truth and fiction a regulatory analysis of hydraulic fracturing by: najwa sharpe
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Truth and Fiction: A Regulatory Analysis
of Hydraulic FracturingSpring 2013International Environmental LawNajwa-Monique Sharpe
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consequences for the health of the earth, and its inhabitants. Over the last 10, hundreds of
thousands of hydraulically fractured wells have sprouted up across the globe. The public has
called upon lawmakers to investigate existing hydraulic fractured wells to determine if there is
any danger to human health, and the environment. The public has also called for targeted
fracking regulation to address their concern that existing oil and gas regulations are ill-equipped
to meet the environmental challenges fracking presents. This paper will first describe the
hydraulic fracturing process and where it is happening globally. Second this paper will describe
the current public discourse on hydraulic fracturing in the United States (U.S.), the United
Kingdom (UK), and Canada. Third this paper will analyze the current regulatory scheme in the
United States at the federal, state and local levels. I will conclude this paper by describing the
role the public, industry, and regulators should play in order to find an appropriate balance
between economic and environmental interests.
WHAT IS FRACKING
Fracking is an energy extraction technique in which shale formations are fractured in
order to release the natural gas trapped inside. Before the actual fracturing of the shale occurs
energy operators usually take the following steps. First, operators will lease land for drilling. In
the United States the identity of the lessor will depend on where the shale is located. If the shale
is located under an individuals land then they will be the lessor. If the shale is under public
lands the leasor will be government. In most other countries the government owns mineral rights
therefore it is the lessor. This is the case in the United Kingdom, and France.4 Second, the
operator will obtain required permits. Third, the operator will conduct tests on the leased land.
4Sorting Frack from Fiction, THE ECONOMIST, July 14, 2012 at ,http://www.economist.com/node/21558458.
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They will conduct environmental assessments to determine any impacts of the drilling operation
on the air, water and land. They will also conduct geological studies to determine the depth of
the target formation and approximate the amount of recoverable gas. Operators will conduct
seismic tests to determine if operations will disturb any existing fault lines.5 Fourth, operators
construct the well pad. Fifth, the well is drilled and cased.6 The construction of the well is very
important to ensuring that the natural gas does not cause contamination. Operators drill a hole
vertically and then horizontally into the shale formation. Most companies drill vertically until
there is between 8,000 and 13,000 feet between the target shale formation and groundwater
sources. Next, the well is drilled horizontally for thousands of feet into the shale portion of a
rock formation. As the well is drilled cement and steel is used to case the well. Casing provides
an impermeable barrier along the walls of the well in order to prevent gas, and fluids from
escaping. The operators will then install the blowout preventer, and pressure test the well casing.
This completes the construction of the well.
Operators can now start fracking the well. The fracking process starts with the insertion
of the perforating tool. The perforating tool bores holes into the shale formation. Once the shale
is fractured, operators inject fracking fluid into the fractures. Fracking fluid is composed of a
mixture of pressurized water, sand, and chemical additives. The pressurized fluids help open up
the fractures. The sand holds the fractures open so that the liberated gas and fluid can flow back
5 SUSAN L. BRANTLEY & ANNA MEYENDORFF, The Facts on Fracking,NEW YORKTIMES, Mar. 13, 2013 at , http://www.nytimes.com/2013/03/14/opinion/global/the-facts-on-fracking.html?pagewanted=all.6 CHEVRON CORPORATION, Developing Shale Gas Wells, Form Leasing to Production,available at http://www.chevron.com/deliveringenergy/naturalgas/shalegas/howweoperate/;EXXONMOBIL CORPORATION,Phases of Natural Gas Production, available athttp://aboutnaturalgas.com/content/technology-and-process/phases-of-natural-gas-production/;ROYAL DUTCH SHELL PLC,How We Operate, available athttp://www.shell.us/aboutshell/shell-businesses/onshore/how-we-operate.html.
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out of the shale, and into the well. Operators repeat this step of perforating the shale and
injecting fracking fluids all along the horizontal part of the well. Once the gas is liberated, gas
and fluids then flow up the well into capture containers where they are separated. The gas goes
into a pipeline where it is transported to sites throughout the country. The fluids that come up
from the well, known as produced water, or flowback, is contained separately and then disposed
in the following ways. Operators initially keep flowback on-site in open pits. The operators then
decide between permanent disposal methods. The most commonly used method, reinjection,
pressurizes the flowback and reinjects it into a deep disposal wells. Another option is recycling.
Recycled flowback can either be reused in future fracking operations, or disposed into public
treatment systems.7
WHERE IS FRACKING OCCURRING
The hydraulic fracturing boom is largely occurring in North America, but interest is
quickly spreading to Europe, Africa, and South America. This paper will focus on existing
fracking operations in the U.S., Canada, and the UK.
The United States is home to approximately eight major shale formations and several
lesser shale formations. The Marcellus and Utica Shale formations are located in Pennsylvania,
New York, Ohio, and West Virginia. The Haynesville, Barnett, and Eagle Ford Shale formations
are located in Texas. The Bakken Shale is located in North Dakota, and Montana. The smaller
Green River formation is located in Colorado and Utah.
7 CONOCOPHILLIPS COMPANY,Natural Gas: The Energy to Move Forward, [Video file]available at http://www.powerincooperation.com/EN/Pages/videos.html#.
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Canadian shale is located in Alberta, British Colombia, Saskatchewan, Manitoba, and
Ontario.8 The majority of Canadian production comes out of the Alberta shale.
Fracking in the UK remains largely in the exploratory phase due to a 2011 moratorium.
Energy operators have their sights set on shale in the Northwest and Southeastern parts of the
country. Cuadrilla, a UK based operator, has drilled four wells in Blackpool thus far.9 Most
people, regardless of which shale formation is in their backyard, have focused on the following
concerns:
Water Contamination
Many are concerned that fracking will contaminate underground, and surface
water supplies. An important part of the concern over water contamination is the chemical
additives in the fracking fluid. Major energy companies have been reluctant to disclose chemical
compositions. The companies believe their intellectual property rights will be compromised if
the chemical composition of their fracking fluid is revealed. For that reason a limited amount of
information is publically available about the chemical contents of fracking fluid. Due to recent
state mandates, oil and gas producers have had to publish some chemical information on
FrackFocus. FrackFocus, an online chemical disclosure registry, has published a list of the most
8 SHAWN McCARTHY , Ottawa Failing to Protect Canadians from Pollution, Report Says,THE GLOBE &MAIL, Feb. 5, 2013 at , http://www.theglobeandmail.com/news/politics/ottawa-failing-to-protect-canadians-from-pollution-report-says/article8248464/; U.S. EnergyInformation Administration, North American Shale Plays, May 9, 2011 athttp://www.eia.gov/oil_gas/rpd/northamer_gas.pdf.9 CUADRILLA RESOURCES LTD, Our Sites, availablehttp://www.cuadrillaresources.com/our-sites/.
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commonly disclosed fracking chemicals.10 In 2011 the US House of Representatives Energy and
Commerce Committee completed a survey of chemical additives used in hydraulically fractured
wells from 2005 to 2009. The report identified twenty-nine known or suspected human
carcinogens in the fracking fluid submitted by oil and gas operators.11 The committee
specifically identified the presence of benzene, lead, and methanol as dangerous to human health.
These chemicals were present alongside benign chemicals like citric acid. Still, some in the
energy industry assert that the chemical additives are completely safe. Recently Colorado
Governor John Hinkenlooper, who supports fracking in his state, drank a glass of Halliburtons
fracking fluid to demonstrate faith in the industrys assertions.
