Here is another timely Congressional Research Service (CRS) report, Hydraulic Fracturing and Safe Drinking Water Act Regulatory Issues, by Mary Tiemann and Adam Vann.
Hydraulic fracturing is a technique developed initially to stimulate oil production from wells in declining oil reservoirs. With technological advances, hydraulic fracturing is now widely used to initiate oil and gas production in unconventional (low-permeability) oil and gas formations that were previously uneconomical to produce. Nationwide, this process is now used in more than 90% of new oil and gas wells and in many existing wells to stimulate production. Hydraulic fracturing is done after a well is drilled and involves injecting large volumes of water, sand (or other propping agent), and specialized chemicals under enough pressure to fracture formations holding the oil or gas. The sand or other proppant holds the fractures open to allow the oil or gas to flow freely out of the formation and into a production well. In combination with directional drilling, its application for production of natural gas (methane) from unconventional shale formations, tight sands, and coal beds has resulted in the marked expansion of estimated U.S. natural gas reserves in recent years. Similarly, hydraulic fracturing is enabling the development of tight oil resources, such as the Bakken and Eagle Ford formations. The rapid growth in the use of fracturing has raised concerns over its potential impacts on groundwater and drinking water resources and has led to calls for more state and/or federal oversight of this activity.
The principal federal law regulating underground injection activities is the Safe Drinking Water Act (SDWA), administered by the Environmental Protection Agency (EPA). Historically, EPA had regulated injection of fluids for disposal and enhanced oil recovery but had not regulated the underground injection of fluids for hydraulic fracturing of oil or gas production wells. In 1997, the U.S. Court of Appeals for the 11th Circuit ruled that fracturing for coalbed methane (CBM) production in Alabama constituted underground injection and must be regulated under the SDWA. This ruling led EPA to study the risk that hydraulic fracturing for CBM production might pose to drinking water sources. In 2004, EPA reported that the risk was small, except where diesel fuel was used, and that national regulation was not needed. However, to address the regulatory uncertainty the ruling created, the Energy Policy Act of 2005 (EPAct 2005) revised the SDWA term “underground injection” to explicitly exclude the injection of fluids and propping agents (except diesel fuels) used for hydraulic fracturing purposes. Thus, EPA lacks authority under the SDWA to regulate hydraulic fracturing except where diesel fuels are used. In February 2014, EPA issued final permitting guidance for hydraulic fracturing operations using diesel fuels.
As the use of the process has grown, some in Congress would like to revisit the 2005 statutory exclusion. Legislation to revise the act’s definition of underground injection to explicitly include hydraulic fracturing has been offered in recent years but not enacted. A variety of hydraulic fracturing bills that would amend the SDWA are pending in the 114th Congress. In EPA’s FY2010 appropriations act, Congress urged the agency to study the relationship between hydraulic fracturing and drinking water. On June 4, 2015, the agency released the draft hydraulic fracturing report for peer review by the EPA’s Science Advisory Board and for public comment. EPA expects to issue a final report in 2016.
This report reviews past and proposed treatment of hydraulic fracturing under the SDWA, which authorizes regulation of the underground injection of fluids to protect groundwater sources of drinking water. It reviews current SDWA provisions for regulating underground injection activities and discusses some possible implications of the enactment of legislation authorizing EPA to regulate hydraulic fracturing (beyond diesel) under this statute. The report also reviews legislative proposals concerning the regulation of hydraulic fracturing under the SDWA.
Cutting to the chase...
Hydraulic fracturing bills introduced in the 114th Congress and previously have generated considerable debate. Many state agencies have argued against regulation of hydraulic fracturing under the SDWA groundwater protection provisions and note a long history of the successful use of this practice in developing oil and gas resources and of state regulation of the industry. Various states and industry representatives argue that additional federal regulation would be redundant vis-à-vis state rules and would likely slow domestic oil and gas development. At the same time, drilling and fracturing methods and technologies have changed significantly over time as they have been applied to more challenging formations, greatly increasing the amount of water, fracturing fluids, and well pressures involved in many oil and gas production operations. In recent years, numerous major oil and gas producing states have revised their regulations in response to changes in the industry, while other states are currently developing or considering new laws and regulations. A few states have imposed moratoria on hydraulic fracturing while evaluating potential impacts and developing regulations, and on June 29, 2015, New York State officially banned high-volume hydraulic fracturing.118
Despite state actions, the increasing density of wells and geographic expansion of unconventional oil and gas extraction activities, along with citizen complaints of groundwater contamination in areas where hydraulic fracturing is used, have led to calls for greater federal oversight of this well stimulation technique—and of oil and gas extraction activities more broadly. Proponents of federal regulation assert the need for a consistent, minimum level of regulation and water quality protection nationwide.
Central issues in the debate concern the need for, and potential benefits of, regulation of hydraulic fracturing under the SDWA. Pollution prevention generally—and groundwater protection in particular—is much less costly than cleanup, and where groundwater supplies are not readily replaceable, protection becomes a high priority. Federal environmental regulations are generally used to address activities found to have widespread public health and/or environmental risks, particularly where significant regulatory gaps and unevenness exist among the states. If Congress directed EPA to regulate fracturing broadly under the SDWA, the environmental benefits could be significant if the risks of contamination were significant and states were not addressing those risks effectively. Alternatively, the benefits may be small if states were addressing risks and/or most pollution incidents were found to be related to other oil and gas production activities, such as poor management of produced water or surface spills. Such issues are not subject to SDWA authority and would not be addressed through regulation under this act. Issues related to well construction, operation, monitoring, and closure could be addressed through the UIC program.
Thus far, the data suggest that hydraulic fracturing—particularly in deep zones—presents a low risk of contamination to underground sources of drinking water, and most reports of contamination have been associated with surface activities or well construction and operation problems, not hydraulic fracturing per se. However, while regulators and industry practitioners define hydraulic fracturing as a specific well stimulation operation, the term is frequently used to refer broadly to the full range of activities associated with unconventional oil and gas production. The answer to the question of whether hydraulic fracturing is contaminating drinking water supplies may depend on how broadly one defines hydraulic fracturing.
While state oil and gas and groundwater protection agencies widely support keeping responsibility for regulating hydraulic fracturing with the states, public water suppliers have called for effective and adequately funded regulation of hydraulic fracturing at the federal, state, and local levels to reduce risks to water supplies as much as possible. Whether state or federal, regulations require adequate resources to be administered effectively. The sheer number of wells that rely on fracturing suggests that state and federal regulators might need significant new staffing and other resources to implement and enforce any new EPA requirements on top of existing state requirements.
Debate continues over the risks that hydraulic fracturing operations may pose to drinking water resources, and Congress directed EPA to study this matter. On June 4, 2015, EPA released its draft study of hydraulic fracturing and drinking water, and the final report is scheduled for 2016. The results of this and other studies are expected to provide a better assessment of potential risks and particular circumstances that may be associated with such risks and may help inform the need for, and focus of, additional regulation—whether at the state level through oil and gas laws and regulations or at the federal level through the SDWA UIC program.
"I always thought the world was divided into only two kinds of people - those who think the world is divided into only two kinds of people and those who don't." - Molly Ivins (in The Week and Asheville (NC) The Citizen- Times).