Legal Issues in Hydraulic Fracturing

Energy is major driving factor in all daily activities, from home use to industries. There are various sources of energy, the major one being natural gas and petroleum. Throughout the years, methods of harvesting these forms of energy have been met by many challenges. However, with the advancing steps made in technology as a field, new ways of harvesting the petroleum and gas energy have been designed and modified over time. It is in this line that the hydraulic fracturing method of getting access to these fuels was developed.

Hydraulic fracturing is the process of introduction of fractures in a rock layer by use of a pressurized fluid. Naturally, hydraulic fractures usually form and occur as veins or dikes. Artificial hydraulic fracturing is also known as hydro fracturing or fracing. It is used to retrieve petroleum, natural gas and other substances from their underground reservoir wells. It is a very efficient method, and it greatly maximizes the extraction of the fuels hence it is very important to the economy of a nation. Vents are dug, and pipes are put in through them or geologically formed vents, and water and chemical additives are pumped into the underground under very high pressure to break the petroleum and gas wells for the fuels to be extracted. The pressure of the fluid pumped into the wells causes the oil to rise near the surface for extraction.

However, this very effective method of extraction of the fuels has met many critics. The method has very severe impacts on the environment. Some of the effects include contamination of the ground water. The other risk is contamination of the air reducing its quality and the mishandling of the waste from this process. The chemicals used in the fracturing process mix with the underground water, which when consumed by living organisms causes illnesses, for example, chronic illness like cancer that may result in deaths. Pollution of air is eminent, and the results are ill health and deaths. The companies that carry out the fracing process are also not trustworthy in taking caution to protect the environment. Mishandling of the waste from this process is rampant causing pollution of the environment.

It is for these reasons that the government and other non-governmental organizations have strongly come out to voice out for the protection of the environment. The government has taken a keen interest in this issue that involves one of the industries that contribute immensely to the economy and the markets of the world. The government has taken precautionary measures to control and counter the environmental impacts. The measures involve drafting, debating and constituting laws that govern the process of oil and petroleum mining and transportation.

Such measures include the proposed federal FRAC Act. H.R. 1084; S.587. This regulation seeks to address the issue of water pollution in the underground. The Michigan DEQ permitting instructions (2011) outlines the guidelines to permitting of the use of the hydraulic fracturing method. Another regulation is Wyoming Oil and GS Regulation, Chapter 3 section 45(September 2010). There are also local laws involved in this regulation process. These laws hold for the drillers, and they have introduced protective drilling formulae for use as cracking fluid. The laws overriding the chemical disclosure also are different from one state to another.

The hydraulic fracturing method is effective for extraction of oil, petroleum and gas. The process directly influences the economy of the nation as well as the environment. It is my opinion that the government and local authorities clearly understand that, and they have taken effective measures to control the process. The laws are effective and will reduce the impacts of the process to the environment.

References

United States Environmental Protection Agency (EPA). (2012). Natural Gas Extraction

Hydraulic Fracturing. Retrieved on 8th January 2013 from http://www.epa.gov/hydraulicfracture/

Boman, K. (2013). .Alaska Proposes Changes to Hydraulic Fracturing Rules. Retrieved on 8th

Jan 2013, from http://www.rigzone.com/news/oil_gas/a/123178/Alaska_Proposes_Changes_to_Hydrauli

c_Fracturing_Rules

Hydraulic Fracturing (“Fracking”)

The Legal and Environment Aspects

Page 3 Introduction / What is Fracking? / Executive order

Page 4 Department of Energy Advisors

Page 7 Law Student Article — Let States Regulate

Page 8 European Union on Fracking

Page 8 Legal Action in Wyoming / California Controversy

Page 9 Writer’s Opinion on Fracking

Legal Issues in Fracturing

Hydraulic Fracturing — also commonly referred to as “fracking” — is a technique for extracting natural gas and oil from the crust of the earth. It has become a controversial program because there are environmental impacts associated with fracking. This paper reports on existing laws and policies in states and at the federal level that have to do with fracking.

