On December 13, 2011, the Railroad Commission of Texas adopted the Hydraulic Fracturing Chemical Disclosure Rule, pursuant to HB 3328 passed by the Texas Legislature in June 2011.[1]
Although the Legislature required the regulations to be adopted by July 1, 2013, the Railroad Commission issued proposed regulations and approved the Rule in less than six months.[2]
The adopted Rule requires operators to disclose chemical ingredients—with exemptions for trade secrets—and water volumes used in hydraulic fracturing activities in Texas.[3] It will apply to all wells for which the Railroad Commission issues an initial drilling permit on or after February 1, 2012.[4]
Disclosure must be made to the hydraulic fracturing registry site http://fracfocus.org.
Also on December 13, 2011, the Colorado Oil and Gas Conservation Commission adopted hydraulic fracturing disclosure regulations.[5] Like Texas, Colorado's regulations require disclosure of chemical ingredients and water volumes.
Unlike Texas, the regulations further require disclosure of concentrations of chemicals in hydraulic fracturing fluid.[6] Additionally, if an operator is granted trade secret protection, the chemical family name of each ingredient must still be disclosed.[7]
Colorado's regulations take effect on April 1, 2012 and apply to all wells hydraulically fractured in Colorado. Disclosure must be made within 60 days of completion of hydraulic fracturing to http://fracfocus.org.
Texas and Colorado join approximately thirty states that have enacted or proposed regulations affecting hydraulic fracturing activities.[8] Eight of those states have established or proposed new regulations since June 2011: Michigan, Montana, Louisiana, New York, North Dakota, Idaho, Texas, and Colorado.
Recently, New York extended the public notice and comment period for its proposed regulations from December 12, 2011 to January 11, 2012.[9] Michigan, Montana, and Louisiana issued their regulations, effective during the summer and fall of 2011, joining Arkansas, Wyoming, and Pennsylvania as states with regulations in place designed specifically to address hydraulic fracturing.[10]
The states with applicable rules vary in what aspects of hydraulic fracturing activities are controlled and how those activities are regulated. Some regulations focus on specific disclosure requirements, such as Texas and Colorado; some focus on construction and casing requirements; some focus on operation and continued monitoring of the wells; and others focus on flowback water storage and removal.
This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) and Andrea Fair (afair@fulbright.com or 713 651 3782) from Fulbright's Litigation Practice Group and Heather M. Corken (hcorken@fulbright.com or 713 651 8386) from Fulbright's Environmental Law Practice Group.
Learn more about Fulbright's Shale and Hydraulic Fracturing Task Force at www.fulbright.com/fracking.
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[1] Press Release, R.R. Comm'n of Tex., Railroad Commissioners Adopt One of Nation's Most Comprehensive Hydraulic Fracturing Chemical Disclosure Requirements (Dec. 13, 2011), available at http://www.rrc.state.tx.us/pressreleases/2011/121311.php. The new rule will be available at http://www.rrc.state.tx.us/rules/index.php one week after the effective date of adoption.
[2] See HB 3328, 2011 Leg., 82 Sess. (TX 2011), available at http://www.capitol.state.tx.us/tlodocs/82R/billtext/pdf/HB03328F.pdf#navpanes=0. The proposed rule, issued in September 2011, is available at http://www.sos.state.tx.us/texreg/pdf/backview/0909/0909prop.pdf.
[3] Press Release, R.R. Comm'n of Tex., supra note 1.
[4] Id.
[5] P. Solomon Banda, Colorado to Require Disclosure of Fracking Chemicals, USA TODAY (Dec. 13, 2011), available at http://www.usatoday.com/money/industries/energy/story/2011-12-13/colorado-fracking-two/51882992/1. Audio of the rulemaking deliberations is available at http://cogcc.state.co.us/.
[6] P. Solomon Banda, supra note 5.
[7] Id.
[8] This count incorporates general regulations that expressly include hydraulic fracturing, as well as specific hydraulic fracturing regulations. The proposed rule amendments are available at http://cogcc.state.co.us/RR_HF2011/FinalModifiedStaffProposal12_13_11V4.pdf.
