A bill has been introduced in the New York legislature that would prohibit nondisclosure agreements in settlements relating to hydraulic fracturing where aspects of the case relate to public health or safety. S. 4630 was introduced last week in the legislature by Senator Mark Grisanti (R-Buffalo), who has pitched several bills in the legislature concerning hydraulic fracturing. Hydraulic fracturing is defined in the bill as “the use of chemicals, water and other substances injected or pumped into a natural gas well to stimulate the extraction of natural gas.” The bill states, “When the parties to an action, which in any manner relates to hydraulic fracturing, agree to settle such action, the term of such settlement shall not include or be subject to any non-disclosure agreement when any facts disclosed in such action relate to a threat to the public health or safety.” To implement this prohibition, before approving a settlement the judge must review the case to determine whether there is evidence of a threat to public health or safety. If there is such a threat, the court cannot approve a settlement that includes a non-disclosure agreement. Last year the same bill was introduced in the state Assembly where it eventually died in the Judiciary Committee. Grisanti hopes by introducing the bill in the Senate that it has more of a chance to move forward.
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Rep. Cartwright (D-PA) introduced the “Focused Reduction of Effluence and Stormwater runoff through Hydrofracking Environmental Regulation” (FRESHER) Act on March 14, which would remove a provision in the Clean Water Act (CWA), added by the Energy Policy Act of 2005, that exempts oil and gas sites from stormwater permitting requirements. The exemption applies to all uncontaminated runoff from oil and gas sites of any acreage. The FRESHER Act, if passed, would also require the Department of Interior (DOI) to study the impact of stormwater from oil and gas sites on surface water, groundwater and drinking water.
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In the last few months, the federal government has ramped up criminal enforcement actions against oil and gas drilling companies for violations of the Clean Water Act, and other environmental statutes. Alleged violations occurred in Ohio, Louisiana, North Dakota, Oklahoma, Texas and West Virginia.
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EPA published the final rule, “Oil and Natural Gas Sector: New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants Reviews,” last week. The rule, which was finalized in April, and we blogged about here, sets the first air pollution standards for hydraulic fracturing operations. For hydraulic fracturing, the rule will require owners/operators to use reduced emissions completions, also known as RECs, and a completion combustion device to reduce VOC emissions beginning on January 1, 2015. Up until January 1, 2015 owners/operators may flare gas to reduce emissions. The new rule not only addresses hydraulic fracturing, it also includes performance standards for other modified oil and gas operations, such as centrifugal compressors, storage vessels, and pneumatic controllers. The final rule is effective on October 15, 2012.
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Last week, Vermont Governor Pete Shumlin signed HB 464 into law which bans hydraulic fracturing in the state. Vermont is the first state to enact such a ban. It is an unusual ban, as there is not believed to be much natural gas within the state's grounds. The bill has essentially been deemed a symbolic one for environmentalists to point to in hopes that other states follow. And according to a report from Fuelfix.com, this doesn’t sit well with the hydraulic fracturing industry. According to that report, the American Petroleum Institute(API) said the law is an "irresponsible path that ignores three major needs: jobs, government revenue and energy security."
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Last week, the United States Environmental Protection Agency released its draft Underground Injection Control (UIC) Program Guidance for Class II wells that utilize diesel fuel as a fracturing fluid or as a component of a fracturing fluid in hydraulic fracturing operations. The draft guidance provides recommendations for UIC permit writers related to permit duration and well closure, permit application and review, area of review, and well construction, including mechanical integrity testing, financial responsibility, and public notification. The draft guidance identifies the following six substances by their chemical abstract service (CAS) numbers, which would trigger Safe Drinking Water Act (SDWA) requirements if injected as a component of hydraulic fracturing fluid: 68334-30-5, 68476-34-6, 68476-30-2, 68476-31-3, 8008-20-6, and 68410-00-4. According to the fact sheet for the draft guidance, it is “intended to provide information for EPA permit writers issuing permits under the Safe Drinking Water Act (SDWA) to ensure protection of underground sources of drinking water (USDWs).” The draft guidance is open for 60 days for public comment. In the interim, while this guidance undergoes public notice and comment, EPA expects that permitting decisions concerning hydraulic fracturing operations that use diesel fuels will be made on a case-by-case basis. EPA further expects that the draft guidance will not be cited as a basis for such permitting decisions.
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Today, the Department of Interior (DOI) released its draft rule which would require public disclosure of chemicals used in hydraulic fracturing on public and Indian lands. The rule, created by the Bureau of Land Management (BLM), would “(1) provide disclosure to the public of chemicals used in hydraulic fracturing on public land and Indian land, (2) strengthen regulations related to well-bore integrity, and (3) address issues related to flowback water.” To coincide with the proposed rule the BLM also released an economic analysis.