What is Fracking?

The U.S. Environmental Protection Agency (EPA) explains that hydraulic fracturing creates “fractures in the rock formation that stimulate the flow of natural gas or oil” — and by creating fractures, it makes it possible to recover volumes of oil and gas that might not otherwise be within reach of the energy companies that do the fracking. The process of fracking can be conducted by drilling vertically for “…hundreds to thousands of feet” beneath the surface of the earth, and once the drill has reached a certain point it can also drill horizontally (EPA, 2012).

Once the drilling has been done, enormous quantities of fluids are pumped “at high pressure down a wellbore and into the target rock formation”; the fluids are normally water, chemical additives and proppant” (proppants used include sand, ceramic pellets or “other small incompressible particles”) (EPA). The internal pressure from the rock formation creates a situation during which fluids (“blowback” or “flowback”) are forced back to the surface. Along with the chemicals that have been injected, typically the blowback contains “…brines, metals, radionuclides, and hydrocarbons”; and hence, the natural gas or oil that was in the rock formations under the crust of the earth can be captured.

Presidential Executive Order #13605

The President of the United States issued an Executive Order on April 17, 2012, basically explaining that the federal government deems it important to produce as much natural gas as possible and therefore has established an “Interagency Working Group to Support Safe and Responsible Development of Unconventional Domestic Natural Gas Resources” (Federal Resister). In that working group President Barack Obama named thirteen departments within the federal government whose heads will be on the group. Obama explained that “…it is vital that we take full advantage of our natural gas resources…” but at the same time American families and communities must be confident that by extracting natural gas in this process that the “natural and cultural resources, air and water quality, and public health and safety will not be compromised” (Federal Register). This shows that Obama is aware of the controversies surrounding fracking, and that he is trying to provide some oversight vis-a-vis fracking.

Laws and Regulations — DOE Advisors Weigh In

Recently a panel of advisors to the U.S. Department of Energy issued a report calling for a reduction in emissions of “…pollutants, ozone precursors and methane” from all fracking sites “as quickly as practicable” (The Chemical Engineer – TCE). The chairman of the committee, John Deutch, who is professor of chemistry at MIT (and formerly head of the CIA), wrote that the committee is “…issuing a call for industry action, but we are not leaving it to the industry alone” (TCE, 2011). Part of what the panel is asking for is full disclosure of what fracturing fluids are being used by the industry. “There is no economic or technical reason” that the industry is keeping those materials and fluids a secret from the public, the report stressed.

Law Professor David Spence on Regulatory Lags

David Spence is a University of Texas Professor of Law, Politics & Regulation, and his article in the peer-reviewed University of Pennsylvania Law Review points out that while fracking has “…proven controversial, triggering intense opposition in some parts of the United States,” he does not believe any federal regulation of shale gas production is necessary at this time (Spence, 2013, p. 432). In his lengthy scholarly piece, Spence suggests that because low prices for natural gas could “stimulate the replacement of dirtier fossil fuels” (he is referring to oil and coal, both known to produce greenhouse gases which contribute to global climate change), the energy industry should be allowed to exploit those natural gas resources that can only be found through fracking (433).

His point is that natural gas could be the energy source American depends on while weaning the country off of coal and oil as energy sources — until renewable energy sources are in great supply (wind, solar, etc.). In the process of explaining how helpful it would be to have access to additional sources of natural gas through fracking, Spence notes that state and federal regulators “…have scrambled to adapt to the boom in natural gas production and the controversy it has spawned” (431). From Texas to New York, states have made changes in regulatory approaches to fracking, he explains; other states have been extremely cautious, even going so far as to ban fracking until more studies are conducted (434).

What Spence has done with his 78-page article is basically argue that there is no need for federal regulation, but in the process he uses scholarly narrative to argue against federalism in this context and promote the rights of states to provide their own oversight. He explains that in 2011, Americans consumed about 24 trillion cubic feet (Tcf) of natural gas; and as to how much is available through the fracking technique, he asserts that American shale deposits hold “…a minimum of several hundred Tcf of natural gas” (439).