12
He and others argue that
because the additives in fracking fluid are also used in food, and household products they will
not cause contamination. In 2011 Halliburton said it made the effort to find a safer alternative to
10 FRACKFOCUS, What Chemicals are Used, available athttp://fracfocus.org/chemical-use/what-chemicals-are-used(noting use of: Hydrochloric Acid, Glutaraldehyde, QuaternaryAmmonium Chloride, Tetrakis Hydroxymethyl-Phosphonium Sulfate, Ammonium Persulfate,Sodium Chloride, Magnesium Peroxide, Magnesium Oxide, Calcium Chloride, CholineChloride, Tetramethyl ammonium chloride, Isopropanol, Methanol, Formic Acid, Acetaldehyde,Petroleum Distillate, Hydrotreated Light , Petroleum Distillate, Potassium Metaborate,Triethanolamine Zirconate, Sodium Tetraborate, Boric Acid, Zirconium Complex, Borate Salts,Ethylene Glycol, Methanol, Polyacrylamide, Petroleum Distillate, Hydrotreated Light PetroleumDistillate, Methanol, Ethylene Glycol, Guar Gum, Petroleum Distillate, Hydrotreated LightPetroleum Distillate, Polysaccharide Blend, Ethylene Glycol, Citric Acid, Acetic Acid,Thioglycolic Acid, Sodium Erythorbate, Lauryl Sulfate, Isopropanol, Ethylene Glycol, SodiumHydroxide, Potassium Hydroxide, Acetic Acid, Sodium Carbonate, Potassium Carbonate,Copolymer of Acrylamide and Sodium Acrylate, Sodium Polycarboxylate, Phosphonic AcidSalt, Lauryl Sulfate, Naphthalene, Isopropyl Alcohol, 2-Butoxyethanol).11'Fracking' Report: Carcinogens Injected into Wells, House Democrats Say, HUFFINGTONPOST, Apr. 16, 2011 at , http://www.huffingtonpost.com/2011/04/17/fracking-report-carcinogens-water-wells_n_850159.html.; UNITEDSTATESH.OFREPRESENTATIVESCOMMITTEE ON ENERGY AND COMMERCE,CHEMICALSUSED IN HYDRAULICFRACTURING, Apr. 2011, available athttp://democrats.energycommerce.house.gov/sites/default/files/documents/Hydraulic-Fracturing-Chemicals-2011-4-18.pdf.12 Ben Wolfgang,I Drank Fracking Fluid, Says Colorado Gov. John Hickenlooper, THE WASH.TIMES, Feb. 12, 2013 at, http://www.washingtontimes.com/blog/inside-politics/2013/feb/12/colorado-gov-hickenlooper-i-drank-fracking-fluid/.
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chemical additives by sourcing the food industry rather than the chemical industry.13 While
Halliburton might be telling the truth that does not mean every operator uses safe chemicals.
Each companys fracking fluid is tailored for the shale formation in which it is used. Fracking
certain formations may require the use of hazardous chemical additives. Many feel that we will
never fully know what is being injected into wells.
In the UK the industry response has been more transparent. Cuadrilla, a leading UK
hydraulic fracturing operator, discloses the contents of its fracturing fluid on its website.
Cuadrilla claims their fracturing fluid contains: fresh water, sand, Polyacrylamide friction
reducer, hydrochloric acid, biocide, and sodium salt.14
Fracking related water contamination has two major causes. The first is water
contamination caused by chemicals. The second is water contamination caused by migrating
natural gas.
Environmentalists believe chemicals can contaminate water either by surface spills, well
leakage, or by traveling up the fractures in the rock formation. Most energy companies would
concede that spills, and well leaks can happen, however they largely denounce the possibility
that chemicals can travel up the fractures in the rock formation. In 2011 Canadas Energy
Resource Conservatory Board discovered that fracturing fluids contaminated groundwater in
Alberta.15 The Board concluded that the owner of a nearby hydraulically fractured well was
13 Steve Hargreaves, Clean Fracking: Moving to Replace Chemicals, CNNMONEY, Nov. 16,2011 at , http://money.cnn.com/2011/11/16/news/economy/clean_fracking/index.htm.
14 CUADRILLA RESOURCES LTD.,Fracturing Fluid, available athttp://www.cuadrillaresources.com/what-we-do/hydraulic-fracturing/fracturing-fluid/.15 ENERGY RESOURCES CONSERVATION BOARD, ERCBINVESTIGATION REPORT:CALTEX ENERGY INC.,HYDRAULIC FRACTURING INCIDENT,16-27-068-10W6M,
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responsible. The operator did not drill its well deep enough. More importantly the operator did
not properly perforate the well. This caused a release of fracking fluid into unintended areas.16
The Board ultimately concluded it was unlikely the contamination would reach drinking water.17
To date there have been no proven cases of chemical related water contamination in either the
U.S., or the UK.
The other branch of concern when it comes to water contamination relates to migrating
natural gas. Some suggest that natural gas can seep upwards through the cracked shale
formations, and into underground water reserves.18 Like in the case of chemical contamination
the industry rejects this claim. The more widely accepted mode of gas contamination of water
happens when gas escapes from leaky wells. When operators drill down to the shale formation
they must drill through other gas producing formations.19 If a well is not properly cased and
cemented as the drilling occurs, the gas from these other producing formations will not be
contained. Uncontained gas rises through the gaps created by the drilling. This gas can migrate
up into aquifers, and ultimately to the surface. In 2011 Duke University released the results of a
study on water quality near shale gas extraction sites in Pennsylvania. The study found that
methane concentrations in well water increased as the samples were taken closer to hydraulically
fractured gas wells.20Fourteen of the sixty wells surveyed contained a hazardous amount of
SEPTEMBER22,2011, Dec. 2012, available athttp://ercb.ca/reports/IR_20121220_Caltex.pdf.16Id.17Id.18 Scott Detrow,Methane Making an Appearance in Pa. Water Supplies,NPR, Aug. 28, 2012 at ,http://www.npr.org/2012/08/28/160128351/methane-making-an-appearance-in-pa-water-supplies.19Id.20 Stephen G. Osborn et al.,Methane Contamination of Drinking Water Accompanying Gas-wellDrilling and Hydraulic Fracturing, PROCEEDINGS OF THE NATIONAL ACADEMY OFSCIENCES USA, May 9, 2011, available at
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methane.21 Critics of the study point out that the study lacked a baseline for methane levels. Two
other studies on the matter conducted by Penn State University and Cabot Oil & Gas concluded
that the methane present in Pennsylvanian water wells did not come from drilling. The Cabot
study finds that the methane was naturally occurring throughout the Marcellus region.22 At the
center of the discussion on methane in the well water is Dimock Pennsylvania. Cabot Oil
operates many hydraulically fractured gas wells in and around Dimock. Anthony Ingraffea, a
Cornell University Professor of Engineering, says the wells in Dimock were poorly designed.
While Cabot intended to only extract gas from the deeper shale formation, it ended up with gas
migrating from the shallow producing zone above the shale formation. The reason the gas
migrated from the shallow producing zone is because some segments of the well were not cased
and cemented.23 Despite residents complaining of illness and flammable tap water, operators and
the Environmental Protection Agency (EPA) insist that the tap water in Dimock is safe for
drinking.24 Specifically the EPA noted that while there was methane present in the well water,
the U.S. does not set a limit on the level of methane in water. Nevertheless property owners in
Pennsylvania and Texas say they only started seeing bubbling flammable gas puddles, and
http://www.pnas.org/content/108/20/8172.full.pdf+html?sid=2eba56e2-e163-4a4e-8d05-bcb0f4ccd730.21 DINA CAPPIELLO ,Methane in Water near Gas Drilling Sites, Study Finds ,NBCNEWS,May 9, 2011 at , http://www.nbcnews.com/id/42964307/ns/us_news-environment/.22 Michael Goldman,Drilling into Hydraulic Fracturing and Shale Gas Development: A Texasand Federal Environmental Perspective, 19 Tex. Wesleyan L. Rev. 185, 243 (2012) (According to the study, the correlation of methane concentrations with elevation indicates that,on a regional level, elevated methane concentrations in groundwater are a function of geologic
features, rather than shale gas development.).23 Anthony Ingraffea, Unconventional Gas Development from Shale: Myths and RealitiesRelated to Human Health Impacts,Keynote Address at Northampton Community College (Mar.17, 2012) [Video file] available athttp://www.youtube.com/watch?v=7DK3fODCZ3w.24 Mark Drajem & Jim Efstathiou Jr., CabotsMethodology Links Tainted Water Wells to GasFracking, BLOOMBERG, Oct. 2, 2012 at , http://www.bloomberg.com/news/2012-10-02/cabot-s-methodology-links-tainted-water-wells-to-gas-fracking.html.
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fizzing tap water after fracking began. In those cases gas wells were being hydraulically
fractured nearby. There is a way to effectively trace the origins of migrating gas. Gas has its own
unique fingerprint called an isotopic characteristic.25 This identifier can be used to determine if
gas originated from one rock formation or another. Scientists are currently using this method to
determine the origins of methane found in well water.
