Drinking Water: EPA Needs to Collect Information and Consistently Conduct Activities to Protect Underground Sources of Drinking Water
Published: 2016-02-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Since the early 2000s, increased oil and gas production has resulted in an increase in wastewater that must be managed properly. The majority of wastewater from oil and gas production is injected into underground wells known as class II wells. These wells are regulated to protect drinking water sources under EPA's UIC class II well program and approved state class II programs. EPA oversees state programs, and EPA regions manage programs in states without approval.
GAO was asked to review EPA's oversight of programs' inspection and enforcement information and activities. This report examines the extent to which EPA has collected inspection and enforcement information and conducted oversight activities needed to assess that class II programs protect underground sources of drinking water. GAO reviewed federal and state laws and regulations and EPA guidance and analyzed a nongeneralizable sample of significant violations. GAO interviewed EPA and state officials from programs in a nongeneralizable sample of eight states selected based on shale oil and gas regions, among other factors.
section_title: What GAO Found
paragraphs: The Environmental Protection Agency (EPA) has not collected specific inspection and complete or consistent enforcement information, or consistently conducted oversight activities, to assess whether state and EPA-managed Underground Injection Control (UIC) class II programs are protecting underground sources of drinking water. EPA guidance calls for states and EPA regions to report certain information and for EPA to assess whether programs are effectively protecting underground sources of drinking water, but the agency does not. Specifically:
EPA annually collects summary data from state and EPA-managed programs on the types of inspections they conduct. However, these data are not specific enough to determine the number of different types of inspections that states and EPA regions are to conduct to meet their annual goals. Such goals are specified at the well level (e.g., to inspect 100 percent of wells associated with emergency responses). Under federal internal control standards, managers are to compare actual performance to planned or expected results and analyze significant differences. Without well-specific data on inspections, EPA cannot assess whether state and EPA-managed programs are meeting annual inspection goals.
EPA collects information on unresolved significant violations of state and EPA-managed programs to determine if the agency needs to take action to enforce applicable program requirements. However, GAO's analysis of a nongeneralizable sample of 93 significant violations for fiscal years 2008 through 2013 found that state and EPA-managed programs did not report data on such violations completely or consistently. For example, of 29 such violations that had not been enforced after 90 days as required, programs reported 7 to EPA. According to EPA and state officials, the cause was inconsistent interpretations of EPA's reporting guidance. EPA officials said they are aware that the data reported on such violations are not complete or consistent, but the agency has not clarified in guidance what data programs should report. Until it does so, EPA does not have reasonable assurance that it has the data needed to assess if it must take enforcement action.
EPA has not consistently conducted oversight activities necessary to assess whether state and EPA-managed programs are protecting underground sources of drinking water. For example, GAO found in June 2014 that EPA does not consistently conduct oversight activities, such as annual on-site program evaluations. According to EPA guidance, such evaluations should include a review of permitting and inspection files or activities to assess whether the state is protecting underground water. In California, for example, EPA did not regularly review permitting, and in July 2014, after a state review of permitting, EPA determined that the program was out of compliance with state and EPA requirements. EPA officials said that they have few resources to oversee UIC class II programs, but EPA has not conducted a workforce analysis consistent with GAO's work on strategic human capital management to identify the resources needed for such oversight. Without conducting such an analysis, EPA will not be able identify the human capital or other resources needed to carry out oversight of the UIC class II programs to help ensure that they protect underground sources of drinking water.
section_title: What GAO Recommends
paragraphs: GAO recommends that, among other things, EPA require programs to report well-specific inspections data, clarify guidance on enforcement data reporting, and analyze the resources needed to oversee programs. EPA generally agreed with GAO's findings, but does not plan to require well-specific data and analyze needed resources. GAO continues to believe that EPA should take both actions to better assess if programs protect underground sources of drinking water.

section_title: Letter
paragraphs: Since the early 2000s, increased oil and gas production across the nation  has resulted in a corresponding increase in wastewater that must be  managed, reused, or disposed of properly, according to a June 2015  Environmental Protection Agency (EPA) draft report. According to the  same report, the growth in domestic oil and gas production has also  raised concerns about potential effects to human health and the  environment, including the potential contamination of underground  drinking water sources by injecting wastewater associated with the  production of oil and gas. In particular, the hydraulic fracturing process— in which water, sand, and chemical additives are injected under high  pressure to create and maintain fractures in underground formations— allows oil and natural gas from unconventional sources, such as shales,  tight sandstones, and coalbed formations, to be developed and can  produce large volumes of wastewater. Underground wells used for  injecting wastewater and other fluids associated with the extraction of oil  and gas resources are known as class II injection wells. The fluids  injected into class II wells are composed mostly of saltwater and may  contain pollutants such as chlorides, hydrocarbons, and naturally  occurring radioactive materials originating from geologic formations  containing oil and gas.
EPA and states regulate three types of class II wells associated with oil  and gas production: (1) enhanced recovery wells into which brine, water,  steam, carbon dioxide, or other fluids and gases are injected into oil- or  gas-bearing formations to increase the recovery of residual oil and gas;  (2) disposal wells into which brines and other fluids brought to the surface  during oil and gas production activities are injected for disposal; and (3)  storage wells into which liquid petroleum products are injected, generally  as part of the U.S. Strategic Petroleum Reserve. As of 2013, there were  over 176,000 class II injection wells in the United States, located in states  as geographically dispersed as California, New Mexico, Oklahoma,  Pennsylvania, Texas, and Virginia. As the volume of wastewater  generated from oil and gas production has increased, the demand for  underground injection wells for disposal of fluids has increased,  particularly in states with limited injection capacity, such as Pennsylvania.  In addition, some operators have violated federal regulations and  disposed of fluids illegally, such as a Kentucky company that in 2013 pled  guilty to illegally injecting fluids into sinkholes and an unpermitted well.
To protect underground sources of drinking water, class II injection wells  are subject to regulation by the Underground Injection Control (UIC)  program overseen by EPA under the Safe Drinking Water Act. The act  includes provisions for states to request approval from EPA to manage  the class II program in their respective state boundaries. States with  approved programs have primary responsibility, or primacy, for managing  and enforcing their programs, and EPA has responsibility for managing  and enforcing programs in states without primacy. We refer to programs  managed by states as state programs and those managed by EPA  regional offices as EPA-managed programs. EPA has approved a total of  40 states (26 with class II wells) to manage their programs. Many of  these states were approved by EPA in the 1980s, soon after the  program’s inception. An additional 10 states (7 with class II injection  wells) do not have program approval, and the programs in these states  are managed by five EPA regional offices. (See app. I for a list of state  programs and EPA-managed programs.)
The Safe Drinking Water Act establishes general minimum requirements  for programs in each state. Applicants for a permit for underground  injection must satisfy the state that the injection will not endanger drinking  water sources, among other requirements. EPA and states rely on more  detailed regulatory and policy safeguards to prevent fluids from migrating  into aquifers that can be used as underground sources of drinking water.  These safeguards require well operators to meet technical standards for  constructing, operating, testing, and monitoring injection wells, among  other requirements. In addition, if certain conditions are met, aquifers can  be exempted from protection under the act and used for injection. An  aquifer may be exempted if (1) it does not currently serve as a source of  drinking water and (2) it will not in the future serve as a source of drinking  water. If the state has primacy, well operators may request an exemption  for injecting fluids into a particular aquifer or portion of an aquifer. The  state must submit a request for the aquifer exemption to EPA for review  and approval, and if EPA approves, operators may be permitted to inject  fluids into the aquifer.
Given the increase in oil and gas production and wastewater disposal,  EPA’s oversight and enforcement of the UIC class II program is important  to ensure that state and EPA-managed programs are protecting  underground sources of drinking water. In June 2014, we reported on  EPA and state roles, responsibilities, and resources for managing the  class II program; EPA and selected state safeguards to protect  underground sources of drinking water; EPA’s oversight and enforcement  of class II programs; and the reliability of data to report on the class II  program nationwide. In our June 2014 report, we did not review EPA  oversight of state and EPA-managed inspections and enforcement  information and activities, which you requested that we review.
This report examines EPA’s UIC class II program to determine the extent  to which EPA has collected the inspection and enforcement information  needed, and conducted the oversight activities necessary, to assess that  state and EPA-managed programs are protecting underground sources of  drinking water.
To perform this work, we reviewed and analyzed the Safe Drinking Water  Act and EPA regulations and guidance on the UIC class II program. We  interviewed EPA UIC program officials in the eight regional offices with  the highest number of class II wells. To understand the class II program  at the state level, we interviewed state officials and reviewed state  program documentation for the same sample of states from our June  2014 report on the UIC program. Specifically, we selected a  nongeneralizable sample of eight states with class II programs. Two of  these states are managed by EPA regions—Kentucky and  Pennsylvania—and the remaining six—California, Colorado, North  Dakota, Ohio, Oklahoma, and Texas—are state programs. We selected  these states from the six shale oil and gas regions defined by the Energy  Information Administration. For each of the six oil and gas shale  regions, we selected at least one state that had among the highest  number of class II injection wells. In July 2014, after we issued our June  2014 report and before we started the work on this review, EPA  determined that one of the state programs in the eight states we  reviewed, California’s class II program, was not in compliance with state  and EPA requirements. EPA Region 9 officials and California’s UIC  program officials have since agreed to a plan to improve the California  program over the next several years. We interviewed EPA headquarters,  EPA Region 9, and California officials regarding the deficiencies in  California’s program, the agreed-upon improvement plan, and EPA  oversight of California’s progress. A summary of the deficiencies found by  EPA and California, and California’s plans to improve its program, can be  found in appendix II. Because EPA determined in July 2014 that  California’s program was not in compliance with state and EPA  requirements, we chose not to include California in our detailed analysis  of inspection and enforcement information from the states. Thus, the  results of our review of inspection and enforcement information reflect the  seven remaining states in our sample.
To analyze the information EPA needs and oversight activities necessary  to assess whether state and EPA-managed programs are protecting  underground sources of drinking water, particularly inspection and  enforcement information, we reviewed EPA regulations and guidance and  obtained and analyzed data collected by EPA from the states and regions  on forms called 7520-3 and 7520-4 forms for fiscal years 2008 through  2013, the most recent years of data available when we began our audit  work. We interviewed EPA officials about the collection of these data and  determined that they were sufficiently reliable for purposes of reporting  data for individual states. To determine if EPA collects information it  needs on inspections, we used EPA’s 1987 Underground Injection  Control Program Compliance Strategy for Primacy and Direct  Implementation Jurisdictions (Strategy), which lays out minimum  inspection goals that state and EPA-managed programs should set. We  then analyzed inspection data from 7520-3 forms for fiscal year 2013, the  most current data available, for the seven states to determine the extent  to which they provide information to assess inspection goals set by states  and EPA regions.
