM's regulations 
and authorities to review and approve each APD. Operators also must 
comply with existing state laws and regulations and, on tribal lands, 
tribal laws and regulations, including those that are intended to 
prevent groundwater contamination. The BLM does not believe that the 
2015 final rule would reduce the risks of groundwater contamination to 
an extent that would justify the burdens imposed on operators or the 
BLM by that rule.
    One commenter states that the cost of cleaning groundwater after it 
is contaminated is exorbitant and therefore that circumstances 
potentially causing contamination should be avoided.
    We agree. The BLM Authorized Officers follow the BLM's regulations 
and authorities (pre-2015 rule 43 CFR subpart 3162 and Onshore Orders 
1, 2, and 7) to review and approve each APD. Operators also must comply 
with existing state regulations, or, on tribal lands, tribal laws. 
Those requirements are intended to ensure protection of the

[[Page 61932]]

water resources and prevent any groundwater contamination. We are no 
longer persuaded, though, that the 2015 rule would improve protection 
of groundwater to an extent that would justify the burdens on operators 
or the BLM.
    One commenter takes issue with the statements in the 2017 proposed 
rule that, ``a review of incident reports from Federal and Indian wells 
since December 2014,'' indicates that, ``resource damage is unlikely to 
increase by rescinding the 2015 final rule.'' The commenter asserts 
that the BLM provides no support or explanation for this statement and 
has failed to consider many of the significant adverse environmental 
impacts associated with rescinding the 2015 rule.
    The BLM did not find any increase in the number of incidents 
related to hydraulic fracturing completions in BLM operations since 
December 2014. The EPA study (EPA 2016) on hydraulic fracturing was 
unable to identify any specific activities of hydraulic fracturing 
operations on Federal or Indian lands that impacted the drinking water 
resources, because the study did not distinguish between hydraulic 
fracturing on Federal or Indian lands and hydraulic fracturing on other 
lands.
    One commenter states that he has lived in North Dakota for five 
years and personally witnessed the purposeful dumping of hydraulic 
fracturing water along roads and ditches on the roads leading to 
hydraulic fracturing sites. The commenter states that most of the oil 
and hydraulic fracturing waste spills that happen on or near sites do 
not get reported.
    The 2015 rule did not address open dumping of recovered fluids. 
Neither the 2015 rule, nor this rule, alter the requirement that 
permanent disposal of produced water must be in accordance with an 
approved plan. See Onshore Oil and Gas Order No. 7, 58 FR 47354 (1993). 
Unpermitted dumping of recovered fluids is outside the scope of this 
rulemaking.
    Multiple commenters assert that BLM's rescission of the 2015 rule 
is appropriate because there has been no proven case of groundwater 
contamination from hydraulic fracturing in the United States to date. 
Several commenters state that studies developed by the EPA and U.S. 
Geological Survey (USGS) indicate that hydraulic fracturing has not had 
an impact on groundwater quality. One commenter further states that 
several studies, including an EPA study, a Yale University study, and a 
study funded by the Natural Resources Defense Council, find no 
incidence of contamination of groundwater due to hydraulic fracturing, 
which has been performed on over 1.2 million wells since 1948. Absent 
any confirmed instances of hydraulic fracturing impacting underground 
sources of drinking water, a commenter asserts that there is no 
protective advantage to the environment from the 2015 rule.
    The BLM generally agrees with the commenter. We conclude that state 
and some tribal regulations, in conjunction with the BLM's own pre-
existing regulations and authorities (pre-2015 rule 43 CFR subpart 3162 
and Onshore Orders 1, 2, and 7) have been effective in ensuring 
protection of the water resources and the local environment.
    One commenter states that any studies contained in the BLM's 
original administrative record that suggest that a link exists between 
groundwater contamination and oil and gas production were focused on 
well construction rather than hydraulic fracturing as the cause of the 
contamination. The commenter further states the BLM and each of the 
states in which Federal oil and gas is produced had well construction 
rules prior to the 2015 rule, and that the BLM's administrative record 
does not provide any evidence that a rule focused on hydraulic 
fracturing would improve the degree of protection related to well 
construction.
    The BLM agrees in part. Onshore Oil and Gas Order No. 2 continues 
to apply to the drilling and cementing of oil and gas wells on Federal 
and Indian lands. See 53 FR 46798 (1988). The 2015 rule would have 
imposed additional monitoring, testing, and reporting requirements. In 
the preamble and supporting documents for the 2015 rule, though, the 
BLM cited a few instances where surface or groundwater contamination 
was caused by inter-well communications during the hydraulic fracturing 
operations. Those were not directly linked to wellbore construction, 
but rather caused by geologic fractures and fissures which are 
prevalent in some areas, or by lack of awareness of other wellbores. 
However, the BLM also possesses discretionary authority allowing it to 
impose site-specific protective measures that can be applied when 
necessary to reduce the risks associated with hydraulic fracturing.
    One commenter noted that, in Federal court, an oil company was 
found to have caused permanent and irreparable pollution of the Sac and 
Fox Nation's groundwater by oil and gas activities. As a result of 
ineffective and absent regulatory actions, portions of the Sac and Fox 
Nation's aquifer will be unsafe to drink for generations.
    It appears that the operator in the cited case did not follow the 
conditions of the permit issued by the BLM for the operation, and is 
responsible for the damage. The BLM's 2015 rule would not have 
addressed such issues related to violation of the rule on tribal lands 
and neither would this rule.
    One commenter describes that the 2015 rule would have redefined 
``usable water,'' modifying the term's definition to include ``those 
waters containing up to 10,000 parts per million (ppm) of total 
dissolved solids.'' The commenter asserts a lack of any empirical 
evidence or science-based support for a need to protect water that is 
so saline that it can kill livestock, and asserts that this definition 
would expand the scope of protected waters well beyond EPA's 
regulations under the Safe Drinking Water Act.
    Onshore Oil and Gas Order No. 2, Section II. Y, states that 
``Usable Water means generally those waters containing up to 10,000 ppm 
of total dissolved solids.'' The BLM believes that the standard set 
forth in Onshore Order No. 2 is appropriate and it will continue to 
follow that standard.
Air Quality/Public Health
    One commenter states that there are unsafe levels of air pollution 
at every stage of oil and gas development. Air quality testing at 
hydraulic fracturing sites in several states have revealed levels of 
hydrogen sulfide and volatile organic compounds capable of causing 
respiratory, neurologic, and cardiovascular disease, blood dyscrasias, 
birth defects, and malignancies after chronic and recurrent exposure. 
The commenter claims that we do not yet know the true level of risk 
related to air contamination for workers, neighboring families and 
communities. The commenter asserts that flowback, even when stored in 
closed tanks, can liberate toxic volatile pollutants (such as 
carcinogenic benzene) at very high concentrations into the atmosphere. 
The commenter states that workers should be wearing respirator masks to 
minimize serious health consequences.
    In response to that comment, the BLM notes that the 2015 rule would 
have generally required recovered fluids to be stored in tanks until a 
permanent disposal plan was approved, but allowed for exceptions and 
did not require closed or vapor-recovery systems. The 2015 rule was 
never intended to be an air quality or emissions regulation. Health 
effects from air emissions and mitigation measures were not addressed 
in the 2015 rule and are outside the scope of this rule. Air quality 
and worker safety

[[Page 61933]]

are regulated by other Federal, state, or tribal agencies.
    One commenter states that a new form of hydraulic fracturing-
related air pollution may be increased levels of indoor radon 
concentration (the number one cause of lung cancer among non-smokers) 
in homes located in areas where hydraulic fracturing is used to extract 
natural gas from shale formations. The commenter highlights that a 
peer-reviewed study published in May 2015 by the National Institute of 
Environmental Health Sciences, ``Predictors of Indoor Radon 
Concentrations in Pennsylvania, 1989-2013,'' documents a progressive 
upward trend in ambient radon levels between 2005 and 2013 coincident 
with the onset of hydraulic fracturing in Pennsylvania. The commenter 
noted that, at present, there are no state or Federal regulations 
addressing this newly discovered association.
    In response to that comment, the BLM notes that the 2015 rule did 
not address radon concentrations, and rescinding that rule will not 
affect radon concentrations. Radon ``association'' with hydraulic 
fracturing operations is outside the scope of this rulemaking.
    One commenter states that unsafe levels of air pollution found near 
hydraulic fracturing sites are largely ignored by Federal and state 
agencies. The commenter suggest that, to remedy this, monitoring of 
pollution emissions, air testing of communities, and strict standards 
to limit pollution are sorely needed and should replace patchy, 
inadequate state protections that do not do enough to safeguard 
communities that are increasingly exposed to the deadly consequences of 
poorly regulated hydraulic fracturing sprawl. Another commenter states 
that diesel emissions from heavy trucks and machinery used during well 
site preparation, drilling, and production contain toxins and release 
diesel soot particles, which increase health risks including: Asthma 
attacks, cardiopulmonary disease, respiratory disease, pregnancy 
complications, and premature death. In addition, the commenter states 
that inhaling respirable silica can cause silicosis and lung cancer in 
miners, sandblasters, and foundry workers. The commenter further notes 
that, due in large part to methane leakage and venting, the greenhouse 
gas footprint of shale gas is larger than the footprint of oil, 
conventional gas, and even coal.
    These comments are outside the scope of the present rulemaking 
action. Neither the 2015 rule nor this rescission will cause air 
pollution, fugitive dust, or greenhouse gas emissions to be greater or 
less. Air quality monitoring and emissions standards are regulated by 
other agencies.
    In addition to air and water pollution, one commenter expressed 
concern about externalities of drilling operations, such as noise 
pollution and odors, which should be kept within tolerance levels as 
drilling expands to areas where more people live.
    This comment is outside the scope of this rulemaking because it 
addresses oil and gas development in general and fails to assert any 
specific alternative approach or change from the 2017 proposed rule 
that the BLM should have considered in this final rule with respect to 
the regulation of hydraulic fracturing operations on Federal and Indian 
lands.
Chemical Disclosure
    In this section, we describe the comments the BLM received 
regarding chemical disclosure and respond to them all in the final 
paragraph of the section.
    Some commenters are concerned that rescinding the 2015 rule will 
result in chemicals used in the hydraulic fracturing process not being 
disclosed by operators. Commenters state that, as the Federal lands 
managed by the BLM are public lands, the public has a right to clearly 
understand what is occurring on them and any potential impacts that 
those activities could have on water resources. One commenter notes 
that a recent study conducted by the Yale School of Public Health found 
that, of the compounds used in hydraulic fracturing that they could 
identify and study, 44 percent of the water pollutants and 60 percent 
of air pollutants were either confirmed or possible carcinogens. 
Although these compounds often make up only a small percentage of the 
total volume of the fluid, many are known to be toxic to humans at 
levels as low as five parts per billion. The commenter suggests that 
the 2015 rule would help to ensure proper handling and would mitigate 
potential exposure and impacts to public health from hydraulic 
fracturing. Another commenter describes a 2015 report published by the 
EPA that stated that well operators refused to disclose 11 percent of 
their ingredient records, citing them as confidential business 
information. Furthermore, one or more ingredients in more than 70 
percent of disclosures were omitted, according to the commenter.
    One comment referred to a 2016 article entitled, ``Hydraulic 
Fracturing Chemicals Reporting: Analysis of Available Data and 
recommendations for Policy Makers,'' which highlighted that 16.5 
percent of chemicals used in hydraulic fracturing between the years 
2012 and 2015 were unreported.
    One commenter expressed concern regarding the BLM's reliance on a 
third party (FracFocus) to replace specific transparency and public 
accountability. In response to commenters on the 2015 rule, the BLM 
stated that, ``compliance with these rules will increase transparency 
of the hydraulic fracturing approval process and provide a means for 
disclosure to the public of the fluids utilized in the hydraulic 
fracturing process.'' The commenter complains that the BLM now states 
that disclosure of the chemical content of hydraulic fracturing fluids 
to states or databases, such as FracFocus, is more prevalent than it 
was in 2015 and so there is no need for a Federal chemical disclosure 
requirement. The commenter asserts that the slight shift in reporting 
frameworks is insufficient justification to remove regulations that 
promote administrative transparency and public disclosure of 
potentially harmful chemicals. Furthermore, the commenter stated that 
the BLM has yet to respond to questions from the Secretary of Energy's 
Advisory Board raised in 2015 with respect to technical issues with 
FracFocus, including a lack of verification for data accuracy.
    One commenter states that the BLM's analysis of state requirements 
for chemical disclosure indicates that all states reviewed require 
chemical disclosure of hydraulic fracturing fluids to FracFocus (with 
the possible exception of New Mexico). The commenter states that the 
BLM rule, however, requires much more than just disclosure of chemicals 
used in the fracturing fluid. The commenter asserts that California is 
the only state that has equivalent requirements for each of the 
elements that had been required in the 2015 rule and the only other 
state that has any equivalent requirements is Wyoming.
    One commenter states that radioactive substances are used in 
hydraulic fracturing fluid to determine the injection profile and 
location of fractures created by hydraulic fracturing. The commenter 
asserts that these chemicals should be heavily regulated as a matter of 
national security and that all chemicals onsite should be identified 
and reported by the operator. The commenter states that the contents of 
all materials and quantities injected into the wells should be 
documented, reported, and provided upon request. The commenter states 
that polluters should not remain unidentified because the identifying 
features of the injected slurry are protected as ``trade secrets.''

