## Comments of the American Chemistry Council on TSCA Section 21 Petition Concerning Oil and Gas Exploration and Production Chemicals

October 20 , 2011

Of Counsel: Christina Franz

Mark N. Duvall Senior Director, Regulatory & Technic al Affairs Beveridge & Diamond, P.C. American Chemistry Council 1350 I Street, N.W. 700 Second Street, N.E. Washington, DC 20005 Washington, DC 20002 (202) 789

- 6090 (202) 249

- 6406

mduvall@bdlaw.com christina_franz@americanchemistry.com- i

- 

### Table of Contents

Page

EXECUTIVE SUMMARY

................................ ................................ ................................ ..... 1

DISCUSSION

................................ ................................ ................................ .......................... 1

I. ACC Statement of Interest

................................ ................................ .......................... 1

II. Importance of Shale Gas to the Chemical Industry

................................ ..................... 2

II I. The Actions Requested by the Petition Are Not Necessary

................................ ........ 3

A. Information Cited in the Petition

................................ ................................ ..... 3

B. EPA‘s Ongoing Study of Hydraulic Fracturing and Drinking Water

.............. 5

C. Other Considerations About the Lack of Need for EPA Action

...................... 9

D. Lack of Complete Information Does Not Justify TSCA Rulemaking

........... 10

IV. Granting the Petition Would Distract EPA From Higher Priority Actions

............... 10

V. E&P Chemicals Is an Inappropriate Category

................................ ........................... 1 1

VI. The Petition Is an Inappropriate Means for Obtaining Trade Secret Chemical

Identities

................................ ................................ ................................ ..................... 12

VII. The Petition Fails to Meet the Criteria for EPA to Take Action Under TSCA

......... 1 3

A. Section 21 Puts the Burden of Proof on the Petitioners

................................ . 1 3

B. The Requested Section 4 Rule

................................ ................................ ....... 1 3

C. The Requested Section 8(a) Rule

................................ ................................ ... 1 4

D. The Requested Sect ion 8(c) Order

................................ ................................ . 1 5

E. The Requested Section 8(d) Rule

................................ ................................ .. 1 5

CONCLUSION

................................ ................................ ................................ ...................... 1 6- 1

- EXECUTIVE SUMMARY

The American Chemistry Council (ACC) urges EPA to deny the citizens‘ petition entitled ―Citizen Petition under Toxic Substances Control Act Regarding the Chemic al Substances and Mixtures Used in Oil and Gas Exploration or Production‖ (the Petition).

Initially, it should be noted that the Petition addresses an issue of considerable importance to America‘s chemical industry. The recent availability of commercial quantities of shale gas, obtained through technology such as hydraulic fracturing and horizontal drilling , has created the potential for a robust and growing chemical industry based on natural gas as a cheap

and reliable feedstock. This in turn is creati ng jobs and generating economic growth for the

country.

The Petition is largely a series of arguments against the development of shale gas in this country in the form of a petition for EPA action s under the Toxic Substances Control Act (TSCA). The actio ns it requests are not necessary. Many of the chemical substances covered by the Petition have robust information already available, while others are of low hazard. EPA is already reviewing the very issues raised by the Petition in a multi

- year, Congress ionally

mandated study of hydraulic fracturing and drinking water supplies

. EPA is already in the process of collecting much of the information requested by the Petition.

The biocides referenced in the Petition are not subject to EPA‘s jurisdiction und er TSCA, as they are pesticides regulated under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).

New chemical substances used in the oil and gas industry are reviewed in detail by EPA through the premanufacture notification (PMN) program. Information about the chemicals used in shale gas development is increasingly ava ilable to the public. The requested actions would

undoubt ed ly divert EPA from higher priorities under TSCA. The requested actions would be a huge drain of EPA‘s resources, given the extraordinarily large number of chemicals and mixtures covered by the Petition. In short, t here is simply no need for EPA to take the requested actions

under TSCA.

Under section 21, the petition er bears the burden of proving tha t taking the re quested action meets the statutory requirements for action under each of the section s cited

. The Petition has not shown that the requested test rule meets the various section 4 requirements. It fails to establish that rules under section 8(a) and section 8(d) would be reasonable or necessary. It asks for a section 8(c) call

- in, relief which is not available under section 21.

Accordingly, EPA should deny the petition in its entirety

...

DISCUSSION

I

. ACC Statement of Interest

The American Chemistry Co uncil (ACC) represents the leading companies engaged in the business of chemistry. A key feedstock for the chemical manufacturing industry in the

United States is natural gas. The Petition challenges the safety of hydraulic fracturing and other- 2

-

technolog ies and practices used in producing natural gas, particularly from shale. As shale gas is crucial to the economic future of the chemical industry, ACC and its member companies are affected by the Petition.

II. Importance of Shale Gas to the Chemical Indu stry

Section 2(c) of TSCA directs EPA to ―consider the environmental, economic, and social impact of any action‖ it takes or proposes to take under that statute. The Petition directly addresses aspects of shale gas production. Thus, in reviewing the Pet ition, EPA should consider the economic and social aspects of shale gas production as well as its environmental aspects.

The Energy Information Administration (EIA) has explained the importance of hydraulic fracturing and horizontal drilling to the produc tion of shale gas, and the importance of shale gas to U.S. energy production:

Shale gas production in the United States grew at an average annual rate of 17 percent between 2000 and 2006 .... The combination of horizontal drilling and hydraulic

fracturin g technologies has made it possible to produce shale gas economically, leading to an average annual growth rate of 48 percent over the 2006

- 2010 period.