Water Consumption
Another water related concern is the amount of water needed to hydraulically fracture a
well. The EPA estimates fracking requires on average two to four million gallons of water.26
Other sources suggest the amount is closer to six million gallons. The amount of water needed to
fracture a well varies based on depth of the shale formation, and the chemical content of the
fracturing fluid.
Water consumption is a concern because water has many competing uses. Draughts in
shale rich parts of the globe have only heightened this concern. In Colorado and Texas, where
draught conditions have been a concern for several years, energy operators are competing with
agricultural uses. In Pennsylvania and New York watersheds provide water to densely populated
urban areas. Draught is also impacting the fracking debate in the UK. A large portion of the
country is under draught conditions, but the problem is particularly acute the in the Southeastern
part of the country. Despite the scarcity, energy operators have expressed interest in exploring
25Id.26 EPA, Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking WaterResources (Nov. 2011) available athttp://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/upload/hf_study_plan_110211_final_508.pdf;How Much Water Does It Take to Frack a Well?,NPRSTATEIMPACT PA.,Mar. 12, 2013 at , http://stateimpact.npr.org/pennsylvania/2013/03/12/how-much-water-it-takes-to-frack-a-well/.
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shale formations in that area.27 Some UK residents have called their government hypocritical for
lifting the fracking ban, while simultaneously asking the public to decrease its water
consumption.28 Canadians in Alberta are concerned that energy operators and environmental
regulators have overestimated the abundance of their water resource the Athabasca River.
Canada allocates water rights on a first come first serve basis. Many of the senior rights holders
under this system are energy companies. Some fear energy companies will put their present
water consumption needs ahead ofthe publics long term needs.29
Some producers have looked into water alternatives to ease the tension. Operators are
experimenting to see if they can use brackish water instead of freshwater to accomplish the same
results. Unfortunately results of a University of Texas study do not suggest brackish water will
become the preferred water source for fracking.30 Another trend is onsite water recycling and
reuse. This practice is still relatively expensive, and waste management regulations in some
jurisdictions make recycling produced water a cumbersome process. Recently operators have
also begun testing a waterless form of fracking. One form of waterless fracking relies on a
mixture of gelled propane and butane while others replace water with carbon dioxide and
27Viewpoints: Fracking's Risks and Benefits, BBC, Jan. 4, 2013 at ,http://www.bbc.co.uk/news/science-environment-20758673.28Letters: In a Drought, Fracking Is the Last Thing We Need , THE INDEP., Apr. 21, 2012 at ,http://www.independent.co.uk/voices/letters/letters-in-a-drought-fracking-is-the-last-thing-we-need-7665817.html.29 Justina Reichel,Alberta Faces Drought if Water System Not Improved, Report Warns , THEEPOCH TIMESENG.EDITION, Oct. 11, 2012 at , http://www.theepochtimes.com/n2/canada/alberta-faces-drought-if-water-system-not-improved-report-warns-301697.html.30 Klarissa Fitzpatrick, UT Study Finds Large Increase in Water Used for Fracking, but Still aSmall Proportion of State's Water Use, THE DAILY TEXAN, Jan. 17, 2013 at ,http://www.dailytexanonline.com/news/2013/01/16/ut-study-finds-large-increase-in-water-used-for-fracking-but-still-a-small.
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nitrogen.31 These techniques are still in experimental stages. Researchers have not established the
effectiveness, or the environmental impacts of waterless fracking as compared to freshwater
fracking. The industry has taken these steps despite the results of a University of Texas study
that found fracking accounts for only 1% of water usage in Texas.32
Air Pollution
Fracking also creates air quality concerns. The first concern relates to the health effects of
gas that escapes from the well pad. Until recently, the public seemed to pay less attention to the
air related health effects of hydraulic fracturing. A 2012 University of Colorado School of Public
Health study raised several red flags. Researchers claim the air surrounding hydraulically
fractured gas wells contained benzene, ethylbenzene, touene, and xylene. The study concluded
based on the presence of benzene that residents in the area around the wells were at a higher risk
for cancer. The study also reported that residents suffered from eye irritation, headaches, sore
throat and repertory issues.33 That same year the EPA also raised the profile of air quality
concerns by releasing rules aimed at reducing Volatile Organic Compounds (VOCs) at
hydraulically fractured well sites. Pennsylvanias Department of Environmental Protection is
currently conducting an air quality study in the Marcellus region that the agency plans to use to
31 Mark Whittington , Canadian Company Tests Waterless Fracking in Texas, YAHOO!NEWS,Mar. 27, 2013 at , http://news.yahoo.com/canadian-company-tests-waterless-fracking-texas-184100202.html.32 Fitzpatrick ,supra note 30.33 Press Release, Univ. of CO Denver Anschutz Medical Campus, Study Shows Air EmissionsNear Fracking Sites may Pose Health Risk (Mar. 19, 2012) available athttp://www.ucdenver.edu/about/newsroom/newsreleases/Pages/health-impacts-of-fracking-emissions.aspx; Michael Goldman,Drilling into Hydraulic Fracturing and Shale GasDevelopment: A Texas and Federal Environmental Perspective, 19 Tex. Wesleyan L. Rev. 185,239 (2012).
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determine the long-term impact of exposure on people living near fracking operations.34 The
Petroleum Technology Alliance of Canada plans to conduct a study of its own on the air
emissions in Western Canada.35
The second concern centers on the assertion that shale gas is a cleaner form of
nonrenewable energy. Environmentalists worry claims that shale gas is a cleaner energy will
undermine efforts to reduce Green House Gas (GHG) emissions. Supporters of shale gas assert
that it emits less CO2 than coal.36 This debate is particularly important in the UK and Canada
because both have pledged to reduce emissions under the Copenhagen Accord. Several studies
have been conducted on shale gas emission. A 2011 Cornell University study concluded that
shale gas, despite emitting less CO2, had significantly larger GHG emissions than coal due to the
methane emissions associated with shale gas.37 Cornell Professor of Ecology and Environmental
Biology Robert Howarth, who worked on the study, explained that the public should be more
concerned about methane because it has, 105 times more warming impact.than carbon
dioxide.38 Conversely, at least four other studies on the subject concluded that shale gas had
34 PA DEPT. OF ENVIRONMENTAL PROTECTION, Oil and Gas Programs, available athttp://www.depweb.state.pa.us/portal/server.pt/community/oil_and_gas/6003.35 PETROLEUM TECHNOLOGY ALLIANCE CANADA,Evaluation of Air EmissionsAssociated with Hydraulic Fracturing, available athttp://www.ptac.org/projects/127.36 Bruce Ho, Shale Gas: A Bridge to Which Climate Future?, YALE CENTER FOR
ENVIRONMENTAL
LAW
&P
OLICY(Nov. 5, 2012) available athttp://environment.yale.edu/envirocenter/post/shale-gas-a-bridge-to-which-climate-future/.
37 Michael Goldman,Drilling into Hydraulic Fracturing and Shale Gas Development: A Texasand Federal Environmental Perspective, 19 Tex. Wesleyan L. Rev. 185, 239 (2012)
38 Stacey Shackford,Natural Gas from Fracking Could Be 'dirtier' Than Coal, CornellProfessors Find, CORNELL CHRON., Apr. 11, 2011 at ,http://www.news.cornell.edu/stories/2011/04/fracking-leaks-may-make-gas-dirtier-coal.
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significantly lower GHG emissions than coal.39 The emission estimates for shale gas were fifty
to seventy-five percent lower than for coal. The University of Texas will release a study on
methane emissions at hydraulically fractured wells in the spring of 2013. The University of
Texas results should be interesting because they are based on emission samples taken by the
research team from well pads in 2012.40 Even if the emissions are lower for shale gas, what
effects would cheap abundant energy have on consumption? Environmentalists argue that even if
shale gas is cleaner it is still dirty, and that governments should focus their support on clean
energy industries. Professor Alan Riley, of the City University of London, argues that
environmentalists should accept shale gas as a stop gap measure to replace coal until clean
renewable resources become commercially viable.41
Earthquakes
The public has also expressed a concern about earthquakes. Hydraulically fractured
resource extraction involves two steps that some can destabilize faults in the earth. The first is
the injection of pressurized fluids into the shale rock during the fracking process. The second
occurs when produced water from the fracking operation is disposed of by high-pressure
reinjection into deep disposal wells. Earthquakes have been reported following both of these
processes.
