HazMat Management

US oil and gas well audit reveals fracking free-for-all

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May 15, 2014 by Hazmat Management

With the US in the midst of a fracking boom, most “high priority” oil and gas wells have been escaping federal scrutiny, a new audit from the US Government Accountability Office (GAO) has found.

The US Interior Department’s Bureau of Land Management (BLM) failed to conduct failed to conduct inspections on more than 2,100 of the 3,702 wells labelled as “high priority” and drilled from 2009 through 2012 across 14 states. The failure was due to limited money, staff, and weak co-ordination with states, the May 2014 audit found.

The BLM has yet to indicate whether another 1,784 wells are considered high priority or not. Priority levels are used to gauge protection against possible water contamination and other environmental safety issues.

“The effectiveness of BLM’s management and oversight of federal and Indian oil and gas resources is hindered by a number of factors, including BLM’s reliance on outdated rules and guidance, limited co-ordination with states, and delayed reviews of revenue sharing agreements,” the GAO report states.

According to the report, from 2007 through 2012, annual production from shale and tight sandstone formations increased more than six-fold for oil and approximately five-fold for gas. Federal energy production generates one of the largest non-tax sources of federal government revenue, accounting for more than $14 billion in 2013.

The report continues that, “BLM’s continued reliance on outdated rules and guidance, limited co-ordination with state regulatory agencies, incomplete data on the location of resources and industry activities, and delayed reviews of communitization agreements hinder BLM’s ability to effectively manage and oversee the development of federal and Indian resources.” 

In the coming months of 2014, the Obama administration is expected to issue rules on fracking and methane gas emissions

Report Recommendations

  • Take steps to establish a documented process that will provide reasonable assurance that oil and gas rules and guidance is reviewed and periodically updated.
  • Take steps to establish formal agreements with all relevant state regulatory agencies regarding oil and gas inspection activities; better leverage state inspection resources to avoid duplicative oversight activities, to the extent possible.
  • Ensure that all BLM field offices with responsibility for protecting federal and Indian resources have the data and direction needed to efficiently identify the location of federal and Indian resources and new and existing oil and gas wells and consistently use the data to identify situations in which federal and Indian resources are at risk of being extracted without approval from BLM. 
  • Identify and take necessary steps to ensure communitization agreements are reviewed within required time frames.