To determine if EPA collects information it needs on enforcement actions,  we used EPA’s Strategy, which directs states and EPA-managed  programs to ensure that timely and appropriate enforcement actions are  taken, and EPA’s 1986 Reporting Requirements—Underground Injection  Control Program Guidance, which provides guidance on what information  on violations and enforcement actions should be reported by state and  EPA-managed programs on 7520-4 forms. We then selected a  nongeneralizable sample of 134 notices of violation, from fiscal years  2008 through 2013 from the seven state and EPA-managed programs we  reviewed and compared the information collected on each violation and  any related enforcement action to the enforcement data provided to EPA  on the 7520-4 forms for that period. We selected a nongeneralizable  sample of at least six notices of violation in each of the seven states in  our sample. We selected violations on the basis of their significance, the  type of enforcement action taken, and the number of days from when the  operator was notified to when the violation was resolved, termed returning  to compliance with EPA and state requirements. We analyzed the number  of days that each of 93 significant violations (of 134) in our sample had  been open and compared this to the number of days (90) established by  EPA as timely for resolving significant violations; we also analyzed each  significant violation to determine if an appropriate enforcement action was  taken. The Strategy specifies the appropriate enforcement action for  significant violations as a formal enforcement action, which among other  things, is legally enforceable, explicitly requires the well owner to take  corrective action, and specifies a timetable for completion.
Finally, to assess the oversight activities that EPA has conducted to  ensure that programs are protecting underground sources of drinking  water, we reviewed findings and recommendations from our June 2014  report and interviewed EPA officials on what the agency has done to  implement our recommendations. In addition to the two oversight  activities needed to manage UIC class II programs discussed in our June  2014 report, we interviewed EPA officials about another oversight  activity—developing and maintaining a database on aquifer exemptions.
We conducted this performance audit from October 2014 to February  2016 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives. A more detailed  description of our objectives, scope, and methodology is presented in  appendix III.
subsections: section_title: Background
paragraphs: This section presents information on roles and responsibilities of EPA and  states in the UIC class II program, information on UIC class II inspection  and enforcement processes, information collected from state and EPA- managed programs, and activities to oversee state and EPA-managed  programs.
subsections: section_title: EPA and State Roles and Responsibilities for Class II UIC Programs
paragraphs: The UIC class II program is overseen by EPA headquarters and managed  by states or EPA regions, depending on whether the state has received  primacy. States can obtain primacy in one of two ways. Under section  1422 of the Safe Drinking Water Act, a state can adopt and implement a  program that meets specific requirements established under EPA  regulations and conduct reporting as EPA requires. Alternatively, under  section 1425 of the act, a state can seek approval to manage its own  program by demonstrating to EPA that the program is effective in  preventing the contamination of underground sources of drinking water.  Both types of program must meet four key requirements in the act: (1)  they must prohibit unauthorized injections; (2) authorized injections must  not endanger drinking water sources; (3) they must include inspection,  monitoring, recordkeeping, and reporting requirements; and (4) they must  apply their provisions to federal agencies and federal land. However,  states approved by this alternative process do not need to address all of  the specific requirements, such as those related to well construction and  testing, established in EPA regulations.
Program oversight by EPA headquarters includes issuing regulations and  guidance, assessing implementation of regulations and guidance by state  and EPA-managed programs, and gathering information and reporting it.  EPA regions both oversee state programs that have primacy and manage  programs in states that do not have primacy, and states with primacy  manage their own programs. Management includes permitting wells;  inspecting wells; enforcing regulations and implementing guidance;  reporting information on well inventories, inspections, violations, and  enforcement actions; and investigating instances of potential  contamination of aquifers.
EPA issued a series of guidance documents describing the program and  various responsibilities of states and EPA regions. To oversee state and  EPA-managed programs and to ensure that they are protecting  underground sources of drinking water, EPA collects certain information  and conducts certain activities, as described in several guidance  documents. Specifically:
Memorandum of agreement for the UIC program. Issued in 1981,  this guidance directs EPA regions to enter into a memorandum of  agreement (MOA) with each primacy state that includes the terms,  conditions, or agreements between the state and EPA regarding the  administration and enforcement of state program requirements,  including state inspection, enforcement, and reporting requirements.
Reporting Requirements—Underground Injection Control  Program (Program Reporting). Issued in 1986, this guidance  explains and clarifies the information state and EPA-managed  programs are to report.
Underground Injection Control Program Compliance Strategy for  Primacy and Direct Implementation Jurisdictions (Strategy).  Issued in 1987, this document provides guidance to state and EPA- managed programs on well inspections and enforcement of program  requirements, including information that should be reported on  inspections and enforcement actions.
Interim Guidance for Overview of the Underground Injection  Control Program (Program Oversight). Issued in 1983, this  document provides guidance to EPA regions and headquarters on  activities that they should take to effectively oversee state and EPA- managed programs, respectively.
Guidance for Review and Approval of State Underground  Injection Control Programs and Revisions to Approved State  Programs. Issued in 1984 to provide guidance for EPA regions on the  review and approval of changes to state program requirements, this  document includes guidance for EPA regions and headquarters on  how to review and approve requests to exempt aquifers and how  decisions on aquifer exemptions should be documented and reported.
Enhancing Coordination and Communication with States on  Review and Approval of Aquifer Exemption Requests Under the  Safe Drinking Water Act (Aquifer Exemption Coordination).  Issued in 2014, this document provides guidance on how to improve  coordination and recordkeeping on aquifer exemption decisions  among states, EPA regions, and EPA headquarters.
According to EPA’s 1981 MOA guidance, EPA regions should develop an  MOA with each primacy state to outline areas of the applicable  regulations that are relevant to the administration and enforcement of the  state’s program requirements, including clarifying
EPA and state roles and responsibilities and the process for sharing  information between EPA and the state; state responsibilities for expeditiously drafting, circulating, issuing,  modifying, reissuing, and terminating permits, consistent with  applicable regulations;  state responsibilities to operate a timely and effective system to track  well operator compliance with program requirements, including  inspection procedures; state responsibilities for taking timely and appropriate enforcement  action against persons in violation of program requirements, including  use of effective enforcement tools such as penalties; and state reporting requirements, including the type and frequency of data  to be reported, and EPA’s annual evaluation of the state program.
According to EPA’s 1983 Program Oversight guidance, EPA-managed  programs are also responsible for establishing systems to track well  operator compliance; taking timely and appropriate action to resolve  violations, including use of effective enforcement tools; and reporting data  on the program.
section_title: Information on the UIC Class II Program Inspection and Enforcement Process
paragraphs: Injection well inspections, to discover and deter violations, and  enforcement are identified in EPA’s 1987 Strategy as tools to achieve  operator compliance with applicable requirements. According to the  Strategy, each state and EPA-managed program should have a strategy  for identifying how many wells it should inspect and the types of  inspections to be conducted at these wells. The types of inspections that  state and EPA inspectors conduct can vary from routine inspections that  ensure that well sites are being properly maintained, to inspections that  include observing pressure tests to determine if wells are structurally  sound, known as mechanical integrity tests (see app. IV for information  on types of inspections).
The enforcement process begins once an inspector identifies a violation.  Violations of UIC program requirements can involve a number of actions  on the part of well operators, such as injecting fluids without authorization,  injecting fluids at pressures above those permitted, or failing to show that  a well holds pressure during testing (mechanical integrity testing).  According to EPA’s Strategy, a state or EPA-managed program can take  various enforcement actions when it finds wells that are violating program  requirements. When inspectors identify wells that are violating applicable  program requirements, they typically first notify the well operators of the  violations. According to EPA’s Strategy, these notifications can be done  through discussion or in writing. For more serious violations, state and  EPA-managed programs can take stronger enforcement actions.
According to EPA’s Strategy, state and EPA-managed programs are to  escalate their enforcement response as needed to resolve violations,  although the actions taken by a program may depend on a number of  factors, including the severity of the violation and its potential to  contaminate drinking water sources. Actions to gain compliance with  program requirements can include sanctions, such as shutting down a  well, assessing administrative penalties, or referring the matter for civil or  criminal adjudication (see app. V for details of the enforcement process).
section_title: Information Collected from State and EPA-Managed Programs
paragraphs: EPA’s regulations and 1986 Program Reporting guidance direct state and  EPA-managed programs to report specific information on class II wells to  assist with program oversight. The Program Reporting guidance directs  these programs to report data on inspections, violations, and enforcement  actions. Specifically, the agency collects information from programs on  different 7520 forms submitted by state and EPA-managed programs.  According to the Program Reporting guidance, information on inspections  conducted by state and EPA-managed programs is collected on 7520-3  forms and includes information on the total number of different types of  inspections. According to this guidance, EPA also collects information on  the number of significant violations and enforcement actions conducted  by state and EPA-managed programs on 7520-4 forms. Under the Safe  Drinking Water Act, EPA is required to notify primacy states of any  violations of state UIC programs it discovers and, if a state does not take  appropriate enforcement action within 30 days, issue an order or initiate  legal action itself. According to EPA guidance, the 7520-4 forms collect  information on individual significant violations that threaten underground  sources of drinking water to help EPA determine whether it should  intervene to enforce state or EPA requirements.