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Today, the EPA issued final air rules for the oil and natural gas sector as mandated by the Clean Air Act. Most notably, the final rule establishes new source performance standards (NSPS) for volatile organic compound (VOC) emissions from natural gas wells, requiring operators of hydraulic fractured wells to use “reduced emissions completions” or “green completions.” Green completions, which are already used by much of the industry, involve the separation of gas and liquid hydrocarbons during flowback to capture the natural gas that may otherwise escape into the air. Operators are required to use green completions, where feasible, by January 1, 2015. Additionally, the final rule revises the NSPS for VOC and sulfur dioxide (SO2) emissions from natural gas processing plants and the national emissions standard for hazardous air pollutants (NESHAP) for glycol dehydration units.
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Today, President Obama issued an executive order supporting safe and responsible development of unconventional natural gas resources, which includes hydraulic fracturing. The executive order focuses on developing policy through an interagency working group. The order reads, “To formalize and promote ongoing interagency coordination, this order establishes a high-level, interagency working group that will facilitate coordinated Administration policy efforts to support safe and responsible unconventional domestic natural gas development.” The group will be chaired by the Director of the Domestic Policy Council, and will include representatives from the Department of Defense(DOD), Department of Interior(DOI),Department of Energy(DOE), Health and Human Services(HHS), Department of Transportation(DOT), Department of Agriculture(USDA), Department of Commerce(DOC), Department of Homeland Security(DHS), Environmental Protection Agency(EPA), Office of Management and Budget(OMB), Council on Environmental Quality(CEQ), Office of Science and Technology Policy(OSTP), the National Economic Council(NEC) and other agencies that the Chair sees fit to participate. The working group will:
- Coordinate agency policy activities,
- Coordinate among agencies the sharing of scientific, environmental and related technical and economic information,
- Engage in long-term planning and ensure coordination among the appropriate Federal entities with respect to such issues as research, natural resource assessment and the development of infrastructure,
- Promote interagency communication with stakeholders, and
- Consult with other agencies and offices as appropriate.
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The Illinois General Assembly is trying to stay one step ahead of its states’ hydraulic fracturing boom, following the example of other states in rapidly developing shales. Four chemical disclosure bills have been introduced in the Illinois General Assembly this year. HB 5853 and SB 3534 would amend the Oil and Gas Act by requiring companies to disclose chemicals used in the hydraulic fracturing process. HB 3897 and SB 3280 also add similar disclosure requirements, as well as require testing of the steel well casings that protect the groundwater during drilling. Members of the Illinois Oil and Gas Association have stated their support for the bills because they provide transparency in the drilling process.
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Last week, President Obama released details of his 2013 budget proposal. As part of the proposal, a total of $45 million would be allocated to federal agencies to study the effects of hydraulic fracturing on health, safety and the environment. The breakdown in the proposal is as follows: $14 million to the EPA, $12 million to the DOE, and $18.6 million to the USGS. The EPA press release states that the “$14 million investment will begin to assess potential impacts of hydraulic fracturing on air quality, water quality and ecosystems.” The USGS sees its budget increase by $13 million from 2012 for hydraulic fracturing studies. The budget increase “includes funding for natural gas assessments, as well as for science that addresses water quality and quantity, induced earthquakes, and habitat impacts.” Overall, the 3 agencies will join together in a collaborative research effort to better understand the effects hydraulic fracturing plays on the environment.
The budget proposal funding comes a few weeks following the President’s State of the Union address where he advocated for gas drilling in shale rock. The President believes that hydraulic fracturing could add more than 600,000 jobs by the end of the decade and provide a boost to the economy. Obama said, “We have a supply of natural gas that can last America nearly 100 years, and my administration will take every possible action to safely develop this energy.” He continued on saying, “The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy.”
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Following recent earthquakes near hydraulic fracturing sites in Ohio, Arkansas, Oklahoma and Colorado, Senator Lautenberg (D-NJ) is calling on the United States Geological Survey (“USGS”) to investigate whether seismic risks are posed by hydraulic fracturing and the related waste disposal process. By letter, Senator Lautenberg urged USGS to conduct: “1) an assessment of the science related to earthquakes caused by disposal of fracking waste fluids, 2) an evaluation of the current risk faced by communities where fracking activity is taking place, and 3) recommended strategies to prevent future earthquakes due to fracking.” The Senator is asking USGS to move quickly on the issue and provide local communities, the states and general public with the information they need to assess the potential dangers associated with hydraulic fracturing.
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Earlier this week, the Colorado Oil and Gas Conservation Commission adopted new regulations for hydraulic fracturing. The regulations require hydraulic fracturing operators to disclose information to the public, including the location of the well, the depth of the well, and the well’s name and registration number. The most significant part of the disclosure regulations focuses on the fracturing fluid. The total volume of the fluid used for fracturing must be disclosed as well as whatever the base fluid is, if it is not water. Each additive of the fluid must be identified (by Chemical Abstract Service(CAS) number) as well as its function, and the maximum concentration allowed of each additive. Trade secret additives may be listed by chemical family only, not CAS number. All of this information must be posted on the FracFocus website. The regulations will go into effect on April 1, 2012.
