EPA Issues First Federal Regulations on Fracking | Practical Law

EPA Issues First Federal Regulations on Fracking | Practical Law

The Environmental Protection Agency (EPA) issued final rules enacting the first Federal regulations on hydraulic fracturing (fracking).

EPA Issues First Federal Regulations on Fracking

Practical Law Legal Update 1-519-0688 (Approx. 3 pages)

EPA Issues First Federal Regulations on Fracking

by PLC Finance
The Environmental Protection Agency (EPA) issued final rules enacting the first Federal regulations on hydraulic fracturing (fracking).
On April 17, 2012, the Environmental Protection Agency (EPA) issued final rules enacting the first federal regulations on hydraulic fracturing (fracking). Fracking is a process in which fluid consisting mainly of water, chemicals and sand is pumped into a well at high pressures. This process widens or creates fractures in rock formations allowing for the extraction of natural gas.
The new rules, which are being implemented under the Clean Air Act, are designed to limit the release of volatile organic compound (VOCs), including smog-forming chemicals and other toxic substances, that can escape into the air during the fracking process. The EPA has identified this release of toxins as one of the largest sources of air pollution stemming from the energy industry.
The new rules require companies to trap the "flowback" of liquid and gas entering the air during the fracking process using what the EPA refers to as "green completions," pollution control equipment that separates and captures toxic substances.
To address concerns raised in comments received after the issuance of the proposed rules related to the availability of equipment and operators to conduct green completions in time to meet compliance dates in the proposed rule, the EPA has established a phased-in approach:
  • During the first phase, which lasts until January 1, 2015, the industry must begin to reduce VOC emissions either through:
    • flaring, using a completion combustion device (unless combustion is a safety hazard or is prohibited by state or local regulations); or
    • capturing gas using green completions with a completion combustion device (unless combustion is a safety hazard or is prohibited by state or local regulations).
  • Beginning on January 1, 2015, oil and gas well operators must capture the gas using pollution control equipment that separates and captures toxic content (green completions). The operators must then make the captured gas available for use or sale, which they can do through the use of green completions. However, even after January 1, 2015, green completions will not be required for:
    • hydraulically fractured low-pressure wells, where natural gas cannot be routed to the gathering line. In these instances, operators of the wells must reduce emissions using combustion during the well-completion process, unless combustion is a safety hazard or is prohibited by state or local regulations; and
    • wildcat wells (wells that are outside known fields or the first well drilled in an oil or gas field where there is no other oil and gas production).
When fully implemented, the rule will affect the nearly 13,000 wells fractured or refractured each year. Under the proposed rules, issued in 2011, implementing all aspects of the rule would have been immediate.
The EPA is currently reviewing several other rules to regulate fracking, including the use of diesel fuels. Given the transformative effect fracking has had on the oil and gas industry, these rules will need to balance environmental concerns with US energy policy and the US's desire to increase domestic production of oil and gas.
The EPA has released a fact sheet and summary of key changes on the final rules.
For more information on fracking, see Practice Note, Understanding Hydraulic Fracturing: Issues, Challenges and Regulatory Regime.