In June 2014, we found that the data on violations and contamination of  underground sources of drinking water that EPA collects from its 7520  forms were not sufficiently complete or comparable to allow EPA to  aggregate state information and report on the status of the class II  program nationally. We also found that EPA was developing a national  UIC database to collect comparable, well-specific data from states, but  that, as of January 2014, the database was not fully populated. We  recommended in our June 2014 report that to support nationwide  reporting goals until the national UIC database is complete, EPA develop  and implement a protocol for states and regions to enter 7520 data  consistently and for regions to check 7520 data for consistency and  completeness to ensure that data collected from state and EPA-managed  class II programs are complete and comparable for purposes of reporting  at a national level. EPA agreed that there is room for improvement in the  completeness and consistency of data submitted by the states and  regions through the 7520 forms. In response to our recommendation,  according to EPA officials, the agency has proposed updated 7520  instructions, intended to encourage consistent reporting by states and  regions. The updated instructions have not been finalized and, according  to EPA officials, cannot be used for reporting until they are approved by  the Office of Management and Budget. EPA has also developed new  standard operating procedures that update protocols for EPA regional  review of 7520 reports submitted by state programs and headquarters  review of 7520 reports submitted by EPA-managed programs.
section_title: Activities to Oversee State and EPA-Managed Programs
paragraphs: EPA’s regulations and 1983 Program Oversight guidance direct EPA  headquarters and regions to conduct specific activities to ensure that the  state and EPA-managed programs are protecting underground sources of  drinking water. These activities include conducting annual on-site  evaluations of state and EPA-managed programs. In addition, EPA  regulations require the agency to incorporate state program requirements,  and any changes to them, into federal regulations to be able to enforce  them if necessary, and to approve aquifers for exemption from protection  under the act, as appropriate, to allow injection of fluids.
According to EPA’s Program Oversight guidance, EPA regional officials  are expected to conduct annual on-site evaluations of state programs.  These evaluations involve, among other things, an on-site meeting with  state UIC officials to discuss program performance and can include a  review of inspection and enforcement files, both of which are intended to  help determine whether the state program is effective at protecting  underground sources of drinking water. We found in June 2014, however,  that EPA was not consistently carrying out annual on-site evaluations of  state class II programs. According to EPA officials at the time, limited  resources have prevented EPA regions and headquarters from  consistently conducting on-site reviews, and some of the oversight  activities identified in the Program Oversight guidance may no longer be  needed. We recommended, and EPA agreed, that EPA should evaluate,  and revise as needed, UIC program guidance on effective oversight to  identify essential activities that EPA headquarters and regions need to  conduct to effectively oversee state and EPA-managed programs.
According to EPA regulations, EPA is also required to incorporate state  program requirements and changes to those requirements into federal  regulations. Under its regulations, EPA can only enforce state program  requirements that it has incorporated into federal regulations. In June  2014, we found that EPA was not consistently incorporating state  program requirements, or changes to state program requirements, into  federal regulations, and as a result, EPA had not been able to enforce at  least one state’s program requirements. To ensure that EPA maintains  enforcement authority of state program requirements, we recommended  that EPA conduct a rulemaking to incorporate state program  requirements, and changes to state program requirements, into federal  regulations and, at the same time, evaluate and consider alternative  processes to more efficiently incorporate future changes to state program  requirements into federal regulations without a rulemaking. EPA  disagreed with this recommendation and said that in lieu of a single  rulemaking, it was conducting an ongoing process of individual  rulemakings to approve and codify state program revisions, as discussed  later in the report.
According to EPA regulations and EPA’s 2014 Aquifer Exemption  Coordination memorandum, EPA is responsible for the final review and  approval of all aquifer exemption requests. Well operators seeking an  aquifer exemption to conduct injection activities in a state with primacy  typically submit the exemption application to state program officials along  with supporting information. State program officials are to review the  application and, if the information submitted supports an exemption,  submit a request to approve the exemption to the appropriate EPA  regional office. Applicants in states with EPA-managed programs are to  submit applications directly to the EPA region managing the program, and  the region approves or disapproves the exemption applications. EPA  regions are responsible for maintaining documentation supporting the  decision to exempt an aquifer and a record of all exempted aquifers.  According to the Aquifer Exemption Coordination memorandum,  maintaining the decision memos and records underlying EPA’s approval  or disapproval of exemption applications and standardized, readily  available data on all existing aquifer exemptions is important to  supporting informed decisions about uses for drinking water.
Under the act, if EPA determines that a state program is no longer  protecting underground sources of drinking water, the agency can revoke  a state’s primacy by rule. According to EPA officials, before such a point  is reached, the agency can work with the state to return the state’s  program to compliance with EPA and state UIC class II regulations. For  example, in July 2014, after California identified instances in which it had  authorized injection into nonexempt aquifers, EPA determined that the  state’s program was not in compliance with state and EPA requirements.  In a series of letters from July 2014 through July 2015, EPA and the  state’s Division of Oil, Gas, and Geothermal Resources reached  agreement on a plan to improve California’s program. (See app. II for the  details of the status of California’s program.)
section_title: EPA Has Not Collected Information, or Consistently Conducted Activities, Necessary to Assess If Programs Are Protecting Underground Sources of Drinking Water
paragraphs: EPA has not collected inspection and enforcement information, or  consistently conducted specific oversight activities, to assess whether  state and EPA-managed programs are protecting underground sources of  drinking water. EPA’s 1981 MOA guidance directs states and EPA  regions to include provisions in memorandums with states to ensure that  regional offices can collect the information and conduct the activities  necessary for oversight, including (1) collecting information on inspections  and enforcement actions and (2) conducting activities to incorporate  approved changes to state program regulations into federal regulations,  conducting annual on-site program evaluations, and reviewing and  approving aquifer exemption applications. EPA’s Program Oversight  guidance also states that EPA headquarters should collect the same  information and conduct the same activities to oversee programs  managed by EPA regions where applicable.
subsections: section_title: EPA Has Not Collected Inspection and Enforcement Information to Assess Whether Programs Are Protecting Underground Sources of Drinking Water
paragraphs: EPA has not collected inspection and enforcement information that can  be used to assess whether state and EPA-managed programs are  effectively protecting underground sources of drinking water.
subsections: section_title: Inspections
paragraphs: EPA collects information from state and EPA-managed programs on the  types of inspections they conduct, but the information EPA collects is at a  summary level and not specific enough to assess whether states are  meeting inspection goals established to protect underground sources of  drinking water. In the 1987 Strategy, EPA provides guidance on the  types of UIC inspections that state and EPA-managed programs should  conduct and specifies minimum annual inspection goals (i.e., frequency of  each inspection type) for state and EPA-managed programs. For  example, (1) 100 percent of wells associated with emergency responses  and public complaints should be inspected annually, (2) 25 percent of  mechanical integrity tests conducted annually should be witnessed by an  inspector, and (3) routine inspections to verify that wells are operating in  compliance with applicable requirements should be conducted at least  once every 5 years. According to the Strategy, state and EPA-managed  programs should set goals for different types of inspections based on  factors such as available resources and program priorities (see app. IV  for additional information on EPA guidance on inspections and selected  state inspection programs).
EPA’s 1987 Program Reporting guidance states that the inspection data  that EPA collects from state and EPA-managed programs should be used  to track each program’s progress toward meeting its inspection goals,  which are to be based on EPA’s minimum annual inspection goals.  EPA’s minimum annual inspection goals are specified at the well level  (e.g., 100 percent of wells associated with emergency responses).  However, state and EPA-managed programs report annual summary data  on the number of inspections conducted for each inspection type by state  and not data on which wells were inspected, when they were inspected,  the types of inspection conducted at each well, and the results of those  inspections. For example, the summary data EPA collects on routine  inspections, as shown in table 1, could not be used to determine if a state  or EPA-managed program had conducted a routine inspection of each of  its class II wells over a 5-year period or multiple inspections of individual  wells. For the seven state and EPA-managed programs we reviewed,  annual data reported to EPA included the total number of wells inspected  and types of inspections conducted statewide, as shown in table 1 for  fiscal year 2013.
Because the inspection data that EPA has collected from states have not  been well-specific and therefore have not included the total number of  inspections by type that could have been done, EPA’s ability to track each  state program’s progress toward meeting its inspection goals is limited.  Under federal standards for internal control, managers need to compare  actual performance to planned or expected results and analyze significant  differences. EPA officials told us that they recognize that they cannot  verify progress toward meeting state program inspection goals without  well-specific data on inspections and have made efforts to collect well- specific data through voluntary programs, but do not require its collection.  Starting in 2007, EPA had been working to develop a voluntary national  UIC database to provide well-specific data from state and EPA-managed  programs; however, according to EPA officials in December 2015,  Montana was the only participating state program, and the agency plans  to complete the national database with Montana and the seven EPA- managed programs currently participating. EPA officials said that they  do not have well-specific information because they do not require it and  most state programs have not provided it voluntarily through the national  UIC database. However, EPA’s MOA guidance says that EPA may  request and should be given access to all files necessary for evaluating  the administration of the state program. Until EPA requires and collects  well-specific data on inspections from state and EPA-managed programs,  including the types of inspections conducted at each well, when the  inspections were conducted, and the results of the inspections, the  agency cannot assess whether the programs are meeting their annual  inspection goals to protect underground sources of drinking water. EPA  officials said that EPA will also have access to another voluntary  database being compiled by the Department of Energy that contains  additional data from state programs on injection wells. According to the  officials, however, the department’s database does not provide well- specific information on inspections either.
section_title: Enforcement
paragraphs: EPA has not collected consistent or complete enforcement information  that can be used to assess whether state and EPA-managed programs  are effectively protecting underground sources of drinking water. To carry  out the Safe Drinking Water Act’s provision that EPA take action on  violations that have not been enforced, EPA’s 1987 Strategy directs state  and EPA-managed programs to take timely and appropriate enforcement  action against significant violations of state or EPA requirements. The  Strategy defines a timely and appropriate response taken by a state or  EPA-managed program as resolving the violation or initiating a formal  enforcement action within 90 days of the identification of the violation. To  help ensure that violations are addressed in a timely and appropriate way,  EPA’s 1987 Strategy and 1986 Program Reporting guidance call for state  and EPA-managed programs to report information to EPA on significant  violations that were not resolved within 90 days of discovery and also did  not have a formal enforcement action taken against the well operator. The  act requires EPA to enforce state program requirements within 30 days  after the agency becomes aware that the state has not taken appropriate  enforcement action.
However, our review of data collected by EPA on significant violations  demonstrated that EPA’s ability to take action may be limited by  incomplete and inconsistent enforcement data reported by state and  EPA-managed programs. Specifically, our analysis of 93 significant  violations for fiscal years 2008 thru 2013 for the seven state and EPA- managed programs we reviewed found that there were 29 that were not  resolved within 90 days of operator notification and for which formal  action had not been taken within that time. According to the Strategy,  each of these violations should have been reported on the 7520-4 form by  the state to the appropriate EPA region or by the EPA-managed program  to EPA headquarters. However, our analysis of the 7520-4 form data  showed that state and EPA-managed programs reported 7 of these 29  violations to the agency. Table 2 shows the results of our analysis of the  7520-4 forms (see app. V for additional information on our analysis and  app. VI for the full list of violations and enforcement actions taken).