[[Page 61934]]

    Some commenters assert that it is not burdensome to require the oil 
and gas industry to disclose the chemicals they are pumping into the 
ground in order to extract petroleum.
    In response to all of the foregoing comments in this section, 
although we agree that the information is readily available to the 
operators or their contractors, we are no longer convinced that a BLM 
regulatory requirement would improve access to that information 
sufficiently to justify the cost of compliance.
    Most states with existing oil and gas operations now have 
regulations that require operators to disclose the chemical content of 
hydraulic fracturing fluids to either a publicly accessible forum, such 
as FracFocus, state regulatory agencies, or both. This includes the 
States of California, Colorado, Montana, New Mexico, North Dakota, 
Oklahoma, Texas, Utah, and Wyoming, which accounted for approximately 
99 percent of the total well completions on Federal and Indian lands 
from fiscal year (FY) 2010 to 2016. In addition, there are 25 states 
that currently use FracFocus for chemical disclosures. These include 
seven states, Colorado, Montana, New Mexico, North Dakota, Oklahoma, 
Texas, and Utah, with substantial BLM administered oil and gas 
operations. The BLM now believes that the 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 duplicate Federal chemical 
disclosure requirement, since companies are already making those 
disclosures on most of the operations, either to comply with state law 
or voluntarily. Furthermore, the 2015 rule did not require disclosure 
of trade secrets. See generally, 18 U.S.C. 1905; 43 CFR 3162.3-3(j) 
(2016). Therefore, there is no reason to believe that rescinding the 
2015 rule will cause operators to withhold more confidential 
information about chemicals used in hydraulic fracturing operations. To 
the extent that the comments address control of hazardous substances 
generally, they are beyond the scope of this rulemaking.
Earthquakes
    Some commenters suggest that there is a link between earthquakes 
and hydraulic fracturing of rock formations. One commenter states that 
significant seismic activity is allowed without any state or Federal 
constraints. Commenters suggest a link between hydraulic fracturing and 
wastewater injection and earthquakes in Oklahoma and Ohio. Several 
commenters describe a 2016 study that cautioned that hydraulic 
fracturing in the United States may be causing higher-than-recognized 
induced earthquake activity that is being masked by more abundant 
wastewater-induced earthquakes. The commenters assert that the 
injection of oil and gas wastewater, often associated with hydraulic 
fracturing, has been linked to the dangerous proliferation of 
earthquakes, including damaging earthquakes in many parts of the 
country.
    In addition, one commenter asserts that the hydraulic fracturing 
industry has burdened tribal businesses and homeowners that have to pay 
to repair damages inflicted by these earthquakes. The commenter asserts 
that induced seismicity prevents tribal members from access to 
Department of Housing and Urban Development (HUD) funds for home 
construction in areas that are now unable to be adequately insured for 
earthquake damage.
    In response to the comments, U.S. Geological Survey research 
indicates that most induced seismicity has been linked to wastewater 
injection, and seldom to hydraulic fracturing operations. While the 
2015 rule contains provisions regarding the storage of recovered 
fluids, it did not include any provisions regarding wastewater disposal 
by underground injection, which is regulated under the SDWA by the EPA 
or an approved state or tribe. The 2015 rule also did not change the 
provisions of 43 CFR 3162.3-2 that apply to injection activities. 
Pursuant to Onshore Order 7, operators must submit a wastewater 
disposal plan prior to commencing operations, and they must provide the 
BLM with a permit from the EPA, state or tribe along with this plan. 
Even if hydraulic fracturing operations were found to cause damaging 
seismicity, the 2015 rule would not have controlled the effect, and, 
therefore, rescinding that rule will not increase the likelihood of 
seismicity damage.
Rule Authorities
    Commenters expressed a variety of opinions about whether the BLM 
has statutory authority to regulate hydraulic fracturing operations on 
Federal and Indian lands. This section of the preamble first summarizes 
the arguments for the BLM's statutory authority (and duty) and responds 
to them. It next summarizes the arguments against the BLM's authority 
and responds to them.
    Some commenters assert that the BLM has clear authority to regulate 
hydraulic fracturing while other commenters disagree. More 
specifically, some commenters state that the BLM issued the 2015 rule 
as part of carrying out its statutory duties to prevent unnecessary or 
undue degradation of public lands consistent with 43 U.S.C. 1732(b) and 
to issue ``comprehensive'' regulations ``necessary to implement the 
provisions'' of FLPMA, and to ``carry out the purposes of [FLPMA] and 
of other laws applicable to the public lands.'' In addition, the 
commenters state that, under the MLA, Congress charged the BLM with 
ensuring that Federal lessees conduct their operations with 
``reasonable diligence, skill and care,'' and instructed the BLM to 
protect the ``interests of the United States'' and ``the public 
welfare.'' The commenters state that Congress authorized the BLM to 
``prescribe necessary and proper rules and regulations and to do any 
and all things necessary to carry out and accomplish the purposes'' of 
the MLA. These commenters conclude that the 2015 rule is consistent 
with the BLM's duties under FLPMA and MLA.
    Similarly, some commenters state that BLM lands are multiple use 
lands that must fulfill not only resource acquisition goals but public 
recreation and public benefit goals. The commenters state that actions 
must be consistent with all the uses of BLM property and the BLM cannot 
make this determination without the information requested in the 2015 
rule. Some commenters assert that activity on public lands must be 
regulated consistently across the nation, especially when activities 
may affect the ability of the BLM to uphold its multiple use mandate. 
Some commenters argue that the proposed action indicates a preference 
for oil and gas leasing and development over other multiple uses. The 
commenters argue that this mandate prohibits DOI from managing public 
lands primarily for energy development or in a manner that unduly or 
unnecessarily degrades other uses.
    Some commenters state that the proposed rescission rule is 
inconsistent with the BLM's statutory duties under FLPMA, the MLA, and 
the IMLA. The commenters state that the BLM concluded in 2015 that the 
requirements of the 2015 rule were necessary to meet those obligations. 
The commenters assert that the BLM's proposed reversal of the 2015 rule 
is not permissible under FLPMA and other laws because the BLM failed to 
explain its departures from the factual conclusions it drew when 
promulgating the rule in 2015.
    Similarly, some commenters state that it is a dereliction of duty 
to abdicate the responsibility of management of the

[[Page 61935]]

appropriate and proper use of public lands to the states. Commenters 
state that they rely on BLM oversight to manage the use of these public 
lands for the benefit of all Americans, not just the profits of oil and 
natural gas companies. Commenters assert that the 2017 proposed rule, 
if finalized, is guided by the short term interests of a few at the 
expense of long-term efforts to protect our lands and most importantly, 
our water.
    We agree in part with the comments in the previous four paragraphs. 
The BLM's actions related to oil and gas operations on Federal land are 
subject to FLPMA, MLA, the Mineral Leasing Act for Acquired Lands 
(MLAAL), and other statutes. FLPMA prescribes that the public lands are 
to be managed for multiple use and sustained yield, and that the BLM is 
to prevent unnecessary or undue degradation. The MLA requires that 
Federal oil and gas leases include provisions to ensure the exercise of 
reasonable diligence, skill, and care in operations. No court, however, 
has held that FLPMA requires BLM to manage each acre of public land to 
support all uses at all times. Rather, oil and gas operations are 
statutorily authorized uses of the Federal lands, and thus may be 
thought of as ``necessary or due'' degradation when conducted according 
to appropriate standards for protection of the lands and associated 
resources.
    With respect to legal duties, no statute requires the BLM to 
regulate hydraulic fracturing operations, and no statute requires all 
oil and gas operations on Federal lands to be subject to the same 
regulations. (Indeed, lease stipulations and COAs are often different 
in different areas to address local conditions.) Rather, the contents 
of operating regulations are within the discretion of the Secretary. 
Mineral Policy Ctr. v. Norton, 292 F. Supp. 2d 30, 44-45 (D.D.C. 2003). 
State laws have always applied to oil and gas operations on public 
lands, even when those laws differ from one another. Particularly 
where, as here, there is no compelling indication that modern state 
regulations are allowing unnecessary or undue degradation to the public 
lands, the Secretary is within his discretion to decide that rescinding 
the 2015 rule would reduce the burdens both on operators and the BLM, 
with little reduction in the protection of those lands.
    This final rule represents no dereliction of duty. See generally, 
Gardner v. BLM, 638 F.3d 1217, 1222 (9th Cir. 2011). Furthermore, it 
has nothing to do with decisions about which Federal lands to open for 
leasing, or which parcels to be offered for lease. Private, for-profit, 
development of oil and gas on Federal lands is authorized by the MLA, 
the MLAAL, and other statutes, and thus objections to those 
authorizations are outside the scope of this rulemaking.
    Other commenters assert that the BLM lacked authority to issue the 
2015 rule. Some commenters argue that Congress has not delegated 
authority to the BLM to regulate hydraulic fracturing and has granted 
only limited authority to the EPA to regulate hydraulic fracturing 
under the Safe Drinking Water Act (SDWA). Another commenter states that 
the BLM concedes that it cannot regulate enhanced oil recovery, 
disposal wells, or hydraulic fracturing using diesel because Congress 
has designated the EPA as the agency with regulatory authority over 
those forms of underground injection in the SDWA, and the same 
conclusion should apply with respect to non-diesel hydraulic 
fracturing.
    Some commenters argue that the 2015 final rule requirement to 
submit water source and recovered fluid disposal method encroaches upon 
state jurisdiction over waters of the state and over underground 
injection control covered in the primacy agreement between North Dakota 
and the EPA in 1983.
    A commenter asserts that North Dakota has a large number of 
``split-estate'' tracts where the Federal minerals have been severed 
from the surface estate, which is owned by either the State of North 
Dakota or private parties. The commenter argues that the 2015 final 
rule inappropriately broadened BLM's authority to regulate surface 
operations for hydraulically fractured wells that penetrate Federal 
minerals, but where the United States does not own the surface.
    With few exceptions, the arguments described in the previous three 
paragraphs were raised in the litigation challenging the 2015 rule. We 
believe that rescinding the 2015 rule alleviates these concerns and, 
therefore, the BLM need not address them here. The more immediate point 
is that the BLM has authority to rescind the 2015 rule, and to restore 
the regulations existing prior to the 2015 rule with the few exceptions 
previously discussed. Those regulations were promulgated in 1982 and 
amended in 1988. See 43 CFR 3612.3-2 (2014); 47 FR 47765 (1982); 48 FR 
36583 (1983); 52 FR 5391 (1987); 53 FR 17363 (1988); 53 FR 22847 
(1988). No commenter provided evidence that this rescission would 
interfere with the regulation of underground injections by states, 
tribes, or the EPA under the SDWA (as amended). The BLM does not 
regulate disposal wells; but BLM's authorization is required for use of 
BLM-managed surface for a disposal well. Other ``enhanced recovery'' 
operations are also outside the scope of this rulemaking. Aside from 
``split estates'' being common in several states where the BLM 
regulates oil and gas operations, no commenter provided evidence that 
rescission of the 2015 rule would be ``inappropriate'' as applied to 
split-estate lands. If after this rescission of the 2015 rule, the BLM 
needs to approve an operation that would, for example, require 
substantial quantities of water, the requirements of NEPA and the 
applicable regulations would apply.
    One commenter states that, regardless of the 2015 rule, the BLM 
already has the ability to impose additional conditions related to 
hydraulic fracturing on operators. This includes the authority to 
require the submission of additional information in relation to the 
permitting process as well as the ability to require that specific 
actions be taken by operators on-site to minimize environmental impacts 
and ensure site safety and security. The commenter states that the 
agency has broad authority to collect information. The commenter also 
noted that, pursuant to 43 CFR 3160.0-9, the BLM may request data so 
that proposed operations may be approved or to enable the monitoring of 
compliance with granted approvals, and operators must respond to such 
requests as a condition of Federal oil and gas leases and as a 
precondition to issuance of a permit to drill. Finally, the commenter 
notes that the BLM also has the authority to require operators to take 
specific actions when developing a lease.
    The commenter is essentially correct. After this rescission, the 
BLM will continue to responsibly use its authorities to carry out its 
duties under the applicable statutes and regulations.
    One commenter criticizes the BLM's intention to restore the 
regulations under which prior approval is required for ``non-routine'' 
hydraulic fracturing operations. 43 CFR. 3162.3-2 (2014). The commenter 
asserts that the BLM has never treated the ``fracturing'' referred to 
in 43 CFR. 3162.3-2 as equivalent to hydraulic fracturing. The 
commenter further argues that proponents of the 2015 rule have 
recognized that under 43 CFR. 3162.3-2 ``companies generally treated 
all hydraulic fracturing operations as routine'' and the BLM did not 
exercise approval authority over hydraulic fracturing.
    In response to this and other similar comments, the BLM 
reconsidered its proposal to restore the regulatory text in