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In response to a petition filed by Earthjustice and several other organizations, EPA stated that it will use the Toxic Substances Control Act (TSCA) to require companies to disclose information regarding "chemical substances and mixtures used in hydraulic fracturing." Earthjustice requested EPA use 15 U.S.C. § 2607 (section 8 of TSCA) to require chemical manufacturers to provide information on all substances used in the exploration and production of oil and gas. EPA has not stated what information will be subject to disclosure, but has limited disclosure to substances used in hydraulic fracturing. EPA will attempt to avoid duplication of "the well-by-well disclosure programs already being implemented in several states," and its regulations will "focus on providing aggregate pictures of the chemical substances and mixtures used in hydraulic fracturing." EPA will develop regulations through a stakeholder process and public comment period in response to an advanced notice of proposed rulemaking. The timeframe for this process is still up in air.
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The State Review of Oil and Natural Gas Environmental Regulations (STRONGER) completed its review of Colorado’s hydraulic fracturing regulations, the PDF can be found here.
On 11/10, Colorado issued draft hydraulic fracturing fluid disclosure regulations. This draft, issued by the Colorado Oil and Gas Conservation Commission, seeks to require public disclosure of the composition of hydraulic fracturing water. In particular, the proposed regulations would require operators of each oil or gas well that is fractured in Colorado to disclose to the public:
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Today, the United States EPA released its “Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources.” EPA will examine the full cycle of the hydraulic fracturing process according to the press release. This means the study will focus on five key areas: water acquisition, chemical mixing, well injection, flowback and produced water, and wastewater treatment and waste disposal.
The initial findings of the study will be released to the public in the early part of 2012, while the final report will be issued in 2014.
Industry members believe the EPA is overextending itself and going beyond what Congress requested them to do. While environmentalists believe the study doesn’t believe it does enough and avoids subjects like public safety and air quality around well fields.
For more information on the EPA’s plan for hydraulic fracturing click here.
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On Thursday, the United States Environmental Protection Agency (EPA) announced plans to begin regulating wastewater discharges associated with hydraulic fracturing and shale gas production. The rulemaking process, which will begin in 2014, is geared towards developing standards for the disposal of wastewater from shale gas drilling.
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Hydraulic fracturing could be suspended in the state of Ohio at least until 2014 if House Bill 345 and Senate Bill 213 in Ohio’s General Assembly last week, pass. These Bills establish “a moratorium on horizontal stimulation of oil and gas wells” in Ohio until the USEPA publishes its report on the relationship of hydraulic fracturing to drinking water resources. The moratorium would also remain in effect until Ohio’s Division of Oil and Gas Resources determines how the state will address any issues raised by the EPA report. For the Ohio hydraulic fracturing industry, this could mean a halt in operations at least until the year 2014. According to the most recent proposed timeline for the study on the EPA’s website, EPA’s initial research results are expected by the end of 2012 with a goal for a report set for 2014. EPA commissioned the study in March 2010 following a Congressional directive to study the relationship between drinking water and hydraulic fracturing.
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At a meeting of the Ground Water Protection Council (GWPC) last week, the Acting Director of EPA’s Drinking Water Protection Division said that industry should expect a broad definition of diesel fuel included in EPA’s upcoming draft guidance for permitting hydraulic fracturing operations using diesel fuel. EPA is authorized to permit fracturing using diesel fuel under the Safe Drinking Water Act (SDWA) Class II UIC program. This is the only fracturing process that EPA has authority to regulate.
The proposed definition would encompass substances with physical and chemical characteristics of diesel, specifically BTEX compounds such as benzene, toluene, ethylbenzene and xylene. This larger scope may be problematic for companies using BTEX compounds in their fracturing fluid in two ways. First, some states’ Class II programs—such as Montana’s—actually prohibit injection pressures high enough to cause fracturing of the rock formation. A broader definition in EPA’s guidance would have the impact of prohibiting fracturing using BTEX compounds in such states. Second, in states that do allow sufficient injection pressures, some companies may be deterred by the 30 day public comment periods on permits that the Class II UIC program requires.
EPA will submit its draft guidance to the White House Office of Management & Budget (OMB) for review within a few weeks. OMB review takes at least 90 days, pushing the expected timeline for the guidance’s release into early next year.
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Earlier this week the New York Department of Environmental Conservation(DEC) released proposed hydraulic fracturing regulations. The draft rule would allow for point-source discharges from hydraulic fracturing wells into state waters. It also sets up other regulations for the fracturing process, which were indicated earlier this month when the DEC released its draft SGEIS, which we blogged about previously. Specifically for the construction phase of the project it requires “the owner/operator must develop and implement a Construction SWPPP in conformance with technical standards or demonstrate equivalency.”
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