Hydraulic fracturing and water management in the Great Lakes.

Author:Schroeck, Nicholas
Position::The Law and Policy of Hydraulic Fracturing: Addressing the Issues of the Natural Gas Boom
 
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CONTENTS INTRODUCTION I. REGULATION OF HYDRAULIC FRACTURING IN THE GREAT LAKES BASIN A. Regulation of Hydraulic Fracturing in the United States 1. Federal Regulation 2. State Regulation: Michigan B. Regulation of Hydraulic Fracturing in Canada 1. Federal Regulation 2. Provincial Regulation: Ontario II. REGIONAL PROTECTION OF GREAT LAKES FRESHWATER A. The Regulation of Water Withdrawals in the Agreement and the Compact B. Applying the Great Lakes Compact to Protect the Great Lakes from the Adverse Environmental Effects of Fracking C. Is It Time to Promulgate New Rules Under the Agreement and Compact? CONCLUSION INTRODUCTION

The Great Lakes are a truly astounding natural resource. The Lakes are the largest freshwater system on earth, bordering eight American states and two Canadian provinces, and holding approximately 21 percent of the world's freshwater supply. (1) About 10 percent of the United States population and 30 percent of the Canadian population live in the Great, Lakes Basin, and millions of people depend upon the Lakes for drinking water supply. (2) The Great Lakes also support a world-class fishery, with over 250 species of fish, as well as robust tourism, transportation, and agriculture industries within the Great Lakes region. (3) Many endangered and threatened animal species make their homes in the unique ecological environment the Great Lakes provide. (4)

In order to better protect and manage this massive and vastly important water resource, the eight American states (5) and two Canadian provinces (6) with jurisdiction over the Great Lakes entered into the Great Lakes-St. Lawrence River Basin Sustainable Water Resources Agreement in 2005. (7) The Agreement is between the eight Great Lakes States and Ontario and Quebec, and it was implemented in Ontario and Quebec through Provincial laws. (8) In the United States, the companion Great Lakes-St. Lawrence River Basin Water Resources Compact passed through the legislatures of each state, then the United States Congress, and was signed into law by President Bush in 2008. (9) The Agreement and the Compact protect the Great Lakes in three important ways. First, all member parties must manage their Great Lakes water withdrawals under a common "Decision-Making Standard," which establishes baseline practices for conservation and sustainable use. (10) Second, the Agreement and Compact ban most new and increased diversions of water out of the Great Lakes basin. (11) Finally, the Agreement and Compact require that member parties create and implement water efficiency and conservation programs and report data oil these programs by specific deadlines. (12)

But despite the extensive ecological and economic importance of the Great Lakes, and the formidable protection provided by the Agreement and the Compact, the integrity of this vast water resource is threatened by the practice of high-volume, slick-water hydraulic fracturing (or fracking) in the Great Lakes basin. This technique, used to "stimulate" oil and natural gas wells, allowing for increased production, requires the use of millions of gallons of water and has the potential to cause significant water depletion and aquifer contamination. (13) This Article will look at new ways of utilizing the Agreement and the Compact to protect the Great Lakes Basin from the environmental hazards posed by fracking.

Part I provides a brief overview of hydraulic fracturing regulation in United States and Canada, with a focus on the state of Michigan and the province of Ontario. Part II focuses on the ban on new and increased diversions of Great Lakes water in the Agreement and the Compact, and how this ban might be used to protect the Great Lakes from the potentially hazardous practice of fracking. Part II also proposes the promulgation and implementation of new rules and regulations under the Compact by the Great Lakes-St. Lawrence River Basin Water Resources Council, which would promote sustainable energy development in the Great Lakes Region by giving special attention to the protection and conservation of Great Lakes water resources. Finally, this Article concludes that while both the Great Lakes states and the Canadian provinces have made a start at regulating hydraulic fracturing, more work needs to be done in order to create a region-wide, comprehensive regulatory system that will ensure the environmental integrity of Great Lakes water for years to come.

  1. REGULATION OF HYDRAULIC FRACTURING IN THE GREAT LAKES BASIN

    1. Regulation of Hydraulic Fracturing in the United States

      1. Federal Regulation

        In the United States, the process of hydraulic fracturing is not subject to federal oversight. In fact, hydraulic fracturing has so far managed to evade the strictures of one of the country's most rigorous and comprehensive water protection laws the Safe Drinking Water Act (SDWA).