[9] See High Volume Hydraulic Fracturing Proposed Regulations, NEW YORK DEP'T OF ENVTL. CONSERVATION, http://www.dec.ny.gov/regulations/77353.html.
[10] See 25 Pa. Code §78.55 (as part of the permitting process, drilling companies must disclose the names of all chemicals to be stored and used at a drilling site in the Pollution Prevention and Contingency Plan submitted to the Department of Environmental Protection); Wy. Oil & Gas Comm'n § 3-8(c) (operators must disclose chemical additives and proposed concentrations in the Application for Permit to Drill or Deepen); Ariz. Admin. Code § 12-7-117 (operators of wells using "artificial stimulation" must report the amount and types of material injected within 15 days of the procedure).
Hydraulic Fracturing Studies Release Preliminary Plans and Initial Reports
Early November has seen quite a bit of activity related to ongoing hydraulic fracturing studies. On November 9, 2011, The University of Texas at Austin's Energy Institute released the preliminary findings from its study on the use of hydraulic fracturing in shale gas development.
Also this month, the Environmental Protection Agency released its Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources, which details its plans to research the potential effects of hydraulic fracturing and well injection processes on drinking water resources.
Finally, on November 10, 2011, the Shale Gas Subcommittee of the Secretary of Energy Advisory Board made available for public comment its report on shale gas production.
Currently, The University of Texas at Austin's Energy Institute is conducting a study on the use of hydraulic fracturing in shale gas development, and the Institute released its preliminary findings on November 9, 2011.[1]
The Institute's preliminary findings suggest no direct link between hydraulic fracturing and groundwater contamination. Instead, allegations of contamination appear to be related to above-ground spills or other mishandling of the wastewater produced from shale gas drilling, and not to the hydraulic fracturing activity. The Institute noted that media coverage of hydraulic fracturing is decidedly negative, though few news reports mention scientific research of the practice.
The Institute's final report will identify existing regulations related to shale gas development, and evaluate the capacity of individual states to enforce the regulations. The report will also analyze public perception of hydraulic fracturing. The final report is expected to be issued in early 2012.
Earlier in November 2011, the Environmental Protection Agency released its Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources.[2]
The EPA plans to research the potential effects on drinking water resources of numerous processes, including hydraulic fracturing fluid mixing, well injection and fracturing, and surface spills of flowback and produced water. The EPA will gather and analyze existing data, as well as develop case studies at sites in the Haynesville, Marcellus, Bakken, and Barnett Shales. The case studies will retrospectively study drinking water at sites where fracturing has already occurred, and prospectively study pre- and post-fracturing conditions at sites where fracturing is about to start. The EPA will also conduct laboratory work to assess the toxicity of hydraulic fracturing fluids and wastewater, and their potential impact on drinking water resources.
The EPA expects to release two reports detailing the study, one in 2012 and the other in 2014. The 2012 report will contain an analysis of existing data, including the chemicals found in flowback water, the frequency and causes of spills of hydraulic fracturing wastewaters, and the toxicological properties of chemicals found in the wastewater.
The 2014 report will evaluate data from resources such as the retrospective and prospective cases studies and the laboratory work. Among other things, the 2014 report will identify methods to protect drinking water from oil and gas resources before and after hydraulic fracturing, evaluate the impact of fracturing on local water quality and availability, and assess the potential for hydraulic fractures to interfere with geological features.
On November 10, 2011, the Shale Gas Production Subcommittee of the Secretary of Energy Advisory Board made its final report on shale gas production available for public comment.[3]
The report focuses on the implementation of the 20 recommendations the U.S. Department of Energy made in its interim report, which included the improvement of public information about shale gas production, disclosure of fracturing fluid composition, and the creation of a shale gas industry production organization dedicated to improving best practices.
The final report calls for credible progress in reducing the environmental impact of shale gas production. The recommendations for implementation require action by federal and state agencies, and call for the creation of new partnerships or "mechanisms for success" to address air, water, and ecological concerns.
This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) and Brian Albrecht (balbrecht@fulbright.com or 713 651 3584) from Fulbright's Litigation Department.
Learn more about Fulbright's Shale and Hydraulic Fracturing Task Force at www.fulbright.com/fracking.