Spence relates that while proponents of hydraulic fracturing assert that despite the fact that “…hundreds of thousands (or millions) of wells in the United States” have used the fracturing process, “fracking has not produced a single confirmed case of groundwater contamination,” opponents have a different story. There have been several “alleged cases” where drinking water was contaminated by methane or fracking fluid chemicals, Spence continues (440). His argument in favor of fracking continues on page 440: burning coal to produce electricity “…is associated with tens of thousands of premature deaths each year” but there could be “substantial health benefits” through the fracking process because natural gas does not have the pollutants associated with it (such as mercury) that coal-fired plants have.

That said, it is true that natural gas production “…can release methane into the atmosphere” because of leaks in the capture of gas, in the storage of natural gas and in the transmission equipment, Spence goes on (445).

As to the existing regulatory environment, it has always been primarily “a state matter,” Spence explains; and the federal regulatory agencies do not oversee the disclosure of what goes into the fracking fluids nor to federal regulatory agencies do not require “underground-injection-well permits” under the Safe Drinking Water Act (SDWA) (430-31). What about the wastewater that is part of the fracking process? Spence asserts that the fracking wastewater does not fall under the Resource Conservation and Recovery Act (RCRA), however, he adds, the very fact that there are few if any federal regulations vis-a-vis fracking “…has exacerbated fears surrounding those operations (452).

Texas and Pennsylvania have regulatory power over natural gas production (and fracking) and those states have enjoyed “a strong surge in natural gas production” over the last decade because those states’ regulations allow fracking. New York, which also has deposits of “Marcellus Shale,” has imposed a ban until rules can be established; through his narrative, it is clear that Spence is critical of New York State’s moratorium.

Texas had 48,609 natural gas well in the year 2000, but in 2009 it reports having 93,507 natural gas wells from which fracking is being used (or has been used recently); in 2000, Pennsylvania had 30,000 natural gas wells but as of 2009 Pennsylvania has 57,356 wells; and New York State reported having 5,304 wells in 2000 and that expanded to 6,628 natural gas wells in 2009 (Spence, 455). Texas leads the way with most wells and most fracking, but it also has stiffer regulatory policies, Spence continues.

The Texas rules require that well casings must be placed in specific areas within the well, and that the casings must be “pressure tested”; moreover, Texas requires certain “hydraulic ram-type blowout preventers” and Texas demands that energy operators must disclose what kinds of fracking fluids are used “…on a well-by-well basis” (Spence, 456). The fact that Texas has more stringent rules than New York or Pennsylvania in one area (production and fluid disclosure) is interesting because in another area — disposal requirements — Texas is less specific or stringent, Spence continues (456).

Spence concludes his piece by saying the states should be playing the biggest role in the regulation of fracking, and federal regulators “…ought to let that process of learning and adaptation play out…intervening only to address risks of national concern” (508).

Law School Student Willie — Let States Regulate Fracking

Matt Willie takes a position similar to Spence; at the same time he admits that the debate over the potential negative environmental effects of fracking has caused “an outright firestorm” in public opinion (Willie, 2011, 1743). Writing in the Brigham Young University Law Review, Willie asserts that environmental concerns vis-a-vis fracking “should not be ignored” but on the other hand he says those concerns “…have been overstated” (1746). Willie also notes that in 2005, Congress passed the Energy Policy Act which essentially “…exempted all fracking with the exception of diesel fuel from the definition of underground injection in Section 1421 of the Safe Drinking Water Act” (1743).

