Federal Regulation of Fracking Has Arrived

EPA granted Earthjustice’s section 8(a) and 8(d) requests. The section 8(a) component will ultimately require chemical manufacturers and processors to submit broad and detailed reports on all aspects of chemical manufacture and use, including chemical names, molecular structure, category of use, volume, by-products, existing environmental and health effects data, disposal practices and worker exposure. The section 8(d) component will require manufacturers and processors to submit all existing health and safety studies known to, or initiated by, them for any substance or mixture. Both section 8 rules will apply only to chemicals and mixtures used in the fracking process, and will not apply to the broader suite of chemicals used across oil and gas exploration and production (E&P) as Earthjustice had requested.

Notably, the Agency rejected the more onerous section 4 request, which would have required the development of toxicity test data. EPA found that Earthjustice had not set forth facts sufficient to conclude that a section 4 request was “necessary to issue”—meaning Earthjustice did not establish that testing was needed because oil and gas E&P chemicals present an unreasonable risk of harm through substantial exposure.

The TSCA rulemaking will commence at the same time EPA is conducting a comprehensive fracking study. Not only is the TSCA petition likely to be duplicative of this study, but most key oil and gas states have adopted, or are in the process of adopting, heightened chemical disclosure laws-calling into question the need for a federal corollary. Thus far, the states have maintained needed protections for legitimate trade secrets and confidential business information (CBI). While TSCA section 14(b) protects CBI, in the wake of EPA’s general commitment to strengthening its chemical management program, it is questionable how much deference EPA will grant to CBI claims for fracking chemicals and formulas.

EPA’s new TSCA rulemaking presents a significant new step in the Agency's efforts to regulate the oil and gas industry. The information gathered under section 8 can be extensive (i.e., environmental and health effects, worker exposure, disposal practices for thousands of chemicals), and is often used to inform, and justify additional regulatory oversight across, virtually all of EPA's programs. After having just announced its CWA rulemaking to develop ELG’s for the shale and coal-bed-methane sectors, and guidance on the use of diesel in fracking fluid anticipated in January, there should be little doubt that EPA is committed to wrestling regulatory oversight over the oil and gas industry from the states. For a compelling discussion of the very real economic (and other) implications of EPA's various efforts see this article from the Bismarck Tribune, which ran on Nov. 27, 2012.

Eric Waeckerlin is an attorney in the Washington, DC office of Kelley Drye & Warren LLP. He focuses his practice on all aspects of regulatory, legislative and litigation counseling in the fields of environment and energy, natural resources, and occupational health and safety law. Visit FrackingInsider.com, where this article first appeared, for insight and analysis of key regulatory, legislative, legal and economic developments related to the use of hydraulic fracturing in the natural gas industry.