According to EPA headquarters, regional, and state officials we  interviewed, state and EPA-managed programs used different  interpretations of the Strategy and Program Reporting guidance to fill out  the forms, resulting in incomplete, and potentially inconsistent,  information across the programs. EPA headquarters officials told us that  all significant violations that were not resolved within 90 days from the  date the violation was discovered should be reported on the 7520-4 form  quarterly until they are resolved, regardless of whether the program had  already initiated enforcement action against the well operator. However,  EPA’s Strategy and Program Reporting guidance call for programs to  report, on the 7520-4 form, information on significant violations that (1)  were not resolved within 90 days from the date the violation was  discovered and (2) had not had a formal enforcement action taken  against the well operator. In addition, according to the Program Reporting  guidance, significant violations reported on the 7520-4 form should  continue to be reported quarterly on subsequent 7420-4 forms until they  are resolved. State and EPA officials we interviewed provided different  interpretations of what they were to put on the 7520-4 form, which would  result in some programs reporting significant violations and some not.  Consistent with EPA’s Strategy and Program Reporting guidance, officials  we interviewed from Ohio and EPA Region 4 (Kentucky) told us that they  only report significant violations on the 7520-4 form that were not  resolved within 90 days and for which a formal enforcement action had  not been taken against the well operator. However, officials we  interviewed from North Dakota, Oklahoma, Texas, and EPA Region 3  (Pennsylvania), told us that they report all unresolved significant  violations regardless of whether they have taken a formal enforcement  action. According to the officials, the information that ultimately gets  reported on the 7520-4 form is based on a quarterly calculation of how  long the well has been out of compliance; however, according to the  officials, EPA only requires state and EPA-managed programs to submit  7520-4 forms to EPA semiannually. In addition, officials in North Dakota  and Oklahoma told us that they only report significant violations once and  not in subsequent quarters, even if the violations have not been resolved.
EPA headquarters officials told us they are aware that the information  reported by states and EPA regions is not complete or consistent, but  they have not clarified, in guidance or otherwise, what information should  be reported. EPA headquarters officials told us that regions are  responsible for ensuring that state and EPA-managed programs take  timely and appropriate enforcement actions, and that regions generally  assess the programs’ enforcement response on a case-by-case basis  through informal communications with state program staff. The  information received on the 7520-4 form, however, is the only  documented information reported to EPA regions and headquarters on  individual violations that may not have been enforced in a timely or  appropriate manner. Until it clarifies guidance on what data should be  reported on the 7520-4 form, EPA does not have reasonable assurance  that state and EPA-managed programs report complete and consistent  information on unresolved significant violations or that it has the  information it needs to assess whether it must take enforcement action,  as directed under the act, to protect underground sources of drinking  water.
section_title: EPA Has Not Consistently Conducted Oversight Activities Necessary to Assess Whether Programs Are Protecting Underground Sources of Drinking Water
paragraphs: EPA has not consistently conducted three oversight activities necessary  to assess whether state and EPA-managed programs are protecting  underground sources of drinking water, as required by regulations and  specified in guidance: (1) incorporation of state program requirements, or  changes to state program requirements, into federal regulations; (2) the  final review and recordkeeping for all aquifer exemption applications it  approves; and (3) annual on-site program evaluations.
subsections: section_title: State Program Requirements
paragraphs: We found in June 2014 that EPA had not consistently incorporated state  program requirements, or changes to state program requirements, into  federal regulations, as required by agency regulations. Specifically, if a  state does not enforce a requirement against an injection well operator  violating state regulations, EPA can take enforcement action if EPA has  approved the state regulations being violated and incorporated them into  federal regulations, and has met specific procedural requirements. EPA  regulations and guidance establish a process for EPA and its regions to  review and approve state programs, as well as changes to state  programs. Under its regulations, EPA can only enforce state program  requirements that it has incorporated into federal regulations through a  rulemaking process. Where it has not done so, EPA is not able to  enforce state program requirements if needed. In June 2014, we found  that EPA had not yet incorporated changes to some state program  requirements into federal regulations and therefore did not have the ability  to enforce these state program requirements if necessary. We concluded  that until it conducts a rulemaking to incorporate the backlog of state  program requirements and changes to state program requirements that  have been approved, EPA would not be able to enforce some state  program requirements, hindering its ability to protect underground  sources of drinking water. To ensure that EPA maintained enforcement  authority of state program requirements, we recommended that EPA  conduct a rulemaking to incorporate state program requirements, and  changes to state program requirements, into federal regulations. We also  recommended that at the same time, EPA evaluate and consider  alternative processes to more efficiently incorporate future changes to  state program requirements into federal regulations without a rulemaking.
In comments responding to our June 2014 report, EPA disagreed with our  recommendation to conduct a rulemaking and said that a single  rulemaking would be impractical because the process would take many  years to complete and would still not ensure that all program changes  were incorporated into federal regulations, as other states could make  changes to their programs during this time. In lieu of a single  rulemaking, EPA said in its comments that it was conducting an ongoing  process of individual rulemakings to approve and codify state program  revisions in collaboration with states, EPA regions, and EPA’s Office of  Enforcement and Compliance Assurance. However, as stated in our June  2014 report, according to an analysis conducted by EPA in 2010, EPA  estimated that it would take 2 to 3 years, dedicated EPA personnel, and  $150,000 in outside contractor support to identify, approve, and conduct a  single rulemaking to incorporate all state program changes made since  1991 into federal regulations. By EPA’s own estimate, the targeted state- by-state approach will take much longer than a single rulemaking and will  face greater challenges with states continuing to make changes in the  interim, leaving EPA without the ability to enforce state programs to  protect underground sources of drinking water if needed. EPA provided  no evidence in its comments that individual rulemakings would be any  less costly or any more efficient than the approach it assessed in 2010.  As of December 2015, EPA has not taken action to incorporate state  program requirements, or changes to state program requirements, into  federal regulations.
section_title: Aquifer Exemptions
paragraphs: EPA is also responsible for the final review, approval, and recordkeeping  for all aquifer exemption applications, but the agency does not have the  location or supporting documentation necessary to identify the size and  location of all aquifers for which it has approved exemptions from  protection under the act. According to EPA’s 2014 Aquifer Exemption  Coordination guidance, EPA regions need to have complete records  documenting support for EPA’s approval or disapproval of exemption  applications to inform decision making by state and EPA-managed  programs on injection well permits. According to EPA officials, regional  offices generally maintain the most comprehensive and up-to-date data  on aquifer exemption approvals. Since 2003, EPA has worked to compile  comprehensive information on aquifer exemptions, including data on the  aquifers’ sizes and locations. In 2011, EPA determined that its  headquarters did not have information on all exempted aquifers and  requested that EPA regional offices provide information on all aquifers  exempted in their respective regions to help compile a centralized  database.
According to EPA officials, the agency has compiled a rudimentary  database from regional datasets, paper files supporting aquifer exemption  decisions, and hard copies of maps specifying the size and location of  exempted aquifers. However, EPA officials said that the database of  aquifer exemptions does not include complete information on each  exemption listed and that EPA does not have a complete inventory of  exemptions. In particular, according to EPA officials, the agency is  missing information on exemption decisions made when state programs  were granted primacy in the 1980s because the supporting  documentation is not readily accessible or was damaged while in storage.
If EPA had maintained an updated database on aquifer exemptions, then  EPA Region 9 may have had the information it needed to review injection  well permits to determine whether injections were being made into  exempted aquifers in California. Instead, California discovered that it had  authorized injection into nonexempt aquifers. Specifically, EPA requested  additional information on aquifer exemptions from California in 2012 as a  part of EPA’s review of historical data on aquifer exemptions nationwide.  At that time, the state reviewed supporting documentation for the aquifer  exemptions and the associated injection wells and determined that it had  permitted operators to inject into nonexempt aquifers that the state  believed were exempted in the 1980s, when EPA granted primacy to  California to manage the class II program.
In July 2014, after identifying water supply wells in the vicinity of some of  these injection wells and informing EPA Region 9, California ordered  operators of those injection wells to cease injection into certain  nonexempt aquifers, and to submit data to California so the threat to  underground sources of drinking water and human health could be  assessed. In July 2014, as a result of this issue, EPA determined that  California’s program was not in compliance with state and EPA  requirements and supported California’s plan to review injection wells that  were permitted to inject into nonexempt aquifers. As of October 2015,  California had identified over 500 wells injecting into 11 nonexempt  aquifers with the potential to threaten underground sources of drinking  water, and 23 of those wells had been shut-in, or ceased injecting fluids.  In November 2015, California shut-in an additional 33 injection wells  injecting into nonexempt aquifers. As of October 2015, California officials  said that they are continuing to collect information on wells injecting into  nonexempt aquifers to determine if additional wells should be shut-in to  protect underground sources of drinking water and are working with EPA  Region 9 to collect additional information on aquifer exemptions to help  complete EPA’s database.
As of December 2015, EPA officials told us that the majority of aquifers in  its database of approved exemptions have complete size and location  data and that headquarters continues to collect information from the  regions and state programs to fill in the remaining data gaps and ensure  that the database is complete and accurate. The officials told us that for  this reason, it is unlikely that they will discover deficiencies in  recordkeeping for approved aquifer exemptions similar to those identified  in California. However, while EPA officials believe that they have the  majority of the data on aquifer exemptions, the database does not include  some historical data on exemption decisions made when state programs  were granted primacy in the 1980s. In addition, the database only has  aquifer exemption data through 2011 and is missing data on aquifer  exemptions approved over the past 4 years. According to EPA officials,  the database is a headquarters-based spreadsheet and updates with new  approvals on aquifer exemptions will need to be collected from EPA  regions and entered manually. The officials also said that EPA will  complete the database using 2011 data and only plan to add updated  data if sufficient resources are available. Until it has a complete aquifer  exemption database and a way to update it periodically, EPA does not  have sufficient information on aquifer exemptions to oversee state and  EPA-managed programs and assess whether programs are protecting  underground sources of drinking water.
section_title: Annual On-site Program Evaluations
paragraphs: As we reported in June 2014, EPA has not consistently conducted annual  on-site program evaluations, as directed by its 1983 Program Oversight  guidance. This guidance directs EPA regions and headquarters to  conduct annual on-site program evaluations of state and EPA-managed  programs, which it characterizes as a key activity necessary for effective  oversight, and to ensure that state and EPA-managed class II programs  protect underground sources of drinking water. According to EPA’s  Program Oversight guidance, EPA regions should perform at least one  on-site evaluation of each state program each year to assess whether the  state is managing the program consistent with state regulations, setting  program objectives consistent with national and regional program  priorities, and implementing recommendations from previous evaluations,  among other activities. According to the Program Oversight guidance,  annual on-site evaluations of state programs should also include a review  of permitting and inspection files or activities to assess whether the state  program is protecting underground sources of drinking water. In  particular, because permitting files should include information on the well  location, and the geology and aquifers in the area surrounding the  injection well, a review of permitting files should cover this information.  EPA headquarters is responsible for conducting similar on-site program  evaluations of EPA-managed programs.