Shale gas production continues to increase strongly through 2035 in the [Annual Energy Outlook 2011] R eference case, growing almost fourfold from 2009 to 2035. While total domestic natural gas production grows from 21.0 trillion cubic feet in 2009 to 26.3 trillion cubic feet in 2035, shale gas production grows to 12.2 trillion cubic feet in 2035,

when it makes up 47 percent of total U.S. production

—up considerably from the 16

- percent share in 2009. 1

Commercial shale gas production in the United States is proving to be the key to renewed growth in the domestic chemical industry. ACC recently analyzed the impact of a hypothetical,

but realistic

, 25 percent increase in ethane supply from shale gas on growth in the petrochemical

sector

, 2 and found that the increase would generate:

 17,000 new knowledge

- intensive, high

- paying jobs in the U.S. chemical indust ry

 395,000 additional jobs outside the chemical industry (165,000 jobs in other industries that are related to the increase in U.S. chemical production and 230,000 jobs from new capital investment by the chemical industry)

 $4.4 billion more in federal, s tate, and local tax revenue annually ($43.9 billion over 10 years)

 A $32.8 billion increase in U.S. chemical production

 $16.2 billion in capital investment by the chemical industry to build new petrochemical and derivatives capacity

1 EIA, Annu al Energy Outlook 2011 with Projections to 2035 (2011), DOE/EIA

- 0383(2011), available at http://www.eia.gov/forecasts/aeo/p df/0383(2011).pdf , at 2.

2 ACC, Shale Gas and New Petrochemicals Investment: Benefits for the Economy, Jobs, and US Manufacturing (2011), available at http://www.americanchemistry.com/ACC

- Shal e

- Report

.- 3

-

 $132.4 billion in U. S. economic output ($83.4 billion related to increased chemical production (including additional supplier and induced impacts) plus $49.0 billion related to capital investment by the U.S. chemical industry)

The scenario outlined in ACC‘s report is corrob orated by trends in the chemical industry. ACC member companies, including The Dow Chemical Company, Shell Chemical, LyondellBasell, Bayer MaterialScience

, and others have announced new investments in U.S. petrochemical capacity to benef it from available r esources and grow their chemical businesses. 3

Accordingly, as EPA reviews the Petition, it should do so with recognition that continued and expanded shale gas production is extremely important to the U.S. economy and to the chemical industry in particular

.

III. The Actions Requested by the Petition Are Not Necessary

The Petition asks EPA to require the development of new information and submission of existing information about what it calls ―E&P Chemicals,‖ a term it defines as ―chemical

substances and mixtures used in oil and gas exploration or production.‖ It is not clear what chemicals and mixtures qualify as E&P Chemicals, but it is clear that much information is available about many chemicals used in the oil and gas industry. A t best

, the Petitio n is

overbroad and fails to establish that the actions requested of EPA a re necessary.

A

. Information Cited in the Petition

The principal source cited in the Petition as supporting the need for EPA action under

TSCA is a list of 980 products containing 6 49 chemicals compiled by the Endocrine Exchange, an NGO with no known expertise in oil and gas issues (Petition pp. 9

- 11)

. 4 The list includes

well

- studied chemicals such as ammonia, carbon black, chlorine, crystalline silica, ethylene glycol, formaldehyde

, and hydr ochloric acid. There is no need for EPA to require the generation or reporting of information on these and other chemicals to supplement the already considerable

data available on them.

The list also includes many low hazard chemicals, such as cellulose, citric a cid, deionized

water, and guar gum . Indeed, multiple listed chemicals are generally recognized as safe (GRAS)

for direct use in food per FDA regulations , including the following, among others:

 Acetic acid, 21 C.F.R. § 184.1005

 Aluminum sodium sulfate, 21 C.F.R. § 182.1131

 Ammonium chloride, 21 C.F.R. § 184.1138

 Ammonium sulfate, 21 C.F.R. § 184.1143

 Boric acid, 21 C.F.R. § 181.30

 Calcium carbonate, 21 C.F.R. § 184.1191

3 See, e.g., J. Kaskey, Cheap Shale Gas Means Record U.S. Chemical Industry Growth (Aug. 10, 2011), available at http://www. bloomberg.com/news/2011

- 08

- 10/cheap

- shale

- gas

- means

- record

- u

- s

- chemical

- industry

- expansion.html

. 4 T he list is available at http://www.endocrinedisruption.com /files/MultistateSpreadsheet3

- 29

- 11States.xls

.- 4

-

 Calcium chloride, 21 C.F.R. § 184. 1193

 Calcium hydroxide, 21 C.F.R. § 184.1205

 Calcium sulfate, 21 C.F.R. § 184.1230

 Calcium oxide, 21 C.F.R. § 184.1210

 Citric acid, 21 C.F.R. § 184.1033

 Guar gum, 21 C.F.R. § 184.1339

 Magnesium chloride, 21 C.F.R. § 184.1426

 Sodium carbonate, 21 C.F.R. § 184.1742

 Sodium hydroxide, 21 C.F.R . § 184.1763

 Sodium metasilicate, 21 C.F.R. § 184.1769a

 Sodium nitrate, 21 C.F.R. § 181.33

 Sodium sulfite, 21 C.F.R. § 182.3798

 Sucrose, 21 C.F.R. § 184.1854

 Sulfuric acid, 21 C.F.R. §184.1095

 Tricalcium silicate, 21 C.F.R. § 182.2906

Although the chemica ls listed above as GRAS may not meet the FDA specifications noted in the regulations or be of a quality appropriate for use in food when used in the oil and gas industry

, the point is that they are recognized as very low hazard chemicals , particularly at t he extremely low concentrations used in hydraulic fracturing, where the formulation s are predominantly water

. FDA requires the same quantity and quality of scientific evidence for GRAS classification as it requires for approval of a food additive applicat ion, 5 so it is reasonable to conclude that these are

well

- studied chemicals.