[[Page 61936]]

43 CFR 3162.3-2(a) (2014) requiring prior approval for ``nonroutine 
fracturing jobs.'' As a result of this review, the BLM decided not to 
restore the ``nonroutine fracturing'' requirement in this final rule.
    As previously mentioned, prior to the 2015 rule, the regulations at 
43 CFR 3162.3-2(a) (2014) provided in pertinent part that 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 . . . perform nonroutine fracturing jobs. . . .'' Those 
regulations, however, did not define ``nonroutine fracturing jobs'' or 
provide guidance to operators or the BLM authorized officers on how to 
distinguish ``routine'' from ``nonroutine.''
    The BLM further notes that as a result of considerable advances in 
oil and gas development technology in the last 20 years, hydraulic 
fracturing practices that would have been considered ``nonroutine'' 
when the BLM originally issued the regulations requiring prior approval 
for ``nonroutine fracturing jobs'' are now commonly employed and 
considered ``routine.'' The combination of advances in oil and gas 
development technology and the BLM's existing authority to mitigate the 
potential risks of hydraulic fracturing operations through site-
specific protective measures that are applied as a part of the 
environmental review and approval process at the APD stage has made 
post-APD approvals for ``nonroutine fracturing jobs'' at most a very 
rare occurrence. In fact, while the BLM has not been tracking requests 
for approval of ``nonroutine fracturing jobs,'' recent inquiries to BLM 
state offices have not revealed any examples of ``nonroutine 
fracturing'' requests or approvals. Thus, given that the ``nonroutine 
fracturing'' requirement has not, and will not foreseeably serve any 
purpose, and that removing it from the regulations could reduce the 
potential for unproductive confusion or paperwork without adverse 
effects, the BLM has removed ``nonroutine fracturing'' from 43 CFR 
3162.3-2(a) in this final rule.
    As for whether the word ``fracturing'' in 43 CFR 3162.3-2 (2014), 
includes hydraulic fracturing, both the plain meaning and its use in 
the industry, includes ``hydraulic fracturing.'' See, e.g., Williams & 
Myers Manual of Oil and Gas Terms, p. 420 (10th ed. 1997) (quoting 
American Gas Ass'n, Glossary for the Gas Industry (3d ed. 1981)). The 
BLM has always interpreted that regulation to include hydraulic 
fracturing. The commenter does not offer any other rational 
interpretation. Therefore, including ``routine fracturing'' in the 
restored section 3162.3-2(b) makes plain that an operator does not need 
the BLM's prior approval for hydraulic fracturing operations, except 
those that involve increased surface disturbance or that do not conform 
to the standard of prudent operating practice.
Adequacy of Existing Regulations and Industry Practices
    The following paragraphs summarize comments regarding whether 
existing regulations and industry practices are adequate to protect 
public lands. We first summarize and respond to comments critical of 
the existing regulations and industry practices, and opposed to 
rescission of the 2015 rule. Then we summarize and respond to comments 
arguing that existing state and Federal regulations and industry 
practices provide adequate protection for federal lands and associated 
resources, and in favor of rescission of the 2015 rule.
    Multiple commenters state that when the BLM rescinds the 2015 rule, 
regulations would be as they existed prior to adoption of the 2015 
rule. One commenter states that it is apparent that almost no oversight 
of hydraulic fracturing was required prior to the 2015 rule, however, 
and that the inadequacy of the prior regulation for dealing with issues 
related to hydraulic fracturing was noted in the rulemaking process for 
the development of the 2015 rule. The commenter states that the prior 
regulations required that the BLM approve proposals for ``further well 
operations,'' which included ``nonroutine fracturing jobs'' and eight 
other activities. The commenter states that no BLM approval was 
required for ``routine fracturing'' jobs unless there was additional 
surface disturbance. However, the commenter states that ``nonroutine 
fracturing jobs'' was not a defined term and the BLM proposes to 
continue to not define the term. The commenter states that the lack of 
defined distinction between nonroutine hydraulic fracturing jobs and 
routine hydraulic fracturing jobs made ``this distinction functionally 
difficult to apply and confusing for both the agency and those 
attempting to comply with the regulations.'' The commenter states that 
the BLM therefore acknowledges that almost all fracturing operations 
were deemed routine and not requiring approval from the BLM prior to 
commencing operations. A separate commenter notes that this ``pre-
existing authority'' clearly existed at the time the 2015 rule was 
promulgated and fails to provide a valid basis for the BLM's change in 
position.
    Multiple commenters express concern that state laws are 
insufficient to regulate hydraulic fracturing activities. The 
commenters state that, while some states have requirements regarding 
particular issues that are equivalent to the 2015 rule, many gaps in 
regulation remain. The commenters state that each state has areas where 
its regulations are weaker than the 2015 rule, and no state requires 
the same best practices across the board. The BLM should keep the 2015 
rule in place to ensure consistent protections across the dozens of 
states with existing Federal oil and gas leases. One commenter notes 
that, if the BLM recognizes that certain states have less comprehensive 
regulations and enforcement mechanisms, it necessarily concedes that 
the legal framework within those states will not provide the same 
protections as the regulations promulgated by the 2015 rule and 
therefore that the 2015 rule is not duplicative of state regulations. 
Another commenter offers that the 2015 rule provided specific direction 
to states on how to protect groundwater and other resources and set 
forth a common standard of environmental protection at hydraulic 
fracturing sites and brought together requirements for a set of 
environmentally protective requirements that could be easily referenced 
in one place for consistent implementation.
    Multiple commenters argue that the BLM's analysis of state 
regulations included in the RIA suggests the 2015 rule is not 
redundant. In particular, two commenters highlight that the BLM, in its 
discussion of the mechanical integrity test requirement, states it ``is 
an industry recommended practice and is required by almost all of the 
states whose regulations we reviewed.'' One commenter states that the 
BLM rule requires operators to perform a successful mechanical 
integrity test prior to fracturing at a test pressure equal to that 
which will be applied during the actual fracturing operation and that 
the applied pressure must hold for 30 minutes with no more than a 10 
percent pressure loss. The commenter states that only California and 
Montana have rules that include these requirements. The commenter 
states that similar issues exist with regard to the annulus pressure 
monitoring and reporting provisions. The commenter states further that, 
in its analysis of state regulations for monitoring pressure during 
hydraulic fracturing operations, the BLM claims that all states 
reviewed, other than New Mexico, Oklahoma, and Utah, explicitly require 
monitoring

[[Page 61937]]

during fracturing operations. The commenter states that, as with state 
mechanical integrity test rules, the mere presence of a rule is not 
sufficient. Rather, the commenter states, the substance of state rules 
must be analyzed to determine whether state rules contain safeguards 
equivalent to the BLM rule. In addition, with respect to review of the 
storage tank requirements, some commenters state that the BLM 
acknowledges that ``Although the use of tanks is reportedly common, 
only 5 out of the 9 states in our in-depth regulatory review had 
requirements specifying that operators must use tanks.''
    One commenter asserts that the fact that all 32 states currently 
with Federal oil and gas leases now have laws or regulations that 
address hydraulic fracturing operations in no way indicates those 
regulations are sufficient to fulfill the stipulations under Executive 
Order 13783, Promoting Energy Independence and Economic Growth. Another 
commenter highlighted that despite the existence of state requirements, 
the BLM explained in 2015 that ``a major impetus for a separate BLM 
rule is that states are not legally required to meet the stewardship 
standards that apply to public lands and do not have trust 
responsibilities for Indian lands under Federal laws.'' 80 FR 16133; 
see id. at 16154. The commenters assert that ``an additional 12 states 
have introduced laws or regulations'' regarding hydraulic fracturing is 
a natural consequence of the significant public concern about the 
practice, but does not obviate the need for Federal regulatory 
standards that promote the responsible development of public lands and 
fulfill BLM's own independent statutory duties to ensure that oil and 
gas operations on Federal and Indian lands are performed in a safe, 
responsible, and environmentally protective manner.
    One commenter states that, unlike BLM's 2015 rule, many states do 
not require operators to obtain a permit specifically for fracturing 
operations. The commenter notes that, of the states the BLM reviewed in 
the RIA, only California, Montana, and Wyoming require a permit for 
fracturing operations. The commenter notes that Oklahoma and Colorado 
require notification before fracturing, while New Mexico, North Dakota, 
Texas, and Utah require neither a permit nor advanced notification. The 
commenter states that this is a significant difference between state 
regulations and the 2015 rule.
    One commenter specifically claims that New Mexico is second only to 
Wyoming in the number of producing oil and natural gas leases on 
federally managed land, yet state regulations lack important safeguards 
included in the 2015 rule. The commenter notes that, for example, New 
Mexico's hydraulic fracturing regulations do not include measures to 
prevent ``frack hits,'' which occur when the hydraulic fracturing of 
one well causes a pressure transfer that interferes with production in 
another well. The commenter states that, as acknowledged in the EA for 
the rescission of this rule, these frack hits pose a tangible threat to 
water resources and the ecological integrity of public land subjected 
to excessive and haphazard drilling.
    One commenter contends that the 2015 rule contains two essential 
safety components: Wellbore testing prior to hydraulic fracturing and 
storage of flowback waste in tanks rather than pits. The commenter 
states that these two areas, if not adequately regulated, present 
significant risks of environmental contamination. The commenter asserts 
that the 2015 rule represented improvements over existing Federal and 
Colorado state rules in these areas. The commenter states that, in 
proposing to rescind them, the BLM clearly recognized what researchers 
have also concluded: Hydraulic fracturing poses pollution risks to air, 
soil and water that are highly correlated with failure to ensure 
wellbore integrity and pit storage of waste. The commenter states that 
the 2015 rule is the BLM's best determination, based on its own 
expertise and expert outside input, for preventing such contamination 
and the rule should therefore not be rescinded.
    One commenter stated that BLM's suggestion that a major expansion 
of state regulation has occurred since 2015 is misleading because the 
states with new regulations represent an insignificant fraction of 
Federal oil and gas development.
    One commenter states that the Appendix to the EA for the proposed 
rule showed that the new state regulations lack many of the protections 
imposed by the 2015 rule. The commenter states that, for example, most 
state regulations do not mandate the use of tanks instead of open pits, 
do not require measures to prevent frack hits, and do not require the 
same measures to ensure adequate cementing.
    One commenter said that the BLM assumes substantial continued use 
of storage tanks by operators in many states even after the rule is 
rescinded, although this is implausible. The commenter states that, for 
example, the BLM assumes that 100 percent of operators in Texas and New 
Mexico will use tanks even after rescission because of state 
regulations despite the fact that both states allow exemptions to their 
regulatory standards. The commenter states that the BLM also assumes 
100 percent voluntary compliance in Utah despite the state's 
``unclear'' standards, and 92 percent voluntary compliance in Wyoming. 
The commenter states that the estimation of voluntary compliance rates 
is based partly on the fact that ``tanks are likely to be less costly 
than pits on smaller and medium volume jobs.'' The commenter states 
that without a Federal regulatory backstop, past voluntary compliance 
rates and past evidence of job size in particular states do not 
guarantee the continued use of tanks in the future.
    In response to the foregoing paragraphs in this section, when 
issuing the 2015 rule, the BLM acknowledged that it already had ``an 
extensive process in place to ensure that operators conduct oil and gas 
operations in an environmentally sound manner that protects resources'' 
(80 FR 16133). At that time, the BLM also noted that while ``the 
regulations and Onshore Orders that have been in place to this point 
have served to provide reasonable certainty of environmentally 
responsible development of oil and gas resources . . .,'' the 2015 rule 
``will complement these existing rules by providing further assurance'' 
that hydraulic fracturing operations are conducted in an 
environmentally responsible manner across all public and Indian lands 
(id. at 16137). However, as previously noted, in accordance with 
Executive Order 13783 and Secretarial Order No. 3349, the BLM recently 
conducted a review of the 2015 rule, existing state laws and 
regulations, existing Federal authorities and recent incident reports 
submitted to the BLM for Federal and Indian oil and gas operations. As 
a result of this review, the BLM now believes that the 2015 rule 
imposes unnecessary and unjustified compliance costs and burdens. 
Moreover, in light of state regulatory programs, the sovereignty of 
tribes to regulate oil and gas operations on their lands, and the BLM's 
pre-existing regulations and Onshore Oil and Gas Orders and other 
Federal authorities, the rescission of the 2015 rule will not lead to 
poorly regulated oil and gas development activities, including 
hydraulic fracturing operations, on Federal and Indian lands. State 
regulatory programs can more readily address local conditions than may 
the BLM's rules. Thus, the fact that state rules differ from each other 
and are not identical to the 2015 rule do not render state programs 
ineffective, or the

