sboxermanFeatured Expert Column – Environmental Law and Policy

by Samuel B. Boxerman, Sidley Austin LLP

On February 12, 2014 the Environmental Protection Agency (EPA) published a notice that the agency was releasing an interpretive memorandum and technical recommendations for the use of “diesel fuels” in hydraulic fracturing.  N1 The guidance is another step in the direction of increased EPA regulation of oil and gas development, a regulatory area long the province of state governments.

In the Energy Policy Act of 2005, Congress had largely exempted hydraulic fracturing from the Underground Injection Control (UIC) program of the federal Safe Drinking Water Act (“SDWA”).  EPA did retain some authority to regulate, however, as Congress amended the SDWA to provide that “underground injection … means the subsurface emplacement of fluids by well injection;” but excludes “the underground injection of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations related to oil, gas, or geothermal production activities.” (emphasis added). N2

EPA’s “Diesel Guidance” N3 has been in the works at the agency since well before it was first proposed in May 2012.  N4  EPA has claimed, but not exercised, a right to regulate hydraulic fracturing fluids that included diesel fuels, in part because as industry pointed out, Congress did not define the phrase “diesel fuels” in the SDWA.  EPA first sought to pursue this authority by quietly publishing a change in policy on its website, but that effort was challenged and the agency withdrew that posting.  Instead, EPA proposed the draft guidance and allowed public comment. N5 The documents were before the Office of Management and Budget (OMB) for many months, before OMB released them shortly after President Obama’s State of the Union.

The Diesel Guidance consists of three separate documents: EPA’s “Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels: Underground Injection Control Program Guidance #84 (Feb. 2014) (“EPA Guidance #84), a Memorandum to the agency’s Regional Administrators and State/Tribal UIC program directors, N6 and a response to public comments. N7  In these documents, EPA essentially does three things: