Featured Expert Column – Environmental Law and Policy
by Samuel B. Boxerman, Sidley Austin LLP with Ben Tannen, Sidley Austin LLP
As I have written previously in a Washington Legal Foundation Legal Backgrounder, the federal government is extending its regulatory reach over hydraulic fracturing. An example of that trend is the recent Advance Notice of Proposed Rulemaking (“ANPR”) by the U.S. Environmental Protection Agency (“EPA”) seeking comment through an advanced notice of proposed rulemaking (“ANPR”) on whether, and if so how, to impose a federal rule mandating the disclosure of the contents of chemical substances and mixtures used in hydraulic fracturing.
Currently, states where hydraulic fracturing techniques are used have already considered these questions and imposed a range of disclosure requirements. Moreover, to facilitate disclosure, state regulators and industry, working together through the Ground Water Protection Council and Interstate Oil and Gas Compact Commission, have developed a voluntary national hydraulic fracturing chemical registry accessible to the public online—FracFocus.org. Although established as a voluntary disclosure portal, to date, FracFocus has information on over 72,000 well sites and ten states have issued regulations requiring operators to use FracFocus as the means of official state chemical disclosure.
To the agency’s credit, EPA’s notice seeks comment on voluntary disclosure options, as well as using the FracFocus database as the repository for information it collects. ANPR at 1, 19. However, EPA is also considering imposing mandatory federal disclosure rules, including mandates under Section 8 of the Toxic Substances Control Act (TSCA).EPA focuses the ANPR on three areas. First, EPA is seeking to identify which entities should be subject to disclosure requirements. According to EPA, the industry contains a variety of companies that could be subject to disclosure, including “chemical manufacturers, chemical suppliers…service providers mixing chemicals on site to create the hydraulic fracturing fluids, and service providers responsible for injecting the hydraulic fracturing fluid into the well….” Id. at 12. EPA asserts that TSCA Section 8(a) would authorize a mandatory disclosure rule, as it enables EPA to issue rules requiring “each person…who manufactures or processes…a chemical substance” to “maintain such records” and submit information to the EPA “as the Administrator may reasonably require” and manufacturers and processors of mixtures to maintain records and submit information “to the extent the Administrator determines…is necessary for the effective enforcement” of TSCA. 15 U.S.C. § 2607(a); ANPR at 6. The agency is also asking for comment on whether, under a mandatory scheme, all of these companies should be required to report or whether some should only “be encouraged to report voluntarily.” ANPR at 12.
Second, EPA is asking for comment on the scope of the information to be disclosed. EPA is considering requiring manufacturers and processors to report information falling into nine broad categories, ranging from “hydraulic fracturing fluid composition” to “all existing data concerning the human and environmental health effects of the chemical substance.” Id. at 14-15. The agency noted that it could “aggregate” this information to “provide a national list of the chemical substances and mixtures used in hydraulic fracturing, providing the Agency with the ability to determine which chemicals are used most frequently” and also use it to “conduct research to better understand” chemicals which had not previously been heavily studied. Id. at 14.
A third area on which EPA has focused in the ANPR is the extent of disclosure of health and safety studies to EPA. The agency asserts that it could require manufacturers, processors, and distributors of hydraulic fracturing chemicals and mixtures to submit such studies under Section 8(d) of TSCA, or that it could voluntarily encourage such disclosure. Id. at 18-19. TSCA Section 8(d) permits the agency to require the submission of “lists of health and safety studies” on chemicals, as well as copies of such studies, which manufacturers, processors, and distributers of such chemicals have conducted, are aware of, or which are “reasonably ascertainable” by them. 15 U.S.C. § 2607(d); ANPR at 7. EPA is requesting comments on the entities that should be covered by such requirements, if imposed, as well as whether a rule should address only chemicals which “are not well-characterized.” ANPR at 19.
EPA has issued this ANPR in response to an August 4, 2011 petition for rulemaking filed by Earthjustice and 114 other groups. Id. at 4. Under the petition, the groups asked EPA to adopt a rule under Section 4 of TSCA that would require manufacturers and processors of all chemicals used in oil and gas exploration and production to conduct toxicity testing on all such chemicals. The petitioners also sought a rule under Section 8 of TSCA “requiring submission of all existing health and safety studies related to” oil and gas exploration and production.
In November 2011, EPA rejected the TSCA Section 4 request, finding petitioners had failed to show such a rule was “‘necessary,’” but granted in part and denied in part the TSCA Section 8 requests, limiting the scope to chemicals used in hydraulic fracturing.* In the ANPR, in addition to relying on TSCA Section 8, EPA also lists the Pollution Prevention Act, 42 U.S.C. §13101 et seq, as a possible basis for the ANPR’s suggested voluntary programs. ANPR at 7. Among other provisions, the PPA created an annual award program for companies which “operate outstanding or innovative source reduction programs.” Id. at 8.
Since EPA is still in the ANPR stage, the agency has not yet determined its path forward. By seeking comment on a range of alternatives, EPA has left open the door for a voluntary disclosure program or one that works cooperatively with existing state programs. Id. at 1, 19. Moreover, at least at this juncture, EPA does not appear to be seeking to regulate the nature of the chemicals used in the hydraulic fracturing process itself. In Section IV.H of the ANPR, entitled “Safer Chemicals and Transparency,” id. at 20, EPA describes “incentives and recognition programs” to “support the development and use of safer chemicals,” and makes no mention of substantive regulation. Ibid.
Interested stakeholders should participate in the comment process. EPA will be accepting comments for 90 days (through mid-August) once the ANPR is published in the Federal Register.
*ANPR at 4. EPA later explained its decision in a 2013 Federal Register notice, noting it was “not committing to a specific rulemaking outcome.” Chemical Substances and Mixtures Used in Oil and Gas Exploration or Production; TSCA Section 21 Petition; Reasons for Agency Response, 78 Fed. Reg. 41768, 41768 (July 11, 2013).