[[Page 61938]]

2015 rule essential. Furthermore, as expressed in the Executive Orders, 
it is this Administration's policy to reduce unnecessary regulatory 
burdens on energy development. Based on the rarity of adverse 
environmental impacts that have occurred from hydraulic fracturing 
operations before the 2015 rule, and the lack of compelling evidence 
that state regulatory programs are inadequate, the 2015 rule is a 
duplicative layer of Federal regulation that should be rescinded. To 
the extent that the comments address the pre-2015 rule requirements for 
prior approval of ``nonroutine fracturing jobs,'' see the BLM's 
response to comments in the Rule Authorities section above. As 
previously discussed, the BLM has decided not to restore the 
requirements for ``nonroutine fracturing jobs'' in 43 CFR 3162.3-2(a).
    One commenter states that the proposed rescission of the 2015 rule 
does not provide substantive evidence that industry practice is 
sufficient to prevent the pollution and degradation of hydrological 
resources on public lands. The commenter states that, given its self-
described mandate to provide bona fide minimum standards to ensure 
industry compliance, as well as its obligations under NEPA, the BLM 
should not rescind protections given to groundwater in the 2015 Rule.
    While industry practices can and often do work to appreciably 
reduce the risks associated with oil and gas development, the BLM does 
not solely rely on industry practice to ensure that oil and gas 
development operations on public lands are conducted in an 
environmentally responsible manner. Operators on Federal lands must 
comply with all Federal, state, and local requirements. On Indian 
lands, they must comply with all Federal and tribal permitting and 
reporting requirements. As previously noted, the BLM has an extensive 
process in place to ensure that operators conduct oil and gas 
operations in a safe and environmentally sound manner that protects 
resources. The environmental reviews conducted under NEPA provide an 
opportunity for the BLM to consider and mitigate potentially adverse 
environmental impacts, including those involving hydrological 
resources. If hydrological concerns arise during the BLM's review of a 
specific oil and gas proposal, the BLM may require additional 
information, or impose protective measures, such as lease stipulations 
or COAs attached to APDs, to mitigate the potential adverse impacts.
    One comment disapproves of the proposed rescission because of a 
lack of reasonable regulation in Idaho to protect the communities 
impacted by hydraulic fracturing. The commenter adds that there is a 
lack of standardization in incident reporting processes in different 
states by highlighting a peer-reviewed study published in February 2017 
in the Journal of American Chemical Society entitled, ``Unconventional 
Oil and Gas Spills: Risks, Mitigation Priorities, and State Reporting 
Requirements.'' The study points out differences in reporting 
requirements in each of the four states that produce most oil and gas 
using hydraulic fracturing, and documents a total of 6,648 spills 
between 2005 and 2014.
    Contrary to the commenter's assertion, the BLM reviewed the 
applicable Idaho state laws and regulations and found an extensive 
regulatory framework for addressing the risks associated with hydraulic 
fracturing. See Idaho Admin. Code Sec. Sec.  20.07.02.210 and 
20.07.02.211. As previously discussed, the fact that state regulatory 
programs differ from each other and are not identical to the 2015 rule 
does not render the state programs ineffective, or the 2015 rule 
essential. Furthermore, operators on Federal or Indian lands are 
required to report adverse incidents directly to the BLM. The BLM 
requires operators to clean up spills promptly and thoroughly. Those 
requirements will not change with the rescission of the 2015 rule.
    Multiple commenters asserted that the hydraulic fracturing 
regulations of specific states are adequate, and thus the 2015 rule is 
not needed. One commenter highlighted that there has never been a 
mechanical failure in North Dakota since the North Dakota Industrial 
Commission's hydraulic fracturing regulations were implemented; a 
separate commenter asserts that the regulatory oversight provided by 
the State of North Dakota protects the environment while providing 
permitting in a careful but timely manner. Another commenter suggested 
that, in Wyoming, operators have employed hydraulic fracturing 
technology safely and efficiently for decades. Another commenter 
asserts that New Mexico's hydraulic fracturing rules and regulations 
are protective of the environment and that hydraulic fracturing is 
proficiently regulated by the State of New Mexico, including rigorous 
protocols for casing, cementing, completions, recompletions and all 
associated procedures, including extensive monitoring and pressure-
testing requirements, as well as mechanical and pressure-based well 
integrity testing. That commenter states that adding an additional 
layer of Federal regulation on top of an efficient and effective set of 
existing state regulations will provide no additional environmental 
protection. Additionally, one commenter states that the State of Utah 
has an effective regulatory program that, for many years, has 
successfully monitored the construction and operation of oil and gas 
wells, including well completion operations, such as hydraulic 
fracturing, water management, and chemical disclosure. Another 
commenter also asserts that Colorado rules and regulations along with 
the Memorandum of Agreement with the BLM (and the United States Forest 
Service) for Permitting of Oil and Gas Operations on BLM and National 
Forest Service Lands in Colorado should suffice in coordinating the 
permitting of oil and gas operations on Federal lands. One commenter 
states that, in Oklahoma, regulators live in the communities most 
affected, are in touch with evolving technical and scientific data, and 
have a demonstrated track record of working effectively with industry 
as well as the other stakeholders of public and private lands. In 
addition, a commenter asserts that Western States with oil and gas 
production have robust regulations to protect the environment and 
public health and are best-equipped to regulate oil and gas 
development. The commenter asserts that the Western States have 
experienced few, if any, adverse impacts involving water quality and 
water allocation attributable to hydraulic fracturing and that the 
process has been used for more than a million wells for over sixty 
years, and is responsible for increasing the nation's ability to 
recover oil and gas at great economic benefit.
    The BLM thanks the commenters for providing comments and supporting 
information.
    One commenter states that the EA for the 2017 proposed rule reveals 
that misguided public sentiment regarding hydraulic fracturing was a 
lead motivator for the BLM's initiation of rulemaking in 2010. The 
commenter states that BLM also accurately observed that adverse 
environmental impacts from hydraulic fracturing were a rare occurrence 
prior to the final 2015 rule, and that observation remains true today. 
The commenter asserts that, instead of imposing a costly regulatory 
burden on oil and gas operators, the BLM would be better served by 
dedicating resources to countering these unfounded public concerns.
    The BLM agrees that the 2015 rule imposes compliance costs on the 
oil and gas industry that are no longer justified. The remaining 
statements in this

[[Page 61939]]

comment are outside the scope of this rulemaking.
    One commenter states that the 2015 rule would have required that 
all fluids recovered between the commencement of hydraulic fracturing 
operations and the authorized officer's approval of a produced water 
disposal plan under BLM requirements must be stored in rigid enclosed, 
covered, or netted and screened above-ground tanks. The commenter 
further states that no regulatory mechanism exists for the ``approval 
of a produced water disposal plan'' on an individual well basis, thus 
the limitations the 2015 rule purports to apply to recovered fluids 
storage are premised on an administrative approval process that does 
not exist.
    As this final rule rescinds the 2015 rule, this comment is outside 
the scope of the present rulemaking action.
Adequacy of Tribal Regulations
    Multiple commenters state that the BLM's suggestion that the 2015 
rule is ``duplicative'' of existing tribal regulation is unsupported. 
The commenters state that the differences between the 2015 BLM rule and 
other regulations are even greater on Indian lands, where many tribes 
have not developed their own regulatory programs to manage 
hydraulically-fractured oil and gas development. The commenters state 
that this is acknowledged in the EA. Another commenter asserts that 
relying on state regulations is inadequate for protecting tribes. One 
commenter describes experiencing multiple oil spills related to 
injection wells on tribal lands and the lack of resources to respond 
and hold corporations accountable for the injury, damage, and 
unnecessary burden the oil industry placed on the tribe and its 
resources. The commenter states that, even though the sovereignty of 
tribes to regulate operations on their lands may be an option and 
reality for some tribes, others have yet to develop the capacity to 
enforce such regulations on their lands and may never have the 
resources to effectively manage and enforce oil and gas regulations. 
The 2015 rule would directly benefit and help protect these tribes.
    We acknowledge that not all oil and gas producing tribes have 
exercised their sovereignty to regulate hydraulic fracturing 
activities. Rescission of the 2015 rule, however, does not affect those 
tribes' options for promulgating and implementing programs in exercise 
of their self-governance and sovereignty. In addition, the BLM 
regulations applicable to tribal lands, which include the regulations 
at 43 CFR subpart 3162, as amended by this final rule, and Onshore Oil 
and Gas Orders 1, 2, and 7, reduce the risks associated with hydraulic 
fracturing by providing specific requirements for well permitting; 
construction, casing, and cementing; and disposal of produced water. 
These BLM regulations, along with the enforcement mechanisms that are 
available to the BLM on tribal lands, provide reasonable assurance that 
oil and gas development on tribal lands will occur in an 
environmentally responsible manner, even when tribal regulations or 
enforcement mechanisms to ensure responsible oil and gas development 
are not fully developed.
Rule Process
    Multiple commenters assert that the BLM has failed to explain why 
the 2015 rule is no longer needed to ensure the environmentally 
responsible development of Federal oil and gas resources. These 
commenters note that the Supreme Court has outlined procedures that an 
agency must take to comply with the Administrative Procedure Act (APA) 
when changing an existing regulation, including the need to provide a 
reasoned analysis or reasoned explanation for the change. The 
commenters contend that the BLM's 2017 proposed rule does not meet 
these requirements and is fraught with loose language that does not 
demonstrate a reasoned basis or reasoned explanation for the change.
    Some commenters assert that the BLM's decision to rely on Executive 
Order 13783 and Secretarial Order 3349 to justify the proposed 
rescission fails to provide the ``reasoned explanation'' required by 
the APA. These commenters note that Executive Order 13783 directs 
agencies to review regulations that ``unduly burden the development of 
domestic energy resources beyond the degree necessary to protect the 
public interest or otherwise comply with the law.'' They contend that 
the BLM does not explain why the 2015 rule ``burdens'' the development 
of energy resources as defined by the Executive Order, particularly in 
light of the BLM's findings that the 2015 rule would cost just a small 
fraction of a percent of the profit margins of small operations. The 
commenters further state that the proposed rescission does not address 
other provisions of the Executive Order, including that ``all agencies 
should take appropriate actions to promote clean air and clean water 
for the American people.''
    Finally, some commenters state that the BLM articulated a reasoned 
justification in 2015 for the storage tank requirement, and that the 
agency now proposes to rescind that same requirement without addressing 
the evidence from the 2015 record or offering any explanation for why a 
tank requirement would no longer deliver important environmental 
benefits.
    On the contrary, the BLM believes that it has articulated a 
reasoned justification for rescinding the 2015 final rule. It therefore 
has not changed this final rule based on these comments. The Supreme 
Court has explained that ``[a]gencies are free to change their existing 
policies as long as they provide a reasoned explanation for the 
change,'' ``display awareness that [they are] changing position,'' and 
``show that there are good reasons for the new policy.'' Encino 
Motorcars, LLC v. Navarro, __U.S. __, 136 S. Ct. 2117, 2125-26 (2016). 
However, agencies do not need to show ``that the reasons for the new 
policy are better than the reasons for the old one'' or necessarily 
``provide a more detailed justification than what would suffice for a 
new policy created on a blank slate.'' FCC v. Fox Television Stations, 
Inc., 556 U.S. 502, 515 (2009).
    The BLM has provided a reasoned explanation for rescinding the 2015 
rule that accords with these requirements: The BLM believes that the 
2015 rule, which would impose compliance costs and information 
requirements that are duplicative of regulatory programs of many states 
and some tribes, is redundant and therefore unnecessarily burdensome on 
regulated entities. Any marginal benefits provided by the 2015 rule do 
not outweigh the rule's costs, even if those costs are a small 
percentage of the cost of a well. In fact, benefits were largely 
unquantified in the 2015 rule. The BLM has also provided good reasons 
for its new policy, explaining that state regulatory programs 
(including those of the states with most of the Federal oil and gas 
leasing), the sovereignty of tribes to regulate operations on their 
lands, and other preexisting Federal regulations provide a better 
framework than the 2015 rule for mitigating the impacts associated with 
hydraulic fracturing operations. For example, there are currently laws 
or regulations to address hydraulic fracturing in all 32 of the states 
in which the BLM currently manages oil and gas leases, and the BLM has 
several existing requirements, some of which are set out at 43 CFR 
3162.3-1 and in Onshore Oil and Gas Orders 1, 2, and 7, that allow it 
to reduce the risks associated with hydraulic fracturing. Additionally, 
the BLM has explained that rescinding the 2015 rule's storage tank 
requirement may alleviate some on-the-ground indirect impacts, such as

[[Page 61940]]

those associated with truck traffic to transport tanks to and from well 
sites.
    The BLM is not required to demonstrate that its reasons for 
rescinding the 2015 rule are better than or refute its rationale for 
initially promulgating the 2015 rule. This is especially true where, as 
here, the 2015 rule was never operational and did not engender serious 
reliance interests on the part of the regulated community. By providing 
an explanation for why it is rescinding the 2015 rule and demonstrating 
that there are good reasons for relying on state regulations, tribal 
sovereignty, and the BLM's preexisting regulations, the BLM has 
provided the necessary justification for changing its policy regarding 
the regulation of hydraulic fracturing. Furthermore, there is no legal 
impediment to this Administration implementing its policies and 
priorities through rulemaking to rescind or amend existing regulations.
    Some commenters state that the BLM failed to consider a full range 
of alternatives in its environmental assessment. In particular, the 
commenters state that the BLM should have analyzed alternatives that 
strengthen the rule instead of rescinding it, including alternatives 
that regulate stimulation operations broadly, area of review, 
strengthen frack hit protections, baseline water testing, well 
construction, and restricted chemicals.
    The BLM disagrees. The BLM considered a reasonable range of 
alternatives in its environmental assessment in light of the proposed 
action's purpose and need and the environmental effects that may result 
from rescinding the 2015 final rule. NEPA requires an agency to analyze 
all reasonable alternatives related to the purposes of the agency's 
action. Where, as here, an agency prepares an EA, the range of 
alternatives that the agency must consider, and the degree of analysis 
that is required, is less than is required for environmental impact 
statements. Moreover, ```the range of alternatives that [an] agency 
must consider [in an EA] decreases as the proposed action's 
environmental impact becomes less and less substantial,' '' Earth 
Island Inst. v. United States Forest Serv., 697 F.3d 1010, 1023 (9th 
Cir. 2012) (quoting Louisiana Crawfish Producers Ass'n-West v. U.S. 
Army Corps of Engineers, 463 F.3d 352, 356-57 (5th Cir. 2006) 
(alterations omitted)), and it becomes even more diminished where, as 
here, an agency concludes that the action being considered will have a 
minimal environmental effect. See Save Our Cumberland Mts. v. 
Kempthorne, 453 F.3d 334, 342-43 (6th Cir. 2006). Furthermore, although 
the unsigned draft EA accompanying the proposed rulemaking analyzed 
only two alternatives, the signed EA for this final rule analyzes four 
alternatives, and explains why other alternatives were considered but 
not carried forward for analysis.
    As described in detail above, this final rule will have minimal 
environmental effects. It will not authorize hydraulic fracturing 
operations as a whole, it will not authorize any particular hydraulic 
fracturing operation on Federal or Indian lands, and it will not impact 
the overall number of hydraulic fracturing operations on Federal or 
Indian lands. What few impacts may result from the final rule will be 
mitigated by state and tribal regulations and the preexisting Federal 
regulations. In light of these minimal impacts, the BLM did not need to 
analyze additional alternatives beyond the alternative that were 
analyzed in the EA that has been prepared for this final rule.
    Additionally, the commenters are mistaken that the BLM should have 
analyzed alternatives that strengthened the 2015 final rule. The 
purpose and need of a proposed action determines the universe of 
alternatives that an agency must consider. The purpose of the BLM's 
proposed action (the 2017 prosed rule) ``is to reduce and eliminate 
unnecessary regulatory requirements in order to more efficiently manage 
oil and gas operations,'' and the need is ``to more prudently balance 
the BLM's interest in mitigating the risks of oil and gas development 
operations, including hydraulic fracturing, . . . with the compliance 
burdens it imposes on the oil and gas industry.'' Alternatives that 
would retain or increase the regulatory burdens imposed by the 2015 
final rule on the oil and gas industry would not further the BLM's 
purpose and need for action and, therefore, did not have to be 
analyzed.
    Some commenters assert that the BLM's proposed rescission of the 
2015 rule fails to comply with NEPA. These commenters state that the EA 
prepared by the BLM contains only a brief discussion of a few of the 
impacts related to groundwater, surface water, and greenhouse gas 
emissions, which it determines to be insignificant. The commenters 
contend that these determinations contradict those found in the EA that 
the BLM prepared when it promulgated the 2015 rule, ignore recent 
science regarding hydraulic fracturing, and contradict several reviews 
of hydraulic fracturing conducted in California and elsewhere that 
demonstrate the potential for other significant environmental impacts 
that may result from the repeal of the 2015 rule.
    The BLM disagrees with the commenters that the EA's discussion of 
impacts constituted a NEPA violation. Pursuant to CEQ's regulations 
implementing NEPA, an EA needs to include only ``brief discussions . . 
. of the environmental impacts of the proposed action and 
alternatives.'' (See 40 CFR 1508.9(b).) The EA's discussion of the 
impacts related to groundwater, surface water, and greenhouse gas 
emissions satisfies this requirement. Moreover, BLM notes that the EA 
references appropriate portions of the 2015 EA addressing these 
impacts, incorporating them into this EA.
    Similarly, the BLM disagrees with the commenters that its 
determinations that the impacts to groundwater, surface water, and 
greenhouse gas emissions of this final rule are insignificant 
contradict its determinations in the EA prepared for the 2015 rule. 
With regard to surface water and groundwater, the 2015 EA merely stated 
that, under the No Action Alternative (i.e., existing regulations), the 
impacts to surface water and groundwater described in the EA would be 
ongoing. The 2015 EA neither stated nor concluded that the impacts to 
those resources from the No Action alternative would be significant. 
Similarly, there is no contradiction between the two EAs regarding 
impacts related to greenhouse gas emissions. The 2015 EA did not, as 
the commenters suggest, determine that greenhouse gas emissions related 
to the No Action alternative would be significant. On the contrary, the 
2015 EA found that although ``the various action alternatives would 
result in some small variations in [greenhouse gas emissions],'' none 
of them ``would appreciably affect the amount of GHG emissions arising 
from oil and gas operations on Federal and tribal lands as compared to 
[existing regulations].'' This finding is consistent with the BLM's 
current determination that rescinding the 2015 final rule would not 
result in an appreciable increase in greenhouse gas emissions.
    The BLM also disagrees that the determinations in the EA ignores 
recent science regarding hydraulic fracturing. The BLM reviewed and 
considered a wide range of scientific evidence, including recent 
studies, in assessing the environmental impacts associated with 
rescinding the 2015 final rule. For example, the BLM gave considerable 
weight to the EPA's December 2016 study of hydraulic fracturing's 
potential impact on drinking water resources. NEPA, however, does not 
require the BLM to rely equally on all such studies.

[[Page 61941]]

Rather, NEPA permits agencies to rely on their expertise to determine 
which studies are particularly relevant or scientifically accurate. The 
fact that the EA does not specifically address the findings in the 
studies referenced in the comment does not mean that such studies were 
not considered. It simply means that, in analyzing the impacts 
associated with rescinding the 2015 final rule, the BLM found other 
studies more relevant.
    Some commenters assert that the BLM violated NEPA by basing its EA 
on unfounded assumptions rather than sufficient evidence or analysis. 
The commenter states, for example, while acknowledging potential risks 
from the impacts that it did consider, the BLM finds that existing 
state and tribal regulations and the BLM's existing authorities will 
``allow it to reduce the risks associated with hydraulic fracturing.'' 
However, the commenter states, the 2015 final rule remains more 
comprehensive than the requirements in many states and tribes, and the 
BLM has previously stated that the final rule ``would result in a 
reduction of the risks associated with hydraulic fracturing operations 
on Federal and Indian lands.''
    The commenters are mistaken. The BLM based its EA on evidence, 
analysis, and technical expertise, not unfounded assumptions. For 
example, the specific conclusion referenced by the commenters that 
existing regulatory frameworks will allow the BLM to reduce the risks 
associated with hydraulic fracturing is based on the BLM's detailed 
review of state, tribal, and Federal regulations. See RIA at Sec.  
2.12, and EA at Appendix 1. That review indicated that all 32 states 
with existing Federal oil and gas leases currently have regulations to 
address hydraulic fracturing operations, as do some tribes with oil and 
gas resources. Additionally, the BLM has several existing requirements, 
some of which are set out at 43 CFR subpart 3162 and in Onshore Oil and 
Gas Orders 1, 2, and 7, that allow it to reduce the risks associated 
with oil and gas operations, including those of hydraulic fracturing. 
The BLM also possesses discretionary authority allowing it to impose 
site-specific protective measures reducing the risks associated with 
hydraulic fracturing. Relying on this evidence to conclude that the 
2015 final rule was duplicative of an existing regulatory framework 
that will reduce the risks associated with hydraulic fracturing 
operations is a technical judgment within the BLM's area of expertise. 
The BLM may rely on the judgment of its own experts, see San Juan 
Citizens Alliance v. Stiles, 654 F.3d 1038, 1057 (10th Cir. 2011), even 
if the same regulatory framework would have led the commenters to 
arrive at a different conclusion. See Greater Yellowstone Coal. v. 
Flowers, 359 F.3d 1257, 1271 n. 14 (10th Cir. 2004).
    The commenters are also mistaken that the 2015 rule's potential to 
reduce risks somehow calls into question the BLM's conclusion that it 
can rely on state, tribal, and Federal regulatory framework to reduce 
the risks associated with hydraulic fracturing operations. The 2015 
rule was meant to ``add to'' and ``complement'' this existing 
regulatory framework. (80 FR 16128). Regardless of whether those 
additions would have resulted in additional risk reductions, the BLM's 
conclusion that the existing regulatory framework is capable of 
reducing risks remains valid.
    Some commenters assert that the BLM must prepare a full EIS before 
rescinding the 2015 rule.
    The BLM has not prepared an EIS in response to those comments. NEPA 
requires an agency to prepare an EIS when it proposes to take a major 
Federal action that significantly affects the quality of the human 
environment. Agencies must consider the context of the action and the 
intensity of its impacts to determine whether an action significantly 
affects the quality of the environment. As discussed in the BLM's EA 
and FONSI, the BLM considered the context of rescinding the 2015 rule 
and determined that doing so would remove information requirements that 
are duplicative of the regulatory programs of many states and some 
tribes with active oil and gas development. The BLM also considered the 
intensity, as that term is defined in CEQ's NEPA regulations, of 
rescinding the 2015 final rule. Applying the intensity factors listed 
in 40 CFR 1508.27(b), the BLM determined that rescinding the 2015 rule 
would not have a severe impact on the quality of the human environment. 
Based on its considerations of the context and intensity of the 
proposed action, the BLM determined that rescinding the 2015 rule will 
not significantly affect the quality of the human environment. In light 
of that determination, it is unnecessary to prepare a full EIS before 
rescinding the 2015 rule.
    Some commenters assert that the BLM failed to analyze indirect and 
cumulative impacts of rescinding the 2015 rule.
    Agencies are required to analyze the indirect and cumulative 
impacts associated with a proposed action. The BLM's analysis of those 
impacts is set forth, respectively, in sections 4.0 and 5.0 of the EA.
    One commenter states that ESA and NHPA consultations are required 
before the 2015 final rule can be rescinded.
    The ESA requires an agency to consult with the U.S. Fish and 
Wildlife Service or National Marine Fisheries Service to ensure that 
any action it authorizes, funds, or carries out is not likely to 
jeopardize the continued existence of any listed species or result in 
the destruction or adverse modification of critical habitat. Section 
106 of the NHPA requires Federal agencies to take into account the 
effects of their undertakings on historic properties included on or 
eligible for inclusion on the National Historic Register of Historic 
Places (NRHP), and to afford the Advisory Council on Historic 
Preservation a reasonable opportunity to comment on such undertakings.
    The BLM is not required to perform ESA or NHPA consultations to 
rescind the 2015 rule. Neither the rescission nor implementation of the 
2015 rule would, by themselves, authorize or prohibit hydraulic 
fracturing operations as a whole, or any particular hydraulic 
fracturing operation on Federal or Indian lands. These actions are also 
not expected to impact the number of hydraulic fracturing operations. 
As such, the actions would not, by themselves, have an effect on any 
listed species or its habitat nor any historic properties that are 
listed on or eligible for listing on the NRHP. After the 2015 rule is 
rescinded, the BLM will continue to make decisions involving the 
development of oil and gas resources on BLM-administered lands at the 
land use planning, leasing, and permitting stages in compliance with 
NEPA, the ESA, and the NHPA. Indeed, site-specific proposals to drill 
for and develop oil and gas resources that involve hydraulic fracturing 
operations would require the same level of compliance with the ESA and 
NHPA if the BLM did not rescind the 2015 rule. Given that the BLM 
considers the cumulative and site-specific effects of proposed oil and 
gas operations as part of its land use planning, leasing, and 
permitting processes, as is discussed earlier in this preamble, and 
will conduct appropriate consultations whenever and wherever 
appropriate, consultation under the ESA and NHPA is not required at 
this time.
    Some commenters state that, because the issue of ``frack hits'' was 
not part of the discussions between stakeholders and the agency during 
the rulemaking process for the 2015 rule, it is reasonable that the BLM 
would rescind the 2015 rule and defer issuance of any

