The EPA recently initiated a process that may result in the first federal regulation of chemicals used in fracking, a drilling technique that has significantly enhanced energy production and development in the United States.
In a response to a citizen petition under Section 21 of TSCA submitted by environmental groups in 2011 seeking the disclosure of the chemicals used in fracking, the EPA issued an advance notice of proposed rulemaking on May 9, 2014. Pursuant to that notice, the EPA announced that it will be considering rules requiring oilfield service companies and others to provide disclosure concerning the health and safety of the chemicals used in fracking. At the same time, the EPA indicated that it may stop short of issuing final rules, by instead developing incentives to induce voluntary disclosure.
Since fracking was first initiated in the United States, environmental groups have been demanding that EPA collect information on the fluids which are injected with water and sand in the fracking process. The mixture of those fluids with water and sand breaks apart underground rocks to release oil and natural gas. In particular, fracking activities include the injection of water, chemicals, proppant, and/or tracers (i) to prepare geologic formations for hydraulic fracturing, (ii) to complete a hydraulic fracturing stimulation stage, (iii) to evaluate the extent of resulting fractures, and (iv) to ensure the future ability to continue enhancement of production through stimulation by hydraulic fracturing. During each hydraulic fracturing stimulation stage, pressurized fluids containing carrier fluids such as water or gas and any combination of proppant and chemicals are injected into wells, to fracture portions of the formation surrounding a selected well section.
As part of its rulemaking, EPA is requesting comment on the information that should be obtained or disclosed and the mechanism for obtaining or disclosing information about chemicals and mixtures used in hydraulic fracturing. EPA is also seeking comment on best management practices for the generation, collection, reporting, and/or disclosure of public health and environmental information from or by companies that manufacture, process, or use chemical substances or mixtures in hydraulic fracturing activities—that is, practices or operations that can be implemented and verified in order to achieve protection of public health and the environment—and whether voluntary third-party certification and incentives for disclosure could be valuable tools for improving chemical safety. In addition, the EPA is seeking comment on ways to minimize reporting burdens and costs, avoid duplication of efforts, and maximize transparency and public understanding. Finally, EPA is soliciting comments on incentives and recognition programs that could be used to support the development and use of safer chemicals in hydraulic fracturing.
As authority for its rulemaking, EPA has invoked TSCA Section 8(d) (15 U.S.C. 2607 (d)), [enhanced version available to lexis.com subscribers], which authorizes EPA to require the submission of lists of health and safety studies conducted or initiated by or for, or known to or reasonably ascertainable by manufacturers, processors, and distributors of (and any person who proposes to manufacture, process, or distribute) any chemical substance or mixture. TSCA Section 8(d) also authorizes EPA to require the submission of copies of studies that are otherwise known by the person submitting the list. EPA has also invoked the Pollution Prevention Act (PPA) (42 U.S.C. 13101 et seq.), [enhanced version available to lexis.com subscribers], which makes pollution prevention the national policy of the United States. The PPA identifies an environmental management hierarchy in which pollution "should be prevented or reduced whenever feasible; pollution that cannot be prevented or recycled should be treated in an environmentally safe manner whenever feasible; and disposal or release into the environment should be employed only a last resort…" (42 U.S.C. 13103), [enhanced version available to lexis.com subscribers]. Among other requirements, the PPA directs EPA to develop improved methods of coordinating, streamlining, and assuring public access to data collected under federal environmental statutes; to facilitate the adoption of source-reduction techniques by businesses; and to establish an annual awards program to recognize a company or companies that operate outstanding or innovative source reduction programs.
While the EPA has labeled its proposed rulemaking as a major first step in considering whether fracking should be a more transparent process, the oil and gas community is wary of any regulation which would undercut the growth and development of fracking. Instead, oil and gas producers have typically advocated for regulation on a state-by-state basis, which they believe will be more effective as well as more compatible with their business interests. At the same time, environmentalists have already criticized the EPA's proposed rulemaking as merely a "baby" step, because there is no guarantee that the EPA will issue rules mandating the disclosure of chemicals and mixtures used in fracking.
The controversy over disclosure will continue to grow. Fracking has already led to a natural gas boom in a number of states, including, in particular, North Dakota, Pennsylvania, Ohio, and Texas. Although drilling companies have been disclosing chemical information on an industry website (http://www.fracfocus.org/), critics contend that the website allows too many exemptions that keep ingredients secret and precludes ready aggregation of information concerning the specific chemicals used in fracking. Given the fracking boom, whether and to what extent the chemicals used in fracking are disclosed will undoubtedly remain a hot topic, both on the state and federal levels.
By Robert L. Graham, Partner, Jenner & Block
Read more at Corporate Environmental Lawyer Blog by Jenner & Block LLP.
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