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Shale & Fracking Tracker

News & Flashes

  • 13
  • December
  • 2016

EPA Releases Final Assessment of Fracking Impacts on Drinking Water

On December 13, 2016, the United States Environmental Protection Agency (“EPA”) released its Final Assessment of the Potential Impacts of Hydraulic Fracturing for Oil and Gas on Drinking Water Resources. Issuance of the final report comes over eighteen months after EPA released a draft report for external review in June 2015, and approximately a year after an EPA Science Advisory Board panel released its initial recommendations regarding the closely-followed hydraulic fracturing study. Pursuant to those recommendations, the final report reflects the removal of the draft report’s overarching conclusion that EPA “did not find evidence that” hydraulic fracturing activities “have led to widespread, systemic impacts on drinking water resources in the United States.” In an accompanying set of “ Questions and Answers about EPA's Hydraulic Fracturing Drinking Water Assessment,” EPA explains that its scientists concluded that the conclusion of the draft report “could not be quantitatively supported” and that it did not “clearly communicate the findings of the report.” Instead, the final report concludes that “hydraulic fracturing activities can impact drinking water resources in the United States under some circumstances.” 

Importantly, however, EPA’s findings that underlie the final report’s conclusion are generally consistent with those set forth in the June 2015 draft report. For example, both the draft report and the final report identify above- and below-ground mechanisms in the hydraulic fracturing water cycle that “have the potential to impact drinking water resources.” Similarly, both the draft report and the final report characterize the number of identified cases of drinking water resource contamination as “small” in comparison to the number of hydraulically fractured wells in the United States. Finally, consistent with the draft report, most of the small number of "impacts on drinking water resources" identified by EPA appear to be unrelated to fracturing activity itself. Nonetheless, like the draft report, the final report identifies the “potential for hydraulic fracturing fluids . . . to reach underground drinking water resources” via the fracture network. On this topic, the final report identifies with more specificity those areas in which hydraulic fracturing activity has occurred within underground drinking water resources—namely “in some areas in the western United States (e.g., the Wind River Basin near Pavillion, Wyoming, and the Powder River Basin of Montana and Wyoming).” 

Unlike the draft report, the final report includes a list of “combinations of activities and factors” associated with hydraulic fracturing activity that EPA concludes “are more likely than others to result in more frequent or more severe impacts” to drinking water resources. That list consists of:

  • Water withdrawals in times or areas of low water availability, particularly in areas with limited or declining groundwater resources;
  • Spills during the management of hydraulic fracturing fluids, chemicals, or produced water that reach groundwater resources;
  • Injection of hydraulic fracturing fluids into wells with inadequate mechanical integrity, allowing gases or liquids to reach groundwater resources;
  • Injection of hydraulic fracturing fluids directly into groundwater resources (a practice primarily associated with coalbed methane production)
  • Discharge of inadequately treated hydraulic fracturing wastewater to surface water resources; and
  • Disposal or storage of hydraulic fracturing wastewater in unlined pits, resulting in contamination of groundwater resources.

Notably absent from this list of increased risk activities is hydraulic fracturing of deep shale formations. Indeed, the final report acknowledges that the presence of “thousands of feet of rock between hydraulically fractured rock formations and underground drinking water resources can reduce the frequency of impacts on drinking water resources” during well injection. Read the final report in full here.

For more insight on water laws and regulation, visit V&E’s Water Blog.

  • 23
  • November
  • 2016

Two Lawsuits Relating to Induced Seismicity Filed in Oklahoma

Two lawsuits recently filed in courts in Oklahoma allege claims relating to induced seismicity following a September 8, 2016 earthquake, which measured magnitude 5.8 and had an epicenter approximately 8 miles northwest of Pawnee, Oklahoma.  That quake was the largest reported in Oklahoma since seismic record-keeping began.

The first case, filed in Oklahoma state court on November 17, is a putative class action brought by an Oklahoma resident against 27 oil and gas companies that have engaged in injection well operations near Pawnee, 25 of which are unnamed in the class action petition. The petition generally alleges that defendants’ disposal of fracking wastewater in injection wells caused dozens of earthquakes near Pawnee from September through November 2016 (including the magnitude 5.8 earthquake on September 3) and asserts claims of absolute liability for ultrahazardous activities, negligence, private nuisance, and trespass.  The petition seeks damages for physical damage to real and personal property, market value losses to real property, and punitive damages, and alleges that the defendants are jointly and severally liable for such damages.  Read the Class Action Petition in James Adams et al. v. Eagle Road Oil LLC et al., case number CJ201678, in the District Court of Pawnee County, Oklahoma here.