[[Page 61942]]

rule related to ``frack hits'' until the appropriate regulatory 
procedures are invoked.
    Some commenters also state that the 2015 rule would have required 
that before hydraulic fracturing operations begin, the operator must 
perform a successful mechanical integrity test of any casing or 
fracturing string through which the operation will be conducted. These 
commenters contend that the administrative record prepared for the 2015 
final rule ``does not contain comments regarding the efficacy, cost, or 
purpose of testing the lateral portion of the wellbore because that 
requirement was not part of the proposed rule.''
    The commenters contend that measures to protect against ``frack 
hits'' and requiring mechanical integrity tests included in the 2015 
rule were not logical outgrowths of the BLM's proposed rule. Because 
the BLM is rescinding the 2015 rule, and because the present rule 
rescission does not contain measures related to ``frack hits'' or 
require mechanical integrity tests, it is unnecessary to address 
whether the issues of ``frack hits'' and mechanical integrity tests are 
a logical outgrowth of the proposed rule that the BLM published.
    One commenter states that it is impossible to reconcile a 
requirement to conduct a mechanical integrity test on casing that does 
not protect usable water and it is likely to increase costs of 
completing a well by $75,000 to $100,000. Given the absence of any 
benefit that will be derived from these costs, rescission of the 2015 
rule is reasonable and appropriate.
    The BLM agrees that rescission of the 2015 rule is appropriate and 
good policy.
Costs of 2015 Rule and Effects on Industry
    Multiple commenters state that the 2015 rule would not be 
burdensome for industry. One commenter states that there are several 
problems with BLM's assertion that the 2015 rule ``imposes burdensome 
reporting requirements and other unjustified costs on the oil and gas 
industry'' (82 FR 34464). The commenter states first, that the BLM's 
own RIA finds that the 2015 rule would cost approximately $9,690 per 
well, or about 0.1 percent to 0.2 percent of the cost of drilling a 
well (RIA at 3, Tables 4.2.2.a, 4.2.2.b). The commenter further notes 
that the BLM's estimate of the costs of the 2015 rule have not 
substantially changed since 2015 (80 FR 16,130 (estimating compliance 
costs to be ``approximately 0.13 to 0.21 percent of the cost of 
drilling a well'')). The commenter states that BLM also noted that its 
cost estimates may be overstated where industry is already in 
compliance.
    In the RIA for the 2015 rule, the BLM asserted that regulation 
would result in a reduction of the risks associated with hydraulic 
fracturing operations on Federal and Indian lands, without providing an 
estimate for the monetary benefits of this risk reduction. The BLM 
noted in the 2015 RIA that the majority of the requirements were 
consistent with industry practice and that some were required by state 
regulations or were generally addressed by existing BLM requirements. 
In light of the protections available under other Federal regulations, 
the increased prevalence of state and tribal laws and regulations to 
address hydraulic fracturing, and new industry practices, the BLM 
believes that the requirements imposed by the 2015 rule are redundant 
and therefore unnecessarily burdensome. There were no monetary 
estimates of any incremental benefit that the 2015 rule provides in 
addition to existing Federal, state, and tribal regulations and 
industry standards. Such incremental benefits, however, are likely to 
be too small in light of the increased prevalence and comprehensiveness 
of these standards since the original RIA was published to justify 
compliance costs that are both monetized and certain to exist.
    One commenter notes that, in 2015, in response to commenters' 
arguments that the rule was not economically justified and that 
benefits did not exceed costs, the BLM responded that the 2015 rule was 
``prudent,'' ``necessary,'' and ``common-sense,'' and that the rule's 
``burden should be minimal.'' The commenter asserts that, in its 
proposed rescission, the BLM never sufficiently explains why those same 
prudent, common-sense requirements, deemed necessary to environmental 
protection after weighing compliance costs, are now suddenly 
unnecessary.
    As noted in previous responses, in light of the protections 
available under other Federal regulations, the increased prevalence of 
state and tribal laws and regulations to address hydraulic fracturing, 
and new industry practices, the BLM now believes that the requirements 
imposed by the 2015 final rule are redundant or only marginally 
beneficial, and therefore unnecessarily burdensome.
    One commenter states that the BLM fails to acknowledge the forgone 
cost savings of the tank requirement that will partly offset any 
estimated cost savings from the rescission. The commenter notes that 
storage tank requirement from the 2015 rule was anticipated to generate 
long-term cost savings for industry that would have partly offset their 
compliance costs. The commenter suggests that rescinding the 
requirement will forgo those cost savings, and that loss of cost 
savings will partly offset any positive cost savings anticipated from 
the rescission.
    In response to the previous comment, the BLM notes that it is not 
clear that requiring operators to use storage tanks for flowback and 
produced water would generate any cost savings. Operators that instead 
use central reservoirs may have decided to do so precisely because it 
is the most cost-effective option available to them, and requiring them 
to do otherwise may have the unintended consequence of increasing costs 
for them.
    One commenter states that an unanticipated cost associated with 
rescinding the 2015 rule is related to road and infrastructure damage 
associated with trucks hauling large quantities of salt water and 
drilling mud at load weights exceeding legal limits by 35 percent. The 
commenter offers that Texas has incurred more than $2 billion debt to 
repair about 40 percent of their damaged roads in absence of having a 
dedicated revenue source to pay for it. A commenter states that failure 
to hold businesses accountable for their externalities amounts to 
indirect subsidies, which is not fair to producers of clean energy who 
do not receive these advantages. The commenter states that Federal 
lands are leased to these extractors at prices that are well below 
market values for extraction on private lands. The commenter asserts 
that this is another indirect subsidy for the extractors and is a bad 
deal for the taxpayers.
    The use of public roads for the transport of materials and 
equipment both to and from energy production sites, including weight 
restrictions and taxation, is regulated by states and localities, and 
on tribal lands by tribes. It was not addressed in the 2015 rule, and 
thus is outside the scope of this rulemaking. Operators do need BLM's 
approval for access roads from public roads across public lands to 
their operation sites.
    The BLM also disagrees with the assertion that Federal lands are 
leased at ``well below market values'' for oil and gas extraction on 
comparable private lands. Although private leases may often have higher 
royalty rates, there are often greater regulatory burdens uniquely 
associated with Federal leasing requirements. These include NEPA 
reviews for leasing nominations and drilling permits, production

[[Page 61943]]

measurement compliance requirements, and other fees and assessments, 
that operators do not encounter to the same extent on non-Federal 
lands. A simple comparison of royalty rates between Federal and non-
Federal oil and gas leases is insufficient to support the commenter's 
conclusion about market values. Furthermore, bonus bids, rentals and 
royalties are outside the scope of this rulemaking.
    One commenter suggests that California's growing economy is an 
example to counter industry's claims that the 2015 rule and regulations 
in general, unnecessarily encumber energy production, constrain 
economic growth, and prevent job creation.
    The commenter does not provide evidence that regulation of 
hydraulic fracturing in California specifically has an impact on 
statewide economic growth. Also, different states have different mixes 
of industries and employers, as well as different geology, land 
ownership patterns, and other conditions important to business growth. 
Thus, we have no reasonable basis to extrapolate from any state's 
economic growth to a conclusion that the 2015 rule would be a net 
benefit for job creation.
    One commenter suggested it is valuable to have a unified standard 
with which to regulate hydraulic fracturing. The commenter states that 
frack hits also pose a threat to industry profits, as they may also 
lead to a decrease in well production. The commenter states that, 
without firmly regulating irresponsible drilling practices, we run the 
risk of not only damaging the ecological health of our public lands and 
water resources, but also sabotaging the success of the extractive 
industry.
    As noted in the RIA, the American Petroleum Institute does provide 
uniform, national voluntary standards for conducting hydraulic 
fracturing. Hydraulic fracturing oversight is and will continue to be 
provided through the state laws and regulations detailed in API 100-1 
and API 100-2. There is ample evidence from national production data 
that hydraulic fracturing allows oil and gas production that would not 
otherwise be realized. Any frack hits on neighboring wells from using 
the technology are unfortunate but not nationally significant compared 
to the overall industry growth emanating from this technology.
    One commenter suggests that, because the 2015 rule presented 
significant conflicts with existing Federal and state regulations, its 
adoption held the potential to create regulatory uncertainty and 
confusion, increasing project costs, thus providing further 
disincentives to operators to develop resources on Federal lands that 
the agency manages for the American people.
    The BLM does not agree that regulations that are largely consistent 
with state rules and industry practices necessarily increase 
uncertainty or confusion. The BLM does agree, however, that such 
overlap can make such regulations redundant, marginally beneficial, and 
unnecessarily burdensome, which is the why it is rescinding the 2015 
rule.
    Multiple commenters state that additional BLM regulation of a 
process already regulated by the states will decrease efficiency and 
increase costs. Commenters assert that the BLM does not have the staff, 
the budget, or the expertise to process APDs with the same efficiency 
as the states. One commenter states that the delay in processing APDs 
by the BLM will result in declining production from Federal lands to 
the detriment of the public. Another commenter asserts that the BLM 
severely underestimated the cost of the 2015 rule by not including the 
cost of delays in permit approval. The commenter asserts that if APDs 
are not approved in a timely manner, the re-leasing process will cost 
additional millions. A separate commenter highlights that BLM officials 
conceded that, given the combination of increases in workload 
associated with the hydraulic fracturing rule and reductions in the 
agency budget, getting the work done could be an issue. The commenter 
also notes that, among other problems, the BLM recognizes that ``skills 
gaps'' are a ``program vulnerability'' for the BLM's existing oil and 
gas programs. The commenter therefore concludes that rescission of the 
2015 rule is entirely appropriate given the admonitions of agency 
leaders that the BLM does not have the expertise in the field to 
administer the rule.
    The BLM's engineers and field managers have decades of experience 
exercising oversight of these wells during the evolution of hydraulic 
fracturing technology. However, as stated in the RIA for this rule, the 
BLM recognizes the potential that the 2015 rule might pose unnecessary 
delays and implementation costs to the BLM and operators. These costs 
were not quantified in the RIA for the 2015 rule. The BLM's staffing 
levels, budget and appropriations are outside the scope of this 
rulemaking.
    One commenter argues that, due to North Dakota's unique history of 
land ownership, it is typical for oil and gas spacing units to consist 
of a combination of Federal, state, and private mineral ownership. The 
commenter notes that, even in circumstances where the Federal mineral 
ownership within a spacing unit is small relative to other mineral 
ownership, the 2015 rule would have required all the oil and gas 
operators within the unit, as a practical matter, to conduct operations 
in accordance with the 2015 rule applicable to the development of 
Federal minerals. The commenter asserts that complying with the Federal 
requirements and permitting timelines imposed by the 2015 final rule 
will substantially delay operations on any spacing units that contain 
Federal minerals and that this delay adversely affects the development 
of all minerals within the unit, including state and private oil and 
gas minerals.
    As stated in the RIA for this rule, the BLM recognizes the 
potential that the 2015 final rule might pose unnecessary delays and 
implementation costs to the BLM and operators. We understand the 
commenter's concerns that many long directional wells are completed in 
many tracts, some Federal, and some not federal. The operators' burdens 
of complying with the 2015 rule could adversely affect the owners of 
the non-federal tracts. Those concerns support the BLM's decision to 
rescind the 2015 rule.
    Some commenters state that the 2015 rule would have represented an 
expansion of the information that oil and gas developers are required 
to disclose publicly both before and after operations and that, much of 
this information, and particularly information regarding local geology 
and the operators' technical designs for extracting resources from that 
geology, is highly proprietary and represents economically valuable 
commercial information. The commenters argue that the 2015 rule failed 
to account both for the confidential nature of the information the rule 
required to be disclosed and the commercial consequences of that 
disclosure. The commenters state that, because the 2015 rule would have 
required public disclosure of highly confidential and commercially 
valuable information, it is contrary to Federal public records law and 
its rescission is appropriate. Another commenter argued that the same 
requirement of the 2015 rule failed to account for service companies 
owning the trade secrets.
    As the commenter notes, by rescinding the 2015 rule, the BLM would 
no longer require that the operator submit information to the BLM and/
or FracFocus after the hydraulic fracturing operation is complete. As

