OIL & GAS ALERT: Proposed Amendments to the Safe Drinking Water Act (42 U.S.C. § 300f, et seq.)

    View Authors 27 July 2009

    Companion bills have been filed in the U.S. Senate and House (S. 1215 and H.R. 2766, respectively) to amend the federal Safe Drinking Water Act (SDWA) to remove the exemption for hydraulic fracturing from coverage under the underground injection provisions of the act. As drafted, these amendments would submit hydraulic fracturing to the direct regulation by the federal Environmental Protection Agency (EPA), unlike other recognized oil and gas injection activities, such as gas storage, disposal of produced salt water and enhanced recovery injection. The amendments under these bills would also require certain disclosure of the content of the hydraulic fracturing fluid, although in a manner intended to protect confidential business information.

    The SDWA was passed in 1974 and gave EPA authority over the “subsurface emplacement of fluids by well injection” and required it to promulgate regulations for such underground injection. However, the SDWA exempted injection for gas storage altogether from the underground injection regulations and also prohibited EPA from impeding state programs for the underground disposal of brine or other fluids produced to the surface by oil or natural gas production or storage and for enhanced recovery operations except where such EPA requirements were essential to assure that underground water sources would not be endangered by the injection. After several rulings by the Eleventh Circuit Court of Appeals beginning in 1997 that hydraulic fracturing activities constituted “underground injection” under the SDWA, the Energy Policy Act of 2005 amended the SDWA to expand the blanket exemption for gas storage injection to also specifically exclude from the definition of “underground injection” the underground injection “of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations.”

    The proposed legislation would remove this blanket exemption for hydraulic fracturing and, additionally, require disclosure of the content of the hydraulic fracturing fluid. However, it would not change the scope of the current limitations against the EPA establishing requirements that “interfere or impede” injection programs for saltwater disposal or enhanced recovery.

    Therefore, removing the blanket exemption for hydraulic fracturing would require the EPA to establish regulations for state programs for hydraulic fracturing unless there is also a corresponding expansion of the currently existing provisions of the act that limit EPA’s interfering in or impeding oil field injection activities to include hydraulic fracturing. Such EPA established programs could (i) prohibit hydraulic fracturing altogether, (ii) restrict the fluids that can be used, and (iii) subject hydraulic fracturing to general underground injection control programs of the SDWA. The American Petroleum Institute (API) has commissioned several studies, available on the API Web site (http://www.api.org), on potential impacts of the proposed legislation.

    One possible balanced legislative modification to the proposed amendments would be to expand the current limitation on EPA’s interference in or impeding oil field injection activities of salt water disposal and enhanced recovery to include hydraulic fracturing. It is not clear that either the sponsors of the proposed amendments or EPA itself envision or desire new direct federal regulation of such a purely oil and gas-related activity as hydraulic fracturing. There certainly does not appear to be any justifiable rationale for treating hydraulic fracturing differently from salt water disposal or enhanced recovery, which, by definition, are long-term operations usually for the life of the field or the need to dispose produced salt water. By definition, hydraulic fracturing is a limited-time completion technique performed in new wells that have passed state drilling permit requirements that explicitly provide for demonstrated isolation of underground fresh water sources.

    The proposed disclosure provisions of the proposed amendments attempt to avoid unnecessary disclosure of confidential business or trade secrets. It may also be of some concern that these disclosure provisions are in conflict, either in their form or purpose, with the provisions of the Occupational Safety and Health Act (29 U.S.C. §651, et seq.) as it governs the work-place safety aspects of hydraulic fracturing.

    HR. 2766, sponsored by Rep. Diana DeGette (D-Colo.), is awaiting action in the House Energy and Commerce Committee. S. 1215, sponsored by Sen. Bob Casey (D-Pa.), is awaiting action in the Senate Committee on Environment and Public Works.