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General Memorandum 13-045

General Memorandum 13-045
Bureau of Land Management Releases Revised Proposed Rule on Hydraulic Fracturing on Public and Indian Lands; Congressman Young's Bill Would Exempt Tribes; Senate Committee on Indian Affairs to Hold Roundtable on Energy Development

On May 24, 2013, the Bureau of Land Management (BLM) published in the FEDERAL REGISTER a revised proposed rule which would update its regulations governing oil and gas operations on public lands and Indian lands in order to regulate hydraulic fracturing: http://www.gpo.gov/fdsys/pkg/FR-2013-05-24/pdf/2013-12154.pdf. The deadline for filing comments is June 24, 2013. On a related note, House Natural Resources Subcommittee on American Indian and Alaska Native (AI/AN) Affairs Chairman Young (R-AK) has reintroduced his tribal energy bill (HR 1548) which contains a provision that would exempt Indian lands from these proposed regulations. Also of interest, on June 5, 2013, the Senate Committee on Indian Affairs will hold a roundtable on Energy Development in Indian Country.

BLM Proposed Rule

The initial iteration of the BLM's proposed rule was published in the FEDERAL REGISTER on May 11, 2012. The existing BLM regulations governing hydraulic fracturing, codified at 43 C.F.R. § 3162.3-2, were most recently revised in 1988, long before the current boom in the practice. The proposed rule is intended to respond to public concerns about issues such as possible contamination of underground water sources, disclosure of the chemicals used, the integrity of wells, and the management of "flowback" fluids that return to the surface during and after fracturing. BLM received more than 177,000 comments on the proposed rule, and the revised version reflects and responds to many of those comments.

Some of the commenters raised issues regarding the authority of BLM to regulate hydraulic fracturing on Indian lands. In particular, several tribal representatives commented that the rule should not apply to Indian lands or should allow tribes to "opt out." BLM responded to this comment by citing the Indian Mineral Leasing Act (IMLA), which states, "All operations under any oil, gas, or other mineral lease issued pursuant to the terms… of this title or any other Act affecting restricted Indian lands shall be subject to the rules and regulations promulgated by the Secretary of the Interior." BLM asserts that the long-standing interpretation of this statutory language does not allow for a tribal opt-out provision. The BLM also asserts that the IMLA does not authorize the Secretary of Interior to delegate his or her regulatory responsibilities to tribes. The revised proposed rule does provide that an operator may apply to BLM for a variance from the minimum standards in the regulations, which BLM may approve only if it determines that the alternative proposed would meet or exceed the regulation for which the variance is requested. The preamble to the proposed rule states that this provision is one way in which BLM could "defer to a standard, technology, or process required or allowed by State or tribal law that meets or exceeds the effectiveness of the revised proposed rule." 78 Fed. Reg. 31661. In addition, BLM recognizes that, under the Safe Drinking Water Act (SDWA), states and tribes can implement certain environmental programs to protect underground sources of drinking water from oil and gas operations within their boundaries, including the designation of protected aquifers, and the revised proposed rule defers to such state and tribal designations.

In the preamble to the revised proposed rule, BLM states that one of the outcomes of its meetings with tribes is "the requirement in this rule that operators certify that operations on Indian lands comply with tribal laws." 78 Fed. Reg. 31639. This is not required; however, until after hydraulic fracturing operations have been completed. A requirement in the original proposed rule that such certification be filed beforehand was deleted as an unjustified "burden on industry." 78 Fed. Reg. 31648.

House Legislative Action

On April 12, 2013, Representative Young (with no co-sponsors) reintroduced his tribal energy bill (HR 1548). It was referred to the House Natural Resources Subcommittees on: AI/AN Affairs; Energy and Mineral Resources; and Public Lands and Environmental Regulation. On April 26, the AI/AN Affairs Subcommittee held a hearing on the bill with Bureau of Indian Affairs Director Michael Black as the sole witness. In addition to exempting Indian lands from the BLM's hydraulic fracturing regulations the bill would: limit the parties which comment on a tribe's environmental impact statement (EIS); prohibit the Secretary of Interior from assessing or collecting certain drilling and inspection fees on Indian land; create a demonstration project to promote biomass energy production on Indian forest land; and would consider activities conducted or resources harvested or produced pursuant to a tribal resource management plan or an integrated resource management plan approved by the Secretary of Interior to be considered "sustainable" when sustainability is federally required.

Senate Roundtable

On June 5, 2013, at 1:00 p.m. in Room 628 of the Senate Dirksen Building, the Senate Committee on Indian Affairs will hold a roundtable on Energy Development in Indian Country. RSVPs can be made via phone: 202-224-2251 to Sarah Stiltner or via email: Roundtable@indian.senate.gov.

Please let us know if we may provide additional information.

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Inquiries may be directed to:
Moriah O'Brien (mobrien@hobbsstraus.com)
Dean Suagee (dsuagee@hobbsstraus.com)

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