Source: https://www.watershedcouncil.org/hydraulic-fracturing---regulations-and-exemptions.html
Timestamp: 2018-09-22 21:48:58
Document Index: 83531746

Matched Legal Cases: ['art 615', 'art 615', 'art 615', 'art 615', 'art 327', 'art 327', 'art 327', 'art 615', 'art 615', 'art 615', 'art 615']

Hydraulic Fracturing - Regulations and Exemptions - Tip of the Mitt Watershed Council
Oil and gas development is primarily regulated under eight federal environmental and public health laws. These laws apply to drilling and hydraulic fracturing from unconventional sources. However, exemptions or limitations exist within many of these laws which affect the applicability of federal law. In general, the Environmental Protection Agency (EPA) retains authorities under federal law to respond to incidents of environmental contamination.
*Clean Air Act is out of the primary scope of work for Tip of the Mitt Watershed Council and is not evaluated below.
Federal laws provide some basic protections from oil and gas development activities. For example, the federal Clean Water Act (CWA) and Safe Drinking Water Act (SDWA) protect surface waters and groundwater from contamination and wastewater disposed of in injection wells are regulated to ensure that injected fluid does not endanger drinking water sources. However, in six of the federal laws, there are exemptions or limitations in regulatory coverage for preventative programs. These exemptions do not limit EPA’s overall authority under federal environmental and public health laws to respond to environmental contamination, but there is less oversight of oil and natural gas development as a result.
The Safe Drinking Water Act is the main federal law that ensures the quality of Americans' drinking water. EPA regulates the injection of fluids underground through the Underground Injection Control (UIC) Program. In 2005, the Energy Policy Act amended SDWA to specifically exempt hydraulic fracturing from the UIC program, except in instances where diesel fuel is injected as part of the hydraulic fracturing. Therefore, the process of injecting fracturing fluid into the target formation as part of oil or gas production is exempt from these requirements unless the fluid contains diesel.
While fracking fluids are exempt under SWDA, wastewater from oil and gas operations, flowback and produced water, are not exempt if disposed of in deep injection wells. Wells used for the disposal of waste fluids associated with oil and production, including produced water, are Class II wells. UIC regulations include minimum federal requirements for most Class II wells including obtaining a permit from the EPA or state, demonstrating that casing and cementing are adequate, and passing an integrity test prior to beginning operation of the injection well and at least once every 5 years.
SWDA also gives EPA the authority to issues orders when the agency received information about present or likely contamination of a public water system or an underground source of drinking water that may present an imminent and substantial endangerment to human health.
The CWA is the principal law to protect the nation’s waters. CWA establishes the basic structure for regulating discharges of pollutants into the waters of the United States and water quality standards for surface waters.
The National Pollutant Discharge Elimination System (NPDES) permit program controls water pollution by regulating point sources that discharge pollutants into waters of the United States. The NPDES program regulates the types and amounts of pollutants that industrial sites, industrial wastewater treatment facilities, and municipal wastewater treatment facilities can discharge into the nation’s surface waters. Currently, there is a zero discharge limit for direct discharges to surface waters for oil and gas wastewater. This means that oil and gas wells cannot directly discharge produced water or wastewater into surface waters.
In 1987, the Water Quality Act amended CWA to establish a specific program for regulating stormwater discharges. Oil and gas sites were largely exempt from these requirements, as long as the stormwater was not contaminated by raw materials or waste products. The 2005 Energy Policy Act further expanded the exemption to include construction activities at oil and gas sites meaning uncontaminated stormwater discharges from oil and gas construction sites do not require an NPDES permit.