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[1] See Gary Rasp, Early Results from Hydraulic Fracturing Study Show No Direct Link to Groundwater Contamination, The University of Texas at Austin's Energy Institute, Nov. 9, 2011, available at
[2] U.S. Environmental Protection Agency, Office of Research and Development, Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources, Nov. 2011, available at http://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/upload/hf_study_plan_110211_final_508.pdf.
[3] U.S. Department of Energy, Shale Gas Production Subcommittee of the Secretary of Energy Advisory Board, Shale Gas Production Subcommittee Second Ninety Day Report, Nov. 18, 2011, available at http://www.shalegas.energy.gov/resources/111011_90_day_report.pdf.
http://www.utexas.edu/news/2011/11/09/energy_fracing/.
Also this month, the Environmental Protection Agency released its Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources, which details its plans to research the potential effects of hydraulic fracturing and well injection processes on drinking water resources.
Finally, on November 10, 2011, the Shale Gas Subcommittee of the Secretary of Energy Advisory Board made available for public comment its report on shale gas production.
The University of Texas at Austin's Hydraulic Fracturing Study
The Institute's preliminary findings suggest no direct link between hydraulic fracturing and groundwater contamination. Instead, allegations of contamination appear to be related to above-ground spills or other mishandling of the wastewater produced from shale gas drilling, and not to the hydraulic fracturing activity. The Institute noted that media coverage of hydraulic fracturing is decidedly negative, though few news reports mention scientific research of the practice.
The Institute's final report will identify existing regulations related to shale gas development, and evaluate the capacity of individual states to enforce the regulations. The report will also analyze public perception of hydraulic fracturing. The final report is expected to be issued in early 2012.
EPA's Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources
The EPA plans to research the potential effects on drinking water resources of numerous processes, including hydraulic fracturing fluid mixing, well injection and fracturing, and surface spills of flowback and produced water. The EPA will gather and analyze existing data, as well as develop case studies at sites in the Haynesville, Marcellus, Bakken, and Barnett Shales. The case studies will retrospectively study drinking water at sites where fracturing has already occurred, and prospectively study pre- and post-fracturing conditions at sites where fracturing is about to start. The EPA will also conduct laboratory work to assess the toxicity of hydraulic fracturing fluids and wastewater, and their potential impact on drinking water resources.
The EPA expects to release two reports detailing the study, one in 2012 and the other in 2014. The 2012 report will contain an analysis of existing data, including the chemicals found in flowback water, the frequency and causes of spills of hydraulic fracturing wastewaters, and the toxicological properties of chemicals found in the wastewater.
The 2014 report will evaluate data from resources such as the retrospective and prospective cases studies and the laboratory work. Among other things, the 2014 report will identify methods to protect drinking water from oil and gas resources before and after hydraulic fracturing, evaluate the impact of fracturing on local water quality and availability, and assess the potential for hydraulic fractures to interfere with geological features.
U.S. Department of Energy Shale Gas Production Subcommittee's Second Ninety Day Report
The report focuses on the implementation of the 20 recommendations the U.S. Department of Energy made in its interim report, which included the improvement of public information about shale gas production, disclosure of fracturing fluid composition, and the creation of a shale gas industry production organization dedicated to improving best practices.
The final report calls for credible progress in reducing the environmental impact of shale gas production. The recommendations for implementation require action by federal and state agencies, and call for the creation of new partnerships or "mechanisms for success" to address air, water, and ecological concerns.
This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) and Brian Albrecht (balbrecht@fulbright.com or 713 651 3584) from Fulbright's Litigation Department.
Learn more about Fulbright's Shale and Hydraulic Fracturing Task Force at www.fulbright.com/fracking.
---
[1] See Gary Rasp, Early Results from Hydraulic Fracturing Study Show No Direct Link to Groundwater Contamination, The University of Texas at Austin's Energy Institute, Nov. 9, 2011, available at
[2] U.S. Environmental Protection Agency, Office of Research and Development, Plan to Study the Potential Impacts of Hydraulic Fracturing on Drinking Water Resources, Nov. 2011, available at http://water.epa.gov/type/groundwater/uic/class2/hydraulicfracturing/upload/hf_study_plan_110211_final_508.pdf.
