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Natural Gas

EPA Air Chief Defends Costs, Emissions Data Underpinning Gas Air Rules

EPA air chief Gina McCarthy is defending from Senate GOP attacks the agency's cost-benefit review and emissions data underpinning EPA's oil and gas drilling air rules, downplaying concerns that the agency overestimated methane and conventional pollutants emitted by the sector and used that data to set unnecessarily strict emissions limits.

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NRC Finds Quake Risks From Fracking Waste

The National Academies in a new report finds disposal of wastewater from hydraulic fracturing and other oil and gas extraction poses some risks of increasing earthquakes, which could aid activists' bid for EPA to regulate the wastewater under strict hazardous substance disposal rules.

However, the June 15 report by the Academies' National Research Council (NRC), also cautions that while wastewater disposal from fracking and other energy technologies “does pose some risk” for induced seismicity, or earthquake activity, “very few events have been documented over the past several decades relative to the large number of disposal wells in operation.”

The study, “Induced Seismicity Potential in Energy Technologies,” includes findings that underground injections conducted as part of fracking operations present relatively low risks of significant earthquakes, whereas carbon capture and sequestration (CCS) activities, which involve higher volumes of fluid, may induce stronger and more substantial seismic events.

However, “because no large-scale CCS projects are yet in operation,” there is insufficient data available to fully examine the potential risks associated with the nascent technology, the report says.

But the NRC findings on risks associated with wastewater from fracking and other types of energy extraction could provide support for environmentalists' push to seek stricter regulation of such waste under the Safe Drinking Water Act (SDWA). While the law prohibits EPA from regulating fracking under SDWA permitting, it does allow regulation of wastewater disposal.

The NRC report finds that while wastewater disposal from oil and gas operations has long been suspected as increasing seismicity risks, the issue has not been well-documented because regulators rarely do through reviews of the seismic makeup of an area slated for just wastewater disposal -- a key criticism of environmentalists. The NRC panel found “However, the long-term effects of increasing the number of waste water disposal wells on the potential for induced seismicity are unknown, and wells used only for waste water disposal usually do not undergo detailed geologic review prior to injection, in contrast to wells for enhanced oil recovery and secondary recovery.”

Environmentalists and Democrats concerned about seismicity risks from fracking are pushing for EPA to consider tighter rules for wastewater from fracking operations, arguing that the SDWA Class II rules under which such operations are currently regulated are too lax to protect against seismicity risks. Activists have long fought for EPA to regulate such wastes under strict Resource Conservation & Recovery Act hazardous waste rules, which would necessitate more stringent Class I regulation for disposal under SDWA instead of the Class II rules.

Sen. Frank Lautenberg (D-NJ) has asked the U.S. Geological Survey (USGS) to conduct an investigation into whether existing federal regulations are effective in protecting against risk of earthquakes from fracking and other energy operations.

EPA and USGS have been considering in joint research studies how the volume of wastewater injected to underground disposal wells may affect the magnitude of seismicity, and how the pressure of injections affects seismicity risks.

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Downplaying Fracking Concerns

A top California regulator recently told stakeholders that hydraulic fracturing in the state is significantly less threatening to the environment and public health than in the eastern part of the country, adding that environmental groups have exaggerated its risks in the Golden State.

But regulators are nevertheless developing new fracking rules in part because companies are expected to ramp up fracking operations to extract oil from the vast Monterey shale formation in California, which stretches for hundreds of miles and is believed to contain 15 billion barrels of recoverable oil, the official said.

California's development of fracking regulations is being closely watched by numerous industry groups, government officials and environmental activists around the country because it could provide a policy model, and because it may have significant implications on the state's clean-energy and environmental protection policies.

Tim Kustic, the state oil and gas supervisor of California’s Division of Oil, Gas & Geothermal Resources (DOGGR), gave an overview of fracking operations in the state and outlined plans by the division to develop first-time fracking regulations during a June 7 presentation to a natural gas stakeholder work group overseen by the California Energy Commission (CEC).

Kustic's presentation comes as the state is under pressure from environmentalists to require oil and gas companies to provide regulators and the public with many more details of fracking procedures, based in part on fears that the process may cause air pollution and contaminate groundwater supplies.

During the presentation, Kustic said that environmental groups have in general overblown the potential risks of fracking, noting that the process has been utilized by drilling companies for decades in California and there is not one known incidence of groundwater contamination.

Much of the concern about fracking has been triggered by environmental contamination caused by natural gas shale fracking operations in the eastern part of the United States that involve horizontal drilling, Kustic explained. This type of fracking for “dry” shale gas also involves high volumes of water and is more intense than the type of fracking performed in California, he said, which mainly consists of vertical drilling to extract additional oil from fields rather than natural gas.

However, DOGGR has been directed by the Brown administration to develop first-time fracking rules, he said. The California legislature has also approved new budget legislation directing the division to develop fracking rules.

Kustic said the rules are necessary in part because drilling companies are utilizing new technologies -- such as horizontal drilling -- that enable them to extract much more oil and gas from ground formations that were previously inaccessible. “With the application of technology, it's clear that fracking will more than likely increase in California,” he said. “So we want to get ahead of the curve and have a robust regulation . . .”

Much more fracking is likely to occur in the Monterey shale formation that runs down the center of the state and extends to coastal areas, Kustic said.

According to the U.S. Energy Information Administration (EIA), California may have more than four times the recoverable shale oil than the Bakken Oil Field in North Dakota. “The largest shale oil formation is the Monterey/Santos play in southern California, which is estimated to hold 15.4 billion barrels or 64 percent of the total shale oil resources” in the United States, according to a July 2011 EIA report. “The next largest shale oil plays are the Bakken and Eagle Ford [in Texas], which are assessed to hold approximately 3.6 billion barrels and 3.4 billion barrels of oil, respectively.”

