Hydraulic fracturing is a technique developed initially to
stimulate oil production from wells in declining oil reservoirs.
More recently, it has been used to initiate oil and gas production
in unconventional (i.e., low-permeability) reservoirs where these
resources were previously inaccessible. This process now is used in
more than 90% of new oil and gas production wells. Hydraulic
fracturing is done after a well is drilled and involves injecting
large volumes of water, sand (or other propping agent), and
specialized chemicals under enough pressure to fracture the
formations holding the oil or gas. The sand or other proppant holds
the fractures open to allow the oil or gas to flow freely out of
the formation and into a production well. Its application, along
with horizontal drilling, for production of natural gas (methane)
from coal beds, tight gas sands, and, more recently, from
unconventional shale formations, has resulted in the marked
expansion of estimated U.S. natural gas reserves in recent years.
Similarly, hydraulic fracturing is enabling the development of
unconventional domestic oil resources, such as the Bakken Formation
in North Dakota and Montana. However, the rapidly increasing and
geographically expanding use of fracturing, along with a growing
number of citizen complaints and state investigations of well water
contamination attributed to this practice, has led to calls for
greater state and/or federal environmental regulation and oversight
of this activity. Historically, the Environmental Protection Agency
(EPA) had not regulated the underground injection of fluids for
hydraulic fracturing of oil or gas production wells. In 1997, the
U.S. Court of Appeals for the 11th Circuit ruled that fracturing
for coalbed methane (CBM) production in Alabama constituted
underground injection and must be regulated under the Safe Drinking
Water Act (SDWA). This ruling led EPA to study the risk that
hydraulic fracturing for CBM production might pose to drinking
water sources. In 2004, EPA reported that the risk was small,
except where diesel was used, and that regulation was not needed.
However, to address regulatory uncertainty the ruling created, the
Energy Policy Act of 2005 (EPAct 2005) revised the SDWA term
"underground injection" to explicitly exclude the injection of
fluids and propping agents (except diesel fuel) used for hydraulic
fracturing purposes. Consequently, EPA currently lacks authority
under the SDWA to regulate hydraulic fracturing, except where
diesel fuel is used. However, as the use of this process has grown,
some in Congress would like to revisit this statutory exclusion.
Several relevant bills are pending. H.R. 1084 and S. 587 would
repeal the exemption for hydraulic fracturing operations
established in EPAct 2005, and amend the term "underground
injection" to include explicitly the injection of fluids used in
hydraulic fracturing operations, thus authorizing EPA to regulate
this process under the SDWA. EPA's FY2010 appropriations act urged
the agency to study the relationship between hydraulic fracturing
and drinking water quality. The interim report, expected in 2012,
may help inform Congress on whether federal action is needed.
Meanwhile, numerous states are reviewing or have revised their oil
and gas rules to address the increased use of hydraulic fracturing.
This report reviews past and proposed treatment of hydraulic
fracturing under the SDWA, the principal federal statute for
regulating the underground injection of fluids to protect
groundwater sources of drinking water. It reviews current SDWA
provisions for regulating underground injection activities, and
discusses some possible implications of, and issues associated
with, enactment of legislation authorizing EPA to regulate
hydraulic fracturing under this statute.
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