[3] U.S. Department of Energy, Shale Gas Production Subcommittee of the Secretary of Energy Advisory Board, Shale Gas Production Subcommittee Second Ninety Day Report, Nov. 18, 2011, available at http://www.shalegas.energy.gov/resources/111011_90_day_report.pdf.
http://www.utexas.edu/news/2011/11/09/energy_fracing/.
Texas, Other States Move Forward With Hydraulic Fracturing Disclosure Regulations
Earlier this year, Texas became the latest state to draft regulations requiring the disclosure of chemicals used in the hydraulic fracturing process. Michigan and Montana issued similar regulations over the summer, joining Arkansas, Wyoming, and Pennsylvania as states recently active in regulating hydraulic fracturing.[1] The new regulations require specific disclosures by operators and outline requirements for construction and operation of the well and continued monitoring of well activity. Three additional states, Louisiana, New York, and North Dakota, have proposed regulations open for public comment. This briefing examines recent changes and additions in hydraulic fracturing regulations throughout the country.
On October 11, 2011, the public comment period closed for the proposed hydraulic fracturing chemical disclosure regulations issued by the Railroad Commission of Texas. The Railroad Commission issued the new regulations on September 9, pursuant to HB 3328, passed by the Texas Legislature in June.[2] HB 3328 requires that the approved regulations be effective by July 1, 2012; however, it is expected that regulations will be finalized by the end of the year.
The proposed Texas regulations require public disclosure of chemicals used in the fracturing process that are either regulated by OSHA or are otherwise intentionally added, along with the actual or maximum concentrations of each chemical.[3]
Michigan's Supervisor of Wells issued new regulations in May 2011, which became effective June 22, 2011.[4] Under the regulations, well completions for high volume hydraulic fracturing must include the Material Safety Data Sheet and the volume used for all additives. High volume hydraulic fracturing is defined as an operation that is intended to use a total of more than 100,000 gallons of hydraulic fracturing fluid.
Additional regulations apply to wells with large volume water withdrawals, defined as withdrawals with a cumulative total of over 100,000 gallons per day. For these wells, permit applications must include: a water withdrawal evaluation (and in some cases a site-specific review by the DEQ); the proposed total volume of water needed; the number of water withdrawal wells; well locations, depths, and proposed pumping rates and frequencies; any freshwater wells within 1,320 feet; and the locations and dimensions of proposed freshwater pits.
Texas: Public Comment Period Closed
On October 11, 2011, the public comment period closed for the proposed hydraulic fracturing chemical disclosure regulations issued by the Railroad Commission of Texas. The Railroad Commission issued the new regulations on September 9, pursuant to HB 3328, passed by the Texas Legislature in June.[2] HB 3328 requires that the approved regulations be effective by July 1, 2012; however, it is expected that regulations will be finalized by the end of the year.
The proposed Texas regulations require public disclosure of chemicals used in the fracturing process that are either regulated by OSHA or are otherwise intentionally added, along with the actual or maximum concentrations of each chemical.[3]
Companies would be required to use Chemical Abstracts Service (CAS) numbers to identify chemicals in the fracturing fluids, making the disclosure more transparent for shippers, suppliers, end users, and the public. The regulations specifically exempt from disclosure chemicals unintentionally added, chemicals that occur naturally, or chemicals not disclosed by the manufacturer, supplier, or service company.
Companies can also claim trade secret exemptions, which must be approved by the Railroad Commission. If a trade secret exemption is granted, only three parties can challenge it:
- the landowner on whose property the wellhead is located;
- any adjacent property owners; and
- government agencies.
Michigan: Regulations Effective June 22, 2011
Michigan's Supervisor of Wells issued new regulations in May 2011, which became effective June 22, 2011.[4] Under the regulations, well completions for high volume hydraulic fracturing must include the Material Safety Data Sheet and the volume used for all additives. High volume hydraulic fracturing is defined as an operation that is intended to use a total of more than 100,000 gallons of hydraulic fracturing fluid.