In our June 2014 report, regional officials said that on-site program  evaluations are valuable for coordinating between federal and state  officials to improve program management. According to EPA officials at  the time, however, limited resources have prevented regions, and EPA  headquarters, from consistently conducting on-site program evaluations.  To ensure effective oversight of the class II program, in June 2014, we  recommended, and EPA agreed, that EPA evaluate and revise, as  needed, UIC program guidance on effective oversight to identify essential  activities that EPA headquarters and regions need to conduct to  effectively oversee state and EPA-managed programs to ensure that they  were effective at protecting underground sources of drinking water.
If EPA had conducted oversight activities, such as annual on-site program  evaluations, EPA Region 9 may have discovered that California’s class II  program did not comply with state and EPA requirements before 2014. In  particular, regular on-site program evaluations that included reviews of  permitting files may have identified the deficiencies in California’s  program. Specifically, reviews of well permitting files, including well  location and information on aquifers surrounding the well, may have  helped identify injections into nonexempt aquifers when compared to  complete records on aquifer exemptions. However, according to EPA  Region 9 officials, they have not conducted annual on-site evaluations of  California’s program. In 2011, regional officials requested a third-party  audit of California’s program, which was the first comprehensive review of  California’s program since primacy was granted in 1983. The audit found  several program deficiencies, including inadequate inspection and  enforcement practices and insufficient staff to adequately manage and  implement the program, but Region 9 did not have complete information  on approved aquifer exemptions in California and did not conduct a  review of permitting files and aquifers in the area surrounding injection  wells to identify wells that California had authorized to inject into  nonexempt aquifers. According to EPA officials, in response to the  recommendation from our June 2014 report for EPA to update its  guidance on effective oversight, EPA headquarters and regional officials  have held preliminary discussions to determine what oversight activities  are necessary to ensure that state and EPA-managed programs are  effective at protecting underground sources of drinking water, including  on-site evaluations of state and EPA-managed programs.
Concerning why annual on-site reviews had not been consistently  conducted, EPA headquarters and regional officials said that they have  few resources to oversee state and EPA-managed programs, and  regional officials told us that available resources are directed toward the  class II programs they manage directly and not oversight of state  programs. EPA headquarters officials we interviewed said that they have  an effective oversight program and conduct necessary activities with the  resources available. The same officials said they do not have the  resources, including the workforce, necessary to consistently conduct the  oversight activities to help assess whether state and EPA-managed  programs are complying with applicable requirements.
According to a key workforce planning principle from our body of work on  strategic human capital management, an agency should determine the  critical skills and competencies that will be needed to achieve current and  future programmatic results, particularly given factors that change the  environment within which agencies work, such as budget constraints.  Our body of work on strategic human capital management indicates that  each agency needs to ask if it has an explicit workforce planning strategy  linked to the agency’s strategic and program planning efforts to identify its  current and future human capital needs, including the size of the  workforce; its deployment across the organization; and the knowledge,  skills, and abilities needed for the agency to pursue its shared vision. In  November 2015, EPA officials said that the agency had not conducted a  comprehensive workforce analysis to identify the resources necessary,  including human capital resources, to oversee state and EPA-managed  programs, and that the agency had not requested additional resources for  oversight. Without conducting such an analysis, EPA will not be able to  identify the human capital and other resources it needs to carry out its  oversight of state and EPA-managed programs and help ensure that they  are effective at protecting underground sources of drinking water.
section_title: Conclusions
paragraphs: EPA established the UIC class II program in in the 1980s, with a vigorous  role for the agency to oversee state and EPA-managed programs to  prevent contamination of underground sources of drinking water.  However, the findings in our June 2014 report, our findings on inspection  and enforcement information and oversight activities in this report, and  the recent decision that California’s program was not complying with state  and EPA requirements illustrate that EPA does not have the information,  or consistently conduct the oversight activities, needed to assess state  and EPA-managed class II programs to help ensure that they protect  underground sources of drinking water.
Specifically, the data EPA requires and collects from state and EPA- managed programs do not include well-specific information on  inspections conducted by those programs needed to track each  program’s progress toward meeting its annual inspection goals, as called  for in EPA’s Program Reporting guidance. Until EPA requires and collects  well-specific data on inspections from state and EPA-managed programs,  including when wells were inspected, the types of inspections conducted  at each well, and the results of those inspections, the agency does not  have the well-specific information to assess whether the programs are  meeting annual inspection goals to protect underground sources of  drinking water.
To assess whether state and EPA-managed programs are effectively  protecting underground sources of drinking water when permitting fluids  to be injected into aquifers, EPA needs complete, updated information on  approved aquifer exemptions. Yet EPA does not have a complete, up-to- date database on aquifer exemptions for all state and EPA-managed  programs, or a way to keep the database containing information on  aquifer exemptions updated. Until it has a complete aquifer exemption  database and a way to update it, EPA does not have sufficient  information on aquifer exemptions to oversee state and EPA-managed  programs and assess whether programs are effectively protecting  underground sources of drinking water.
Moreover, under the Safe Drinking Water Act, EPA must enforce state  program requirements if they have not been enforced by the state in a  timely and appropriate fashion. However, because of inconsistent  interpretations of reporting guidance, state and EPA-managed programs  report inconsistent and incomplete information on individual significant  violations that have not been resolved, and therefore EPA regions and  headquarters cannot know about, let alone take enforcement action  against, operators committing significant violations. Until it clarifies  guidance on what data should be reported on the 7520-4 form, EPA does  not have reasonable assurance that state and EPA-managed programs  report complete and consistent information on unresolved significant  violations or that it has the information needed to assess whether it must  take enforcement action, as required under the act, to protect  underground sources of drinking water.
Finally, although EPA headquarters officials said they do not have the  resources necessary to conduct the oversight activities needed to assess  whether state and EPA-managed programs comply with applicable  requirements, the agency has not conducted a workforce analysis to  identify the resources, including human capital resources, the agency  needs to oversee state and EPA-managed programs. Without conducting  such an analysis, EPA will not be able to identify the human capital and  other resources it needs to oversee state and EPA-managed programs  and help ensure that they are effective at protecting underground sources  of drinking water.
section_title: Recommendations for Executive Action
paragraphs: To help ensure protection of underground drinking water from the  injection of wastewater associated with domestic oil and gas production,  we recommend that the Administrator of the Environmental Protection  Agency take the following four actions:
Require and collect well-specific data on inspections from state and  EPA-managed programs, including when the wells were inspected,  the types of inspections conducted, and the results of the inspections  in order to track progress toward state and EPA-managed annual  inspection goals.
Complete the aquifer exemption database and establish a way to  update it to provide EPA headquarters and regions with sufficient  information on aquifer exemptions to oversee state and EPA- managed programs.
Clarify guidance on what data should be reported on the 7520-4 form  to help ensure that the data collected are complete and consistent  across state and EPA-managed programs and to provide the  information EPA needs to assess whether it must take enforcement  actions.
Conduct a workforce analysis to identify the human capital and other  resources EPA needs to carry out its oversight of state and EPA- managed programs.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided the Administrator of EPA with a draft of this report for review  and comment. In written comments provided by EPA (reproduced in app.  VII), EPA generally agreed with our analysis and findings on the class II  program and described planned actions, but disagreed with some findings  and recommended actions, as discussed below. EPA also provided  technical comments that we incorporated in the report, as appropriate. In  addition, we provided the draft report to the six states whose programs  we reviewed. Officials from these states—California, Colorado, North  Dakota, Ohio, Oklahoma, and Texas—provided technical comments,  which we incorporated as appropriate.
In response to our first recommendation that EPA require and collect well- specific data on inspections from state and EPA-managed programs to  track progress toward state and EPA-managed annual inspection goals,  EPA stated that the agency’s goal is to obtain high quality data to  understand program activities at the well-specific level, but that it didn’t  make sense to require the states to submit well-specific data now. EPA  said that it is mindful of the need to think carefully about requiring  information from states, and it will continue to work with its state partners  to improve both the collection and the quality of the data currently  required and to expand EPA’s access to additional state data.  Specifically, EPA stated that it had taken steps to address the gaps in the  summary data collected on 7520 forms identified in GAO’s June 2014  report, including developing standard operating procedures for  submission and review of the data forms, and revising instructions to  increase consistency in reporting the data to EPA. EPA said that it plans  to continue to increase the inventory of well-specific data in the national  UIC database including states that were working towards e-reporting  status, and that EPA welcomes and encourages further participation.  Further, EPA stated that it will continue to work with the Department of  Energy and other stakeholders as they develop a database with well- specific state inventory data. We recognize EPA’s efforts to improve the  consistency and completeness of summary data collected on the 7520  forms, and to collect additional well-specific data through voluntary  programs such as the national UIC database and the Department of  Energy’s database, but EPA has made little progress since 2007  collecting well-specific inspections data from state programs voluntarily.  As we stated in the report, EPA needs access to well-specific inspections  data from all programs to track the progress of state and EPA-managed  programs towards meeting their inspection goals. If EPA believes that  well-specific data is important, it should require that state and EPA- managed programs report well-specific data on inspections.
