V&E Shale Insights — Tracking Fracking E-communication, May 13, 2014
Following through in its 2011 Thanksgiving-eve grant of a petition under the Toxic Substances Control Act (TSCA), the U.S. Environmental Protection Agency (EPA) has posted on its website a prepublication version of an Advanced Notice of Proposed Rulemaking (ANPRM) to regulate chemicals used in hydraulic fracturing under Sections 8(a) and 8(d) of TSCA. This ANPRM does not propose any actual regulation at present but instead seeks “comment on the information that should be reported or disclosed for hydraulic fracturing chemical substances and mixtures and the mechanism for obtaining this information” from the public and interested parties. EPA also indicates it is considering whether to require such reporting through regulatory action under TSCA authority, to implement a voluntary program, or to have a combination of both. The ANPRM asks for comments within ninety (90) days of publication in the Federal Register. This timeframe appears somewhat limited given the broad scope of questions on which EPA has requested comments.
Earthjustice and other environmental organizations petitioned EPA in 2011, requesting that the agency issue TSCA Section 4 and TSCA Section 8 rules requiring toxicity testing, chemical reporting, and health and safety studies for chemicals and mixtures used in oil and gas exploration and production. EPA denied the TSCA Section 4 request regarding testing but granted, in part, the TSCA Section 8(a) and 8(d) requests, although limited only to chemical substances and mixtures used in hydraulic fracturing. By way of background, TSCA Section 8(a) authorizes EPA to require broad reporting of information, including the nature, amount and manner of disposal of the materials. Under Section 8(d), EPA can require copies of all existing health and safety studies regarding chemicals or any mixtures. EPA is now issuing this ANPRM to identify issues for discussion and analysis and to gather information for its rulemaking efforts.
Before addressing the substance of any potential rule resulting from this process, a threshold question is “why is EPA pursuing such a rulemaking in the first place?” The petition urged EPA to act in order to address a supposed “gap” in the regulation of hydraulic fracturing. That assertion looks pretty questionable, however, as at least twenty states already have disclosure requirements for chemicals used during hydraulic fracturing and at least five others have such requirements in the proposal stages. The FracFocus website is also widely used as a voluntary mechanism for public disclosure nationwide and the Bureau of Land Management has proposed regulations requiring chemical disclosure for operations on federal and tribal lands. Layering EPA requirements on top of requirements already in place runs the risk of creating duplicative and conflicting reporting requirements.
In addition, EPA is currently undergoing an extensive study of hydraulic fracturing and its impact on water resources. EPA issued a progress report in 2012 but is not expected to issue its preliminary report on the results for peer review until late 2014. Enacting rules regarding hydraulic fracturing fluids before reviewing the results of this study seems premature given the agency’s approach thus far.
Perhaps EPA intends to obtain this information to assist with its comprehensive three-year study to examine the potential risks associated with fracking operations. Alternatively, EPA may be concerned about the willingness of states to accept assertions of “confidential business information,” and may want to apply a more restrictive test that would broaden existing disclosure requirements. Other possibilities include obtaining sufficient information to consider federal regulation of other aspects of the siting, implementation and abandonment of fracking operations, or further regulate the disposal of the associated wastes. What is clear for now, however, is that this rulemaking has the potential to further complicate the various regulatory requirements associated with hydraulic fracturing. Moreover, the volume of information EPA can request may be vital to any effort by EPA to expand the areas of federal control over hydraulic fracturing activities.
Operators, well services companies, and chemical manufacturers may all be subject to portions of any new rule that results from this process. Indeed, one topic for which EPA seeks feedback is which entity (or entities) should be responsible under the state regulations for compliance. See EPA’s ANPRM and directions regarding submitting comments here. The notice has not yet been published in the Federal Register and comments cannot be submitted until it is.
For further information, please contact Vinson & Elkins lawyers Casey Hopkins or Larry Nettles of V&E's Shale and Fracking practice group. Visit our website to learn more about V&E’s Environmental practice.