Additional regulations apply to wells with large volume water withdrawals, defined as withdrawals with a cumulative total of over 100,000 gallons per day. For these wells, permit applications must include: a water withdrawal evaluation (and in some cases a site-specific review by the DEQ); the proposed total volume of water needed; the number of water withdrawal wells; well locations, depths, and proposed pumping rates and frequencies; any freshwater wells within 1,320 feet; and the locations and dimensions of proposed freshwater pits.
If there is a freshwater well within 1,320 feet, a monitor well must be installed and monitored daily during water withdrawal, and weekly thereafter. During the withdrawal process, injection pressures must be recorded. Upon well completion, records and charts showing fracturing volume, rates, pressures, and the total volume of flowback water must be included in the record of well completion.
According to the Michigan Department of Environmental Quality, no current hydraulic fracturing activity in Michigan would qualify as high volume under the proposed regulations.[5]
According to the Michigan Department of Environmental Quality, no current hydraulic fracturing activity in Michigan would qualify as high volume under the proposed regulations.[5]
Existing wells, which are located on the Antrim Shale, are shallow and typically use only 50,000 gallons of water in the fracturing process. The regulations were implemented in anticipation of development on the Utica Shale, a deeper formation that would require much larger volumes of water use.
Montana: Regulations Effective August 27, 2011
The Montana Board of Oil and Gas issued new regulations that became effective August 27, 2011.[6] Under the Montana regulations, applications for permits must include the volumes and types of materials to be used in the proposed hydraulic fracturing activities. Principal components or chemicals must be identified by trade name or generic name.
Upon completion, fracturing operators must disclose the amounts and types of chemicals used, including the additive types, chemical ingredient names, and CAS numbers. Operators can qualify for trade secret exemptions, under which exempted chemicals must be identified by trade name, inventory name, chemical family name, or other unique name, and operators must disclose the quantity of the exempted chemical to be used. The regulations also require that permit applications include the processes to be used and the maximum anticipated treating pressure.
In addition to application requirements, the Montana regulations lay out specific structural and operational requirements. Fracturing wells must have a pressure relief valve and a remotely controlled shut-in device. Before stimulation, fracturing wells must undergo a casing pressure test. During the casing test, the maximum anticipated pressure must be applied for thirty minutes without the well losing more than ten percent of the pressure. Additionally, during operations, the annular space must be monitored. Upon completion, operators must describe the interval or formation treated and the amounts of maximum pressure during treatment.
In September 2011, the New York Department of Environmental Conservation issued extensive proposed regulations that outline permitting and operations requirements for hydraulic fracturing that uses more than 300,000 gallons of water cumulatively.[7] Under the proposed regulations, operators must follow the requirements of the application process for a normal drilling permit, as well as comply with State Pollutant Discharge Elimination System (SPDES) and Stormwater Pollutant Prevention (SWPP) plans. The New York regulations will be out for public comment through December 12, 2011.
To obtain a permit for hydraulic fracturing, operators must include the following information: the minimum and estimated maximum depths; the proposed volume of water and source of the water; distances from certain types of water supplies; identities of nearby abandoned wells; the engines and fuel to be used and air emission control measures; and information on blowout preventer measures. The New York regulations also contain detailed requirements for setbacks, water and pressure testing, casing structure, and construction, including site preparations and maintenance.
To comply with SPDES and SWPP requirements, operators must disclose particular information and submit plans aimed at preventing water contamination and sediment erosion. Operators must disclose: the proposed additives and each additive's proposed volume; copies of Material Safety Data Sheets for each product to be used; the proposed percent of water, proppants, and each additive product; documentation showing that the proposed additives have reduced aquatic toxicity and pose a lower potential risk to water resources and the environment than available alternatives (or that available alternative products are not equally effective or feasible); and the identification of the service company. Trade secret protection is available if granted by the Department of Environmental Conservation. Plans to prevent water contamination and sediment erosion require operators to continually monitor well activity, such as stormwater discharges, water usage, and flowback and produced water volumes. Operators must have certification for planned disposal methods, secondary containment measures, spill prevention plans, and methods to store flowback water.