Kustic said the forthcoming fracking regulations will probably require “pre-fracking testing,” including a pressure test for certain parts of the well. While companies usually perform pre-testing and monitoring, those tasks would be “memorialized” in the regulation,” he said. After fracturing, companies will likely be required to perform an inspection on the well to ensure there are no problems with certain casing areas that might lead to any fluid leaks, Kustic said.

In addition, the rules are likely to cover fluid content management, fracture modeling, notification and reporting requirements, he said. The division likely will not finalize the regulations until sometime in 2013 he added.

There are several bills pending in the state legislature requiring companies to report fracking-related activities, including notification to regulators of all chemicals being used in the operations.

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EPA Fracking Policies Queried

A key House Republican is questioning an EPA official's statements that the agency is conducting a comprehensive review of its existing authority to regulate hydraulic fracturing, arguing EPA appears intent on finding “fault” with fracking in order to justify strict new rules for the sector.

Rep. Andy Harris (R-MD), chair of the House science panel's environment subcommittee, sent a June 7 letter to EPA Administrator Lisa Jackson seeking clarification on statements made by Fred Hauchman, director of EPA's Office of Science Policy within the agency's Office of Research & Development (ORD), to a March 6 National Association of Counties (NACo) meeting held in Washington, DC.

As reported by Inside EPA, Hauchman told the meeting, “We're doing a pretty comprehensive look at all the statutes” to determine “where there are some holes” for additional oversight given the number of statutory exemptions that prohibit some direct EPA regulation of fracking, such as a Safe Drinking Water Act (SDWA) prohibition on the agency from regulating the fracking process with SDWA permits.

In the letter to Jackson, Harris asks several questions about the statements, including why ORD is conducting the review, under what authority ORD is acting and sought a list of officials who are involved in the process along with a list and description of any related meetings.

Harris also cited statements made by then ORD Assistant Administrator Paul Anastas during a House science hearing, in which Anastas characterized the agency's Congressionally-directed study of the potential drinking water impacts of fracking as a “not a risk assessment” but more aimed at identifying potential risks rather than quantifying them.

“Unless EPA's study identifies the degree of any risk, the probability of any risk occurring, and whether or not existing state or federal rules or industry best practices eliminate or mitigate any risk, EPA's study will provide little meaningful guidance to policymakers,” the letter says.  “Does EPA consider this outcome -- after four years and millions of dollars -- to be consistent with the letter and spirit of the request made by Congress for EPA to study this issue?”

Harris asks how EPA will ensure the study accurately portrays the risks of fracking, taking into account rapidly evolving technology, given that portions of the study use 2009 data.

Harris also challenges three separate groundwater investigations, in Parker County, TX; Dimock Township, PA; and Pavillion, WY, where EPA has struggled to defend its preliminary conclusions that fracking may have posed a risk to groundwater or drinking water supplies.

The three studies reflect the committee's “continued concern with EPA's confusing and questionable approach to hydraulic fracturing,” the letter says. “These examples, while individually very troubling, collectively suggest EPA is not objectively pursuing an improved understanding of the relationship between hydraulic fracturing and drinking water, but rather is determined to find fault with the technology in order to justify sweeping new regulations,” Harris writes.

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Rare Tort Ruling Stresses Difficulties In Proving Fracking's Harmful Effects

A rare ruling by a state judge dismissing toxic tort litigation against natural gas drillers highlights the uphill battle landowners -- and EPA -- face in trying to show that hydraulic fracturing causes adverse effects, while also encouraging industry to ask courts to require plaintiffs early on in the suit to prove a link between fracking and health impacts.

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Oil Industry Study Faulting EPA GHG Data May Undermine Drilling Air Rule

Oil industry groups are touting a new study that finds EPA vastly overestimated emissions of the greenhouse gas (GHG) methane from natural gas production sites, results aimed at undermining the agency's projected benefits from its drilling emissions rules and also bolstering an industry suit over EPA's GHG reporting rule for the sector.

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EPA Seeks To Allay Concerns Over Effects Of Diesel Fracking Guidance

EPA's top water official is seeking to allay concerns from House Republicans that the agency's draft guidance for permitting hydraulic fracturing operations that use diesel fuels could drive new enforcement burdens and undermine state permitting authorities, while defending EPA's description of “diesel fuels” that are subject to permit requirements.

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EPA Air Rules Seen Driving State Efforts To Curb Drilling's NOx Emissions

Several states facing problems attaining EPA's ozone standard are pursuing measures to cut ozone-forming nitrogen oxides (NOx) from oil and gas operations in their states in order to help meet the ozone limit, after EPA decided not to set direct NOx controls on drilling operations in its recently revised emissions rules for the sector.

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States Plan To Seek Broad Exemptions From EPA, DOI Fracking Policies

State officials are calling on EPA and the Department of the Interior (DOI) to carve out broad exemptions from their recently issued draft policies governing hydraulic fracturing operations for states that already have similar regulations in place governing the process, such as chemical disclosure requirements.

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EPA Enforcement Seen Shaping Fracking Policy Despite Regulatory Limits

EPA is increasingly using settlements in oil and gas enforcement cases to secure monitoring, permitting and other measures, in what industry sources say could be a strategy for shaping the agency's upcoming hydraulic fracturing policies given statutory and resource limitations that are making it difficult for EPA to craft formal regulatory policies.

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