South Coast Air Quality Management District Approves California’s First New Fracking Rule

The focus on regulation of hydraulic fracturing, or fracking, has increased in California during recent months. The Department of Conservation’s Division of Oil, Gas, and Geothermal Resources (“DOGGR”) has been holding workshops for interested parties to discuss Governor Brown’s discussion draft of proposed regulations, which would, among other things, require operators of fracking wells to report the chemicals used in and location of their wells. However, the South Coast Air Quality Management District (“SCAQMD”) has moved ahead and adopted the state’s first new fracking regulation.

On April 5, 2013, in the culmination of a process that began in September of 2012, SCAQMD passed Rule 1148.2, which establishes notification and reporting requirements for both oil and gas well operators and those who supply chemicals to drilling operations. The rule covers general notification requirements, emission reporting, chemical use reporting for chemical suppliers, chemical use reporting for operators, and public disclosure of reported information via SCAQMD’s website. Among Rule 1148.2’s new requirements are:

• Operator Notification prior to the start of drilling, completion, or rework of an onshore well, including location of the well and the nearest sensitive receptors.
• Post-drilling operator reporting, including combustion equipment used; type and amount of dry materials used; the method of how dry material was mixed and any air pollution techniques used to control fugitive emissions/odors; the volume of well completion fluids used and volume of flowback fluid recovered; and methods for collecting, storing, and treating drilling and/or flowback fluids.
• Supplier notification to the operator of the name and service number of each chemical ingredient; and the amount, purpose, maximum concentration, and identification if the chemical is air toxic.
• Supplier notification to the operator of any trade secret chemical information and the basis for the claim of trade secret, as well as identification of any air toxic chemical ingredient.
• Supplier notification to SCAQMD reporting the operator, name, and API number of the affected well for which chemicals are being used; the name and chemical abstract service number of each chemical ingredient, purpose of the chemical, amount used, maximum concentration, and whether it is an air toxic; and the basis of any trade secret claim, as well as the chemical family and whether any ingredient within the chemical family is an air toxic.
• Operator reporting to SCAQMD of the name, and API number of the affected well; for non-trade secret chemicals, each chemical ingredient, purpose of the chemical, amount used, maximum concentration, and whether the chemical is an air toxic; and for trade secret chemicals, identification of the chemical information claimed to be trade secret, as well as the chemical family and whether any chemical ingredient within that family is an air toxic.

In contrast to the proposed DOGGR regulations, Rule 1148.2 requires operators and suppliers to report all chemicals used for drilling or sold to an operator, regardless of whether the reporting entity considers them to be trade secret. For each well event, the SCAQMD will report, on its website, all non-trade secret chemicals and chemical ingredients, as well as trade secret chemical families used and whether any ingredient within the trade secret family is an air toxic.

SCAQMD’s Board will convene a working group to discuss the results of the emissions and chemical use data within six months of collecting the first emissions report, and SCAQMD staff will report on the status of data collection and notification within two years to determine whether new or additional rules are needed.

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