Cracking down on Fracking – The US Regulatory Trend and what that means for oil companies

In June 2011 Enhesa is focusing on an emerging Oil & Gas issue, which has recently become a major concern for Oil Companies in the United States. Hydraulic fracturing or “fracking” has long been used for natural gas and oil production in the United States. However, due to growing concern regarding its environmental impacts, the US Federal Government and various states are assessing the need for Fracking regulation. According to Enhesa’s research, the regulatory trend will most likely continue to grow, with  major oil states taking the lead in the rulemaking process.

Fracking is the primary method for stimulating wells to recover natural gas and oil from geologic formations.  The U.S. Department of Energy projects by 2020, approximately 20% of the total U.S. gas supply will be a product of shale gas, collected from states such as Texas, Wyoming, and Pennsylvania.   Hydraulic fracturing fluids are commonly composed of water and chemical additives, and are pumped into a geologic formation at high pressure to maximize the extraction of underground natural gas and oil resources.  What to do with the resulting  hydraulic fracturing fluid is a significant issue for industry at both the state and federal levels, as concerns on how to protect limited water resources throughout the U.S. continue to gain the attention of citizens, lawmakers, and industry. 

At the federal level, the U.S. Environmental Protection Agency is currently conducting draft studies to determine the potential impacts of hydraulic fracturing on drinking water and groundwater.  EPA regulates surface water discharges from hydraulic fracturing flowback through the National Pollutant Discharge Elimination System program, which requires flowback to be treated prior to the discharge into surface water.  EPA does not currently regulate the chemical components used in hydraulic fracturing for wells. 

In response to growing citizen concern, some states have implemented regulations to address the chemical constituents used by industry.  Throughout the U.S., states have started requiring the disclosure of chemical constituents found in hydraulic fracturing fluid either prior to hydraulic fracturing or as resulting wastewater.  Texas and Pennsylvania are two such states, currently addressing hydraulic fracturing fluids through the rulemaking process.  The Railroad Commission of Texas, the energy regulatory body for the U.S.’s largest oil and natural gas producing state, announced it will begin the process of drafting rules to mandate disclosure of certain chemicals used in the hydraulic fracturing.  Pennsylvania already has regulations in place that require generators of wastewater produced from the drilling, completion, and production of a shale gas well to disclose the chemical analysis of the wastewater produced.  

In the absence of federal regulation concerning the chemical composition of hydraulic fracturing fluid, it is likely other oil and gas producing states will follow Texas and Pennsylvania and require chemical disclosure for hydraulic fracturing fluid. If you would like to learn more about this topic, or how the US Federal & State Governments diverge in regulatory rigidities, please tune in to our next webinar, The EHS Audit Solution to Federal & State Variances. In this webinar, Enhesa will be exploring various state and federal variances to these major issues, and providing solutions on how to address them.

The webinar will take place on 23 June 2011, 11:00 AM Eastern Standard Time. To register, please click here. If you would like to be added to Enhesa’s Webinar Invitation List, please email your request to webinars@enhesa.com. We hope to have you join us!

 –Rachel Degenhardt, US EHS Consultant

 

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