Of th e 649 chemicals on the Endocrine Exchange list, 432 (66%) were reported to have appeared in only 1 of the 980 product s , and 9 (1%) were reported to have appeared in 0 produc ts

. Thus, while the list may include 649 chemicals, most appear to be in extremely limited usage in the oil and gas industry , and thus are of little relevance in this context

. Only the following

chemicals on th e list were reported to have appeared in 10 or more of the 980 products (with the

number of products in which they were apparently reported ) :

 2

- BE (ethylene glycol monobutyl ether)

– 23

 Aluminum oxide

– 17

 Barite (BaSO 4 )

– 15

 Bentonite

– 20

 Crystalline silica, cristobalite

– 14

 Crystalline silica, quartz

– 124

 Crystalline silica, tridymite

– 13

 Deionized water

– 32

 Diesel 2

– 20

 Ethylene glycol

– 18

 Glutaraldehyde

– 11

5 21 C.F.R. § 170.30(b).- 5

-

 Guar gum

– 11

 Heavy aromatic petroleum naphtha (aromatic solvent)

– 15

 Hydrochloric acid (HCl)

– 13

 Iron oxide (Fe 2 0 3 , Diiron trioxi de)

– 10

 Isopropanol (Propan

- 2

- OL)

– 50

 Methanol

– 76

 Mica

– 14

 Napthalene

– 19

 Petroleum distillate hydrotreated light

– 24

 Potassium chloride

– 10

 Potassium hydroxide

– 10

 Proprietary

– 34

 Sodium chloride

– 15

 Sodium hydroxide

– 17

 Unknown

– 45

 Xanthan g um

– 10

 Xylene

– 12

This is hardly a list of exotic or understudied chemicals for which EPA must postpone its other

activities under TSCA and collect information

.

In denying an earlier section 21 petition involving air fresheners by some of the same

p etitioners, EPA concluded:

In sum, the NRDC report indicates that some phthalate esters are present in some air fresheners at generally low concentrations. This information is not surprising and does not provide a basis to suspect that the presence of th e phthalate esters at the concentrations detected presents a significant public health risk. 6

Similarly, the mere presence of certain chemicals in products used in the oil and gas industry does not provide a basis to suspect that those chemicals present a significant health risk, particularly in light of their low concentrations in hydraulic fracturing, where by far most of the

fluid is water.

B. EPA’s Ongoing Study of Hydraulic Fracturing and Drinking Water

The Petition recognizes ( Petition pp. 3

- 4), then disregards, that EPA is currently undertaking a large study of the very issues for which the Petition asks EPA to collect information under TSCA. The House of Representatives Appropriations Conference Committee,

in connection with EPA‘s Fiscal Year 2 010 appropriation, directed EPA to undertake the study:

Hydraulic Fracturing Study.

— The conferees urge the Agency to carry out a study on the relationship between hydraulic fracturing and drinking water, using a credible approach

6 72 Fed. Reg. 72886, 72889 (Dec. 21, 2007).- 6

-

that relies on the best a vailable science, as well as independent sources of information. The conferees expect the study to be conducted through a transparent, peer

- reviewed process that will ensure the validity and accuracy of the data. The Agency shall consult

with other Feder al agencies as well as appropriate State and interstate regulatory agencies in carrying out the study, which should be prepared in accordance with the Agency‘s quality assurance principles. 7

Since announcing in March 2010 that it would undertake the study , EPA has prepared a draft study plan

. 8 T he Science Advisory Board (SAB) has review ed the draft study plan

, 9 and EPA is revising the draft in light of the SAB comments. 10 EPA has identified seven case studies to be undertaken as part of the overall study. 11 EPA expects to issue a first report of results by the end of 2012, with an additional report in 2014. 12

This massive project includes the collection of information on the identities, hazards, and risks of chemicals used in hydraulic fracturing, the key request of the Petition. The section 8(a)

rule requested in the Petition will be substantially addressed by the study:

EPA is concerned with assessing the toxicity and potential human health effects associated with these possible drinking water contamin ants. In order to do this, EPA will first obtain an inventory of the chemicals associated with hydraulic fracturing activities (and their estimated concentrations of occurrence), including chemicals used in hydraulic fracturing fluid and naturally occurri ng substances that may be released from subsurface formations during the hydraulic fracturing process. EPA will also need to identify the relevant reaction and degradation products of these substances, which may have different toxicity and human health ef fects than their parent compounds, in addition to the fate and transport characteristics of the chemicals

. 13

The section 8(d) rule requested in the Petition will also be effectively addressed:

