The Frack Pack Strikes Back: Hydraulic Fracturing Legislation in the 114th Congress
V&E Shale Insights — Tracking Fracking E-communication, May 11, 2015
This spring, House and Senate Democrats proposed a suite of bills, known as the “Frack Pack,” attempting to expand federal regulation of hydraulic fracturing activities. The bills specifically target major environmental laws that provide exemptions for hydraulic fracturing and oil and gas production activities. These bills echo the themes of unsuccessful legislation proposed in prior Congresses. By contrast, several Republican lawmakers have introduced legislation that would limit the authority of the U.S. Department of Interior’s Bureau of Land Management (BLM) to regulate hydraulic fracturing on Federal and Indian lands. These bills are summarized below:
Legislation that Would Expand Federal Regulation of Hydraulic Fracturing
The Fracturing Responsibility and Awareness of Chemicals (FRAC) Act of 2015 (H.R. 1084 and S. 785)1 would remove the exclusion of hydraulic fracturing from the definition of “underground injection” in the Safe Drinking Water Act (SDWA) so that the U.S. Environmental Protection Agency (EPA) could regulate such injections through the SDWA’s Underground Injection Control (UIC) Program. In the 2005 Energy Policy Act, Congress excluded hydraulic fracturing from the UIC Program Class II requirements under the SDWA, except where diesel fuels are used in fracturing fluids or propping agents.2
In addition, the FRAC Act proposes to add a new provision to the SDWA that would require certain disclosures by operators or producers both before and after hydraulic fracturing operations. These disclosures would include a list of chemicals used in any underground injection during the operations. This list would include an identification of the chemical constituents of mixtures, Chemical Abstracts Service (CAS) numbers for each chemical and constituent, material safety data sheets when available, and the anticipated volume of each chemical to be used. Additionally, the bill would require that this information be made publically available online. The bill provides trade secret protection for chemical formulas. However, it would require immediate disclosure to medical personnel regardless of any asserted trade-secret claims in the event of an emergency.
The FRAC Act has encountered consistent bipartisan opposition since previous versions were first introduced in 2009.3 The original bills were reported to standing committees in their respective houses of Congress, but neither bill was ever brought to a vote on the floor, even when Democratic majorities controlled both chambers. The current Republican majority is even less likely to approve the FRAC Act this year. Similar attempts to repeal the UIC exclusion for injection of fluids through hydraulic fracturing have likewise failed. For example, on January 28, 2015, the Senate rejected a proposed amendment to the Keystone XL Pipeline Act, which sought to repeal the hydraulic fracturing exclusion and expand the UIC program to include the underground storage of natural gas.
The Safe Hydration is an American Right in Energy Development (SHARED) Act of 2015 (H.R. 1515)4 would amend the SDWA to require operators to conduct baseline groundwater testing and compliance monitoring during all stages of operations. Specifically, the legislation would require testing of any underground source of drinking water located within one mile of a well site “for any substance that the [EPA] Administrator determines would indicate damage associated with hydraulic fracturing operations.” The legislation would also require the state or the EPA to publish the test results on the internet.
The Focused Reduction of Effluence and Stormwater Runoff through Hydrofracking Environmental Regulation (FRESHER) Act of 2015 (H.R. 1460)5 would specifically repeal the exemption for oil and gas activities from the Clean Water Act’s (CWA) stormwater permitting requirements. Under the CWA, pollutants associated with oil and gas operations cannot be discharged to waters of the United States without a National Pollutant Discharge Elimination System or equivalent state-delegated permit. However, the CWA does not currently require oil and gas exploration and production facilities and construction sites to obtain such a permit for uncontaminated stormwater run-off. The FRESHER Act would repeal this exemption, thereby requiring operators to obtain permits for stormwater run-off (contaminated and uncontaminated) for all phases of hydraulic fracturing activities.
The Bringing Reductions to Energy’s Airborne Toxic Health Effects (BREATHE) Act of 2015 (H.R. 1548)6 would amend Section 112 of the Clean Air Act (CAA), which addresses emissions of hazardous air pollutants (HAPs). In particular, the BREATHE Act would repeal Section 112(n)(4), which specifies that HAP emissions from geographically dispersed oil and gas wells and compressor stations should not be aggregated for the purpose of deciding whether they are “major sources.” A second provision of the BREATHE Act directs the EPA Administrator to add hydrogen sulfide to the list of HAPs under Section 112(b), and to include oil and gas wells as major and area sources of hydrogen sulfide under Section 112(c), thereby authorizing the EPA to set standards to limit Hydrogen Sulfide emissions from these facilities.