On August 30, 2011, the Louisiana Department of Natural Resources released a proposed rule for public comment.[8] The rule requires operators upon well completion to disclose the types and volumes of the hydraulic fracturing fluid, a list of additives including trade names and suppliers, CAS numbers for hazardous chemicals, and maximum ingredient concentrations. The proposed rule has a provision for trade secret protection under which only the chemical family must be disclosed.
The Department of Natural Resources has not officially issued an anticipated effective date. According to reports, the rule is expected to become effective in October 2011.
The North Dakota Industrial Commission proposed new regulations for hydraulic fracturing on September 23, 2011.[9] Under the proposed rules, companies who do not use a frac string running inside the intermediate casing string must disclose the hydraulic fracturing fluid composition, including the trade name, supplier, ingredients, CAS number, and the maximum ingredient concentrations of all additives in the hydraulic fracturing fluid. No disclosure is required for wells that use a frac string inside the intermediate casing string. The proposed rules also outline specific safety systems that must be used, including pressure relief valves, diversion lines, and remote operated frac valves. The North Dakota regulations are currently out for public comment, and a public hearing is scheduled for November 1.
This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) and Andrea Fair (afair@fulbright.com or 713 651 3782) from Fulbright's Litigation Department.
Learn more about Fulbright's Shale and Hydraulic Fracturing Task Force at www.fulbright.com/shale.
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[1] See 25 Pa. Code §78.55 (as part of the permitting process, drilling companies must disclose the names of all chemicals to be stored and used at a drilling site in the Pollution Prevention and Contingency Plan submitted to the Department of Environmental Protection); Wy. Oil & Gas Comm'n § 3-8(c) (operators must disclose chemical additives and proposed concentrations in the Application for Permit to Drill or Deepen). Ariz. Admin. Code § 12-7-117 (operators of wells using "artificial stimulation" must report the amount and types of material injected within 15 days of the procedure).
[2] HB 3328, 2011 Leg., 82 Sess. (TX 2011). For an in-depth analysis of HB 3328 and the proposed Texas disclosure requirements, see Texas Legislature Joins Growing Number of States in Requiring Disclosure of Hydraulic Fracturing Fluids, Fulbright Briefing (June 16, 2011).
[3] 36 Tex. Reg. 5765 (2011) (to be codified at 16 Tex. Admin. Code § 3.29) (proposed September 9, 2011) (Railroad Commission of Texas).
[4] Supervisor of Wells Instruction 1-2011, High Volume Hydraulic Fracturing Well Completions, State of Michigan Department of Environmental Quality (May 23, 2011).
[5] Keith B. Hall, Michigan Issues New Hydraulic Fracturing Regulations, Oil & Gas Law Brief, Stone Pigman Walther Wittmann L.L.C.
[6] Administrative Rules of Montana, Title 36, Chapter 22.
[7] N.Y. Comp. Codes R. & Regs. tit. 6, Parts 52, 190, 550–556, 560, 750
[8] LAC 43:XIX Subpart 1, Chapter 1.
[9] N.D. Admin. Code § 43-02-03-27.1.
In addition to application requirements, the Montana regulations lay out specific structural and operational requirements. Fracturing wells must have a pressure relief valve and a remotely controlled shut-in device. Before stimulation, fracturing wells must undergo a casing pressure test. During the casing test, the maximum anticipated pressure must be applied for thirty minutes without the well losing more than ten percent of the pressure. Additionally, during operations, the annular space must be monitored. Upon completion, operators must describe the interval or formation treated and the amounts of maximum pressure during treatment.
New York: Out for Public Comment
In September 2011, the New York Department of Environmental Conservation issued extensive proposed regulations that outline permitting and operations requirements for hydraulic fracturing that uses more than 300,000 gallons of water cumulatively.[7] Under the proposed regulations, operators must follow the requirements of the application process for a normal drilling permit, as well as comply with State Pollutant Discharge Elimination System (SPDES) and Stormwater Pollutant Prevention (SWPP) plans. The New York regulations will be out for public comment through December 12, 2011.
To obtain a permit for hydraulic fracturing, operators must include the following information: the minimum and estimated maximum depths; the proposed volume of water and source of the water; distances from certain types of water supplies; identities of nearby abandoned wells; the engines and fuel to be used and air emission control measures; and information on blowout preventer measures. The New York regulations also contain detailed requirements for setbacks, water and pressure testing, casing structure, and construction, including site preparations and maintenance.