7 H.R. Rep. 111

- 316 (2009) at 109 (conference report for Pub. L. 111

- 88), available at http://www.gpo.gov/fdsys/pkg/CRPT

- 111hrpt316/pdf/CRPT

- 111hrpt316.pdf

. 8 EPA, Draft Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources,

EPA/600/D

- 11/001 (2011), available at http://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/upload/HFStudyPlanDraft_SAB_020711

- 08.pdf

. 9 The SAB comments on the draft study plan, dated August 4, 2011, are available at http://yosemite.epa.gov/sab/sabproduct.nsf/0/2BC3CD632FCC0E99852578E2006DF890/$F ile/EPA

- SAB

- 11

- 012

- unsigned.pdf

. 10 EPA‘s response to the SAB comments, dated September 27, 2011, is available at http:// yosemite.epa.gov/sab/sabproduct.nsf/2BC3CD632FCC0E99852578E2006DF890/$File/EPA

- SAB

- 11

- 012_Response_09

- 27

- 2011.pdf

11 EPA, Case Study Locations for Hydraulic Fracturing Study, available at http://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/case_studies.cfm

. 12 EPA, Questions and Answers About EPA‘s Hydraulic Fracturing Study, available at http://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/faqs.cfm#generalthree

. 13 Draft Study Plan at 47

- 48,- 7

-

In the first phase of this work, EPA will conduct an initial screen for known toxicity and human health effects information (including existing toxicity values such as reference doses and cancer slope factors) by searching existing databases. 14

Finally, even the section 4 rule requested in the Petition will be addre ssed :

The second phase of this work will focus on additional testing and/or assessment of high

priority chemicals. High

- priority chemicals may be subjected to a battery of tests used in the ToxCast program, a high

- throughput screening tool that can ident ify toxic responses

.... ToxCast may also be used to establish the level of toxicity or dose

- response relationships for chemicals where some existing information on toxicity or mode of

action is available. For chemicals that QSAR analysis and high

- throug hput screening identify as having a high priority for assessing risk in a semi

- quantitative or quantitative mode, EPA will initially apply computational modeling (e.g., ToxPi and computation

dose

- response analysis) to determine a relative estimate of toxic ity. Based on these assessments, additional testing of the highest

- priority chemicals may be conducted using

medium

- throughput cellular and alternative animal models (e.g., C. elegans, zebra fish, and stress response cellular assays) together with targete d laboratory animal assays. The latter will be targeted to the specific mode of action indicated by high

- and medium

throughput assays and computational modeling. 15

The ultimate purpose of the actions requested by the Petition is assessment of the risk of

E&P Chemicals. The ongoing EPA study will assess the risk of both individual chemicals and

relevant mixtures used in hydraulic fracturing :

EPA may also develop chemical

- specific Provisional Peer Reviewed Toxicity Values (PPRTVs) for high

- priority chemic als for which there are no existing toxicity values.

PPRTVs summarize the available scientific information about the adverse effects of a chemical and the quality of the evidence, then ultimately derive toxicity values, such as

reference doses and cancer slope factors, that can be used in conjunction with exposure and other information to develop a risk assessment. In addition to single chemical assessments, further information may be obtained for mixtures of chemicals based on which components occur most frequently together and their relevant proportions as identified from exposure information. EPA may also assess how changes in source water characteristics impact treated drinking water and associated disinfection by products

... . When combined with exp osure and other relevant data, this information will help EPA characterize the potential public health impacts of hydraulic fracturing on drinking water

resources. 16

14 Id. at 48.

15 Id. at 48

- 49.

16 Id. at 49.- 8

-

EPA has already begun data collection from companies involved with hydraulic fracturing, 17 including issuing a subpoena to one company. 18 The Petition‘s requested section 8(a) and section 8(d) rule s duplicate this data collection, despite the Petition‘s attempt to show otherwise ( Petition p. 4). For example, the 2010 EPA data collection reque st addressed to the nine companies includes the following information, similar to the provisions of sections 8(a) and 8(d) as applied to this context :

1. Provide the name of each hydraulic fracturing fluid formulation/mixture distributed or utilized by the Company within the past five years from the date of this letter. For each formulation/mixture, provide the following information for each constituent of such product ....

2. Provide all data and studies in the Company‘s possession relating to the human hea lth and environmental impacts and effects of all products and constituents identified in Question 1.

3. For all hydraulic fracturing operations for natural gas extraction involving any of the products and constituents identified in the response to Question 1 , describe the process including the following: ....

4. a. Identify all sites where, and all persons to whom, the Company:

i. provided hydraulic fracturing fluid services that involve the use of hydraulic fracturing fluids for the year prior to the date of th is letter, and

ii. plans to provide hydraulic fracturing fluid services that involve the use of hydraulic fracturing fluids during one year after the date of this letter.

b. Describe the specific hydraulic fracturing fluid services provided or to be provided fo r each of the sites in Question 4.a.i. and ii., including the identity of any contractor that the Company has hired or will hire to provide any portion of

such services.

For each site identified in response to Question 4, please provide all information

sp ecified in the enclosed electronic spreadsheet.

