Oil & Gas Drilling Regulations

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Oil and gas drilling occurs on private and public lands and offshore on the outer continental shelf. Drilling in each area falls under its own regulatory jurisdictions, local, state, and federal; compliance with all drilling regulations is necessary. As a rule of thumb, drilling on public lands and the outer continental shelf falls under the Department of Interior regulatory umbrella. Drilling on private lands is usually regulated by the states. Protecting the environment and human health is the main goal of all drilling regulations.

Protecting the Environment

  • Oil and gas drilling occurs in unique geologic formations. Technologies to fracture rock and drill bore holes can create significant environmental problems when large amounts of oil and gas are accidentally released into the surrounding soil, groundwater, rivers, lakes, and ocean waters. Regulatory compliance programs grant permits for drilling that contain details on where drilling can occur, under what conditions, and with what technologies, taking into account the geology and landscape where the drilling will occur. For example, drilling wells cannot be placed near municipal drinking water sources, and oil spill preparedness and prevention plans must be prepared before drilling can occur.

Protecting Human Health

  • Health and safety plans are required for oil and gas drilling to protect workers from slips and falls while working in unusual landscapes and difficult weather conditions. Training is usually given to prepare workers for such conditions, but plans need to be in place to identify what to do if a worker is injured, detailing where to take the worker and by what type of transportation. For example, a worker who needs medical attention on an offshore drilling platform would need helicopter transport to the nearest hospital. Written plans including details on helicopter availability and hospital proximity facilitate treatment.

Natural Gas

  • Natural gas permits include compliance requirements to account for new drilling techniques for extracting difficult-to-reach gas deposits. These techniques use large amounts of water to break up natural fissures and cracks, creating greater access to gas deposits. The water becomes a waste product and must be stored, treated, and disposed of properly as guided by permits and regulations.

Monitoring

  • Oil and gas drilling regulations include a monitoring component. Permits require updates to spill preparedness and prevention plans, and regulators inspect operations to ensure plans are accurate and waste is disposed of properly. Accidental spills are expensive problems. Oil and gas drilling stops while cleanup activities take place. It is good business practice to execute the preparedness and prevention plan properly, saving money, improving worker morale, and increasing profits.

The Costs of Compliance

  • Permits, plans, monitoring, and cleanup entail costs to be built into the drilling budget. Oil and gas drilling is done to bring commodities to market. It is important to understand the regulatory climate under which drilling will occur. Which regulator issues permits and has oversight authority can greatly influence costs and profits. A good understanding of drilling regulations is necessary for smooth operations.

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