39 Goldmansupra note 37 at 239 (noting A second group of researchers at Cornell University, as
well as researchers at Carnegie Mellon, the National Energy Technology Laboratory, and theUniversity of Maryland concluded that shale gas had a lower GHG emission than coal.).
40 Press Release, Univ. of Texas at Austin Cockrell School of Engineering, University of Texasat Austin Study Measures Methane Emissions Released from Natural Gas Production (Oct. 10,2012) available athttp://www.engr.utexas.edu/news/7416-allenemissionsstudy.41 Alan Riley, Shale Gas to the Climate Rescue,NYTIMES, Aug. 13, 2012 athttp://www.nytimes.com/2012/08/14/opinion/shale-gas-to-the-climate-rescue.html.
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Fears about earthquakes have dominated the fracking conversation in the UK. In 2011 the
UK placed a moratorium on hydraulic fracturing following two small earthquakes in Lancashire.
The earthquakes were 2.3 and 1.5 magnitude.42 A Department for Energy and Climate Change
(DECC) investigation into the cause of the earthquakes found that the injection of pressurized
fracking fluid destabilized a fault line.43 Many were surprised in late 2012 when the UK lifted its
ban on fracking. UK government officials stated that the occurrence in Lancashire was unlikely
to occur at other fracking sites because the Lancashire earthquakes were caused by a pre-existing
fault.44 The premise is that fracking will not cause earthquakes if operators conduct seismic tests
before drilling. The DECC went on to say if fracking caused earthquakes in the future that they
would not top a magnitude of 3.45 Operations have since resumed in the same area where the
2011 earthquakes occurred.46 The public and regulators have called for constant seismic
monitoring that would automatically shut down fracking operations upon an increase in seismic
activity.
Earthquakes became a part of the U.S. discourse due to eleven earthquakes in
Youngstown Ohio in 2011. The largest of the quakes reached magnitude 4.0. The Youngstown
earthquakes, unlike those in the UK, were linked to the reinjection of waste at a deep disposal
well. The Ohio Department of Natural Resources says it linked the earthquakes to the reinjection
based on co-occurring circumstances that suggested fluid from the disposal well intersected
42 Juliette Jowit & Hanna Gersmann ,Fracking 'probable' Cause of Lancashire Quakes,GAURDIAN, Nov. 2, 2011 at , http://www.guardian.co.uk/environment/2011/nov/02/fracking-cause-lancashire-quakes.43 Reedsupra note 3.44 Jowitsupra note 42.45Id.46 Cuadrilla Resources LTD. supra note 9.
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with an unmapped fault.47 The Department added that the earthquake was a rare occurrence and
could be avoided in the future with proper monitoring and regulation.48 In 2012 the University of
Texas conducted as study into the cause of earthquakes in the Barnett Shale region. The
earthquakes analyzed were nearly all less than magnitude 3.0.The analysis of seismic data
collected between 2009 and 2011 led researchers to conclude that reliably located earthquakes
occurred within two miles of one or more reinjection wells.49 Researchers also addressed the
reinjection rate factor. While the reinjection rate in the earthquake zones exceeded 150,000
barrels of water, the same was true for wells where no earthquakes were reported. To reconcile
this researchers concluded that high reinjection rates might only be a factor when the reinjection
well is near an active fault line.50
While environmentalists have attempted to link these earthquakes to the injection of
hydraulic fracturing fluid its important to note that waste reinjection is not a disposal method
used solely by fracking operators. Waste reinjection has been around for decades, and is used for
many types of oil and gas waste.
Waste Disposal
Hydraulic fracturing operators have several methods for disposing waste. In the section
on earthquakes we discussed the controversy surrounding reinjection. The public also holds a lot
47 Michael Muskal & Neela Banerjee, Ohio Earthquakes Linked to Natural Gas Drilling, LATIMES, Mar. 9, 2012 at , http://articles.latimes.com/2012/mar/09/nation/la-na-fracking-quake-20120310.48Id.49 Press Release, Univ. of Texas at Austin, Study Finds Correlation Between Injection Wells andSmall Earthquakes (Aug. 6, 2012) available athttp://www.utexas.edu/news/2012/08/06/correlation-injection-wells-small-earthquakes/.50Id.
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of concerns about waste while it is onsite. Storage in on-site open pits is a temporary disposal
method until waste can be disposed elsewhere. One temporary disposal method is to leave waste
in open pits until they can be disposed elsewhere. The pits can hold upwards of 750,000 gallons
of waste. Two dangers seem to have surfaced. First storage pits are exposed thus if flooding
occurs pits can overflow and waste may contaminate nearby water sources.51 The Colorado Oil
and Gas Conservation Commission cited an operator for overflowing pits in 2007. 52A 2012
University of Texas study on the environmental regulation of shale gas development concluded
that surface spills posed a greater risk for contamination than injected fracking fluids.53 A second
pit related concern is waste seepage. Though most states now require pits to be lined, poor
materials and execution pose an ongoing risk that waste will seep and contaminate the land.
Another concern is that fracking waste will be disposed into public waste treatment
systems and eventually make its way into our tap water.54The EPAs study on hydraulic
fracturing, due out in 2014, will explore this concern. The EPA study will determine whether
51 Lynne Peeples,Hurricane Sandy May Have Spared Fracking Operations, but Toxic ConcernsRemain , HUFFINGTON POST, Nov. 1, 2012 at ,http://www.huffingtonpost.com/2012/11/01/hurricane-sandy-fracking_n_2056293.html; NATHANATKINSON &KATIE KING ,NO.2,27FLOODING AND FRACKING:AREVIEW OF EXTREMEWEATHERIMPACTS ON DRILLING ACTIVITIES (ABA Section of Environment, Energy & Res.2012),http://www.americanbar.org/publications/natural_resources_environment/2012_13/fall_2012/flooding_and_fracking_review_extreme_weather_impacts_drilling_activities.html.
52 Gargi Chakrabarty,Driller Leaves Mess Behind, ROCKY MOUNTAINNEWS, July 19, 2007 at ,http://m.rockymountainnews.com/news/2007/Jul/19/driller-leaves-mess-behind/.53 ENERGY INSITUTE UNIV. OF TEX. AT AUSTIN,FACT-BASED REGULATION FORENVIRONMENTALPROTECTION IN SHALE GAS DEVELOPMENT 31-34 (2012),http://www.velaw.com/UploadedFiles/VEsite/Resources/ei_shale_gas_reg_summary1202[1].pdf.54 Leigh Krietsch Boerner, Sewage Plants Struggle to Treat Wastewater Produced By FrackingOperations, CHEMICAL &ENGINEERINGNEWS, Mar. 18, 2013 at ,http://cen.acs.org/articles/91/web/2013/03/Sewage-Plants-Struggle-Treat-Wastewater.html.
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contaminants associated with fracking making it into our drinking water even after treatment.55
The EPA will also look to see if byproducts form when fracking contaminants mix with the
facilitys disinfectants.56
Land Use
Fracking operations are moving closer to densely populated cities. Many early fracking
operations occurred in rural American communities. In those instances property owners decided
whether to lease their land for fracking. Now operations are expanding to places like the UK
where the state owns mineral rights, and thus has the power to decide whether to lease land to
fracking operators. Combine that fact with population density in many shale rich areas and you
have the concern of residential displacement.57
NO FRAC PLEASE
It is also worth noting that several countries have banned fracking. France has been an
adamant opponent of fracking. France officially banned fracturing in 2011. French public
opinions seem to have been influenced by fracking in America. Reportedly the French were
alarmed by the images of Americans setting their tap water on fire.58 As of January 2013 France
is blocking 120 exploration permits.59 The U.S. Energy Information Administration estimates
that France has 180 trillion cubic feet of technically recoverable shale gas resources. This is the
55 EPA,EPAs Study of Hydraulic Fracturing and Its Potential Impact on Drinking WaterResources, available athttp://www2.epa.gov/hfstudy.56Id.57 Reedsupra note 3.58 Michel Rose,Analysis: Clock Ticking on French Fracking Veto, REUTERS, Sept. 25, 2012 at ,http://www.reuters.com/article/2012/09/25/us-energy-shale-france-idUSBRE88O0J720120925.59 Tara Patel , U.K. Explorer Shows French Fracking Ban Stalls Conventional Oil, BLOOMBERG,Jan. 23, 2013 at , http://www.bloomberg.com/news/2013-01-23/u-k-explorer-shows-french-fracking-ban-stalls-conventional-oil.html.