17 The EPA letter sent to 9 hydraulic fractu ring service providers in September 2010 requesting certain information

is available at http://water.epa.gov/type/groundwater/uic/ class2/hydraulicfracturing/upload/HFvoluntaryinformationrequest.pdf

. The EPA letter to those service providers in August 2011 requesting additional information is available at http://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/upload/LetterTo9HFCompanies_August2011.p

df

. 18 The subpoena to Halliburton is available at http://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/upload/hydrofrac_halliburton_subpoena_11

- 9

- 2010.pdf

.- 9

-

In light of this ongoing study and its focus on the very issues underlying the Petition, the actions requested in the Petition ar e un necessary.

The Petition seeks ( Petition p. 3) to discount the relevance of the EPA study, which focuses on the potential effects of hydraulic fracturing to drinking water, by asserting that E&P Chemicals may also have adverse effects on air quality. EPA is addressing air issues in oil and natural gas production separately th rough a proposed rulemaking under the Clean Air Act . It is obligated by a consent decree to take final action on that rulemaking by February 28, 2012. The preamble explains, ― [w]e are proposing operational standards for completions of hydraulically

fractu red gas wells.‖ 19 Thus, EPA has already proposed to take action on a subject for which the Petition merely requests that it collect information.

C

. Other Considerations About the Lack of Need for EPA Action

The Petition refers ( Petition p p. 2 , 12 ) to ―bactericides

, ‖ ― biocides

, ‖ and ―microbicides‖
[s ic] as being among the E&P Chemicals for which the petitioners have concerns. As EPA is well aware, biocides are regulated under FIFRA and are excluded from the scope of TSCA through the definition of ―chem ical substance‖ in section 3(2)(B)(ii). There i s no authority for EPA to require information about biocides under TSCA. Moreover, there is no need for EPA to do so, since oilfield use of biocides must be specifically supported and reviewed by EPA before

that use can be added to a biocide‘s FIFRA label.

The Petition says ( Petition p. 20) that EPA should include ―new substances‖ in its section 8(a) rulemaking for E&P Chemicals. New chemical substances must be reviewed by EPA under

TSCA section 5 before t hey are used for non

- exempt commercial purposes, such as oil and gas exploration and development. .

The Petition also s tates (p. 20) that all new mixtures must be included in the requested section 8(a) rule. Such a requirement would be burdensome and p ose an impediment to innovation, as it would slow down the introduction of new products, even those which may reduce the environmental footprint of oil and gas exploration and production. This request is

similar to that in the 2010 House bill to amend TSC A, which would have required a declaration under section 8(a) for any use of a mixture which had not previously been reported to EPA. 20
This request would put EPA in the business of reviewing each new formulation used in the oil and gas industry, for no ap parent purpose.

Information about the chemicals used in hydraulic fracturing is now widely available through such sources as the FracFocus website, as the Petition concedes (pp. 4

- 5). These sources may not satisfy the petitioners, either because they do not disclose trade secret chemical identities or because they are largely voluntary. (Reporting for the FracFocus website is now mandatory in Texas. 21 ) Those objections , however, do not undermine the Petition‘s own

19 76 Fed. Reg. 52738, 52745 ( Aug. 23, 2011).

20 The Toxic Chemicals Safety Act of 2010, H.R. 5820 (2010) , § 5(2).

21 Texas Natural Resources Code § 91,851(a)(1).- 10

-

evidence that there is no need at thi s point for EPA to duplicate such websites through rulemaking under TSCA.

D. Lack of Complete Information Does Not Justify TSCA Rulemaking

The Petition does ask for some information not already available in public databases or to be included in the ong oing EPA study. For example, EPA asked some, but not all, companies involved in hydraulic fracturing to provide detailed information ( Petition p. 5) . The testing that EPA anticipates in the course of the study may be narrower than the virtually unlimited testing requested in the Petition. This lack of exact duplication of the Petition does not establish that additional information is necessary to be developed under TSCA.

It is abundantly clear that EPA must balance the nee d for additional information a bout any chemical or category of chemicals against the need to make decisions in a timely manner and the costs of obtaining additional information . In this case, EPA plans to work through 2014 on the study which it launched in 2010. EPA reasonably conclu ded that its draft study plan was sufficiently broad in scope to meet its needs and the Congressional mandate. The Petition attempts to second

- guess that conclusion and should be denied.

IV. Granting the Petition Would Distract EPA From Higher Priority A ctions

The effect of a successful section 21 petition is to disrupt EPA‘s established priorities so that EPA redirects its limited resources to the subject matter addressed by the petition, even if EPA does not consider that subject matter to be a priori ty. Section 21(b)(4)(B) recognizes that EPA‘s priorities are a relev ant factor in its review of a petition

.

EPA is already addressing the potential impact of hydraulic fracturing on drinking water as a priority matter, as evidenced by the ongoing study discussed above. Beyond that, EPA has important priorities under TSCA reflected in its chemical action plans, its long

- range plan, and

other documents.

EPA has struggled to establish clear priorities and stick with them. In a 1987 report, EPA

Administra tor Lee Thomas called for risk

- based prioritization:

Although EPA‘s mission enjoys broad public support, our agency nonetheless must operate on finite resources. Therefore, we must choose our priorities carefully so that we apply those resources as eff ectively as possible ....

