On May 4, two federal agencies took coordinated steps to regulate the exploding and controversial drilling method of hydraulic fracturing, or “fracking,” used for multiple purposes in oil and natural gas exploration, including stimulating gas wells and recovering gas from sources such as coal beds and shale gas formations.
In the spirit of a Memorandum of Understanding signed by the U.S. Departments of Energy (DOE) and Interior (DOI) and the Environmental Protection Agency (EPA) on April 13, the agencies will collaborate on research concerning hydraulic fracturing within their areas of expertise. The agencies initiated their collaboration on May 4 with the issuance of complimentary rulemaking and guidance applicable to hydraulic fracturing activities.
The EPA’s action involves the issuance of Underground Injection Control (UIC) program guidance for permitting the underground injection of oil and gas-related fracturing using diesel fuels, where EPA is the permitting authority. The draft guidance includes the EPA’s interpretation of the Safe Drinking Water Act, 42 U.S.C. § 300f, et seq., as amended (SDWA).
The technical topics covered in the draft guidance include:
- A description and enumeration of diesel fuels covered by the guidelines
- Authorization of multiple wells through area permits
- Establishment of permit duration and application of UIC well closing requirements
- Well construction requirements for both newly constructed and already constructed wells
- Operation, mechanical integrity, monitoring and reporting requirements
- Public notification and environmental justice considerations
The proposed guidance is limited only to diesel fuels because, in the 2005 Energy Policy Act, Congress revised the SDWA definition of “underground injection” to specifically exclude from UIC regulations the “underground injection of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations related to oil, gas, or geothermal production activities.” SDWA, § 1421(d)(1)(B).
The DOI’s action goes further than guidance, and proposes to regulate oil and gas fracturing activities on federal and tribal lands. The proposed rule requires public disclosure of the chemicals used in hydraulic fracturing, but only after fracturing operations have been completed. The rule also includes improved assurances that the wells used in fracturing operations meet appropriate construction standards and a requirement that operators implement appropriate plans for managing “flow back” waters from fracturing operations.
By far the more contentious of the two proposals is the DOI’s proposed rule. Originally, the rule was supposed to require the disclosure of chemicals used in fracturing operations at least 30 days before starting a well in order to inform the public and allay concerns about the potential pollution of ground water.
Ultimately, due to pressure from an industry holding 49,000 leases, covering 38 million acres of federal and tribal lands, drilling 3,400 new wells per year—90 percent of which use fracturing—and concerned about the cost of permitting delays, the DOI relented. Instead, the DOI proposed an after-the-fact disclosure requirement to which the environmental community vehemently objects.
The DOI’s proposed rule was published in the Federal Register on May 11, and allows comments until July 11.