Brazil Issues Fracking Regulations

By James Burgess:

Brazilian regulators have put in place rules to govern the use of hydraulic fracturing.

The National Petroleum Agency (ANP) said in a statement that fracking must not harm the environment and announced that it has issued several new regulations to ensure groundwater sources are protected.

For example, fracking will not be allowed within 200 meters of wells used for irrigation or drinking water. The rules also mandate that well casings use cement to prevent natural gas from migrating out of the well.

The regulations won’t have a big immediate effect, since Brazil’s unconventional oil and gas landscape is thus far unexplored. Brazil is a major player in the conventional oil sector – and its state-owned oil company Petrobras is a world-class deepwater driller – but there are some onshore basins that are thought to have some shale potential.

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The Reconcavo basin in the state of Bahia, the Sergipe-Alagoas basin in the northeast and the Sao Francisco basin in Minas Gerais have shown promise for shale gas and oil. But shale projects take years to develop, so a Brazilian shale industry could not viably begin until the early 2020s, at the earliest. Still, on a visit to Brazil last year, U.S. Secretary of Energy Ernest Moniz discussed the possibility of U.S. shale companies investing in the country.

Hugo Afonso, the Environmental and Operational Safety Superintendent at ANP, said in formulating the new rules, the agency had reviewed fracking regulations around the world, especially the United States, where shale drilling is widespread.

While he went to lengths to emphasize environmental protections in the new rules, he tried to reassure potential drillers that the regulations would not impede development.

“Operational, environmental and human safety were on top of ANP priorities,” Afonso said. “The regulations have not been enacted to be a roadblock for the shale exploration, however, as the activities move on, cost reductions will come up as a consequence.”

This piece is cross-posted from OilPrice.com with permission.