Legislation that Would Ban Hydraulic Fracturing on Federal Lands
On April 22, 2015, House Democrats introduced the “Protect Our Public Lands Act” (H.R. 1902).7 The bill, if enacted, would ultimately prohibit all hydraulic fracturing operations on lands leased by the federal government. The bill would not apply to any operations in effect on the date of the bill’s enactment until the renewal or adjustment of the lease. This approach is at odds with the BLM’s efforts to regulate hydraulic fracturing and is thus even more unlikely to gain traction than the Frack Pack bills.
Legislation that Would Restrict Federal Regulation of Hydraulic Fracturing
In contrast to the Frack Pack, several Senate bills seek to limit federal involvement in hydraulic fracturing. The Fracturing Regulations are Effective in State Hands (FRESH) Act of 2015 (S. 828)8 would give states sole authority to regulate hydraulic fracturing operations within their borders. In addition, the bill specifies that hydraulic fracturing activities on federal lands would be subject to the applicable state law where the operations occur.
The FRESH Act appears to be a response to the BLM’s final rule governing hydraulic fracturing activities on Federal and Indian lands. The final rule, released on March 20, 2015, imposes new well-bore integrity requirements, standards for interim storage of recovered waste fluids, and mandatory notifications and waiting periods for pivotal aspects of the fracturing process. The rule also requires disclosure of the chemicals used in the process, which can be done through the industry-supported FracFocus website.
Similarly, the Protecting States Rights to Promote American Energy Security Act of 2015 (H.R. 1647 and S. 15)9 would amend the Mineral Leasing Act to prohibit the Department of Interior from enforcing any federal regulation, guidance documents, or permit requirements related to hydraulic fracturing in any state “that has regulations, guidance, or permit requirements for that activity.” The legislation also directs the Secretary of the Interior to “recognize and defer” to state regulations on federal land, regardless of whether the state rules are duplicative, more or less restrictive, or impose different requirements. The prohibition on enforcement applies only to the Department of the Interior and therefore would only impact hydraulic fracturing on federal or Indian lands under management by the BLM management.
The House passed similar versions of these bills in November 2013, but the Senate did not vote on them and the President pledged to veto them. Since there is no indication that the President’s position has changed, these bills have little chance of becoming law before 2017.
The development of unconventional oil and gas resources has drawn significant attention from the 114thCongress. Legislation intended to increase federal oversight of hydraulic fracturing has been proposed, largely in response to concerns about potential environmental impacts from well development and stimulation, wastewater management, and air quality impacts. By contrast, other lawmakers have sought to limit federal regulation by displacing existing applicable federal regulations with state-level requirements.
The immediate prospects for the passage of any of these bills are dim. Instead, it seems likely that most regulation of fracking will continue to be left to the states, and any new federal regulation of hydraulic fracturing will take place through various administrative agency actions. However, as long as state regulation remains uneven, and hydraulic fracturing operations continue to enjoy certain exemptions from federal regulation, congressional pressure to act will remain.
For further information, please contact Vinson & Elkins lawyers Larry Nettles, Eric Groten, Jay Rothrock, Corinne Snow, or one of the members of V&E's Shale and Fracking practice group. Visit our website to learn more about V&E’s Environmental practice.
1 The Senate bill was introduced by Sen. Robert Casey (D-PA). The House version was introduced by Rep. Diana DeGette (D-CO).
2 On February 11, 2014, the EPA published permitting guidance and an interpretive memorandum to clarify the existing legal requirements of the UIC Class II permit program. Together, these materials provide non-binding, technical recommendations for EPA Region, State, and Tribal authorities to consider when issuing Class II permits for hydraulic fracturing activities that use diesel fuels. The most important aspect of the new guidance is the EPA’s revised definition of “diesel fuel,” which the EPA defines with reference to five specific chemicals: CAS Registry Nos. 68344-30-5, 68476-34-6, 68476-30-2, 68476-31-2, and 8008-20-6. The guidance does not address other hydraulic fracturing activities using diesel range organics.
3 Fracturing Responsibility and Awareness of Chemicals Act, H.R. 2766, 111th Cong. (2009); Fracturing Responsibility and Awareness of Chemicals Act, S. 1215, 111th Cong. (2009).
4 The bill was introduced by Rep. Janice Schakowsky (D-IL).
5 The bill was introduced by Rep. Matthew Cartwright (D-PA).
6 The bill was introduced by Rep. Jared Polis (D-CO).
7 The bill was introduced by Reps. Mark Pocan (D-WI) and Janice Schakowsky (D-IL).
8 The bill was introduced by Sen. James Inhofe (R-OK).
9 The Senate bill was introduced by Sen. Orrin Hatch (R-UT). The House version was introduced by Rep. Bill Flores (R-TX).