CWA does require facilities, including oil and gas well sites, to report any unpermitted releases of oil or hazardous substances above threshold quantities to the National Response Center. Oil discharges must be reported if they cause a film or sheen on the surface of the water or if it violates water quality standards. Certain oil and gas well sites are also subject to the Spill Prevention, Control, and Countermeasure (SPCC) rule and are required to prepare and implement a plan describing how they will control, contain, clean up, and mitigate the effects if any oily discharges occur. Oil and gas wells sites are subject to the SPCC rule if they have total aboveground oil storage capacity greater than 1,320 gallons and could reasonably be expected to discharge into navigable waters of the U.S, based on location. Nearly all drill rigs have fuel tanks larger than 1,320 gallons, so if they are near navigable waters, they are subject to the SPCC rule.
RCRA gives EPA the authority to control hazardous waste from the "cradle-to-grave." This includes the generation, transportation, treatment, storage, and disposal of hazardous waste. RCRA also set forth a framework for the management of non-hazardous solid wastes. In 1980, the Solid Waste Disposal Act Amendments exempted drilling fluids, produced water, and other wastes associated with the exploration, development, or production of oil or gas wells from being regulated as hazardous waste. Therefore, regardless of if a waste exhibits hazardous characteristics, wastewater including flowback, from oil and gas wells is exempt from the “cradle to grave” provisions under RCRA.
Other wastes generated from activities other than the well or field operations may be regulated as hazardous, such as unused fracturing fluids or acids, waste solvents, painting wastes, and oil and gas service wastes. RCRA also authorizes EPA to issue orders in cases where handling, treatment, or storage of hazardous or solid waste may present an imminent and substantial endangerment to health or to the environment.
CERCLA, or Superfund, provides clean up of uncontrolled or abandoned hazardous waste sites as well as accidents, spills, and other emergency releases of pollutants and contaminants into the environment. CERCLA requires operators of oil and gas sites to report releases of hazardous substances above reportable quantities to the National Response Center. However, releases of petroleum and petroleum products are excluded. The liability and reporting provisions also do not apply to injections of fluids authorized by state law for production, enhanced recovery, or produced water. Oil and gas well operators would be required to report any releases to the environment of hazardous substances, other than petroleum. For example, CERCLA applies if a stored hazardous substance was accidentally spilled onto the ground or if hazardous substances above the reportable quantity were injected but not authorized by state law.
EPA also has investigative and response authority under CERCLA, including provisions allowing EPA access to information and the authority to enter property to conduct an investigation or a removal of contaminated material.
EPCRA is designed to help local communities protect public health, safety, and the environment from chemical hazards. EPCRA provides individuals and their communities with access to information regarding storage or release of certain chemicals within their communities. Release notification and chemical storage reporting apply to oil and gas well sites. The release notification requires companies that produce, use, or store certain chemicals to notify state and local emergency planning authorities of certain releases that would affect the community. The chemical storage reporting provision requires facilities storing or using hazardous or extremely hazardous chemicals over certain thresholds to submit an inventory report including detailed chemical information to state and local emergency planning authorities. The requirements generally apply to facilities storing or using 1) more than 500 pounds or the threshold planning quantity, whichever is lower, of extremely hazardous substances or 2) more than 10,000 pounds of other hazardous chemicals. These facilities are required to provide chemical information through Material Safety Data Sheets, or other detailed lists.
Examples of some CERLCA hazardous chemicals used in hydraulic fracturing operations include hydrochloric acid, formaldehyde, formic acid, acetaldehyde, ethylene glycol, methanol, acetic acid, sodium hydroxide, potassium hydroxide, acrylamide, and naphthalene.
EPCRA also established the Toxics Release Inventory (TRI), a publically available database containing information about chemical releases from industrial facilities. However, oil and gas well sites are not required to report to TRI.
TSCA provides EPA with authority to require reporting, record-keeping and testing requirements, and restrictions relating to chemical substances and/or mixtures. EPA maintains the TSCA inventory, a list of chemicals that are or have been manufactured or processed in the United States. It is expected that most of the chemicals used in hydraulic fracturing are on the list.