In response to our second recommendation that EPA complete the  aquifer exemption database and establish a way to update it to provide  EPA headquarters and regions with sufficient information on aquifer  exemptions to oversee state and EPA-managed programs, EPA  disagreed with our assessment that the agency is deficient in its duties to  maintain aquifer exemption records, but is taking action to complete the  database and to update it. Specifically, EPA stated that the draft report  presents incomplete information as to which materials are held at the  EPA headquarters and regional levels, and the roles and objectives that  EPA headquarters and regions play regarding aquifer exemptions and the  use of data. EPA said that our statement that the agency does not have  sufficient information to oversee state and EPA-managed programs is  incorrect because its regions have the most comprehensive and current  data on aquifer exemptions as they conduct the final review of exemption  requests and must approve all exemptions. According to EPA, it initiated  the effort to collect data from the regional offices to better understand the  number, locations, and nature and quality of aquifers exempted by the  UIC program and expects to release a public data set by the end of 2016,  which will include data current through 2015 with the exception of Region  9’s data for the State of California. EPA stated that it anticipates adding  Region 9's aquifer exemption data for California as the region works with  the state to clarify the boundaries of the agency's historic approvals and  takes action on the state's requests for new exemptions. Further, EPA  said it plans to update the data set annually and that the regions will  continue to hold the most current data. We commend EPA’s efforts to  develop an up-to-date data set of aquifer exemptions and note that the  updated information is important for overseeing whether the regions have  current information on aquifer exemptions. As shown in the situation in  Region 9 with California, at least one region did not have current or  comprehensive information on aquifer exemptions. Further, EPA has  been working since 2003 to compile comprehensive information on  aquifer exemptions from regions, and, according to EPA officials, does  not have a complete inventory of exemptions. In light of the situation in  Region 9, until EPA has a complete aquifer exemption database and a  way to update it, we continue to believe that it does not have sufficient  information on aquifer exemptions to oversee state and EPA-managed  programs and assess whether programs are protecting underground  sources of drinking water.
In response to our third recommendation that EPA clarify guidance on  what data should be reported on the 7520-4 form to help ensure that the  data collected are complete and consistent across state and EPA- managed programs and to provide the information EPA needs to assess  whether to take enforcement action, EPA agreed that the continued  improvement in collection and consistency of data via the 7520-4 form  would be valuable for more effective oversight. Specifically, EPA stated  that the form is a tool for obtaining important information used in  assessing enforcement activities and that providing guidance on the  7520-4 form could be valuable to improve the quality of information the  agency receives. EPA also said that the 7520 standard operating  procedures that it created in response to our June 2014 report reminds  reviewers that wells with significant violations for two or more quarters  should remain listed on the 7520-4 until the issue is resolved.  In addition,  EPA said that it will provide further materials to UIC data submitters to  improve completeness and consistency of the data that programs report  on the 7520-4 form within 6 months of this final report. As these standard  operating procedures have not yet been finalized, we have not assessed  them to determine whether they meet the intent of our recommendation.
In response to our fourth recommendation that EPA should conduct a  workforce analysis to identify the resources it needs to conduct effective  program oversight, EPA agreed that oversight is an important aspect of  ensuring an effective UIC program, but stated that a workforce analysis  was not necessary to better assess the resources needed to oversee the  implementation of the UIC class II program. EPA stated that it is working  with program managers to evaluate the effectiveness of EPA’s oversight  activities in response to our June 2014 report, and would expand the  evaluation to include elements of inspection and enforcement activities if  necessary. Upon completion of its evaluation, EPA said that it would look  to improve the effectiveness of state and EPA oversight of the UIC  programs, if needed. EPA may, for example, pilot a project to explore the  potential to ensure program implementation by use of remote  approaches, such as data collection, data analysis, targeting and priority  ranking, and public transparency, as a viable option for increased  oversight. While we recognize EPA’s commitment to assess whether it  should expand its evaluation of oversight activities to include inspections  and enforcement, we still believe it is critical for EPA to identify the  resources necessary, including human capital resources, to oversee state  and EPA-managed programs and that without doing so, EPA may not  have reasonable assurance that it can effectively collect information or  conduct activities to ensure protection of underground sources of drinking  water.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies of this report to the  appropriate congressional committees, the Administrator of the  Environmental Protection Agency, and other interested parties. In  addition, this report will be available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact me at (202) 512-3841 or gomezj@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Key contributors to this report are listed in  appendix VIII.
section_title: Appendix I: List of State and EPA-Managed Class II Programs and Well Inventory
paragraphs: Table 3 provides a list of programs managed by the Environmental  Protection Agency (EPA), state programs with safeguards deemed  effective by EPA, state programs that have adopted minimum federal  underground injection control requirements, and the number of class II  wells in each state in 2014.
section_title: Appendix II: Status of California’s Underground Injection Control Class II Program
paragraphs: According to a 2015 letter from California to Environmental Protection  Agency (EPA) Region 9, California is the nation’s third largest oil- producing state, producing 575,000 barrels per day, and the state’s oil  and gas industry earns $34 billion annually. Injection wells have been  used in the state for more than 50 years. According to a 2015 report,  currently over 50,000 injection wells are operating in California, with about  75 percent of the state’s production coming from enhanced oil recovery  methods using underground injection wells. California’s class II  underground injection control (UIC) program is managed by the Division  of Oil, Gas, and Geothermal Resources (Division) and is divided across  the Division’s six district offices. The majority of class II underground  injection activity occurs in District 1 (Cypress) and District 4 (Bakersfield).
subsections: section_title: California Program Determined to Be Noncompliant
paragraphs: In July 2014, EPA Region 9 determined that the UIC class II program  managed by the Division did not comply with state and EPA  requirements. In a series of letters from July 2014 through July 2015,  EPA Region 9 and the Division reached agreement on a plan to improve  California’s UIC class II program. Below is a summary of the deficiencies  identified in California’s UIC class II program and the plans California and  EPA Region 9 agreed on to resolve these deficiencies, including actions  taken by EPA and California before and after the determination of  noncompliance in 2014.
In 2011, EPA requested a third-party audit of the state’s UIC class II  program. The audit made recommendations to improve California’s  class II program, including recommendations regarding the program’s  definition of underground sources of drinking water, area of review  calculations, well construction practices, inspection and enforcement  practices, and staff qualifications.
In November 2012, the Division developed an action plan to address  each of the recommendations from EPA’s audit. To address a number  of recommendations necessitating regulatory updates, the Division  committed to update its class II program regulations beginning in  2013.
In response to an EPA inquiry initiated in 2012, California reviewed  program records to ensure that injection wells the state authorized  aligned with EPA-approved aquifer exemptions. In doing so, in 2014  the Division discovered that it authorized operators to inject class II  wastewater into 11 nonexempt aquifers in the vicinity of water supply  wells, and EPA determined that the program was not in compliance  with state and EPA requirements.
In October 2015, the Division issued the first report from its Monitoring  and Compliance Unit, which was created in 2011. The report  identified a number of program deficiencies, including insufficient  staffing to address increasing regulatory workload and significant  remedial programmatic work; poor recordkeeping on mostly paper  forms and a lack of modern data tools and systems; outdated  regulations that in some cases do not address the modern oil and gas  extraction environment; inconsistent and understaffed program  leadership; insufficient breadth and depth of technical talent;  insufficient coordination among district and state offices; and lack of  consistent, regular, high-quality technical training.
Division officials also identified deficiencies with the enforcement of class  II requirements. Division officials said that the state office receives  violation information from districts and is responsible for pursuing  enforcement actions against operators and collecting penalties assessed  by the Division. However, according to Division officials, California has  historically had difficulties enforcing regulations for both production and  class II wells in the state. In particular, the Division identified many  examples of enforcement actions that were not pursued and wells that  were not being returned to compliance in a timely manner. For example,  in 2010, the Division hired a contractor to review its accounts receivable  to identify outstanding penalties that the Division had not collected.  According to Division officials, there were over $5 million in unpaid  penalties that the Division had assessed but did not collect. In September  2015, according to Division officials, the Division hired a deputy  supervisor to start tracking enforcement of state requirements and to lead  the development of new business processes to improve violation tracking  and enforcement.
section_title: Division’s Plan for Program Improvements
paragraphs: Since July 2014, the Division, California’s State Water Resources Control  Board (Board), and EPA have been working together to systematically  address a number of important deficiencies in the UIC program, including  permitting injection into nonexempt aquifers. In letters between California  (the Division and the Board) and EPA, the three-agency group agreed to  a plan for the Division to shut down wells permitted to inject into  nonexempt aquifers and improve and modernize its UIC practices.  Specifically, the plan consists of four major components to be completed  concurrently:
New regulations and program revisions. The Division determined  that many state regulations that govern underground injection control  are obsolete, deficient, or unable to address current industry practice.  According to agency documents, the Division plans to undertake a  series of rulemakings to improve California’s regulatory framework to  address these issues, including isolation of injected fluids, quality of  water to be protected, well construction practices, cyclic steam  operations, project review, and idle well standards and testing. In  July 2015, the Division stated that it planned to update its class II  regulations in two phases, with the first phase starting with the  informal circulation of draft regulations in the fall of 2015 and the  second phase beginning in 2016.
Well review and aquifer exemptions. The Division and the Board  have been systematically reviewing injection wells that may have  been permitted to inject into nonexempt aquifers. The Division has  proposed a schedule for reviewing and ceasing injection into these  aquifers. As of October 2015, the Division shut down 23 wells  injecting wastewater into underground sources of drinking water that  may have posed an immediate risk to waters of beneficial use. Over  the next 2 years, through 2017, according to agency documents, the  Division will review additional injection wells to determine whether  they should be shut down or continue operating. The Division is  collecting information from operators interested in pursuing  exemptions and will review each exemption application to determine  whether exemption criteria have been sufficiently met. If the Division  approves the aquifer exemption, it will forward it to EPA for review and  approval or disapproval. EPA has final authority to declare an aquifer  exempt. The Division has issued regulations to ensure that injection  activity ends by specified deadlines unless aquifer exemptions are  approved.
Project-by-project review of injection project approvals. The  Division plans to conduct individual project reviews designed to find  missing data, identify UIC compliance issues, and compare existing  project approvals with current conditions in the field. Operators will  be required to provide missing data, and the Division will reevaluate  the project based on all relevant regulations, mandates, and policies,  including demonstration of zonal isolation of injected fluids. Projects  will be reapproved, modified, or canceled as appropriate. The Division  plans to conduct separate reviews in each Division district and plans  to complete the review by October 2018.
Development of a modern well and data management system.