In a world of limited resources, it may be wise to give priority attention to those pollutants and problems that pose the greatest risks to our society. 22

22 EPA, ―Unfinished Business: A Comparative Assessment of Environmental Problems

- Overview Report‖ (1987) at i, ii, available at http://nepis.epa.gov/Exe/ZyPURL.cgi?Dockey=2001635G.TXT

.- 11

-

EPA is already working to identify priorities under TSCA. As announced in August 2011,

― EPA intends to identify priority chemicals for review and possible ri sk management action under TSCA, ‖ in part through a webinar and discussion forum in September 2011. 23

In effect, the Petition asks EPA to drop its other priorities and red irect its broad TSCA resources to promulgat e regulations under section 4, section 8(a), and section 8(d) and issu e orders under section 8(c) on substances used in oil and gas exploration and production

, and then review and

evaluat e the resulting informatio n. The Petition applies to hundreds

– potentially thousands

-- of

individual chemicals and mixtures . The resulting rules , order s
, r eview s
, and analyse s would consume substantial amounts of EPA‘s limited resources , precluding work on many higher priority a ctivitie s, including those priorities that may be identified in EPA‘s current effort

. In denying a section 21 petition on air fresheners, EPA noted that it had higher priorities:

EPA has a number of high priority chemical assessment and risk management p rojects and actions already underway that are requiring a substantial amount of OPPT resources. EPA views many of these projects as being more broadly applicable, and as having greater potential to result in the understanding and reduction of possible che mical risks, than the actions suggested by the petitioners. 24

Simply put, t he need for this Petition has not been established , and EPA should deny it in its entirety

.

V. E&P Chemicals Is an Inappropriate Category

The Petition defines ( Petition p. 1) E& P Chemicals as ―chemical substances and mixtures used in the oil and gas exploration or production.‖ Thus, it is a category consisting of both

indivi dual chemicals and mixtures of chemicals related only by the industry in which they are used. Section 26( c) of TSCA authorizes EPA to take action with respect to categories rather than with respect to individual chemicals, but only if the members of the proposed categories are ―suitable for classification as such for purposes of this Act.‖ The Petition‘ s pro ffered category is not suitable for regulatory purposes under TSCA.

In denying a section 21 petition on air fresheners, EPA concluded that it ―does not believe that it would be appropriate at this time to treat the vast array of air freshener products as a category.‖ 25 Similarly, it is not appropriate to classify the vast array of chemicals and mixtures used in the exploration and production of oil and gas as one or more categories

, the members of which are unrelated in terms of chemical structure, toxici ty, or exposure

.

This is an issue clearly committed to EPA‘s discretion. As noted in its denial of the air freshener petition:

23 EPA, Discussion Guide: Background and Discussion Questions for Identifying Priority Chemicals for Review and

Assessment (Aug. 2011)

, available at http://www.epa.gov/opptintr/existingchemicals/pubs/Chem.Priorization.August2011.DiscussionGuideOnly.pdf

. For

additional inf

ormation regarding EPA‘s ongoing prioritization activities under TSCA, see http://www.epa.gov/oppt/existingchemicals/pubs/chemprioritizations.html

. 24 72 Fed. Reg. 72886, 72 890 (Dec. 21, 2007).

25 Id. at 72 891.- 12

-

EPA has broad discretion to determine whether to regulate by category under TSCA section 26(c). Beyond the language of TSCA section 26(c), this discretion is evidenced by the fact that TSCA section 21(b)(4)(B)(i) provides an opportunity for a de novo hearing with respect to petitions for testing of chemical substances, but not for categories

of chemicals or mixtures. As with m ixtures, Congress left the complex issues associated

with regulation by category to the Administrator‘s discretion. Congress intended this authority to ― facilitate the efficient and effective administration ‖ of TSCA. Senate Report No. 94

– 698 at p. 31. 26

EPA has already exercised considerable discretion in planning and executing its study of hydraulic fracturing and drinking water supplies. EPA should exercise its discretion as it did in denying the air freshener petition and conclude that the category sug gested is not suitable,

because its use would not facilitate the efficient and effective administration of TSCA.

VI. The Petition Is an Inappropriate Means for Obtaining Trade Secret Chemical

Identities

The Petition seems motivated largely because trade secret identities are not disclosed publicly

. This may be seen from the following excerpts from the Petition:

 ―At present, EPA and the public lack adequate data about the identity of E&P

Chemicals

. ‖ ( Petition p. 3)

 ―This exemption, commonly known as the  ̳Halliburton loophole,‘ allows the oil and gas industry to conceal chemical formulas

. ‖ ( Petition p. 5)

 ―the oil and gas industry is resistant to disclosure of E&P Chemicals.‖ ( Petition p. 9)

 ―manufacturers and processors rarely disclose the complete chemi cal composition of their products.‖ ( Petition p. 10)

 ―the [requested section 4] rule must require the identification of each chemical substance or mixture for which testing is performed.‖ ( Petition p. 19)

 ―Petitioners request that this [section 8(d)] rulem aking encompass all health and safety studies related to any substance or mixture used in oil and gas exploration or production, including ... the identity of the chemical substances and mixtures.‖ ( Petition p. 21)

EP A has recognized that using section 14 (b) as a means of obtaining trade secret chemical identities is inappropriate. In denying the section 21 air freshener petition, EPA explained:

Petitioners request EPA to use a TSCA section 8(d) rule to obtain ingredient information.