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second highest estimated resources in Europe. In 2010 ExxonMobil was forced to stop fracking
operations in Lower Saxony Germany due to opposition.60 The Greens, an environmental party,
is a well-established voice in Lower Saxony. They are also a political force in France. In 2012
Bulgaria became the second European country to ban fracking.61 In the United States a few states
have banned fracking. Vermont has banned fracking and New York and New Jersey have put
temporary moratoriums in place. Cities across the United States have also attempted to ban
fracking however the legality of those laws remain in question.
Still it seems that energy shortages and economic shortcomings have softened some
fracking opponents. The UK and South Africa both lifted bans on fracking in 2012.62 South
Africa plans to allow some fracking despite suffering environmental damage in its Karoo region
in non-fracking related oil production.
FRACKING REGULATION IN AMERICA
With those concerns in mind its important to determine how fracking is regulated and if
that regulatory scheme is effective. Hydraulic fracturing has been around for over 50 years, but
60 Stanley Reed,Fracking Still Controversial in Europe,NYTIMES, Nov. 13, 2012 at ,http://www.nytimes.com/2012/11/14/business/energy-environment/fracking-still-controversial-in-europe.html?pagewanted=1.Bulgaria Bans Shale Gas Drilling with 'Fracking' Method, BBCNEWS, Jan. 9, 2012 at ,http://www.bbc.co.uk/news/world-europe-16626580 (Fracking also banned in The Netherlands,
Luxemburg and the Czech Republic); Unconventional Gas in Europe Frack to the Future, THEECONOMIST, Feb. 2, 2013 at , http://www.economist.com/news/business/21571171-extracting-europes-shale-gas-and-oil-will-be-slow-and-difficult-business-frack-future.62Sally Bakewell, U.K. Government Lifts Ban on Shale Gas Fracking, BLOOMBERG, Dec. 13,2012 at , http://www.bloomberg.com/news/2012-12-13/u-k-government-lifts-ban-on-shale-gas-fracking.html.; South Africa Lifts Fracking Ban , WALL STREET J., Sept. 7, 2012 at ,http://online.wsj.com/article/SB10000872396390443589304577637382738533386.html.
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because it was not the primary technique used for natural gas extraction until recently,
legislatures have not addressed the process directly.
Federal
Although the federal government has done little to addressed hydraulic fracturing
directly, it is possible that some of the concerns described in this paper can be addressed by
existing federal environmental laws such as the Clean Air Act (CAA), the Clean Water Act
(CWA), the Resource Conservation and Recovery Act (RCRA), and the Safe Drinking Water
Act (SDWA). The CWA doesnt directly address hydraulic fracturing but sets standards with
which all energy operators must comply. For instance when energy operators dispose of
wastewater by trucking the waste water off to a treatment plant 40 C.F.R. 403.5 specifically
prohibits introduction of eight hazardous pollutants63 into public waste treatment systems.
RCRA specifically exempts waste from all oil and gas exploration and production which
includes waste from hydraulic fracturing operations. Promulgated under the SDWA the
Underground Injection Program (UIP) allows the EPA to regulate the discharge of pollutants into
underground wells in an effort to protect drinking water sources. The rule states that an injection
is presumed to endanger drinking water sources if it might result in the public water systems not
complying with any national primary drinking water regulation, or might otherwise adversely
affect the public health. 64 While hydraulically fractured gas wells would seem to qualify for UIP
coverage they are no longer covered due to the 2005 Energy Act. The Energy Act expressly
63 40 C.F.R. 403.5 (Prohibiting oil and gas operators from sending caustic, hazardous,corrosive pollutants to publically operated treatment works. The concern is these pollutants willdamage the POTW, or create an even more dangerous pollutant when mixed with the POTWscleaning solutions).64 40 C.F.R. 144.12(a).
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exempted hydraulic fracturing activities that use underground injection unless those operations
utilize diesel fuel.65 This exemption is infamously known as the Halliburton Loophole. Many
speculate that Congressional Republicans teamed up with Vice President Dick Chaney to create
a lucrative opportunity for Chaneys old company, Halliburton. At the time Halliburton was one
of the worlds largest providers of fracking services.
The EPA has attempted to regulate fracking operations directly in recent years. In 2012
the EPA issued NSPS OOOO, the agencys first new set of rules directed at the oil and gas
industry in decades. NSPS OOOO includes a provision that directly addresses air quality at
hydraulically fractured well sites. The major goal of this rule is the reduction of Volatile Organic
Compounds (VOCs) which the EPA defines as organic chemical compounds whose composition
makes it possible for them to evaporate under normal indoor atmospheric conditions of
temperature and pressure. The EPA requires operators to reduce VOCs through a process known
as green completion. Green completions minimize the amount natural gas released into the
atmosphere when a well is in the completion stage. Green completion tanks capture, process and
condense gas that would otherwise be vented into the atmosphere. 66The EPA points out that this
65 EPA,Hydraulic Fracturing Background Information, available athttp://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/wells_hydrowhat.cfm;https://a.next.westlaw.com/Document/Ib28e678606cf11e28b05fdf15589d8e8/View/FullText.html?navigationPath=Search%2Fv3%2Fsearch%2Fresults%2Fnavigation%2Fi0ad6040d0000013d88c48dbc6f6d2dc2%3FNav%3DANALYTICAL%26fragmentIdentifier%3DIb28e678606cf11e28b05fdf15589d8e8%26startIndex%3D1%26contextData%3D%2528sc.Search%2529%26transitionType%3DSearchItem&listSource=Search&listPageSource=bf68febd96a31ac232a9b6fbd2f71e70&list=ANALYTICAL&rank=6&grading=na&sessionScopeId=8f2b2866e929836a3f5257e8eea3f53a&originationContext=Search%20Result&transitionType=SearchItem&contextData=%28sc.Search%29.66 Rachael Colley,Natural Gas and Green Completion in a NutShell, ENERGY IN DEPTH,Nov. 26, 2012, available athttp://eidmarcellus.org/marcellus-shale/natural-gas-and-green-completion-in-a-nut-shell/15507/; EPA, Summary of Requirements for Processes and Equipment
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process is not only beneficial for the environment, but also beneficial for natural gas producers
because they can sell the additional gas they recover in the green completion. The EPA believes
over 10,000 Mcf of methane can be recovered in a single green completion.67 Green completion
is not new. Devon energy, a company that works on fractured wells in Barnett Shale, claims to
have been using green completion since 2004.
The EPA has also proposed a rule that will set water discharge standards for wastewater
from shale gas operations.68 The current guideline for onshore facilities is zero, thus oil and gas
producers may not directly discharge produced water into navigable water source. It is unclear
how a shale specific standard will improve water quality where the current onshore guideline is
zero.
The Bureau of Land Management (BLM) has also proposed a rule that would regulate the
hydraulic fracturing operations that occur on federal lands. Like many other state fracking rules
the BLMs rule requires disclosure ofthe chemicals in fracking fluid, well integrity standards,
and standards for handling flowback.69
States
at Natural Gas Sites, available athttp://www.epa.gov/airquality/oilandgas/pdfs/20120417summarywellsites.pdf.67 EPA,Reduced Emissions Completions for Hydraulically Fractured Natural Gas Wells, 1available athttp://epa.gov/gasstar/documents/reduced_emissions_completions.pdf.68 EPA, Unconventional Extraction in the Oil and Gas Industry, available athttp://water.epa.gov/scitech/wastetech/guide/shale.cfm.69 Ronald J. Tenpas & Charles B. Moldenhauer,Federal Regulation of Fracking: A ChangingLandscape, MORGAN LEWIS BOCKIUS LLP, Jul. 31, 2012 available athttp://www.morganlewis.com/index.cfm/publicationID/56e11e09-029c-47da-8536-00f5c201cfce/fuseaction/publication.detail.