FIFRA provides for federal regulation of pesticide distribution, sale, and use. Pesticides may be used in oil and gas wells to kill bacteria or other organisms that may interfere with the hydraulic fracturing process. Some pesticides registered under FIFRA are used in hydraulic fracturing.
Oil and gas wells in Michigan are regulated by the Michigan Department of Environmental Quality Office of Oil, Gas, and Minerals. Part 615 is the primary state law regulating the drilling and operation of oil and gas wells, gas storage wells, and associated waste disposal or injection wells in Michigan.
Part 615 states that it is the declared policy of the state to protect the interests of its citizens and landowners from unwarranted “waste” of gas and oil and to foster the development of the industry along with the most favorable conditions and with the view to the ultimate recovery of the maximum production of these natural products.
“Waste” is defined as the following:
Inefficient or improper use of reservoir energy;
Drilling or operating of a well in a manner that reduces the amount of oil or gas that can be recovered;
Unnecessary damage to fresh water or brines;
Unnecessary loss of gas or oil from leakage or fire;
Unnecessary damage to or destruction of the surface, soils, animal life, property, or other environmental values;
Unnecessary endangerment of public health, safety, or welfare; and
Drilling of unnecessary well.
Michigan has addressed some specific issues associated with high volume hydraulic fracturing by supplementing the Part 615 requirements with a permitting instructions issued in May 2011. In addition, in March of 2015, the MDEQ completed a revision of the administrative rules for oil and gas operations under Part 615, Supervisor of Wells, of the Natural Resources and Environmental Protection Act, 1994 PA 451, as amended (NREPA).
The revised administrative rules codifies many of the requirements in the 2011 Supervisor of well instructions and contain additional requirements for wells using high volume hydraulic fracturing.
Under the new rule, high volume hydraulic fracturing (HVHF) is defined as a hydraulic fracturing well completion operation that is intended to use a total volume of more than 100,000 gallons of primary carrier fluid. Primary carrier fluid is the base fluid, such as water, into which chemical additive are mixed to form the hydraulic fracturing fluid.
Michigan’s regulations pertaining to various aspects of the oil and drilling process, including the hydraulic fracturing, are explained below.
Part 327 is the primary law governing water withdrawals in Michigan. Part 327 prohibits new or increased “large quantity withdrawals” of more than 100,000 gallons per day averaged over 30 days from adversely impacting water resources and requires users who develop capacity for a large quantity withdrawal to utilize an online assessment tool, register, and report. Users who develop capacity to withdraw more than 2 million gallons per day are required to obtain a permit. However, withdrawals for oil and gas wells, including water for hydraulic fracturing, are currently EXEMPT under Part 327.
While oil and gas activities remain exempt from Michigan’s Water Use Law, the amended rules require operators to obtain approval for a large volume water withdrawal for high volume fracking operations. This requires an evaluation of large-volume water withdrawals using the MDEQ’s Water Withdrawal Assessment Tool (WWAT). The WWAT is designed to estimate the likely impact of a water withdrawal on nearby streams and rivers to confirm that a withdrawal will not cause an adverse resource impact.
In addition, monitoring of groundwater levels is required if a drinking water supply well is within 1,320 feet of a proposed large volume water withdrawal. The operator is required to measure and record the water level in the monitor well daily during water withdrawal and weekly thereafter until the water level stabilizes and report all data to the MDEQ.
To prevent surface spills, part 615 requires “secondary containment” under tanks and wellheads. Fracking fluid and wastewater must be stored in frac tanks rather than open pits. To prevent underground leaks, Part 615 has well construction requirements, requires the identification of nearby wells that could act as conduit for fluid, and sets requirements for monitoring and recording of pressures during fracking.
The revised administrative rules require operators to collect baseline samples from up to 10 drinking water wells within a quarter mile of the site before drilling. Samples are to be analyzed for what would be most likely found in the event of contamination including benzene, toluene, ethylbenzene, xylene, total dissolved solids, chlorides, and methane.
