What the EPA can do regarding hydraulic fracturing

Over the course of the last ten days, the New York Times has published a series of articles describing the purported environmental problems arising from hydraulic completion of natural gas wells, particularly in the Marcellus Shale in Pennsylvania. Much of what has been written has been misleading, incomplete and even erroneous. I have written to the reporter repeatedly to try to get him to give a complete picture, but nothing has come of this. Accordingly, I think it is time that some actual facts get set forth particularly regarding the EPA.

Despite the scare tactics pushed by the Times, the EPA has a very limited jurisdiction when it comes to hydraulic completion. The EPA cannot regulate, for example, what gets pumped into the ground as part of hydraulic completion unless the mix includes diesel fuel. The Safe Drinking Water Act was amended in 2005 to make this clear. All regulation of this sort is expressly left to the individual states to control. This is not a controversial position; rather, it is the accepted common view of the law. Here, for example, is the position statement of the New York State Department of Environmental Conservation on the point:

"The federal Energy Policy Act of 2005 amended the Underground Injection Control ("UIC") provisions of the Safe Drinking Water Act to exclude hydraulic fracturing from the definition of 'underground injection.' The objective of the federal UIC program is to protect underground sources of drinking water from contamination by underground injection of hazardous and non-hazardous fluids. However, protection of groundwater resources during oil and gas extraction activities is a responsibility of state government. The cited federal amendment in no way hampers or denigrates the Department's authority over oil and gas well development in New York, including oversight of hydraulic fracturing activities to ensure protection of groundwater resources."

So the issue regarding the Marcellus is not what the EPA does, but rather what the states of Pennsylvania, new York and West Virginia do. For other shales, there are obviously other states that get into the mix. So far, only New York has taken any steps that in any way restrict drilling.

In 2005, there was another limitation placed on the EPA regarding drilling activities. Well site activities that disturb one or more acres were exempted from the Clean Water Act's requirement for National Pollutant Discharge Elimination System ("NPDES") stormwater permits for sediment runoff from construction sites, normally an EPA activity. This change led to new EPA regulations and court proceedings that got to the Ninth Circuit in 2008. As of now, the full extent of the exemption is unclear, but it certainly is not meaningless and it has limited what the EPA can do.

The EPA itself describes its powers regarding hydraulic fracturing in this regard by saying: "Disposal of flowback into surface waters of the United States is regulated by the National Pollutant Discharge Elimination System (NPDES) permit program. The Clean Water Act authorizes the NPDES program." So if there is an exemption for the drill sites, there is nothing that the EPA can do her.

So what does all this mean? Unless Congress decides to change the laws that govern the EPA, that is not where the main fight regarding possible pollution from hydraulic fracturing will come. It will be the states that decide. The EPA can get into the act if the fluids recovered from the ground are just haphazardly dumped into a nearby river, but that is not the current method of disposal. Many E&P companies now recycle the fluids and only dispose of them by trucking them to treatment plants. Strangely, it is this treatment of the recycled fluids that could give the EPA an entry into the process since it has the ability to regulate the way that the treatment plants operate.

If the content of the fluids is tested and disclosed, however, the EPA will lose its hook into the regulation of hydraulic fracturing. So the bottom line is that the EPA may be able to increase the cost of hydraulic fracturing, but it will not be able to stop it. Only state action could do that.

One thing which is certain, however, is this. If one accepts that hydraulic fracturing causes pollution (which is doubtful at best), there is a clear "green" alternative. The fracturing process using liquified propane gas which is done by GasFrac Energy Systems of Canada avoids essentially all of the possible environmental complaints raised by the New York Times in its series. As any reader of this blog is aware, I have written to the reporter many times to inform him of this process, but, of course, the Times and its reporters are more interested in doing a hatchet job on the natural gas industry than at explaining to the public that there is a clear and simple solution to all the problems that are raised.