On May 9, 2014, the U.S. Environmental Protection Agency (EPA) initiated a public participation process to develop an approach to collecting information on various chemicals and mixtures used in hydraulic fracturing. The EPA’s advance notice of proposed rulemaking (ANPR), 79 Fed. Reg. 28,664 (May 19, 2014), poses a number of questions to interested stakeholders for comment. The EPA granted a 30-day extension to the initial 90-day comment period, so that the public comment period now closes September 18, 2014. The comments that the EPA receives at this stage will inform its proposal. 

Background

On August 4, 2011, the EPA received a petition from Earthjustice and 114 other groups under Section 21 of the Toxic Substances Control Act (TSCA). The petition requested that the EPA issue rules requiring reporting to the EPA of the identity of chemical substances and mixtures used in oil and gas exploration or production, toxicity testing of those substances and mixtures, and submission of related health and safety studies. The EPA rejected the request for toxicity testing but plans to proceed with respect to reporting and submission of health and safety studies related to hydraulic fracturing chemicals and mixtures. The ANPR represents part of the EPA’s response to the petition. Meanwhile, the Bureau of Land Management (BLM) issued its own proposed regulation last year, which would govern hydraulic fracturing on federal and Indian lands. In the ANPR, the EPA announces its intention to coordinate with the BLM and other federal agencies to obtain useful information regarding hydraulic fracturing chemicals and mixtures without overly burdening the regulated community.

Who is affected?

Anyone who manufactures (or imports), processes, or distributes chemical substances or mixtures used in any type of hydraulic fracturing may be affected by this rulemaking. This includes chemical manufacturers, chemical suppliers who engage in processing, and service providers or well operators who mix chemicals to create the hydraulic fracturing fluids. In addition to businesses engaging in oil and gas extraction and mining support activities, the EPA expects that other industries, states, tribes, and members of the public will be interested in commenting.

What is the EPA considering?

The EPA is seeking comment on what information regarding hydraulic fracturing chemicals and mixtures should be disclosed or reported, and how this information should be obtained. The EPA has suggested that the information-gathering mechanism could be: (1) mandatory under new TSCA regulations; (2) voluntary; or (3) a combination of those two. 

The EPA raises a number of specific questions and issues for comment in its ANPR. Below are a few of the most significant questions presented to the public for input:

  • Who should report?

    • Would a size threshold be appropriate to limit reporting by small manufacturers or processors?
    • Should each type of company (e.g., chemical supplier, service provider) be responsible for reporting different data elements?
    • Should reporting should be mandatory or voluntary for each type of company?
  • What information regarding hydraulic fracturing chemicals and mixtures should be reported?

    • Should information be reported regarding chemicals used to maintain or improve the function and productivity of the well (e.g., acid treatments, biocides)?
    • What health and safety studies should be reported or disclosed?
  • Where should information be reported?

    • Should information be reported to the EPA or through a third-party certifier? 
    • How could a third-party certification and information collection program be structured?
    • What information collection repository or database (e.g., FracFocusdata.gov) should be used to encourage transparency while minimizing duplicative reporting requirements?
  • When should information be reported to the EPA or disclosed publicly? 

    • How often should information be reported or updated, given potential changes in well ownership or fluid composition?
  • How should information be reported?

    • Should reporting be mandatory or voluntary?
    • What information should be disclosed publicly? Could data claimed to be trade secrets or confidential business information be aggregated and disclosed publicly while protecting individual company identities?
    • What are the best management practices for companies and the EPA to generate, collect, report, and disclose information regarding hydraulic fracturing chemicals and mixtures?
    • What incentives could be used and how should they be structured to promote effective voluntary disclosure and safe and sustainable practices?
  • Why should the EPA adopt certain proposed measures? 

    • The EPA seeks specific recommendations, including rationales, costs/benefits, feasibility, alternatives, and supporting data such as studies and articles, standard professional practices, and examples of experiences with particular well sites.

What should you do?

We encourage industry members to make their voices heard now, while the EPA is in the early stages of developing its proposal. The ANPR raises a number of possibilities for how an information-gathering program may be structured, some of which are likely viewed as much more preferable than others from each stakeholder’s perspective. As the EPA receives comments, it will narrow its focus and take some approaches off the table while it moves toward a proposed, and then final, rulemaking.