Michigan’s amended administrative rules for high volume hydraulic fracturing, which became effective March of 2015, require operators to submit information on chemical additives used in a fracking operation using the internet-based FracFocus Chemical Disclosure Registry within 30 days after completion of the fracking.
A list of all chemical additives used during the treatment specified by general type, such as acids, biocides, breakers, corrosion inhibitors, cross-linkers, demulsifiers, friction reducers, gels, iron controls, oxygen scavengers, pH adjusting agents, scale inhibitors, and surfactants.
The specific trade name and supplier of each chemical additive.
A list showing the specific identity of each chemical constituent intentionally added to the primary carrier fluid and its associated Chemical Abstract Service (CAS) Number
The maximum concentration of each chemical constituent listed expressed as a percent by mass of the total volume of hydraulic fracturing fluids utilized.
There are provisions allowing operators to withhold the specific identity of a chemical constituent if it is identified as a trade secret. If a claim of trade secret protection is made, the operator must still identify the chemical family associated with the constituent.
Additionally, there exists a confidentiality periods for oil and gas wells in which well data and samples may not be disclosed to the public for 90 days from completion of drilling. This confidentiality period does not apply to information associated with spills of fracking fluid and wastewater.
Identify whether high volume fracturing is expected to be utilized in permit applications for new wells.
Submit separate applications for HVHF operations on existing wells.
Notify the MDEQ at least 48 hours before starting the operation.
According to state law, flowback must be disposed of in injection wells. Other forms of disposal, such as discharge to surface waters through publicly owned treatment works or evaporation pits, are thus prohibited.
Injection wells for disposal are regulated by the EPA Underground Injection Control Program and MDEQ Office of Oil, Gas, and Minerals. As part of disposal, the volume of flowback must be reported by the well operator, but there are no requirements to test waste for hazardous characteristics.
Michigan’s local units of government have broad regulatory authority to protect the health of their residents, the environment, and the local economy. However, the Michigan Zoning Enabling Act (ZEA) expressly preempts regulation of the” drilling, completion, or operation of oil or gas wells or other wells drilled for oil or gas exploration purposes" by counties or townships. Counties and townships are also prohibited from exercising jurisdiction over the issuance of permits for location, drilling, completion, operation, or abandonment of wells. Cities and villages are not restricted by the express preemption provision in the ZEA. But cities and villages can only regulate wells, including those that use fracking, if the ordinance does not directly conflict with detailed state and federal requirements, other environmental laws do not preempt local action, and the ordinance is not considered exclusionary.
While federal and state regulations exist to govern the development of oil and gas in Michigan, more protections are needed. In the case of high volume hydraulic fracturing, there are very few federal requirements because of exemptions and limitations in federal environmental laws. The State of Michigan is more prepared than many other states to regulate fracking due to Michigan’s long history of oil and gas development. However, this oil and gas development is different than any other gas and oil development which has preceded it. Subsequently, more robust oversight is needed to address future development in an orderly and sustainable manner while protecting Michigan’s natural resources.
The regulations and rules for oil and gas development must keep pace with the advancements in technology. If the use of fracking techniques increases in Michigan without proper regulations to provide necessary protections, there is concern that Michigan’s surface, ground, and drinking water could be contaminated. Strategically located in the heart of the Great Lakes, we must make sure that Michigan’s oil and gas regulations will protect our magnificent water resources and what makes Michigan the Great Lakes state.
GAO, Unconventional Oil and Gas Development: Key Environmental and Public Health Requirements, GAO-12-874
(Washington, D.C.:September 2010)
Summary of Federal Regulations, Regulatory Gaps and Proposed Legislation
Michigan Part 615 Administrative Rules
Michigan Part 615 Law
Hydraulic Fracturing in Michigan Integrated Assessment (AI)
A comprehensive review of policy options for high volume hydraulic fracturing in Michigan.