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.

The “Bringing Reductions to Energy’s Airborne Toxic Health Effect (BREATHE) Act” was also introduced on March 14 by Rep. Polis (D-CO), would remove a so-called “loophole” from the Clean Air Act’s (CAA) aggregation provision. This loophole designates each well site as an individual source of a pollutant, rather than taking into account all well sites in a specific area. The BREATHE Act would also add hydrogen sulfide to the CAA’s list of hazardous air pollutants.

The Colorado case of Strudley v. Antero Resources Corp., No. 2012 CA 1251 (Colo. Ct. App.), centers on the use of a so-called Lone Pine order in the context of hydraulic fracturing litigation. Lone Pine orders tend to be used as trial management devices in complex mass tort cases, where evidence of causation will be hard fought. The defendants sought and obtained one in Strudley, which involved localized claims of water contamination from hydraulic fracturing. Plaintiffs were unable to put forth sufficient evidence, and the trial court dismissed their claims, indicating the wisdom of issuing the Lone Pine order.

Plaintiffs, however, feel cheated by having to produce evidence to support their novel claims, and are seeking review in the Colorado Court of Appeals. It is difficult to predict the outcome of the case—seemingly, the Lone Pine ruling should be insulated by abuse of discretion review, but even so the appellate court may find that it was inappropriate here. If the order is upheld, though, it could have important ripple effects. Presumably, other hydraulic fracturing defendants will point to Strudley. And thinking more broadly, so should other defendants in smaller-scale cases involving complex causation issues.

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.

On March 30, 2012, the Department of Justice and Range Resources jointly dismissed a Safe Drinking Water Act enforcement case that the DOJ brought against Range Resources in January 2011. The suit sought to enforce an Imminent and Substantial Endangerment Administrative Order that the Environmental Protection Agency (EPA) had issued in December 2010 pursuant to the Safe Drinking Water Act. The EPA order, which Range challenged, had alleged that gas wells drilled by Range were responsible for the presence of certain chemicals in two nearby private water wells.

Range filed a petition for review of the order in the Fifth Circuit Court of Appeals, arguing that EPA had not adequately investigated whether the company’s wells could be responsible for the contamination before issuing its order. The district court stayed the enforcement case pending the outcome of this appeal. The Fifth Circuit held oral argument in October 2011, but had not yet issued a decision when the parties filed the voluntary dismissal.

Two recent decisions by New York state trial courts further complicate the already uncertain atmosphere surrounding natural gas production in New York. In Anschutz Exploration Corp. v. Town of Dryden, No. 2011-0902 (Tompkins Cnty. Sup. Ct. Feb. 21, 2012), and Cooperstown Holstein Corp. v. Town of Middlefield (Otsego Cnty. Sup. Ct. Feb. 24, 2012), the courts rejected preemption challenges against local bans on natural gas production, which were apparently driven by perceived concerns over hydraulic fracturing.

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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.

This week Vermont’s House of Representatives approved a bill that would preclude hydraulic fracturing in the state for three years. The Senate is likely to take up the legislation several weeks from now. The issue in that chamber will be whether to impose a moratorium or an outright ban. The Governor’s signature of either measure is likely.

Despite the legislative interest, these measures may be more political than prophylactic – Vermont has not been high on the radar of likely regions for hydraulic fracturing.

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.

In a 29-20 vote on November 15, the PA state Senate approved a bill requiring drilling companies to pay an impact fee on their wells. The fee would be an annual decreasing fee for 20 years, beginning at $50,000 per well. Of this fee, 55 percent of the money would go to Marcellus counties and municipalities, while 45 percent would go to the state for infrastructure, environmental programs and natural gas projects.

The House also passed a bill requiring an impact fee on the county level of an annual decreasing fee of $40,000 per well, shrinking to $10,000 over a 10 year period. Of the fees generated, 75% percent will go to the local county, and 25% to state agencies.

Both proposals have language restricting municipalities’ ability to zone and regulate natural gas drilling.

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.

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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A committee affiliated with the National Academy of Sciences is currently studying the potential for man-made seismic activity associated with energy production activities such as carbon capture and storage, geothermal projects, and shale gas production. Those underground events are examples of what scientists in the field call “induced seismicity.” The committee is reviewing the existing scientific literature and consulting with researchers, regulators, and industry to understand what is known and what is unknown regarding induced seismicity. The committee does not appear to be conducting original research.

The potential for induced seismicity has played a relatively small role in the ongoing discussion over hydraulic fracturing. There are a few pending lawsuits raising that issue, but they relate to the underground injection of hydraulic fracturing waste, rather than hydraulic fracturing itself. The committee’s report, due in the spring of 2012, is likely to renew interest in the topic, and may serve as an inspiration for future litigation.

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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