The Division is updating its data management systems for production  and injection wells to improve regulatory compliance and  effectiveness, transparency, and support of all stakeholders. Finishing  every component of the UIC improvement plan submitted to EPA  could take 3 to 4 years. However, according to state documents, as  each piece is completed, improvements in the Division’s mission  performance will follow. According to state documents, changes will  be supported by the development of training programs to support the  process of internal review and adjustments for continuously improving  the Division’s execution of its responsibilities.
section_title: Appendix III: Objectives, Scope, and Methodology
paragraphs: This report examines the Environmental Protection Agency’s (EPA)  Underground Injection Control (UIC) class II program to determine the  extent to which EPA has collected the inspection and enforcement  information needed, and conducted the oversight activities necessary, to  assess that state and EPA-managed programs are protecting  underground sources of drinking water. To perform this work, we  reviewed and analyzed the Safe Drinking Water Act, and EPA regulations  and guidance applicable to the UIC class II program. We also interviewed  EPA UIC program officials in the eight regional offices with class II wells.  To understand the class II program at the state level, we interviewed state  officials and reviewed state program documentation for the same sample  of states from our June 2014 report on the UIC program. Specifically, we  selected a nongeneralizable sample of eight states with class II programs.  Two of these states are managed by EPA regions—Kentucky and  Pennsylvania—and the remaining six—California, Colorado, North  Dakota, Ohio, Oklahoma, and Texas—are managed under provisions of  the act that allow them to have primary responsibility to manage the  program in their states. We selected these states from the six shale oil  and gas regions defined by the Energy Information Administration. For  each of the six shale regions, we selected at least one state that had  among the highest number of class II injection wells.
In July 2014, after we issued our June 2014 report and before we started  the work on this review, EPA determined that one of the programs in the  eight states we reviewed, California’s class II program, was not in  compliance with state or EPA requirements. EPA Region 9 officials and  California’s UIC program officials have since agreed to a plan to improve  the California program over the next several years. We interviewed EPA  headquarters, EPA Region 9, and California officials regarding the  deficiencies in California’s program, the agreed-upon improvement plan,  and EPA oversight of California’s progress. A summary of the deficiencies  found by EPA and California, and California’s plans to improve its  program, can be found in appendix II. Because of the deficiencies in  California’s program, we chose not to include California in our detailed  analysis of inspection and enforcement information from the states. Thus,  the results of our review of inspection and enforcement reflect the seven  states remaining in our sample. Because the sample is a  nongeneralizable sample, our results cannot be generalized to other  states but do provide detailed examples of EPA’s and states’  management of class II programs.
To analyze whether EPA collects the information it needs to assess  whether state and EPA-managed programs are protecting underground  sources of drinking water, particularly inspection and enforcement  information, we first reviewed EPA regulations and guidance on UIC  inspections and enforcement to determine what information EPA needs to  assess the programs and their ability to protect underground sources of  drinking water. EPA’s 1987 guidance document Underground Injection  Control Program Compliance Strategy for Primacy and Direct  Implementation Jurisdictions (Strategy) establishes minimum goals for  inspections of class II wells. We obtained and summarized inspections  data collected by EPA from each program we reviewed for fiscal year  2013, the most current year of data available at the beginning of this  review. The state and EPA-managed programs are directed to report  these data to EPA quarterly on the 7520-3 form. To assess the reliability  of these data, we interviewed EPA and state officials about their  processes for managing the data collected on the 7520-3 forms and  tested the data for completeness. We found that the data were not  comparable across states but were sufficiently reliable for reporting on a  state-by-state basis. To understand EPA’s use of the data to assess state  and EPA-managed programs, we interviewed officials from EPA  headquarters about their use of the information to oversee EPA-managed  programs and from EPA regions about their oversight of inspections  conducted by state programs. We also interviewed selected state  program officials about how they manage class II inspections, and we  requested information on annual inspection goals and inspection  strategies. Similarly, we interviewed regional office staff responsible for  managing the programs in Kentucky and Pennsylvania about their  management of the class II programs in these states, including any  inspection goals and strategies they have.
To analyze whether EPA has the enforcement information to assess  whether state and EPA-managed programs are protecting underground  sources of drinking water, we reviewed EPA’s Strategy, which also  establishes enforcement expectations for both state and EPA-managed  programs. In particular, the Strategy identifies the need for state and  EPA-managed programs to conduct timely and appropriate enforcement  actions. Specifically, state and EPA-managed programs are expected to  resolve significant violations within 90 days of discovery or take a formal  enforcement action against the well operator. According to the Strategy, a  formal enforcement action, among other things, is legally enforceable,  explicitly requires the well owner to take corrective action, and specifies a  timetable for completion. Under the act, EPA is to intervene and take  enforcement action once it is notified that a violation has occurred and  that the state has not taken appropriate action after 30 days. Similarly,  EPA regions should take timely and appropriate enforcement actions in  states with EPA-managed programs. According to EPA’s 1987 Reporting  Requirements—Underground Injection Control Program Guidance  (Program Reporting), EPA uses the 7520-4 forms to evaluate the  timeliness and appropriateness of a state or EPA-managed program’s  enforcement response; EPA regions receive 7520-4 forms from their state  programs, and EPA headquarters collects information on the 7520-4  forms from programs managed by EPA regions.
We then assessed a sample of violations, using EPA’s definition of timely  and appropriate resolution from its Strategy and Program Reporting  guidance, to determine if EPA receives information on individual  significant violations that may have the potential to threaten underground  sources of drinking water. We selected a nongeneralizable sample of 134  notices of violation, issued from 2008 through 2013 (the most recent  years of data available when we began our audit work), from the seven  state and EPA-programs we reviewed and compared the data to  enforcement data provided to EPA on the 7520-4 forms. We selected a  nongeneralizable sample of at least six notices of violation in each of the  seven states in our sample based on the significance of the violation; the  type of enforcement action taken; and the number of days between when  the operator was notified and when the violation was resolved, termed  returning to compliance with applicable requirements. We also obtained  the 7520-4 forms for fiscal years 2008 through 2013 to identify what  violations had been reported on these forms. We analyzed the number of  days that each significant violation in our sample had been open and  compared this to the number of days (90) established by EPA as timely.  We then analyzed each violation to determine if a formal action had been  taken. We identified 93 violations that were open for more than 90 days  and compared these to the information reported on the 7520-4 form by  the appropriate state. We then interviewed EPA, regional, and state  officials to determine how they reported the information on the 7520-4  form.
Because our sample of violations is nongeneralizable, our results cannot  be generalized to other states and violations; however, they do provide  detailed information on the violations that should have been reported by  state and EPA-managed programs. To assess the reliability of the  violation and enforcement information we obtained, we interviewed EPA  headquarters officials about their processes for collecting and managing  the information and tested the information for completeness by looking for  missing information. We determined that the information from EPA’s  reporting forms was reliable for purposes of reporting individual state  results.
To analyze the activities EPA conducts to assess whether state and EPA- managed programs protect underground sources of drinking water, we  reviewed several EPA guidance documents that describe activities EPA is  to take to oversee state and EPA-managed programs. EPA’s 1983  guidance document, Interim Guidance for Overview of the Underground  Injection Control Program, states that EPA is supposed to conduct annual  on-site evaluations of state and EPA-managed programs. EPA’s UIC  regulations describe activities that EPA is supposed to conduct to ensure  that it can enforce state program requirements, if necessary. EPA’s 1984  guidance, Guidance for Review and Approval of State Underground  Injection Control Programs and Revisions to Approved State Programs,  describes the activities that EPA is to conduct to review changes to state  program requirements. We reviewed the extent to which EPA conducted  the first two activities in our June 2014 report on the UIC program. We  met with EPA headquarters officials to discuss our findings from that  report and EPA’s efforts to implement our recommendations.
To analyze the extent to which EPA has carried out activities to review  and approve aquifer exemptions for state and EPA-managed programs,  we reviewed EPA guidance documents on aquifer exemptions. We then  interviewed EPA headquarters officials about EPA’s progress developing  and maintaining a database on aquifer exemptions. To analyze the extent  to which EPA applied best practices for workforce planning and strategic  human capital management to the management of the UIC program, we  reviewed GAO reports specifying best practices for strategic human  capital management. We then interviewed EPA’s headquarters officials  about EPA’s efforts to apply those best practices to the UIC program.
We conducted this performance audit from October 2014 to February  2016 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix IV: Information on Inspections Conducted by Selected State and EPA- Managed Programs
paragraphs: The Safe Drinking Water Act requires states to include inspection  requirements in their programs. In a 1987 document titled Underground  Injection Control Program Compliance Strategy for Primacy and Direct  Implementation Jurisdictions (Strategy), the Environmental Protection  Agency (EPA) provides guidance on the types of inspections and the  frequency at which they should be conducted. The types of inspections  include routine inspections, well construction inspections, mechanical  integrity tests witnessed, emergency and complaint response,  enforcement follow-up, and plugging and abandonment verification.
According to the Strategy, the goal of an inspection program is to  determine that a well is in compliance with applicable requirements and to  detect any violations of those requirements. It directs programs to adopt  minimum priority standards for each type of inspection and gives the  programs discretion to consider additional priorities, such as  environmental risks, population risks, and well construction, when  determining which wells to inspect. The Strategy ranks inspection types,  including those for class II wells, by priority, as shown in table 4.
The seven state and EPA-managed programs we reviewed establish  goals for each of the inspection types identified in the Strategy based on  program priorities and available inspection resources. Table 5 shows  state and EPA-managed program inspection goals by inspection type.  Some states have goals to inspect all of their wells monthly or quarterly.  For example, North Dakota program officials told us that their goal is to  conduct routine inspections at all class II injection wells monthly, and  Ohio has a goal of inspecting 100 percent of its wells quarterly, according  to program officials. Other programs we reviewed do not set specific  annual goals for individual types of well inspections. For example,  according to EPA Region 4 officials, EPA Region 4 has a goal of  conducting routine inspections of all of the class II wells in Kentucky at  least once every 5 years and does not set inspection goals for observing  well plugging and well construction. Some state and EPA program  officials told us that when states do not have the resources to inspect all  wells annually, type and frequency of inspections are prioritized based on  risk factors such as the operator’s history of compliance with state or EPA  requirements or danger to the general public. For example, Oklahoma  officials told us that inspectors will inspect an operator more frequently if  the inspector determines the well operator is violating state requirements  and will also prioritize inspections in areas of the state where there is a  history of illegal disposal activity. Similarly, EPA Region 3 officials told us  that they do not set annual inspection goals by inspection type, but  prioritize inspections based on factors such as danger to the general  public, emergency response, and the availability of inspection staff.
