Nearly four years in the making, the Environmental Protection Agency’s guidance on the use of diesel fuels in hydraulic fracturing finally hit the streets this week, prompting praise from environmentalists but concern from industry analysts who fear the guidance is a prelude to agency enforcement for past failures to obtain permits.
Formally titled Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels: Underground Injection Control Program Guidance #84, the guidance provides direction to EPA regional permit writers in the few states – and for most tribal lands – where the EPA directly implements the Safe Drinking Water Act’s (SDWA’s) Underground Injection Control (UIC) program for Class II hydrocarbon injection wells. While SDWA generally exempts hydraulic fracturing from UIC regulation, the Energy Policy Act of 2005 made an exception for hydraulic fracturing with “diesel fuels.”
Incorporating comments from industry and environmentalists, and after a protracted review in the Office of Management and Budget, the guidance defines “diesel fuels” to include any materials that fall under five Chemical Abstracts Service Registry Numbers (CASRNs). Most of these definitions contain the words “diesel” or “fuel,” and it seems unlikely that they cover the full range of petroleum distillates still used in fracking today.
For the vast majority of states with UIC primacy, the guidance will likely sit on a shelf, a forgotten artifact reflecting EPA’s views on sound hydraulic fracturing practices. But the EPA retains primacy in 10 states and on virtually all tribal lands, including states that overlie the Marcellus Shale (such as Pennsylvania, New York and Virginia) and tribal lands atop the Bakken Formation in North Dakota. In those areas, which have large numbers of hydraulically fractured oil and natural gas wells, the guidance will have nearly the force of law, as EPA personnel generally comply with agency guidance, even though they have discretion to deviate from it.
The guidance draws from various state and voluntary standards and relies on the EPA’s experience regulating various types of injection wells. While it sets no de minimis diesel fuel threshold for the permitting requirement – even a tiny amount of diesel fuel will trigger the need to obtain a permit – it sets robust standards for area of review, well construction, operations and monitoring, and will require well integrity and baseline water quality testing.
Trade and environmental groups have not yet signaled whether they intend to challenge the guidance. Though several recent court cases have held that the EPA improperly used guidance to circumvent notice-and-comment rule-making under the Administrative Procedure Act (APA) – see, e.g., National Min. Ass’n v. Jackson, 880 F.Supp.2d 119 (D.D.C. 2012) – it is unclear whether the process the EPA utilized here similarly runs afoul of the APA.