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States have taken more of a lead when it comes to regulating hydraulic fracturing. Its
likely States have taken the lead for two reasons. First the federal government has deferred
enforcement of many federal environmental laws to the States. Second, the States have a long
history of regulating oil and gas operations. States like Pennsylvania, Texas, Colorado, and now
New York are proving grounds for hydraulic fracturing regulation because they are home to the
major U.S. shale formations. I will now describe the way legislatures and state agencies in these
states have addressed hydraulic fracturing.
Pennsylvania
The Pennsylvania Department of Environmental Protections Bureau of Oil and Gas
Management (PDEP) is tasked with regulating the states ever expanding natural gas operations.
PDEP has passed the following hydraulic fracturing regulations. In order to address water
contamination concerns PDEP requires disclosure of hydraulic fracturing chemicals, and makes
that information publically available on its website. In 2010 the agency also passed regulations to
protect the states streams. PDEP requires that operators adhere to the SDWA standard for Total
Dissolved Solids (TDS) or 5,000 milligrams per liter. This test is one way environmental
scientists are attempting to determine if treated produced water is impacting the public water
supply. PDEP also requires that operators maintain a 150 foot buffer between fracking operations
and streams. This regulation is undoubtedly a response to the risk of surface spills, but depending
on the size of the spill this buffer may not prove to be very effective. PDEP has also updated
existing drilling, casing, cementing, monitoring, and plugging regulations so that they meet the
standard of best industry practice.
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PDEPs blowout prevention regulations could have more of an impact. The regulation
requires all wells to have a remote-controlled, independently powered blowout preventer.
Operators must maintain records of blowout preventer testing that PDEP says should occur after
installation, and before use.70 The regulation also promotes greater oversight on the part of
operators by requiring the presence of a supervisor certified in well control at each well site. The
on-site supervisory requirement ensures someone that knows emergency control measures is
ready to act at all times. Quick action can prevent thousands of gallons of fluids or gas from
contaminating the environment.
PDEP believes it is doing a great job of enforcing its regulations. PDEP has also taken
measures to ensure enforcement of those rules. Despite budget decreases,71 PDEP has found a
way to ensure it has funds to enforce its regulations. PDEP raised its drilling permitting fees
from $100 to $5,500 in order to increase oversight funds. Second it added employees to the oil
and gas bureau. Despite that critics argue that the bureau remains understaffed to meet the rapid
growth of fracking in the state.
Critiques of the agencys enforcement do not stop there. PDEP touts a record of 5,000
inspections in 2012. According to Professor Ingraffea that is where PDEPs enforcement ends.
Ingraffea claims that while PDEP inspected thousands of wells, it failed to issue violations to a
significant number of offending well operators.72 Specifically Ingraffea highlights a high number
70 PA Dept. of Environmental Protection,Marcellus Shale: Tough Regulations, GreaterEnforcement, available athttp://www.elibrary.dep.state.pa.us/dsweb/Get/Document-84024/0130-FS-DEP4288.pdf.71DEP: The Department that Regulates and Oversees Drilling,NPR,http://stateimpact.npr.org/pennsylvania/tag/department-of-environmental-protection/.72 ANTHONY R.INGRAFFEA,,FLUIDMIGRATIONMECHANISMSDUE TO FAULTYWELLDESIGNAND/ORCONSTRUCTION:AN OVERVIEW AND RECENTEXPERIENCES IN THE
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of well integrity failures. Holes in well casing, or cement that allow gas to escape. Well failures
of course are the most likely cause of natural gas migration which leads to air and water
contamination.
Texas
The Texas Railroad Commission (RRC) is in charge of regulating oil and gas industry
operations in the state. In 2011 Texas became the first state to require energy operators to
disclose the chemical content of fracking fluids.73 The Texas rule requires disclosure of each
intentionally added chemical additive. The rule also forces operators to disclose the
concentration of each chemical. Critics of the chemical disclosure rule say it lacks teeth because
of a loophole that allows operators to withhold chemicals that they consider to be a trade secret.
Texas also has established casing, cementing, drilling and completion requirements for
hydraulically fractured wells.74 The casing rule requires surface casing, which provides
protection all the way up to the uppermost part of the well. Some states do not require casing of
this part of the well. Studies have shown that casing to the top of a well helps prevent the escape
of migrating gas from the shallow production zones. The casing must undergo pressurized tests
so that the operator can be certain that the integrity of the casing will withstand high pressure
PENNSYLVANIAMARCELLUS
PLAY 7-9 (Physicians Scientists & Engineers for HealthyEnergy 2012),
http://catskillcitizens.org/learnmore/PSECementFailureCausesRateAnalysisIngraffea.pdf (NotingPDEP sent operators with leaking gas wells violation pending notices rather than issuingviolations).73 16 Tex. Admin. Code 3.29.
74 16 Tex. Admin. Code 3.13.
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operations. The RRC has a long list of other rules that do not address hydraulic fracturing
directly, but would certainly be helpful in protecting air, water and soil quality.75
In an attempt to keep up with the industry, the RRC has also proposed several fracking
rules.76 The RRC plans to strengthen casing requirements. They plan to require that the blowout
prevention system be installed as soon as casing is set. Another proposal would require operators
to stop fracking operations if well pressure tops levels previously anticipated. A proposal that has
garnered national attention would authorize recycling of produced water at the drilling site. The
rule would waive the disposal permit requirement where the recycled water would be reused on-
site, or where it would be treated to SDWA standards and then disposed.
Enforcement seems to be an issue for the commission. The state advisory board reviewed
the RRC and concluded that it should codify certain procedures to ensure effective enforcement.
The advisory board suggested that the RRC: 1) codify penalty guidelines, 2) require staff to rank
oil and gas violations, 3) increase penalties for repeat offenders, and 4) increase enforcement of
existing rules by following through with penalties.77
There are other reasons the RRC appears to be a less effective regulator. Many believe
the three person commission is too close to the industry it regulates. For that reason the state
advisory board recommended: 1) the commission raise the cap on self-funding for its oil and gas
75See generally TEXAS RAILROAD COMMISSION, Texas Administrative Code EconomicRegulation Railroad Commission of Texas Oil and Gas Division Rules, available athttp://info.sos.state.tx.us/pls/pub/readtac$ext.ViewTAC?tac_view=4&ti=16&pt=1&ch=3&rl=Y.76 TEXAS RAILROAD COMMISSION,Railroad Commission of Texas Proposed Rules,available athttp://www.rrc.state.tx.us/rules/proposed.php (noting changes to Chapter 3 Oil andGas Division rules).77 SUNSET ADVISORY COMMISSION, REPORT TO THE 83RDLEGISLATURE, Feb. 2013, 147-155 available at http://www.sunset.state.tx.us/83rd/report_83rd.pdf.
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related enforcement 2) that commissioners only be allowed to solicit campaign contribution
during the year and a half surrounding an election, and 3) that commissioners be prohibited from
knowingly accepting contributions from parties to contested actions before the commission.78
Colorado
The Colorado Oil and Gas Conservation Commission (COGCC) has exclusive authority
to regulate oil and gas operators in the state of Colorado. The agency already has several rules on
the topic of hydraulic fracturing.79 COGCC also requires operators to disclose the chemicals in
fracturing fluid. Like the other states Colorado does allow operators to claim a proprietary
exception which allows companies to withhold the identity or concentration of a chemical.
Colorados disclosure rule is different in that it requires that the operator disclose the chemical
family of the undisclosed chemical.80 To ensure that proprietary concerns do not outweigh health
concerns Colorado requires that operators disclose all chemicals, even those claimed to be
proprietary, to health professions. This requirement has stirred up controversy in Colorado and
other states that have similar provisions. The controversial element of the rule is that energy
operators do not have to disclose chemicals unless health professionals sign a confidentiality
agreement. Health care providers argue that chemical exposure usually goes beyond the
treatment of one patient, and has the potential to impact the public health. Signing the
78Id149-50.79 COLORADO OIL AND GAS CONSERVATION COMMISSION, COGCC Hydraulic
Fracturing Rules, available athttp://cogcc.state.co.us/Announcements/Hot_Topics/Hydraulic_Fracturing/COGCC%20Hydraulic%20Fracturing%20Rules.htm.80 Scott Detrow,Fracking Disclosure: Colorados Compromise Is Pennsylvanias Controversy,NPR, June 7, 2012 at , http://stateimpact.npr.org/pennsylvania/2012/06/07/fracking-disclosure-colorados-compromise-is-pennsylvanias-controversy/ (Noting that Pennsylvania, Ohio andTexas also require chemical disclosure to health care professionals.).