The second case, brought by the Pawnee Nation of Oklahoma (the “Pawnee Nation”) in federal court, involves claims against the United States Bureau of Indian Affairs, the Bureau of Land Management, and Sally Jewell as Secretary of the Interior.  Specifically, the complaint alleges that defendants’ approval of various oil and gas leases and drilling permits on Pawnee land failed to comply with several federal laws, including the National Environmental Policy Act (“NEPA”), the National Historic Preservation Act, and the American Indian Agricultural Resource Management Act of 1993. The complaint links these failures to various impacts on Pawnee land that have occurred as a result of oil and gas development, including earthquakes allegedly caused by hydraulic fracturing operations.  Like the petition in Eagle Road discussed above, the Pawnee Nation’s complaint makes specific reference to the magnitude 5.8 earthquake that occurred on September 3.  Among the myriad of violations alleged in the complaint is a claim that environmental assessments prepared to comply with NEPA in association with the issuance of drilling permits were deficient for failing to consider earthquakes as an “indirect impact.”  The complaint asks the court to set aside 17 leases approved in 2013, as well as at least 10 related permits to drill and associated sundry notices, and to enjoin the defendants from approving any other activities on the relevant leases until defendants have complied with all federal laws.  Read the complaint in Pawnee Nation of Oklahoma et al. v. Jewell et al., case number 4:16cv00697, in the U.S. District Court for the Northern District of Oklahoma here.

  • 21
  • November
  • 2016

New Study Links Hydraulic Fracturing Operations to Earthquakes in Western Canada

A newly-released study links hydraulic fracturing operations to injection-induced earthquakes in Western Canada. Geoscientists at the University of Calgary studied all wells completed from December 2014 to March 2015 within the Devonian Duvernay Formation, finding both spatial and temporal correlations between hydraulic fracturing operations and seismic activity in the area. The largest observed seismic event during this time measured magnitude 3.9. Nonetheless, a prior study found that induced seismic events of magnitude 3 or greater are associated with only about 0.3% of hydraulically fractured wells in western Canada.

The new study also found important differences in how different portions of the underlying fault system responded seismically; the east fault strand was primarily active during hydraulic fracturing operations, whereas the west fault strand remained activated for several months afterwards. The authors conclude that “the elastic response of the rockmass to hydraulic fracturing” is one of several different mechanisms that can trigger fault activation, leading to seismic activity. Indeed, the study acknowledges that the recent increase in induced seismic activity in North America “is primarily associated with” a different mechanism—the “high-rate injection of large volumes of saltwater into porous rock formations” that occurs in underground wastewater disposal operations. However, the authors also cite to two earlier studies that found links between hydraulic fracturing operations and earthquakes in Oklahoma and Poland, Ohio. Speaking with the New York Times, one of the study’s authors acknowledged that different geographic areas respond differently to hydraulic fracturing activity, and that additional research should be conducted to “understand[] the origin of the differences.” Read the study in full here.

  • 11
  • November
  • 2016

Wyoming DEQ Issues Final Report Concluding that Upward Migration of Fracturing Fluids at Depth Is Unlikely

The Wyoming Department of Environmental Quality ("WDEQ") has released its final report in response to resident concerns alleging a link between well water taste and odor issues in the Pavillion Gas Field and hydraulic fracturing activity. The final report brings to a close an investigative effort that initially began in 2009.  While a 2011 draft report by the United States Environmental Protection Agency ("EPA") concluded that hydraulic fracturing fluids may have impacted groundwater in the Pavillion Gas Field, WDEQ’s final report concludes that "[i]t is unlikely that hydraulic fracturing fluids (injected into the deeper production zone(s)) have risen to the depths utilized by water-supply wells.”  This finding is consistent with WDEQ’s December 2015 draft final report as well as EPA's June 2015 draft hydraulic fracturing study, which did not identify any instances where fluids migrated from the factures made in rock formations more than a mile below the surface up into aquifers that could be potential sources of drinking water. Like other recent studies, the final report further concludes that well construction issues present the "most probable pathway for gas or other fluids to reach shallow depths" via seepage along the wellbore, a risk WDEQ likewise identified in its December 2015 draft final report. Read WDEQ's final report in full here and the tables here.

  • 14
  • October
  • 2016

Industry Advocates Sue Over Pennsylvania’s New Hydraulic Fracturing Rules

On Thursday, October 13th, a trade group representing unconventional gas producers filed suit asking a Pennsylvania court to delay implementation of the rules until the appeal is decided. The challenge targets provisions in the new rules that industry representatives claim are vague, burdensome, and not authorized under Pennsylvania law, including a rule expanding operators’ responsibility to avoid and protect endangered species and rules governing site remediation, spill-reporting, and waste disposal, among others. The new rules have been in effect less than a week.