Generally, according to state officials, state inspection staff in the five  state programs we reviewed are responsible for inspecting both  production and class II injection wells in the state. According to state  officials, staff may inspect only class II or production wells or may inspect  both. For example, of the 47 staff members conducting inspections in  Ohio, 4 conduct inspections on class II wells full-time and 8 to 10 split  responsibilities between production and class II wells. Similarly,  inspection staff in EPA regions we reviewed are responsible for  inspecting all classes of injection wells managed by the region. For  example, according to EPA Region 4 officials, Region 4 has  approximately 3 program staff members and 2 contractors to conduct  inspections of all classes of injection wells in the region.
State agencies and EPA regional offices responsible for managing or  overseeing programs in the seven states we selected vary in the  inventory of wells they manage and the staffing resources dedicated to  inspect those wells. For example, according to North Dakota officials,  North Dakota has 35 staff members to inspect 14,158 production and  class II injection wells in the state. According to Oklahoma officials,  Oklahoma has 62 staff members to inspect the state’s almost 190,000  production and class II wells. EPA regions managing programs in states  we selected have comparatively fewer inspection staff to inspect the  injection wells they manage. For example, according to EPA officials,  Region 3 has 1 full-time inspector and 3 part time inspectors to inspect  the almost 29,000 injection wells it manages region-wide, including over  1,800 class II wells in Pennsylvania.
section_title: Appendix V: Information on Enforcement Actions Taken by Selected State and EPA- Managed Programs
paragraphs: This appendix contains information on the enforcement process used by  selected state programs and programs managed by the Environmental  Protection Agency (EPA), the enforcement tools available to programs,  and our analysis of a sample of enforcement cases that we reviewed. We  selected a nongeneralizable sample of at least six enforcement cases in  each of the seven states in our sample, based on the significance of the  violation, the type of enforcement action taken, and the number of days  between when the operator was notified and when the violation was  resolved—defined as returning to compliance—with applicable  requirements.
subsections: section_title: Enforcement Process
paragraphs: According to EPA’s Underground Injection Control Program Compliance  Strategy for Primacy and Direct Implementation Jurisdictions (Strategy),  state and EPA-managed programs should escalate their enforcement  response if compliance is not achieved in a timely manner. The  enforcement action taken can depend on a number of factors, including  the severity of the violation and its potential to contaminate underground  sources of drinking water. Our analysis of enforcement actions taken by  select state and EPA-managed programs found that the programs have  generally similar enforcement processes to respond to class II  Underground Injection Control (UIC) violations.
A violation can be discovered a number of ways, including through an  inspection, administrative review of a well file, or reports by citizens or  others. According to EPA and state officials, the enforcement process  generally begins when program officials notify a well operator that the well  is in violation of applicable requirements. Six of the seven programs we  reviewed generally issue a written notice of the violation to the well  operator, but North Dakota program officials told us that they instead give  a verbal notification and then, depending on the severity of the violation,  will allow a 30-day grace period before initiating a formal enforcement  action. For the state and EPA-managed programs we reviewed, notices  of violation can include one or more violations in a single notice. If the  operator does not take action to resolve a significant violation—that is,  return the well to compliance with all state and federal regulations—in a  timely manner, EPA’s 1987 Strategy directs state and EPA-managed  programs to take formal enforcement actions to ensure that compliance is  achieved. Formal enforcement actions can include the following:  Administrative orders. Administrative orders are legally enforceable  orders, the terms of which can either be dictated by the program or  negotiated with the well operator in violation (which may be referred to as  a consent order or consent agreement). Administrative orders may  enjoin the well operator from taking certain actions, may require the well  operator to take corrective action, and may impose monetary penalties.
Civil judicial action. Civil judicial actions are lawsuits filed against an  operator that has failed to comply with, for example, statutory or  regulatory requirements or an administrative order. Civil actions are  generally taken when administrative enforcement actions have been  unsuccessful in achieving compliance and resolving the violation,  according to EPA officials.
Criminal judicial action. A program may also refer a case to the criminal  justice system if an action is willfully committed. A criminal court  conviction can result in fines or imprisonment.
section_title: Enforcement Tools Available to State and EPA-Managed Programs
paragraphs: State and EPA-managed programs have various tools available to  facilitate a return to compliance with applicable requirements and deter  future violations. According to EPA officials, state and EPA-managed  programs can vary in their approaches to enforcing UIC program  requirements as long as the programs are effective at protecting  underground sources of drinking water. Six of the seven state and EPA- managed programs in our review have authority to assess monetary  penalties. Table 6 details the types of administrative, civil, and criminal  monetary penalty authority available at the state and federal levels for the  selected states in our review.
While six of the seven programs we reviewed have the legal authority to  assess monetary penalties, some do not regularly use these authorities  for various reasons. For example, North Dakota’s program has  administrative authority to assess a monetary penalty, but the state  prefers to employ a more cooperative approach to get operators to bring  wells back into compliance, according to North Dakota officials. According  to Colorado officials, Colorado’s program has also historically employed a  cooperative approach, but the state recently revised its regulations to  require a more prescriptive approach to enforcement. Ohio program  officials told us that they do not have an administrative process for  assessing a monetary penalty, and the penalty must instead be pursued  through the civil judicial process. In turn, Ohio officials told us that they  consider the advantages and disadvantages of resolving a violation  through negotiated consent agreement before referring the case to the  state’s attorney general to pursue civil penalties.
Other tools available to selected state and EPA-managed programs to  enforce program requirements may include the following:  Well shut-in. Some programs we reviewed may temporarily close down a  well until a violation is resolved. For example, Oklahoma officials can  shut-in a well if an operator is out of compliance with its financial  assurance requirements.
Pipeline severance. A program may also have the authority to sever an  operator’s access to oil and gas pipelines. For example, if an operator  uses a well that has been shut-in for violations, Texas may take the  further step of refusing to renew certain documents the operator needs to  do business in the state. If the disposal well operator also has production  wells in the state, this would prevent the operator from producing oil and  gas. According to EPA officials, this can be an effective enforcement tool  given that a company’s income is generated on the production side.
Permit revocation or temporary suspension. A program may have the  authority to revoke or temporarily suspend existing UIC permits, thereby  making it illegal for an operator to continue injecting into a well or group of  wells covered under the permit. For example, North Dakota may revoke  permits after notice and hearing if the well operator fails to comply with  the terms and conditions of its permit or any applicable rule or law, and  the state may suspend permits for good cause.
Moratorium on new or renewed permits. A program may be able to  refuse to issue new permits to an operator with a history of  noncompliance. For example, Oklahoma program officials can seek an  order denying a permit to an operator with an unsatisfactory compliance  history.
Bond forfeiture. A program may require well operators to post a bond to  ensure compliance with requirements applicable to the well. If an operator  fails to comply with these terms, a state may be able to seize the bond to  cover the costs of returning the well to compliance. For example, if Ohio  officials find that an operator has failed to comply with, among other  things, certain orders, regulations, or its permit, it may declare the  operator’s bond to be forfeit.
section_title: Timely and Appropriate Enforcement of State and EPA Requirements
paragraphs: Under the Safe Drinking Water Act, EPA must enforce state requirements  if violations have not been enforced by states in a timely and appropriate  manner. EPA’s Strategy sets forth standards for timely and appropriate  enforcement action in response to significant violations. Specifically, state  and EPA-managed programs are expected to resolve significant  violations within 90 days of discovering the violation or take a formal  enforcement action against the well operator. According to the Strategy, a  formal enforcement action, among other things, is legally enforceable,  explicitly requires the well owner to take corrective action, and specifies a  timetable for completion. When EPA becomes aware that an operator is  violating a state program requirement, a provision in the act requires EPA  to notify the state and, if the state does not take appropriate action within  30 days, to intervene by issuing an administrative order or commencing a  civil action. Similarly, EPA regions should take timely and appropriate  enforcement actions in states with EPA-managed programs.
State and EPA-managed programs are required to submit periodic  reports to EPA headquarters with information on enforcement actions  taken against well operators. One of the required reports is to provide  quarterly information on individual significant violations by well operators  that have not been resolved and that may have the potential to threaten  underground sources of drinking water. EPA uses the 7520-4 form to  collect this information. According to EPA’s 1987 Reporting  Requirements—Underground Injection Control Program Guidance  (Program Reporting), EPA uses the 7520-4 forms to evaluate the  timeliness and appropriateness of a state or EPA-managed program’s  enforcement response.
Our analysis of a sample of significant violations from selected state and  EPA-managed programs found that a subset of significant violations that  should have been reported on the 7520-4 forms were not reported, and  that the forms contained incomplete and inconsistent information.  Specifically, we sampled 134 notices of violation from selected state and  EPA-managed programs, of which 93 included significant violations (see  app. VI for a list of the enforcement cases we reviewed in the seven state  and EPA-managed programs). Table 7 shows the number and types of  violation notices we assessed from our sample of 134 notices of violation,  for fiscal years 2008 through 2013, for each state and EPA-managed  program in our review.
To establish which of those 93 violations should have been reported on  the 7520-4 form, we used EPA’s 1987 Strategy and 1986 Program  Reporting guidance, which call for state and EPA-managed programs to  report information on significant violations that were not resolved within  90 days of discovery and also did not have a formal enforcement action  taken against the well operator. To determine the 90-day allowable time  frame, we calculated the number of days between the date the operator  was notified of the violation and the date a formal enforcement action was  taken, and found that 29 significant violations had gone longer than 90  days without formal enforcement action and should have been reported  on the 7520-4 form (see table 8). We then compared the results of our  calculation to 7520-4 forms we obtained from EPA for fiscal years 2008  through 2013, and found that 7 of the 29 were reported by the respective  program.
section_title: Appendix VI: Information on Sample Enforcement Cases from Selected State and EPA-Managed Programs
subsections: section_title: State KY
section_title: State ND
section_title: State OK
section_title: State OK
section_title: State TX
paragraphs: Legend: EPA = Environmental Protection Agency; CO = Colorado; KY = Kentucky; ND = North Dakota; OH = Ohio; OK = Oklahoma; PA = Pennsylvania; TX = Texas; N/A = not applicable, Admin =  administrative order; Consent = consent agreement; Civil = civil judicial action; Criminal = criminal judicial action.
section_title: Appendix VIII: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact:
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Susan Iott (Assistant Director),  Mark Braza, Antoinette Capaccio, John Delicath, John Hocker, Rich  Johnson, Micah McMillan, Maria Stattel, Kiki Theodoropoulos and  Breanna Trexler made key contributions to this report.