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confidentiality agreement would prevent health care professionals from sharing information with
other health care professions and state health departments.81
Like other states Colorado has several well casing and cementing standards, pressure
monitoring standards. Colorados other fracking rules require notice to landowners and notice to
local government of planned hydraulic fracturing operations. Rules also require notice to
COGCC and the landowner of spills that threaten water sources. The COGCC lays out a
multifaceted standard for protecting surface waters. The rule requires operators to maintain a
surface buffer zone between operations and streams. A proposed rule would create similar buffer
zones between fracking operations and sensitive areas such as neighborhoods, hospitals, and
schools.82 The surface water setback rule requires operators to test surface water before, and
three months after fracking operations. Operators must collect data on the following water
quality characteristics: pH, alkalinity, specific conductance, presence of chloride, fluoride,
sulfate and sodium, total dissolved solids, BTEX, TPH, PAH, and metals.83 These testing
requirements detect many substances that one would find in an oil and gas operation. Another
rule requires that certain production pits be lined with thick, impervious, synthetic material.84
Making pit lining mandatory will prevent seepage of waste into groundwater.
81 Bruce Finley, Colorado Docs Chafe at Secrecy Oath Needed for Access to Chemical List,DENVERPOST, Mar. 21, 2013 at,
http://www.denverpost.com/environment/ci_22827696/colorado-docs-chafe-at-secrecy-oath-needed-access.82Editorial: Colorado Fracking Rules on Right Track, DENVERPOST, Oct. 1, 2012 at ,http://www.denverpost.com/opinion/ci_21655618/editorial-colorado-fracking-rules-right-track.83 2 Colo. Code Regs. 404-1:317B(Requiring operators to take precautions near surface watersand tributaries that are sources of public drinking water).842 Colo. Code Regs. 404-1:903; 2 Colo. Code Regs. 404-1:904.
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Environmentalists say these rules do not go far enough. With regards to the water quality
rules the Sierra Club Rocky Mountain chapter says that COGCC should not only monitor for
BTEX but require operators to stop using85 the carcinogen. Sierra Club also finds fault in the fact
that the setback rules only apply to new wells and not to existing wells that operate without a
buffer between operations and streams.86 Others suggest that while the rules address water
related fracking concerns they completely miss the mark for addressing air quality concerns.87
On the surface COGCC seems very transparent. COGCC violation, spill, and inspection
reports are all made available to the public.88
Environmental groups have pointed to several shortcomings of the COGCC. Sierra Club
alleges that the COGCC only has seventeen inspectors to monitor nearly 50,000 wells.
Earthworks, an environmental advocacy group, says that COGCC has actually decreased the
number of wells it inspects despite a growing number of hydraulically fractured wells in the
state. Earthworks adds that when COGCC does uncover violations, the agencies fines are too low
to have a deterrent effect.89
Another source of contention is the exclusive jurisdiction of the
COGCC. Earthworks believes that local enforcement agencies should be allowed a say in light of
85 SIERRA CLUB ROCKY MOUNTAIN CHAPTER, New COGCC Fracking Rules Fail toProtect Public from Toxic Air and Water Pollution, available athttp://action.sierraclub.org/site/PageNavigator/E-Newsletters/Misc_CHP_CO_January_2013_COGCC_fracking_rules_fail.html.86Id.87Id.88 Troy Hooper,Report: Colorado Oil, Gas Regulators inadequate, Not Enforcing Rules, THECOLO.INDEP., Mar. 20, 2012 at , http://coloradoindependent.com/116024/report-colorado-oil-gas-regulators-inadequate-not-enforcing-rules.89 Earthworks,New Report Shows COGCC Fails to Enforce its Own Rules: 516 Spills in 2011,Only 5 Fines Assessed, available athttp://www.earthworksaction.org/media/detail/new_report_shows_cogcc_fails_to_enforce_its_own_rules_516_spills_in_2011_on.
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facts that suggest the COGCC is understaffed. The Hickenlooper administration has been
adamant that COGCCs authority should not be undercut by local agencies. City councils in Fort
Collins and Longmont Colorado have banned fracking out of concern for the health of their
residents. In response to Longmont the state sued the city for being out of compliance with state
law. Environmentalists argue Hickenlooper and the COGCC are becoming too concerned with
making it easy for operators and less concerned with making it safe for residents.90
New York
The New York Department of Environmental Conservations Bureau of Oil and Gas
Permitting (DEC) is responsible for regulating the oil and gas industry in New York State.
Currently New York has a moratorium on hydraulic fracturing operations. On March 6, 2013 a
bill was introduced to extend the moratorium until 2015.The DEC has taken a different approach
to regulating fracking by working out regulations before operators are allowed to drill. The DEC
is using the experiences of its neighbor Pennsylvania as a guide. A part of the DECs regulatory
approach is conducting its own fracking studies. The DECs comprehensive study on the health
effects of fracking will be used to help Governor Andrew Cuomo decide whether to lift the
fracking moratorium.91Initial results of the study, released in 2012, concluded that fracking
could be safely done in New York.
90 Bruce Finley, Threat of Colorado Lawsuit Looms As Fracking Ban OK'd in Fort Collins,DENVERPOST, Mar. 6, 2013 at , http://www.denverpost.com/breakingnews/ci_22724633/threat-state-lawsuit-looms-fort-collins-votes-fracking.91 Danny Hakim, Gas Drilling Is Called Safe in New York,NYTIMES, Jan. 3, 2013 at ,http://www.nytimes.com/2013/01/03/nyregion/hydrofracking-safe-says-ny-health-dept-analysis.html; Danny Hakim,New York Governor Puts Off Decision on Drilling,NYTIMES,Feb. 12, 2013 at , http://www.nytimes.com/2013/02/13/nyregion/cuomo-delays-decision-on-gas-drilling-as-health-study-continues.html?_r=0.
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Highlights of the DECs proposed rule include: disclosure of proposed additives used and
the volume of those additives; breaking down the percentage of chemical additives, propellant
and water used in fracking fluid; maintaining records showing that additives used pose a lower
potential threat to water and the environment; disclosure of proposed volume and source of water
used in the operation; and disclosure of air emission control measures. The proposed rules also
require testing of water, well pressure, and well casing. In another attempt to address concerns
about water contamination the proposed rules prohibit placement of wells near watersheds that
severe New York City, and Syracuse. The rules also addresses fracking waste by requiring
operators to certify planned disposal methods including methods to store produced water.
Additionally, operators must also inform the DEC of its waste contingency plans. Operators must
lay out their spill prevention plans and secondary containment measures.92
Though there is no enforcement of the rules at this time, the DECs rules have been
critiqued during the notice and comment period. The Independent Oil and Gas Association of
New York (IOGANY) is one of 66,000 commenters on the proposed rules. The New York
branch of the national trade group submitted over a hundred pages in response to the DEC.
IOGANY argued that compliance costs were unreasonable to the industry. Specifically IOGANY
said air quality rules go beyond DECs authority and address issues covered by the CAA. The
association also claims that well placement prohibitions would make it impossible to layout well
92 NY DEPT. OF ENVIRONMENTAL CONSERVATION,High Volume Hydraulic FracturingProposed Regulations 6 NYCRR Parts 52, 190, 550-556, 560, and 750, available athttp://www.dec.ny.gov/regulations/77353.html; Lauren Brogdon, New York Assembly ApprovesTwo-Year Moratorium on Hydraulic Fracturing, Fulbright & Jaworski Hydraulic Fracking Blog,Mar. 11, 2013, available at http://fracking.fulbright.com/search/label/New%20York.
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pads in an economically viable way.93 Conversely Riverkeeper, an environmental group,
believes the proposed rules will not do enough to protect New Yorkers. Riverkeeper argues the
proposed buffer zones lack scientific basis and thus may not provide a buffer that will actually
keep water sources safe in the event of surface spills. They also believe the chemical disclosure
proposal fails to provide a way for the public to challenge disclosure rules proposed trade secret
exception. Because chemicals can migrate, owners of land in the areas around the fracking
operation feel they also need a citizens action provision.