  • 12
  • October
  • 2016

Pennsylvania’s New Fracking Regulations

On October 8, 2016, the Pennsylvania Environmental Quality Board published a comprehensive set of new rules regulating hydraulic fracturing operations in the state. Discussion of these rules began in 2011 and resulted in significant opposition--including resistance at the Pennsylvania legislature. Pennsylvania’s rules governing above-ground operations at oil and gas well sites had not been updated since 2001, prior to the expansion of hydraulic fracturing in the state. Under the regime implemented by the new rules, Pennsylvania has bifurcated its regulation of conventional and unconventional wells; the regulations governing conventional operations appear at 25 Pa. Code Chapter 78, while the regulations governing unconventional operations appear at 25 Pa. Code Chapter 78a. Many fear that the new rules will stifle energy production at a time when production has already slowed due to uncertain commodity prices, while others argue that the rules provide changes to protect both public health and the state’s natural resources. Read the full article here.

  • 29
  • August
  • 2016

Colorado Anti-Fracking Measures Fail to Satisfy Signature Validation Requirements

State officials in Colorado have indicated that supporters of two anti-fracking initiatives did not collect enough valid signatures to qualify the initiatives for the November ballot. Supporters of the initiatives initially submitted more than the required 98,492 signatures for each initiative, but fell short of meeting the required threshold after the Secretary of State’s office screened the signatures to determine their validity. The measures would have authorized local communities to limit or ban hydraulic fracturing and created a 2,500-foot setback requirement, which could have severely limited oil and gas production throughout the state. The announcement marks another high profile defeat for anti-fracking activists following the Colorado Supreme Court’s ruling earlier this year that municipal regulation of hydraulic fracturing is preempted by existing state law. Proponents of the initiatives have 30 days to appeal the decision to the Denver District Court.

  • 22
  • June
  • 2016

Federal Court in Wyoming Strikes Down BLM Fracking Rule

In a June 21 ruling, the United States District Court for the District of Wyoming set aside the Bureau of Land Management’s (“BLM”) comprehensive hydraulic fracturing regulations, holding that BLM lacks the statutory authority to regulate the hydraulic fracturing process.  BLM promulgated a final rule in March 2015 that regulated wellbore construction, chemical disclosure, and water management for hydraulic fracturing operations on federal and Indian lands.  The rule was scheduled to take effect in June 2015.  States and industry groups challenged the rulemaking under the Administrative Procedure Act, and the court stayed the effective date of the rule before it went into effect.  

BLM had claimed “broad authority” to regulate all oil and gas operations on federal and Indian lands under a bevy of statutes, but the court concluded that BLM’s authority under these statutes did not extend to “the kind of comprehensive rulemaking” aimed at the process of hydraulic fracturing embodied in its March 2015 rule.  Rather, the court held that the Safe Water Drinking Act (“SWDA”) originally vested the Environmental Protection Agency (“EPA”) “with the authority and duty to regulate hydraulic fracturing on all lands, federal state and tribal,” but that Congress, in the Energy Policy Act of 2005, explicitly removed non-diesel hydraulic fracturing from EPA regulation under the SWDA.  Pursuant to the court’s holding, BLM is now without the statutory authority to regulate the process of hydraulic fracturing, though it may appeal the court’s decision; indeed, the government had already appealed the court’s stay of the rule’s effective date to the Tenth Circuit Court of Appeals. Read the opinion in full here.

  • 14
  • June
  • 2016

New EPA Rule Prohibits Discharge of Unconventional E&P Wastewaters to POTWs

On June 13, EPA released its final rule prohibiting unconventional oil and gas well operators from discharging wastewater to publicly-owned treatment works (“POTWs”). The final rule only applies to unconventional oil and gas well operators; conventional wells and coalbed methane extraction facilities are unaffected. EPA’s preamble to the final rule acknowledges that the current industry practice for wastewater disposal does not include discharge to POTWs; indeed, in the preamble to EPA’s proposed rule, the agency could not identify a single current instance of an operator sending wastewater to a POTW. Rather, operators typically inject wastewaters underground, reuse or recycle them, or transfer them to centralized waste treatment facilities for disposal. Nonetheless, EPA has promulgated a final rule “to ensure that the current industry practice of not sending wastewater discharges from this sector to POTWs continues into the future.” The final rule is effective 60 days after its forthcoming publication in the Federal Register. Read the final rule is its entirety here.

  • 03
  • June
  • 2016

The Clock Starts on New Compliance Requirements for Methane Emissions

On June 3, 2016, EPA published New Source Performance Standards for methane and volatile organic compound emissions from the oil and natural gas industry in the Federal Register. The rule will take effect on August 2, 2016, and the first leak detection surveys must be completed by the latter of June 3, 2017, or 60 days after startup. For more information on EPA’s recent rules aimed at the oil and gas industry, read our briefing on this new rule and our first post in a series discussing steps that upstream and midstream companies should consider in adapting to the new rule.

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