Willie goes on to point out several court actions with reference to fracking, most of which ruled in favor of energy companies fracking projects. However, Willie does point out a Colorado incident which Spencer failed to point out: a resident of Colorado reported that gas wells were fracked near his house and “…a water well on a neighbor’s property exploded, and sand built up in his own water filter” (1759). Setting a glass of water out overnight, the resident testified before a congressional committee (in 2007), would result in “…a thin oily film” floating on top; moreover, his wife’s eyes were burning and she had “nosebleeds” (Willie, 1759). The law student concludes his piece by taking sides: he doesn’t use “environmental groups” but instead refers to opponents as “special interest groups”; they shouldn’t be taken seriously he implies, because “…decades of study have revealed only minor concerns” (1780).

Hydraulic Fracking in the European Union

The European Union press release explains that Bulgaria and France have flatly prohibited fracking and the Netherlands has a “temporary moratorium” on fracking (EC). And while the European Commission has listened to concerns and is prepared to ensure that rules are met via environmental issues, “…it is up to the Member States to ensure, via appropriate assessment, licensing, permitting as well as monitoring and inspection regimes” (EC).

Legal Action in Wyoming / Controversy in California

The Los Angeles Times reports that California is at this time considering rules to regulate fracking — and the initial legislation that the legislature has proposed will allow “…companies to file trade secret claims for chemicals they consider to be proprietary” (Mishak, 2013). There is certain to be resistance to that legislation if it reaches a point of fruition. Meanwhile, a coalition of environmental groups are suing the Wyoming Oil and Gas Conservation Commission for approving more than 50 secrecy claims by oil and gas companies (involving 190 chemicals) (Mishak). Environmental concerns have been raised in Wyoming because the EPA has linked “water contamination” to certain secret fluids used in fracking (Mishak).

The Opinion Portion of This Paper

Writer Matt Willie mentions that the first hydraulic fracturing project was completed in 1947 in Kansas, and it was done with a fracking fluid containing “a gasoline-based napalm gel,” which he admits was “hazardous” for rig workers (1743). That kind of fracking of course would never be permitted today, but there are fracking procedures that do not come under federal or state regulation that may not be safe.

While this writer agrees with much of what the two legal-related articles present — including the fact that states should be regulating fracking activities rather than the federal government — there are so many unanswered questions about fracking that states should be cautious and error on the side of public and environmental safety. For one thing, states should put their most sensitive lands, including watersheds that are critical to ecosystems and wildlife, off limits to fracking. Even if there are gas deposits to be exploited, sensitive environments must be made off limits to fracking.

Moreover, the states should insist on sound well drilling practices; the cementing and casing issues must be standardized to assure safety during the process. The applicable federal laws (Clean Air, Clean Water, etc.) must be adhered to as well.

In conclusion, there is no doubt that America must be able to meet its energy needs, and must try to extract available natural gas where it is feasible and safe. Still, solar and wind energy sources must be developed at the same time that fracking is being done. After all, the future of U.S. energy sources will not be oil, will not be coal, and will not be natural gas; it will be clean, renewable energy. Getting there in safe and environmentally responsible ways is the only question.

Works Cited

Environmental Protection Agency. (2012). The Process of Hydraulic Fracturing. Retrieved February 10, 2013, from http://www.epa.gov.

European Union. (2012). Statement on the use of hydraulic fracturing (“fracking”) in the European Union. Retrieved February 10, 2013, from http://ec.europa.eu.

Federal Register. (2012). Executive order 13605 / Supporting Safe and Responsible

Development of Unconventional Domestic Natural Gas Resources. 77(74).

Mishak, Michael J. (2013). While California considers fracking rules, legal battles flare elsewhere. Los Angeles Times. Retrieved February 10, 2013, from http://latimesblogs.latimes.com.

The Chemical Engineer. (2011). DOE advisors call for tougher fracking laws. 843(14), p. 14.

Spence, David B. (2013). Federalism, Regulatory Lags, and the Political Economy of Energy

Production. University of Pennsylvania Law Review, vol. 161, 431-508.

Willie, Matt. (2011). Hydraulic Fracturing and “Spotty” Regulation: Why the Federal

Government Should Let States Control Unconventional Onshore Drilling. Brigham Young

University Law Review, Issue 5, 1743-1781.