While information o n air freshener ingredients could be a useful starting point for

a ssessing whether air fresheners present any significant health risk, TSCA section 8(d) does not provide an efficient or effective way to obtain ingredient information because a

TSCA section 8(d) rule would only obtain the ingredient information that was part of a health or safety study. Section 8(d) of TSCA is not designed for, and is not an

26 Id.- 13

-

efficient or effective means of obtaining general or comprehensive ingredient information

on air fres heners. 27

The same point can be made even more effectively for the identities of all chemicals and mixtures used in oil and gas exploration and production

. A section 4 test rule for hundreds or thousands of chemicals and mixtures, at a potential cost to i ndustry of hundreds of millions of dollars, is a grossly inefficient and ineffective means of obtaining ingredient information on

those chemicals and mixtures , and a section 8(d) rule would also be costly and inefficient

.

VII. The Petition Fails to Meet t he Criteria for EPA to Take Action Under TSCA

A. Section 21 Puts the Burden of Proof on the Petitioners

Section 21(b)(3) mandates that EPA either agree to initiate actions requested in a petition or deny the petition within 90 days of receipt. During that time EPA may hold a public hearing

, conduct an investigation

, or complete a proceeding, per section 21(b)(2), but the time available is very limited

.

Accordingly , section 21 puts the burden of proof on the petitioner to provide s ufficient

informa tion to enable EPA to make a decision

, including a demonstration that the requested actions meet the applicable requireme n ts

. As discussed above, the p etition ers failed to carry

their burden of proof that the requested actions are reasonable and appropria te, and otherwise meet the TSCA criteria for taking action.

B. The Requested Section 4 Rule

Section 21(b)(4)(B)(i) requires the petitioner to demonstrate that information available to EPA is insufficient to permit a reasoned evaluation of the health an d environmental effects of a chemical, and that in the absence of such information, the chemical may pose an unreasonable

risk or that the chemical is produced in substantial quantities and it enters or may enter the environment in substantial quantities, or that there is or may be substantial or significant human

exposure. In addition, EPA has determined that the petitioner must establish that the requested testing is necessary to develop the data

. 28

As noted earlier, t he Petition has not provided suffici ent information for EPA to make any of thes e findings. Instead, the Petition has outlined ( Petition pp. 13

- 18) a set of unsupported allegations that some unspecified chemicals and some unspecified mixtures used in oil and gas exploration and production ma y at some time have caused some adverse effects in a handful of alleged incidents. For context, over a million wells have been hydraulically fractured. This is exactly what the court had in mind when it concluded that:

27 72 Fed. Reg. 7 2886, 7 2 892 (Dec. 21, 2007) (air fresheners petition denial)

. 28 Id . at 72 887. See also 55 Fed. Reg. 17404, 17405 (Apr. 24, 1990) (new carpet emissions petition denial).- 14

-

Congress did not intend EPA to dir ect expensive experimentation based on mere speculation .... [T]he statute prevents a testing rule based on little more than scientific curiosity .... 29

The Petition has not shown that there is more than a ―theoretical possibility‖ of harm, 30 and for

that reason the request for a section 4 rule must be denied.

The Petition asks that every mixture of E&P Chemicals be tested. In the case of mixtures, s ection 4(a)(2) establishes a heavy burden for those seeking the testing of mixtures;

EPA must find that:

i n the case of a mixture, the effects which the mixture‘s manufacture, distribution in commerce, processing, use, or disposal or any combination of such activities may have on health or the environment may not be reasonably and more efficiently determined o r predicted by testing the chemical substances which comprise the mixture ....

The Petition has offered nothing which would support such a finding. The legislative history explains the reasoning behind this additional requirement:

The assessment of safe ty of a mixture may well be based upon the toxicity of particular components, and tests of the entire mixture with its varying component ratios may be unnecessary or unrewarding. 31

In this case, testing of hundreds or thousands of mixtures is simply unnece ssary.

Citing section 4(a)(2), EPA has denied petitions for the testing of mixtures in similar situations, 32 and it should do so here as well. EPA‘s denial of the Petition on this basis would be

within EPA‘s unreviewable discreti on , as section 21(b)(4)( B)(i) does not provide for judicial review of a denial of a petition for a test rule on mixtures. 33

C. The Requested Section 8(a) Rule

Under section 21(b)(4)(B)(ii) , the petitioner seeking a rule under section 8(a) must

establish that ―there is a reaso nable basis to conclude that the issuance of [the requested rule] is necessary to protect health or the environment against an unreasonable risk of injury to health or

the environment. ‖ EPA has previously denied petitions for section 8(a) rules on the ba sis that the petitioner failed to establish that the requested rule was necessary, 34 and it should do so here

as well.

29 Ausimont U.S.A., Inc. v . EPA , 838 F.2d 93, 96

- 97 (3d Cir. 1988).

30 See Chemical Manufacturers Ass‘n v. EPA , 859 F.2d 977, 988 (D.C. Cir. 1988).

31 H.R. Rep. 94

- 1341 (1976) at 18, Legislative History of the Toxic Substances Control Act (1976) at 425.

32 72 Fed. Reg. at 728 9 3

- 9 4 ( te sting of air freshe ners as such); 72 Fed. Reg. 50954, 50957 (Sept. 5, 2007) (testing of unspecified mixtures of nonylphenol and nonylphenol ethoxylates).