INDUSTRY REGULATORY PROSPECTIVE
An integral player in the regulatory process is the regulated industry. The public
perception of the industrys stance on regulation has not been positive. Most think that the
industry uses its powerful lobby to escape a lot of regulation. Many cite tax breaks for oil and
gas, and the 2005 Energy Act exceptions as proof. While it is true that the energy industry has a
powerful presence in Washington, its unfair to assume that the industrys stance on fracturing
regulation is monolithic. Operators are affected differently by regulation depending on the size of
the company, the areas in which they operate, and equipment used. Energy operators make their
opinions about laws and rules known through notice and comment, direct negotiations with
lawmakers and regulators, though litigation, and though trade association statements.
The energy industry has had a lot to say about the regulation of hydraulic fracturing.
Many would assume oil and gas companies are lobbying for no regulation whatsoever. Recent
statements made by industry leaders directly and through industry organizations suggest
93 Brad Gill, Indep. Oil & Gas Assoc. of NY Response to Preliminary Revised DraftSupplemental Generic Environmental Impact Statement Economic Impediments to Shale GasDevelopment (Sept. 2, 2011) available athttp://www.slideshare.net/MarcellusDN/ioga-ny-letter-to-dec-com-joe-martens-sept-2-2011.
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otherwise. At a 2012 energy conference Royal Dutch Shells CEO called for, targeted and
robust regulation. At the same conference, ExxonMobil CEO Rex Tillerson acknowledged that
the industry has a responsibility to make, policy makers and the public [feel]confident in
these proven technologies.94 Tilerson says he encouraged the creation of FrackFocus and has
been outspoken about BPs failures to manage risk in the wake of the Deep Water Horizon
incident.95 In the same breath Tillerson also criticized the current federal regulatory regime
arguing that the regime was becoming too complicated, and involved too many different
agencies. That brings up a salient question, who would the industry prefer to regulate fracking?
The industry has answered that question through the American Legislative Exchange
Council (ALEC). ALEC says the States may be better regulators of fracking than the federal
government because each formation has its own geological composition, and because state
regulators have more extensive experience with other oil and gas issues. The group threw its
support behind Texas fracking disclosure law by crafting substantially similar model legislation.
ALEC suggests that states should require oil and gas companies to disclose the amount of water
utilized in fracking, and each chemical used in fracking fluid.96ALECs model legislation does
deviate in the following ways: first ALEC suggests states should allow companies to claim that
its fracking fluid is a trade secret without being required to ever disclose chemical names,
concentration or origin. Second, ALEC limits who may challenge a companys claim of trade
94 Christopher Helman,Exxon's Tillerson Lambasts Dysfunctional Regulation for HinderingEnergy Growth, FORBES, Mar. 9, 2012 at ,http://www.forbes.com/sites/christopherhelman/2012/03/09/exxons-tillerson-lambasts-dysfunctional-regulation-for-hindering-energy-growth/.95Id.96 AMERICAN LEGISLATIVE EXCHANGE COUNCIL, The Disclosure of HydraulicFracturing Fluid Composition Act, Jan. 15, 2012, available at http://www.alec.org/model-legislation/the-disclosure-of-hydraulic-fracturing-fluid-composition-act/.
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secret protection. ALEC believes the only entities who should have standing are the owner of the
property on which the fracking is occurring, the adjacent property owner, and the agency that has
jurisdiction over the matter to which trade secret is relevant. This would prevent suits by
environmental groups, and residents that live downstream from fracking operations, but whose
water has been contaminated.
Statistics on use of the trade secret exception suggest operators thwarting regulatory
attempts at transparency. When journalists looked into the disclosures made for wells drilled in
Texas, they found that oil and gas producers claimed the trade secret exemption 19,000 times
which breaks down to one in five chemicals being withheld.97
In response to the EPAs rule requiring green completion American Petroleum Institute
(API), another industry trade group, released a report in which it stated several industry
concerns. First, well drilling for unconventional natural gas production would be reduced. API
estimates between a 31 to 52 percent reduction. Second, there are more wells than available
equipment needed to do green completions. API believes the lack of equipment would force gas
producers to slow down production until green completion companies could meet demand.
Third, the slowdown would have economic impacts beyond the gas production industry. There
would be less tax and royalty revenue for both state and federal governments. There could also
be a rise in the price of natural gas due to the drop in supply. The study also alludes to possible
97 Terrence Henry, The Number of Fracking Trade Secrets in Texas Will Likely Surprise You,NPR, Dec. 14, 2012 at , http://stateimpact.npr.org/texas/2012/12/14/the-number-of-fracking-trade-secrets-in-texas-will-likely-surprise-you/; Ben Elgin, Benjamin Haas & Phil Kuntz,Fracking Secrets By Thousands Keep U.S. Clueless on Wells, BLOOMBERG, Nov. 30, 2012 at ,http://www.bloomberg.com/news/2012-11-30/frack-secrets-by-thousands-keep-u-s-clueless-on-wells.html.
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job losses in the industry and related industries that depend on production. API does not offer
any projections to support its job loss contention. Fourth API suggests that the cost of green
completion may be so prohibitive that it will impact the economic viability of developing shale
gas. API specifically notes that the figure the EPA used in its Regulatory Impact Analysis was
too low. The EPA estimated the incremental cost to be $33,237 per completion while API figures
the cost will be closer to $62,881. API believes the cost will be higher because the green
completion equipment will be on-site for twice the amount of time the EPA estimated. Because
the equipment is rented per day the overall costs would rise.
An unlikely supporter of increased fracking regulation is George P. Mitchell
affectionately known as the father of fracking. Mitchell, though retired, remains the majority
shareholder of Devon Energy, a major shale gas operator. When asked about fracking regulation
Mitchell said he supported tighter federal regulations noting that there are good techniques to
make [fracking] safe that should be followed properly. Mitchel called out smaller, independent
drillers for engaging in dangerous practices.98 Through his foundation, Mitchell seeks to promote
a sustainable energy regime where the U.S. can utilize abundant natural gas resources while
maintaining environmental integrity. While there does not appear to be one industry prospective
one thing is certain, the industry will continue to want a seat at the negotiating table.
FINAL THOUGHTS
98 Christopher Helman,Billionaire Father of Fracking Says Government Must Step UpRegulation, FORBES, July 19, 2012 at ,http://www.forbes.com/sites/christopherhelman/2012/07/19/billionaire-father-of-fracking-says-government-must-step-up-regulation/.
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Hydraulic fracturing has spurred both an energy boom, and a spike in civic engagement.
The general public, industry, environmentalists, and academics have all contributed to the
regulatory discussion. In the end all, of the actors must be involved if regulation is going to be
balanced and effective. With fracking occurring in many of our backyards the public has become
a reluctant industry watchdog. Citizens might actually be the perfect watchdogs because they
internalize both the positive and negative externalities of fracking. The public benefits from the
overall economic boom, the lower energy prices, and job creation. The public also suffers the
effects of contamination in the form of illness, property loss and loss of aesthetic appeal.
Sensible regulation will addresses the publics very real concerns about health, and safety while
allowing the development of a cleaner, and potentially sustainable resource. A resource that we
are not currently in a position to live without. Whether federal or state governments take the lead
on fracking regulation in the future will depend on several factors. First, the way the industry
operates. The more examples there are of contamination linked to hydraulic fracturing the more
likely the federal government will be to take regulatory responsibilities away from the States.
Second, political alignments will impact passage of broad federal fracking legislation.
Republicans have long supported oil and gas subsidies, and limited government oversight. Its
unlikely that strict fracking regulation would get passed while there is a republican House
majority. Some argue Democrats probably would not pass broad fracking legislation either
because when Democrats had control of the Senate, House and the presidency they failed to act.
Third, U.S. economic outlook will also be factor. States are not the only ones afraid to upset the
fragile economic recovery. The federal government is well aware that tax increases, reduced
subsidies, and costs of new compliance will likely be passed along in the price of natural gas.
Passing along energy costs to the public has always been a tough sell. Fourth, regulators will
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look to the hard science. In the next several years studies on hydraulic fracturing will provide the
greatest insight into fracking that we have ever had. These studies will reveal the health risks,
expose deficiencies in current industry practices, and definitively establish which environmental
impacts we should expect from fracking. Until these factors become more clear it will be hard to
make pragmatic decisions on how best to regulate hydraulic fracturing. The U.S. regulatory
scheme will undoubtedly set an example that will either be followed or avoided by the rest of the
worlds shale rich countries.
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