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Hydraulic Fracturing and Safe Drinking Water Act Regulatory Issues

Authors: Mary Tiemann - Specialist in Environmental Policy and Adam Vann - Legislative Attorney. July 13, 2015


Hydraulic fracturing is a technique developed initially to stimulate oil production from wells in declining oil reservoirs. With technological advances, hydraulic fracturing is now widely used to initiate oil and gas production in unconventional (low-per   meability) oil and gas formations that were previously uneconomical to produce. Nationwide, this process is now used in more than 90% of new oil and gas wells and in many existing wells to stimulate production. Hydraulic fracturing is done after a well is drilled and involves injecting large volumes of water, sand (or other propping agent), and specialized chemicals under enough pressure to fracture formations holding the oil or gas.

The sand or other proppant holds the fractures open to allow the oil or gas to flow freely out of the formation and into a production well. In combination with directional drilling, its application for production of natural gas (methane) from unconventional shale formations, tight sands, and coal beds has resulted in the marked expansion of estimated U.S. natural gas reserves in recent years. Similarly, hydraulic fracturing is enabling the development of tight oil resources, such as the Bakken and Eagle Ford formations.

The rapid growth in the use of fracturing has raised concerns over its potential impacts on groundwater and drinking water resources and has led to calls for more state and/or federal oversight of this activity. The principal federal law regulating underground injection activities is the Safe Drinking Water Act (SDWA), administered by the Environmental Protection Agency (EPA). Historically, EPA had regulated injection of fluids for disposal and enhanced oil recovery but had not regulated the underground injection of fluids for hydraulic fracturing of oil or gas production wells. In 1997, the U.S. Court of Appeals for the 11th Circuit ruled that fracturing for coalbed methane (CBM) production in Alabama constituted underground injection and must be regulated under the SDWA.

This ruling led EPA to study the risk that hydraulic fracturing for CBM production might pose to drinking water sources. In 2004, EPA reported that the risk was small, except where diesel fuel was used, and that national regulation was not needed. However, to address the regulatory uncertainty the ruling created, the Energy Policy Act of 2005 (EPAct 2005) revised the SDWA term “underground injection” to explicitly exclude the injection of fluids and propping agents (except diesel fuels) used for hydraulic fracturing purposes. Thus, EPA lacks authority under the SDWA to regulate hydraulic fracturing except where diesel fuels are used. In February 2014, EPA issued final permitting guidance for hydraulic fracturing operations using diesel fuels.

As the use of the process has grown, some in Congress would like to revisit the 2005 statutory exclusion. Legislation to revise the act’s definition of underground injection to explicitly include hydraulic fracturing has been offered in recent years but not enacted. A variety of hydraulic
fracturing bills that would amend the SDWA are pending in the 114th Congress. In EPA’s FY2010 appropriations act, Congress urged the agency to study the relationship between hydraulic fracturing and drinking water. On June 4, 2015, the agency released the draft hydraulic fracturing
report for peer review by the EPA’s Science Advisory Board and for public comment. EPA expects to issue a final report in 2016.

This report reviews past and proposed treatment of hydraulic fracturing under the SDWA, which authorizes regulation of the underground injection of fluids to protect groundwater sources of drinking water. It reviews current SDWA provisions for regulating underground injection
activities and discusses some possible implications of the enactment of legislation authorizing EPA to regulate hydraulic fracturing (beyond diesel) under this statute. The report also reviews legislative proposals concerning the regulation of hydraulic fracturing under the SDWA.

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