The thirst of fracking: regulating to protect the linchpin of the natural gas boom.

• Author: Negro, Sorell E.
• Position: Fractured Communities: Hydraulic Fracturing and the Law in New York State

The natural gas boom sweeping the United States has many enthusiastic about the production of domestic energy and the accompanying economic opportunities, but often taken for granted is another valuable resource that is essential to the extraction process: water. (1) The natural gas boom was ignited by the development of high-volume hydraulic fracturing (fracking) with horizontal drilling, which has enabled oil and gas companies to extract oil and gas from a significantly larger underground area through a single well. (2) The fracking process, however, requires huge amounts of water, in essence trading one resource for another. (3)

In order to break up the shale and release the oil or gas, millions of gallons of water are mixed with sand and chemicals and injected into the well at high pressure. (4) Wells are drilled thousands of feet deep and then angled horizontally to access the shale, potentially stretching for thousands of feet. (5) The discovery of this new drilling technology in the last decade has opened up massive reserves of shale to oil and gas development in the United States. (6) Fracking was first employed in the Texas portion of the Barnett Shale in the 1990s, and came to eastern states in 2003 when the first horizontal well tapped the Marcellus Shale in Pennsylvania. (7) The boom ensued. (8) In August 2011, the Secretary of Energy Advisory Board reported that, "Owing to breakthroughs in technology, production from shale formations has gone from a negligible amount just a few years ago to being almost 30 percent of total U.S. natural gas production." (9) Even with low natural gas prices, some state and local economies are still booming from natural gas operations. (10) Certain communities across the U.S. that host oil and natural gas activities are seeing increases in jobs, tax revenues, incomes, economic activity, housing prices, and even zero vacancy rates. (11) Such economic growth is in stark contrast to much of the rest of the country, as it wades through a lingering recession. (12)

Despite the booms and often-cited economic potential for gas drilling in the United States, a critical, inescapable fact is that significant amounts of water are needed for drilling operations. (13) Given the two to five million gallons of water used to frack a horizontal shale gas well and extract gas, the natural gas industry's expansion throughout the U.S. has raised water supply concerns. (14) The Colorado Oil and Gas Conservation Commission (COGCC) estimates that almost 17,800 acre-feet of water (one acre-foot equals about 326,000 gallons) will be used for fracking in Colorado in 2014 and almost 19,000 acre-feet will be used in 2015. (15) The New York Department of Environmental Conservation's Revised Draft Supplemental Generic Environmental Impact Statement (RDSGEIS) estimates that "average water use per well in New York could be 3.6 million gallons." (16) Such large-scale water withdrawals for fracking could impact water supplies, and other industries and uses as well as ecosystems may find themselves competing with the gas industry. (17)

Much of the water used in fracking remains trapped deep underground. (18) The U.S. Environmental Protection Agency (EPA) estimates that anywhere from 15% to 80% of the water is pushed back up to the surface. (19) This water, called "flowback," may contain elements of the chemicals added to the fracking fluid or hazardous chemicals from below the earth's surface. (20) This water cannot be adequately treated by typical municipal water treatment plants, so it must either be stored--such as by being injected into an underground disposal well--or transported to a facility capable of processing chemical wastes. (21) Thus, the fracking process raises issues of water quantity and water quality, presenting regulators with complex challenges regarding how to properly and adequately regulate fracking in order to preserve water supplies and protect the quality of those supplies. (22)

This article examines water resources concerns raised by natural gas development and regulatory approaches to addressing those issues. Part I of this article provides a brief overview of how the oil and gas industry is regulated. Part II identifies water supply and use issues, such as sources of the water used for fracking and impacts on competing uses, and specific regulatory approaches to address those concerns. Part III discusses water quality concerns, including disclosure of the chemicals used, setback requirements, and disposing or reusing flowback, and gives examples of regulations that address these issues. Finally, Part IV identifies key regulatory challenges for adequately regulating the oil and gas industry in light of the industry's complex and quickly changing technology. This part further examines the appropriate regulatory scale for addressing these water resources concerns, as well as the difficulty of implementing and maintaining regulations that effectively regulate an industry that is rapidly changing--with regard to the best available technology for drilling and extracting the resource, and the technology that can most effectively protect water resources, including treating flowback.