33 EPA made this point in connection with the air fresheners petition at 72 Fed. Reg. 72886, 72887 (Dec . 21, 2007).

34 65 Fed. Reg. 18097, 18098

- 101 (Apr. 6, 2000) (HPV chemicals petition denial); 55 Fed. Reg. 17404, 17407 (Apr. 24, 1990) (new carpets petition denial).- 15

-

Moreover, under section 8(a)(2), ―to the extent feasible,‖ EPA may not adopt a section 8(a) rule that is ―unnecessary or duplicative.‖ States already collect much of the information that

the Petition seeks. EPA is already collecting much of the information requested in the section 8(a) rule from multiple companies in the oil and gas industry, as noted above. Further, the

Chemical Data R eporting (CDR) rule already collects detailed information on E&P Chemicals. 35
Thus, the requested section 8(a) rule would be unnecessary and duplicative. It is noteworthy that the CDR rule exempts from processing and use information requirements most petr oleum distillates, 36 which the Petition cites ( Petition p. 12) as being of particular concern

. EPA has already determined that collection of processing and use information on petroleum distillates is

unnecessary.

D. The Requested Section 8(c) Order

The Petition asks EPA to issue an order under 40 C.F.R. § 717.17(c) requiring nine named companies to submit their section 8(c) allegations relating to E&P Chemicals to EPA.

The expected value of this requested action is not explained. More significantly, s ection 21 does not permit such a request, and for that reason alone, EPA should deny th e Petition.

Section 21(a) authorizes citizens‘ petitions for ―a rule under section 4, 6, or 8 or an order under section 5(e) or (6) (b) (2).‖ An order under section 8(c) is not included. EPA has previously concluded that a request for a call

- in under section 8(c) is ―not a petitionable matter under TSCA section 21,‖ explaining:

EPA interprets section 21 to apply only to the enumerated actions. EPA believes the Cong ress reasonably chose to extend TSCA section 21 only to the specific rules and orders identified under section 21 .... Congress chose not to extend TSCA section 21 to other kinds of agency implementation actions. 37

Accordingly, EPA should deny the request for a call

- in of section 8(c) allegations.

It is particularly concerning that the request for a non

- petitionable section 8(c) call

- in order is made here, since two of the petitioners here, the Sierra Club and the Natural Resources Defense Fund (NRDC)

, w ere also petitioners for the 2007 air freshener petition

. Yet the Petition fails even to acknowledge that EPA has previously determined that requests for section 8(c) call

in orders are not petitionable.

E. The Requested Section 8(d) Rule

As with secti on 8(a), under section 21(b)(4)(B)(ii), the petitioner seeking a rule under section 8(d) must establish that ―there is a reasonable basis to conclude that the issuance of [the

35 40 C.F.R. Part 711, 76 Fed. Reg. 50816 (Aug. 16, 2011) , corrected, 76 Fed. Reg. 54932 (S ept. 6, 2011)

. 36 40 C.F.R. § 711.6(b)(1).

37 72 Fed. Reg. 72886, 72891 (Dec. 21, 2007) (air fresheners petition denial). See also 71 Fed. Reg. 42640 (July 27, 2006) (lead in toy jewelry petition denial) (―The other two requests, for actions under TSCA sect ions 5(a) and 9, are not petitionable under section 21.‖).- 16

-

requested rule] is necessary to protect health or the environment against an un reasonable risk of injury to health or the environment.‖ EPA may exclude studies if it finds that they are ―unnecessary,‖ per section 8(d)(1). The legislative history emphasize d that ―the Administrator is to avoid imposing unnecessary or overly burdenso me reporting requirements‖ under section 8(d). 38

This situation resembles the air freshener petition, where EPA found that the request for a section 8(d) rule on hundreds of products was un necessary : ―Petitioners have not set forth

sufficient facts to es tablish that it is necessary to initiate the requested section 8(d) rulemaking.‖ 39 In addition to the inadequate factual presentation in the petition itself, EPA found

that:

The cost of this TSCA section 8(d) rule would be substantial for both the industr y and the Agency. Although such a rule would not require industry to perform new testing, the scope of studies covered by the requested rule would be very broad. It is not clear

whether the ― manufacturers and processors ‖ that would to be subject to the r ule petitioners request are intended to include manufacturers and processors of air freshener ingredients as well as products. Such a rule would potentially cover a very large group of entities, products, and ingredients.

In addition, this rulemaking wo uld require substantial Agency resources to develop, and significant Agency resources would also be required to analyze submitted studies on air

fresheners. 40

The Petition has failed to provide an adequate factual predicate of establishing that a section 8 (d) rule is ―necessary to protect health and the environment against an unreasonable risk of injury to health or the environment,‖ and the requested rule would be unduly costly to both industry and EPA. Like with the air freshener petition, the requested section 8(d) rule would cover hundreds

or thousands of chemicals and hundreds or thousands of mixtures . T here is simply no basis for requiring the immense cost involved with industry compliance and EPA time in reviewing and analyzing those studies.

CONCL USION

EPA should deny the Petition in all its aspects.

38 H.R. Rep. 94

- 1679 (1976) at 81, Legislative History of the Toxic Substances Control Act (1976) at 694.

39 72 Fed. Reg. 72886, 72891 (Dec. 21, 2007). EPA has also denied requests for section 8(d) rules in other section 21 petitions as well, including 71 Fed. Reg. 42640, 42641 (July 27, 2006) (lead in toy jewelry); 65 Fed. Reg. 18097,

18098

- 100 (Apr. 6, 2000) (HPV chemicals); 55 Fed. Reg. 17404, 17407 (Apr. 24, 1990) (new carpets).

40 Id. at 72892.