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Thursday, November 7, 2013

Hydraulic Fracturing: Selected Legal Issues

Adam Vann
Legislative Attorney

Brandon J. Murrill
Legislative Attorney

Mary Tiemann
Specialist in Environmental Policy

Hydraulic fracturing is a technique used to recover oil and natural gas from underground low permeability rock formations. Its use along with horizontal drilling has been responsible for an increase in estimated U.S. oil and natural gas reserves. Hydraulic fracturing and related oil and gas production activities have been controversial because of their potential effects on public health and the environment. Several environmental statutes have implications for the regulation of hydraulic fracturing by the federal government and states.

An amendment to the Safe Drinking Water Act (SDWA) passed as a part of the Energy Policy Act of 2005 (EPAct 2005) clarified that the Underground Injection Control (UIC) requirements found in the SDWA do not apply to hydraulic fracturing, although the exclusion does not extend to the use of diesel fuel in hydraulic fracturing operations. The underground injection of wastewater generated during oil and gas production (including hydraulic fracturing) does require a UIC permit under the SDWA, as do injections for enhanced oil and gas recovery operations. Under the Clean Water Act (CWA), parties seeking to discharge produced water may have to apply for a permit under the National Pollutant Discharge Elimination System. Under the Clean Air Act (CAA), the Environmental Protection Agency (EPA) has issued new rules covering emissions of volatile organic compounds from hydraulic fracturing operations.

Provisions of the Resource Conservation and Recovery Act (RCRA) exempt drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal energy from regulation as hazardous wastes under Subtitle C of RCRA. However, these wastes are subject to other federal laws (such as the SDWA and the CWA), as well as to state requirements. Facility owners and operators and other potentially responsible parties could potentially face liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) for cleanup costs, natural resource damages, and the costs of federal public health studies, if hydraulic fracturing results in the release of hazardous substances at or under the surface in a manner that may endanger public health or the environment.

The National Environmental Policy Act (NEPA) requires federal agencies to consider the environmental impacts of proposed federal actions before proceeding with them. An agency would be obligated to consider the impacts of an action that involves hydraulic fracturing if that action takes place on federal lands or when there is otherwise a sufficient federal nexus to hydraulic fracturing.

Under the Emergency Planning and Community Right-to-Know Act (EPCRA), owners or operators of facilities where certain hazardous hydraulic fracturing chemicals are present above certain thresholds may have to comply with emergency planning requirements; emergency release notification obligations; and hazardous chemical storage reporting requirements. In August 2011, environmental groups petitioned EPA to promulgate rules under Section 4 and Section 8 of the Toxic Substances Control Act (TSCA) for chemical substances and mixtures used in oil and gas exploration or production.

Hydraulic fracturing tort litigation has raised questions about causation; whether hydraulic fracturing is an abnormally dangerous activity; and whether hydraulic fracturing may constitute a subsurface trespass to land.

Date of Report: October 22, 2013
Number of Pages: 37
Order Number: R43152
Price: $29.95

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