truth and fiction a regulatory analysis of hydraulic fracturing by: najwa sharpe

7/28/2019 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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N. Sharpe ID: 3245201

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.
http://fracking.fulbright.com/search/label/New%20Yorkhttp://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.

truth and fiction a regulatory analysis of hydraulic fracturing by: najwa sharpe

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