1. REGULATION OF FRACKING IN A NUTSHELL

   The regulation of the oil and gas industry has traditionally been left to the states, and fracking itself is currently exempt from the principal federal environmental laws. (23) Notably, fracking is exempt from the Safe Drinking Water Act's underground injection control program, unless diesel fuel is used. (24) The U.S. Bureau of Land Management (BLM) regulates the permitting of fracking on federal lands, and is currently in the process of proposing regulations for gas drilling activities. (25) Otherwise, fracking is generally regulated at the state level. (26) States typically implement regulations of the oil and gas activities, including standards and the permitting process for well construction and regulation of environmental impacts. (27)

   The EPA, however, has been revisiting its role. (28) It is currently investigating the impacts of fracking on drinking water. (29) In addition, legislation has been proposed in recent years to revise the exemptions of fracking from federal regulation. (30) The Fracturing Responsibility and Awareness of Chemicals Act, the so-called "FRAC Act," was re-proposed in 2013, (31) which would require operators to disclose the chemicals used in fracking and would allow the EPA to regulate fracking under the Safe Drinking Water Act. (32)

   While similar FRAC Act bills have not gone very far in the past, (33) should the federal government take a larger role in regulating fracking, the natural gas operations in the states that currently support natural gas activities, and the regulatory agencies of those states, would undergo significant change. (34)

   State law determines the extent to which a local government may enact regulations that impact natural gas development. (35) States vary with regard to how much authority is granted to local governments to enact regulations that may affect the oil and gas industry. (36) Some states grant significant authority to municipalities. (37) Often states authorize municipalities to enact general land use ordinances that specify where certain industrial development may occur, such as high-impact industry, (38) or ordinances addressing nuisances, public safety, or traffic concerns, (39) but will less likely allow local governments to determine how the industry can operate or what environmental or technical standards must be applied to the industry. (40) For example, the Railroad Commission of Texas regulates the oil and gas industry, including production and delivery of the natural resources, but municipalities in Texas may regulate where drilling occurs within their borders through such tools as zoning ordinances and land use permitting requirements. (41) For a more specific example, Coppell, Texas, allows drilling only in areas zoned "Light Industrial" or "Agricultural," and operators must obtain a permit. (42)

   Some states are facing these questions for the first time, and it might be unclear in a given state how much authority municipalities have in this area. Pennsylvania has been in a notorious state of flux in this respect. In 2012, the Pennsylvania General Assembly passed Act 13, which was intended to "preempt]] and supersede!] the local regulation of oil and gas operations regulated by the [state's] environmental acts...." (43) A provision of Act 13, section 3304, required municipalities to allow natural gas development in all zones, including residential, (44) and another provision, section 3125(b)(4), conferred significant authority on the state Department of Environmental Protection to waive setback requirements for wells. (45) In 2013, these provisions were overturned by a trial court in Robinson Township v. Commonwealth of Pennsylvania (46) on constitutional grounds, and this decision was appealed to state's Supreme Court. The lower court held that the provision requiring fracking in all land use zones violated the substantive due process provision of the state's constitution, which authorizes municipalities to regulate to protect the public safety and welfare. (47) By forcing municipalities to allow for drilling in all zones without limitation, the court found that the statute forced irrational zoning. (48) In addition, the provision allowing the state to waive setback requirements was struck down because the statute provided insufficient guidance as to when setbacks could be waived, in violation of the state's non-delegation doctrine. (49)

   On appeal, the Pennsylvania Supreme Court held that the provisions of Act 13 discussed above are unconstitutional because they violate the Environmental Rights Amendment of the State Constitution, article I, section 27, which obligates the Commonwealth to "conserve and maintain" the public natural resources, including clean air and water...