To comply with SPDES and SWPP requirements, operators must disclose particular information and submit plans aimed at preventing water contamination and sediment erosion. Operators must disclose: the proposed additives and each additive's proposed volume; copies of Material Safety Data Sheets for each product to be used; the proposed percent of water, proppants, and each additive product; documentation showing that the proposed additives have reduced aquatic toxicity and pose a lower potential risk to water resources and the environment than available alternatives (or that available alternative products are not equally effective or feasible); and the identification of the service company. Trade secret protection is available if granted by the Department of Environmental Conservation. Plans to prevent water contamination and sediment erosion require operators to continually monitor well activity, such as stormwater discharges, water usage, and flowback and produced water volumes. Operators must have certification for planned disposal methods, secondary containment measures, spill prevention plans, and methods to store flowback water.
Louisiana: Out for Public Comment
On August 30, 2011, the Louisiana Department of Natural Resources released a proposed rule for public comment.[8] The rule requires operators upon well completion to disclose the types and volumes of the hydraulic fracturing fluid, a list of additives including trade names and suppliers, CAS numbers for hazardous chemicals, and maximum ingredient concentrations. The proposed rule has a provision for trade secret protection under which only the chemical family must be disclosed.
The Department of Natural Resources has not officially issued an anticipated effective date. According to reports, the rule is expected to become effective in October 2011.
North Dakota: Out for Public Comment
The North Dakota Industrial Commission proposed new regulations for hydraulic fracturing on September 23, 2011.[9] Under the proposed rules, companies who do not use a frac string running inside the intermediate casing string must disclose the hydraulic fracturing fluid composition, including the trade name, supplier, ingredients, CAS number, and the maximum ingredient concentrations of all additives in the hydraulic fracturing fluid. No disclosure is required for wells that use a frac string inside the intermediate casing string. The proposed rules also outline specific safety systems that must be used, including pressure relief valves, diversion lines, and remote operated frac valves. The North Dakota regulations are currently out for public comment, and a public hearing is scheduled for November 1.
This article was prepared by Barclay R. Nicholson (bnicholson@fulbright.com or 713 651 3662) and Andrea Fair (afair@fulbright.com or 713 651 3782) from Fulbright's Litigation Department.
Learn more about Fulbright's Shale and Hydraulic Fracturing Task Force at www.fulbright.com/shale.
----
[1] See 25 Pa. Code §78.55 (as part of the permitting process, drilling companies must disclose the names of all chemicals to be stored and used at a drilling site in the Pollution Prevention and Contingency Plan submitted to the Department of Environmental Protection); Wy. Oil & Gas Comm'n § 3-8(c) (operators must disclose chemical additives and proposed concentrations in the Application for Permit to Drill or Deepen). Ariz. Admin. Code § 12-7-117 (operators of wells using "artificial stimulation" must report the amount and types of material injected within 15 days of the procedure).
[2] HB 3328, 2011 Leg., 82 Sess. (TX 2011). For an in-depth analysis of HB 3328 and the proposed Texas disclosure requirements, see Texas Legislature Joins Growing Number of States in Requiring Disclosure of Hydraulic Fracturing Fluids, Fulbright Briefing (June 16, 2011).
[3] 36 Tex. Reg. 5765 (2011) (to be codified at 16 Tex. Admin. Code § 3.29) (proposed September 9, 2011) (Railroad Commission of Texas).
[4] Supervisor of Wells Instruction 1-2011, High Volume Hydraulic Fracturing Well Completions, State of Michigan Department of Environmental Quality (May 23, 2011).
[5] Keith B. Hall, Michigan Issues New Hydraulic Fracturing Regulations, Oil & Gas Law Brief, Stone Pigman Walther Wittmann L.L.C.
[6] Administrative Rules of Montana, Title 36, Chapter 22.
[7] N.Y. Comp. Codes R. & Regs. tit. 6, Parts 52, 190, 550–556, 560, 750
[8] LAC 43:XIX Subpart 1, Chapter 1.
[9] N.D. Admin. Code § 43-02-03-27.1.
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