[[Page 61944]]

stated in the RIA, the removal of this requirement would alleviate some 
administrative burden. At least for Federal wells, operators are likely 
to report the chemicals used regardless of whether the BLM requires 
them to or not, since almost all states currently have chemical 
disclosure requirements.
    One commenter estimates that the 2015 rule would have imposed a 
minimum per-well additional cost of $1,500 associated with assembling, 
analyzing and adding new information to APDs and final reports 
submitted to the BLM, not including the potential additional costs 
associated with legal review and requirements for the operator to 
verify and manage proprietary information that is claimed to be exempt 
from disclosure. The commenter estimates the following additional costs 
of the 2015 rule: Potential work stoppage during completions if there 
is a ``false positive'' 500 psi increase in annulus pressure (assumed 
$200,000 to $500,000 per day standby cost); managing ``recovered 
fluids'' or produced water by constructing and utilizing a central 
storage and treatment facility according to rule requirements 
(estimated 5-year net present cost of $2.3 million for a lined pit, vs. 
$23 million for using 500-barrel tanks to provide a storage capacity of 
250,000 barrels); concern that a BLM field office could interpret the 
2015 rule in a more stringent fashion than intended, which could lead 
to a slowdown, stoppage, or delay of work, or additional costs for 
specific requirements.
    The BLM acknowledges that there are several potential compliance 
costs for the 2015 rule that it did not quantify in the economic 
analysis that was prepared for that rule. However, because this final 
rule rescinds the 2015 rule, it is not necessary to review whether the 
BLM's cost estimates for that rule were adequate, or to determine if 
the commenters' estimates are appropriate.
    A commenter critiqued the effects of the 2015 rule on operators, 
concluding that the rule would have caused unintended burdens or 
delays.
    Because we are rescinding the 2015 rule, there is no need to 
analyze the commenters' predictions.
    One commenter asserts that small businesses will benefit from this 
final rule because elimination of the 2015 rule would eliminate any 
future possibility that they must pay the compliance costs associated 
with the rule.
    We agree that small businesses would benefit to the degree that 
they are no longer subject to the compliance costs associated with the 
2015 rule.
    One commenter states that a comprehensive analysis of the costs the 
2015 rule would have imposed demonstrates that costs savings resulting 
from the rule's rescission are likely to exceed $220 million per year 
due to increased administrative costs ($17.8M), delay costs ($6.7M), 
additional casing costs ($174M), additional mechanical integrity 
testing costs ($17M), and additional costs of recovered fuel storage 
($4.9M).
    The comment has been considered in developing the final regulatory 
impact analysis (RIA), but we find that the estimated cost savings 
discussed in the RIA are more supportable and are adequate for the 
decision to rescind the 2015 rule.
Regional and National Implications
    One commenter states that the economic impact of rescinding the 
2015 final rule on the outdoor industry and farming should be seriously 
considered when evaluating whether rescinding the 2015 rule is good for 
economic growth and job creation. The commenter asserts that hydraulic 
fracturing operations effectively destroy natural and rural areas 
integral to the outdoor industry. The commenter notes that, in 2011, 
the outdoor industry employed 6.1 million Americans and Americans spend 
approximately $646 billion annually on outdoor recreation.
    There is little to no evidence that properly regulated hydraulic 
fracturing operations have a significantly greater effect on natural 
and rural areas integral to the outdoor industry compared to the 
conventional oil and gas drilling operations that have taken place on 
BLM lands for decades. In its decision to rescind the 2015 rule, the 
BLM examined existing state regulations--as well as existing Federal 
regulations contained in Onshore Orders 1, 2, and 7--and determined 
that they are sufficient to ensure that hydraulic fracturing operations 
on Federal lands remain properly regulated.
    To the degree that lands open for oil and gas development could 
have an opportunity cost in that they could otherwise be used for 
recreational activities, the BLM has long implemented FLPMA's policy of 
multiple use that uses the NEPA environmental review process to 
determine how best to plan for the public's desires to put the lands to 
competing uses. The BLM's land use planning, however, is beyond the 
scope of this rulemaking.
    Multiple commenters support the proposed rescission asserting that 
the 2015 rule imposes unnecessary costs, hinders energy production, and 
constrains economic growth. Commenters argue that the potential cost 
impacts of the 2015 rule on exploration and production activities on 
BLM managed lands would greatly exceed the estimates that the BLM 
provided in its original RIA. One commenter asserts that governments 
should take care to ensure that any regulations they issue to ensure 
safety and protect the environment recognize the economic importance 
of, and avoid unduly burdening the use of, hydraulic fracturing to 
develop America's energy resources.
    In analyzing the 2015 rule, the BLM has reached the same conclusion 
regarding its unnecessary costs and impact on energy production and 
economic growth. As a result, the BLM has decided to rescind the 2015 
rule.
    One commenter stated that BLM's 2015 rule would exacerbate the 
decline in oil and natural gas production on Federal lands and that 
this would have a severe, negative effect on Wyoming's tax revenue and 
employment numbers, would increase the costs for energy to all 
consumers, and could increase this country's reliance on imports from 
less than friendly nations.
    Regardless of whether the 2015 rule would have had a ``severe, 
negative effect'' on any state, or whether it would have caused an 
increase in reliance upon imported oil or gas, the BLM does believe 
that the costs of complying with the 2015 rule would be an unnecessary 
burden on industry. This Administration's policy is to increase 
revenues and to reduce reliance on imported oil through this and other 
actions to reduce unnecessary burdens on energy industries, including 
oil and gas on Federal and Indian lands. Thus, we are rescinding the 
2015 rule.
Climate Change
    Some commenters contend that the BLM cannot, in evaluating its 
oversight of hydraulic fracturing on the public lands, overlook the 
fact that extracting the new oil and gas resources made exploitable by 
modern hydraulic fracturing techniques is inconsistent with any 
reasonable likelihood of avoiding the most catastrophic effects of 
global climate change. Some commenters recommend that the United States 
shift toward alternative forms of energy.
    Some commenters assert that the BLM must weigh the relative effects 
on oil and gas production, supply, markets, and ultimately emissions of 
its actions in regulating public lands hydraulic fracturing. The 
commenters assert that this must include an assessment of the net 
emissions consequences of all

[[Page 61945]]

reasonable alternatives--including implementation of the 2015 hydraulic 
fracturing rule, the BLM's proposed rescission of that rule, or an 
alternative rule banning public lands hydraulic fracturing.
    Those commenters seek a reduction in leasing and production of oil 
and gas from Federal and Indian lands with the goal of reducing 
emissions of greenhouse gasses. Issues of land use planning, leasing of 
parcels, and levels of production from Federal and Indian lands are 
beyond the scope of this rulemaking. Hydraulic fracturing was a 
technology available to operators on Federal and Indian lands prior to 
the promulgation of the 2015 rule, it would have been available had the 
2015 rule become effective, and it will be available after promulgation 
of this rescission rule. The BLM is committed to compliance with NEPA 
at each stage of its decision-making. NEPA does not require the BLM to 
consider banning hydraulic fracturing in its analysis of this 
rescission rule. As previously stated, the purpose and need for the 
rule is to reduce unnecessary burdens on oil and gas production from 
Federal and Indian lands. Furthermore, since emission levels from 
future hydraulic fracturing operations are necessarily speculative 
(because they depend upon geologic, technical, and economic variables, 
plus the potential substitution of sources for oil and gas), a 
comparison of ``net emissions consequences'' would not provide useful 
information to the decision-maker or the public.
    The BLM has not made a change from the 2017 proposed rule to this 
final rule in response to those comments.
Recommendations
    Multiple commenters suggest the BLM should conduct additional 
research regarding the impacts of hydraulic fracturing and of 
rescinding the 2015 rule, including the impacts of hydraulic fracturing 
on drinking water resources and human health. Some commenters assert 
that the BLM must thoroughly study the effects of repealing the rule, 
including consideration of new circumstances, studies, and information 
developed since the rule was adopted. The commenters assert that this 
should include, for example, consideration of recent information 
regarding connections between disposal of drilling-related waste and 
earthquakes, according to some commenters. Moreover, the commenters 
state that the BLM must consider the likelihood that the proposed 
deregulation will lead to a significant expansion in poorly controlled 
oil and gas drilling and hydraulic fracturing and the consequences for 
global climate change. Some commenters suggest that the BLM should 
consider and adopt a rule that protects public lands, public health, 
and the climate by banning hydraulic fracturing altogether on public 
lands.
    In response to the previous comments, the BLM notes that, in 
December 2016, EPA completed its nationwide study of hydraulic 
fracturing. U.S. EPA, Hydraulic Fracturing for Oil and Gas: Impacts 
from the Hydraulic Fracturing Water Cycle on Drinking Water Resources 
in the United States (Final Report), EPA/600/R-16/236F (available at 
2016https://cfpub.epa.gov/ncea/hfstudy/recordisplay.cfm?deid=332990). 
The BLM has considered the findings in that report. That report 
demonstrated that, like most industrial processes, hydraulic fracturing 
has the potential to cause the release of pollutants into the 
environment, including groundwater resources. A logical conclusion is 
that hydraulic fracturing activities should be regulated to control 
those risks. It is not clear, however, that the 2015 rule was the best 
or only way to regulate hydraulic fracturing on Federal and Indian 
lands. Commenters have failed to provide facts demonstrating that the 
BLM needs to conduct another study a year after EPA's report. Risks of 
induced seismicity from hydraulic fracturing operations are beyond the 
scope of this rulemaking. The USGS studies both natural and induced 
seismicity. Several USGS publications are listed at https://earthquake.usgs.gov/research/induced/references.php. Those studies show 
that induced seismicity from hydraulic fracturing operations is 
uncommon, and seems to occur mostly in areas with small percentages of 
federally owned minerals. More common is seismicity induced by the 
injection of waste fluids for disposal. Those disposal wells, however, 
are regulated by states, tribes and the EPA under the Safe Drinking 
Water Act, and are beyond the scope of this rulemaking.
    This final rule will not lead to poorly regulated drilling of oil 
and gas wells on Federal and Indian lands. Drilling operations will 
continue to be subject to the BLM's regulations, including Onshore Oil 
and Gas Order No. 2, (53 FR 46798, 1988), state regulations on Federal 
land, and tribal regulations on tribal lands. We do not believe that 
hydraulic fracturing operations will be poorly regulated under the 
present rule, with states and tribes taking the lead for regulating 
most hydraulic fracturing activities.
    As previously explained, we do not believe it is in the national 
interest to ban hydraulic fracturing on Federal and Indian lands. 
Hydraulic fracturing activities can be conducted in ways that reduce 
risks to the environment while providing the benefits of domestically 
produced oil and gas, including jobs. Furthermore, a ban on hydraulic 
fracturing on Federal and Indian lands would most likely cause 
production to move to areas that are not subject to the BLM's 
regulations, and have no impact on emissions.
    One commenter asserts that the 2015 rule provides for a ``type 
well'' to be used for an entire field to satisfy the pre-fracturing 
approval requirements. The commenter recommends that the 2015 rule 
should be rescinded in its entirety or expanded to allow a type well to 
cover an entire county or basin if the geology is substantially 
similar.
    The commenter is mistaken. The 2015 rule does not mention a ``type 
well.'' The present rule rescinds the 2015 rule in its entirety.
    The BLM has not made a change from the 2017 proposed rule to this 
final rule based on these commenters' recommendations.

