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Indiana Adopts “Emergency” Hydraulic Fracturing Fluid Disclosure Rule

by James A. Pardo and Brandon H. Barnes

As hydraulic fracturing (fracing) activity increases in Indiana, in the view of the state’s Department of Natural Resources, so too has the need for increased and updated regulations.   Last week, Indiana addressed this need in part by adopting new "emergency" regulations for fracing fluid disclosure.  These regulations took effect on July 1, 2012, and require the following information to be disclosed immediately after well completion:

  • Volume and source of base fluid (water or other substance); 
  • Type and amount of proppant (sand or other substance);
  • Trade name of each additive as identified on the material safety data sheets (MSDS);
  • Purpose of each additive;
  • MSDS for each additive;
  • Maximum volume of each additive, expressed as a percentage by mass or by volume;
  • Copies of documents like well service company job tickets that summarize the products used, pressure recording charts and logs or surveys calculating or mapping the fracture length and height.

Because these emergency regulations modify (rather than replace) Indiana’s existing disclosure rules for coal-bed methane operations, the existing provision protecting trade secrets remains intact under the new regulations.  The definition of “base fluid,” however, is broader than we have seen proposed in states like New York, so drillers probably will not be able to avoid fluid disclosure requirements by using liquid propane.  Many stakeholders with an interest in Indiana already should be familiar with the requirements of these new rules, as they closely track the disclosures already being voluntarily made on fracfocus.org.




Recent Developments in Federal and State Efforts to Regulate Hydraulic Fracturing

by James A. Pardo and Brandon H. Barnes

Obama Signs Executive Order Creating Hydraulic Fracturing Task Force

President Obama’s position that hydraulic fracturing must be conducted in a "safe and responsible" manner has been interpreted as suggesting the need for increased federal regulation of fracing. Indeed, various federal agencies have stepped forward with proposed regulations targeting air emissions, chemical disclosures, wastewater handling and other fracing-related issues.  Many natural gas stakeholders have expressed concern about this building wave of federal regulation, from different agencies and regulators, and the potential that this will result in inefficient, burdensome and even conflicting federal-versus-federal and federal-versus-state regulatory requirements. 

Perhaps in response to these concerns, on April 13, President Obama signed an executive order creating a task force of 13 federal agencies to "coordinate the efforts of Federal agencies responsible for overseeing the safe and responsible development of unconventional domestic natural gas resources and associated infrastructure and to help reduce our dependence on oil …." While some in the oil and gas industry have applauded the creation of this task force for its potential to streamline and coordinate federal activity on fracing, stakeholders will keep a close eye on the path taken by the Obama Administration.  Since 2005, the bulk of hydraulic fracturing oversight has come from state regulatory authorities – who typically are better positioned to deal with the unique regional and local issues often presented by oil and gas development. 

Requiring coordination among 13 different federal agencies may be a positive development. However, the precedent of federal regulation – and the possibility that coordination may lead to calls for more regulation in the future – may be one that stakeholders will be less than enthusiastic about, particularly after the Environmental Protection Agency wraps up its multi-year study of fracing’s impacts on groundwater in 2014.

Colorado Governor’s Task Force Releases Draft Report

A task force established by Colorado Governor John Hickenlooper recently released a draft report on strategies regarding state and local development and regulation of oil and gas activities.  The task force determined that "drawing bright lines between state and local jurisdictional authority was not realistic or productive," thus refusing to find that local authority is completely preempted by the Colorado Oil & Gas Act.  The group also concluded that no new laws are necessary at this time, but that consideration of Colorado’s oil and gas rules related to setbacks and air quality are topics for further discussion.  

The task force is comprised of representatives from counties, municipalities, the state, industry, civic organizations and the general public.  The Governor’s task force was established only a few days after two New York trial courts rejected separate legal challenges to local zoning amendments that banned hydraulic fracturing – handing victories to those who advocate for "local" (not state) control over whether fracing is allowed.  Fracing supporters in Colorado had hoped that the task force report would conclude (or recommend) that state regulation preempted local ordinances like those in New York.  Fracing opponents had hoped for [...]

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