        The United States Congress passed the SDWA in 1974 to ensure safe drinking water for the American public. (14) Part C of the SDWA requires that the Administrator of the United States Environmental Protection Agency establish underground injection control regulations in order to protect underground sources of drinking water from contamination by underground injection of wastes. (15) Individual states may acquire primary enforcement responsibility for these regulations by adopting and implementing an underground injection control program in compliance with EPA requirements. (16) In the absence of an approved state program, the EPA will implement a program for that state. (17)

        Hydraulic fracturing is conspicuously excluded from regulation under the SDWA. (18) This exclusion was the product of almost a decade of debate between environmental advocacy groups, the oil and gas industries, and the EPA, (19) and is embodied in the Energy and Policy Act of 2005 (EPAct). (20) The EPAct amended the SDWA to exclude hydraulic fracturing from the definition of "underground injection" as provided in [section] 30011 by stating that, "underground injection" means only "the subsurface emplacement of fluids by well injection," excluding "(i) the underground injection of natural gas for purposes of storage; and (ii) the underground injection of fluids or propping agents ... pursuant to hydraulic fracturing operations." (21)

        Subsequent attempts by members of Congress to remove this "loophole" for fracking created by the EPAct have been unsuccessful, (22) and today the United States is still without any federal directive regarding the hydraulic fracturing process. Government administration of fracking has thus been left to each individual state and has resulted in a widely varying patchwork of regulatory programs across the country.

      2. State Regulation: Michigan

        In 2010, use of hydraulic fracturing in the natural gas recovery process began to garner much attention in Michigan due to the discovery of significant gas reserves in the Utica and Collingwood shales in the northern Lower Peninsula. Since then, this discovery has led to the sale-at-auction of approximately 147,000 acres (23) of state land for oil and gas development and the permitting and construction of approximately 209 new natural gas wells. (24) Besides motivating industry and investment, this natural gas "boom" has also triggered a strong opposition movement made up of Michigan citizens and lawmakers who are concerned about the health and environmental consequences associated with fracking. (25) Tension between the natural gas industry and these various advocacy groups has made the utilization of hydraulic fracturing a hot-button issue in Michigan, leading to much discussion about the adequacy of the state's existing oil and gas regulations.

        In Michigan, the hotly contested regulation of natural gas wells is the responsibility of two administrative agencies: the Department of Environmental Quality (DEQ), which primarily oversees the well permitting and construction processes under part 615 of the Michigan Natural Resources and Environmental Protection Act (NREPA), (26) and the Public Service Commission (PSC), which controls well production under chapter 460 of the Michigan Compiled Laws. (27) The natural gas recovery process begins with an application for a permit to drill filed with the DEQ. The DEQ has a sixty-day period in which to review and either grant or deny the application. (28) If the application is granted, well construction may begin, according to DEQ regulations on spacing and location of wells, and drilling and well construction. (29) After construction is complete, the newly drilled natural gas well must undergo extensive testing by the DEQ, and the well owner must obtain a Standard Well Connection Permit and Allowable Withdrawal Order from the PSC. (30) When all three of these requirements have been met, the new well may finally begin production.

        Importantly, recent amendments to the above-mentioned DEQ fracking rules promulgated under part 615 have changed the regulatory requirements for "all ... gas wells that utilize high volume hydraulic fracture completion technology." (31) Specifically, the new regulations impose additional reporting, (32) completion, (33) and permitting (34) requirements for these select natural gas wells. While these amendments have made significant strides toward a more comprehensive hydraulic fracturing regulatory system for Michigan, further change is still needed.

    2. Regulation of Hydraulic Fracturing in Canada

      1. Federal Regulation

        In Canada, the federal government has very little control over hydraulic fracturing regulation. In fact, most of the power to regulate oil and gas activities is explicitly delegated to the individual Canadian provinces by the country's Constitution, which prohibits the Canadian parliament from regulating "subjects by this Act assigned exclusively to the Legislatures of the Provinces." (35) One such subject is the regulation of "non-renewable natural resources," which includes oil and gas resources. (36) But this broad...

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