Discussion of the Final Rule

    As previously discussed in this preamble, the BLM is revising 43 
CFR part 3160 to rescind the 2015 rule. The regulatory amendments in 
this final rule are identical to those in the proposed rule, except 
that the phrase ``perform nonroutine fracturing jobs'' has been removed 
from the regulations at 43 CFR 3162.3-2(a). This final rule restores 
the regulations in part 3160 of the CFR to exactly as they were before 
the 2015 rule, except for 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, and the phrase ``perform 
nonroutine fracturing jobs,'' which is not restored to the list of 
subsequent operations requiring prior approval in section 3162.3-2(a). 
None of the amendments to part 3160 by other rules are relevant to this 
rulemaking. See, e.g., 82 FR 83008 (2016). The following section-by-
section analysis discusses returning to the pre-2015 rule regulations.
Section 3160.0-3 Authority
    The BLM amends 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 rule added this reference as an administrative matter. 
This final rule returns this section to the language it contained 
before the 2015 rule and does not have any substantive impact.

[[Page 61946]]

Section 3160.0-5 Definitions
    The BLM amends this section by removing several terms that were 
added by the 2015 rule and by restoring the definition of ``fresh 
water'' that the 2015 rule removed. This final rule removes 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 rule 
used those terms in the operating regulations. Since those operating 
regulations are rescinded, these terms are no longer necessary in this 
definitions section. This final rule restores the previous definition 
of ``fresh water'' to the regulations.
Section 3162.3-2 Subsequent Well Operations
    This final rule amends 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 rule only added to more fully describe Form 
3160-5.
    In response to comments received, Sec.  3162.3-2(a) of this final 
rule does not include the requirement to obtain prior approval to 
``perform nonroutine fracturing jobs.'' As previously discussed in this 
preamble, as a result of considerable advances in oil and gas 
development technology in the last 20 years, hydraulic fracturing 
practices that would have been considered ``nonroutine'' when the BLM 
originally issued the regulations requiring prior approval for 
``nonroutine fracturing jobs'' are now commonly employed and considered 
``routine.'' See the ``Rule Authorities'' discussion of comments for 
more information about this revision.
    The final rule makes 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 final rule restores ``routine fracturing or'' to paragraph (b) 
of Sec.  3162.3-2. The 2015 rule removed those words from the list 
because it amended Sec.  3162.3-3 to include a detailed listing of 
requirements for hydraulic fracturing operations to be approved by the 
authorized officer. This final rule removes that requirement from Sec.  
3163.3-3, which is discussed below.
Section 3162.3-3 Other Lease Operations
    The BLM revises this section by removing language that was added by 
the 2015 rule and returning this rule to the exact language it 
contained previously. The 2015 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 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 rule is unnecessarily duplicative and 
would impose costs that would not be clearly exceeded by its benefits 
and, therefore, removes these 2015 rule provisions and restores the 
previous language of the section.
Section 3162.5-2 Control of Wells
    The BLM amends 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 final rule also restores other non-
substantive provisions that appeared in the previous version of the 
regulations.
Good Cause for Immediate Effectiveness
    The APA normally requires regulations to become effective no sooner 
than 30 days after publication in the Federal Register (5 U.S.C. 
553(d)). Nonetheless, the APA allows regulations to go into effect 
immediately upon publication when ``a substantive rule grants or 
recognizes an exemption or relieves a restriction'' (5 U.S.C. 
553(d)(1)). As explained in this preamble, this final rule relieves oil 
and gas operators on Federal and Indian lands from the numerous 
restrictions and burdens that would be imposed if the 2015 rule were to 
go into effect.
    The primary purpose of the delayed effective date requirement in 
section 553(d) is to give people a reasonable time to prepare to comply 
with or take other action with respect to the rule (See Attorney 
General's Manual on the Administrative Procedure Act 37 (1947)). As 
explained elsewhere in this preamble, the 2015 rule has never been 
operational. Therefore, no one requires time to conform their conduct 
to avoid the legal consequences of ``violating'' the regulations that 
would remain in effect after rescission of the 2015 rule. Even if 
persons not subject to the 2015 rule could claim a benefit from a 30-
day effective date, that would not prevent this final rule from 
becoming effective immediately upon publication (Independent U.S. 
Tanker Owners Comm. v. Skinner, 884 F.2d 587, 591-92 (D.C. Cir. 1989), 
cert. denied, 495 U.S. 904 (1990)).
    The APA also allows regulations to go into effect immediately upon 
publication for ``good cause'' (5 U.S.C. 553(d)(3)). Application of the 
good cause exception requires an `` `urgency of conditions coupled with 
demonstrated and unavoidable limitations of time,' '' with the 
``primary consideration . . . be[ing] the `convenience or necessity of 
the people affected' '' (United States v. Gavrilovic, 551 F.2d 1099, 
1104 (8th Cir. 1977) (quoting 92 Cong. Rec. 5650-51 (1946) (remarks of 
Cong. Walter))). In determining whether to invoke the good cause 
exception, an ``agency is required to balance the [public] necessity 
for immediate implementation against principles of fundamental fairness 
which require that all affected persons be afforded a reasonable time 
to prepare for the effective date of its ruling'' (Gavrilovic, 551 F.2d 
at 1105).

[[Page 61947]]

    The current posture of the litigation related to the 2015 rule 
makes it possible that the 2015 rule could become operational within 30 
days of the publication of this final rule. Were that to happen, oil 
and gas operators--the persons most affected by this final rule--would 
have to go to significant expense to comply with the 2015 rule, even 
though that rule would be rescinded in a matter of days upon the 
effective date of this final rule. Those significant burdens would not 
be offset by the de minimus environmental benefits of a few days of 
compliance with the 2015 rule. Requiring oil and gas operators to incur 
such significant expense to comply with a rule that will be rescinded 
in a matter of days would be fundamentally unfair. Thus, there are 
urgent conditions, unavoidable limitations of time, and a risk to the 
convenience or necessity of the people affected.
    For both of these reasons, the BLM finds that there is good cause 
for this final rule to be effective upon publication in the Federal 
Register.

III. Procedural Matters

Regulatory Planning and Review (Executive Orders 12866, 13563, and 
13771)

    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs in the Office of Management and Budget will review 
all significant rules. The Office of Information and Regulatory Affairs 
has determined that this rule is significant because it will raise 
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. E.O. 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 final rule to be 
$14--$34 million per year from the 2015 rule. Therefore, this final 
rule is expected to be a deregulatory action under Executive Order 
13771.

Regulatory Flexibility Act

    The BLM certifies that this rule will not have a significant 
economic effect on a substantial number of small entities pursuant to 5 
U.S.C. 605(b). The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
(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.
    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 final rule will likely affect a substantial number of small 
entities.
    Although the final rule will likely affect a substantial number of 
small entities, the BLM does not believe that these effects would be 
economically significant. This final rule is a deregulatory action that 
will remove all of the requirements placed on operators by the 2015 
rule. Operators will not have to undertake the compliance activities, 
either operational or administrative, that are outlined in the 2015 
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 will 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 RIA prepared for this final rule. 
The final RIA has been posted in the docket for the final rule on the 
Federal eRulemaking Portal: http://www.regulations.gov.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

    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 cause 
a major increase in costs or prices for consumers, individual 
industries, Federal, state, or local government agencies, or geographic 
regions. The 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 final rule is a deregulatory action that removes all of the 
requirements placed on operators by the 2015 rule. Operators will not 
have to undertake the compliance activities, either operational or 
administrative, that would have been required solely by the 2015 rule. 
The screening analysis conducted by the BLM estimates the average 
reduction in compliance costs will 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 does not impose an unfunded mandate on state, local, or 
tribal governments, or the private sector of more than $100 million per 
year. The rule does not have a significant or unique effect on State, 
local, or tribal governments or the private sector. A statement 
containing the information required by the Unfunded Mandates Reform Act 
(2 U.S.C. 1531 et seq.) (UMRA) is not required. 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

[[Page 61948]]

governments, nor does it impose obligations upon them.

Takings (EO 12630)

    This rule does 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 removes all of the requirements placed on operators solely 
by the 2015 rule and therefore will 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 final rule will 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 
summary impact statement is not required. The final 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 will not apply 
to states or local governments or state or local governmental entities. 
The rule will 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 
final 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. The BLM has evaluated this final rule in 
accordance with the Department's consultation policies and under the 
criteria in Executive Order 13175. The BLM authorizes oil and gas 
operations that are proposed on Indian onshore oil and gas leases. 
Therefore, the rule has the potential to affect Indian tribes and 
tribal lands.
    Potentially affected tribes were provided an opportunity to provide 
feedback and consult with the BLM regarding this rule. The BLM has 
fully considered tribal views made known to us in preparing this final 
rule.

Paperwork Reduction Act (44 U.S.C. 3501 et seq.)

    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 issued by the Office of Management and 
Budget (OMB). Collections of information include requests and 
requirements that an individual, partnership, or corporation obtain 
information, and report it to a Federal agency. See 44 U.S.C. 3502(3); 
5 CFR 1320.3(c) and (k).
    This rule rescinds information collection activities that would 
have required approval by the OMB under the PRA had the 2015 rule 
become effective. OMB pre-approved those activities and assigned 
control number 1004-0203 to them, but the control number was not 
activated. In view of the rescission, there will be no need to continue 
the information collection activities that the OMB has pre-approved 
under control number 1004-0203. Accordingly, the BLM will request that 
the OMB discontinue that control number after the effective date of 
this final rule.
    In accordance with this final rule, the BLM will include in its 
request for renewal of control number 1004-0137 (expires January 31, 
2018) that nonroutine fracturing jobs be removed from the information 
collection activity for subsequent well operations, at 43 CFR 3162.3-2.

National Environmental Policy Act

    The BLM prepared an environmental assessment (EA) to document its 
examination of the potential environmental impacts that may occur as a 
result of this final rule. The BLM has determined that this rule does 
not constitute a major Federal action significantly affecting the 
quality of the human environment. A detailed statement under the 
National Environmental Policy Act of 1969 is not required because we 
reached a Finding of No Significant Impact (FONSI) for this final rule.
    The final EA and FONSI that were prepared for this final rule have 
been placed in the file for the BLM's Administrative Record for the 
final rule at the BLM's 20 M Street address specified in the ADDRESSES 
section. The final EA and FONSI have also been posted in the docket for 
the final rule on the Federal eRulemaking Portal: http://www.regulations.gov. The BLM invites the public to review these 
documents.

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

    This final 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 this final rule 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 final rule to be a 
``significant energy action'' as defined in Executive Order 13211.

Authors

    The principal author(s) of this rule are Justin Abernathy, Senior 
Policy Analyst, BLM, Washington Office; Michael Ford, Economist, BLM, 
Washington Office; James Tichenor, Economist, BLM, Washington Office; 
Ross Klein, (Acting) Natural Resource Specialist, BLM, Washington 
Office; Subijoy Dutta, Lead

[[Page 61949]]

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 Richard McNeer and Ryan Sklar of the Department of the 
Interior's Office of the Solicitor.

    Dated: December 22, 2017.
Joseph Balash,
Assistant Secretary--Land and Minerals Management, U.S. Department of 
the Interior.

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 amends 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. 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, 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. 2017-28211 Filed 12-28-17; 8:45 am]
 BILLING CODE 4310-84-P