Introduction
Background
Guidance
Implementation


Introduction

On February 12 2014 the Environmental Protection Agency (EPA) published notice in the Federal Register of final guidance implementing the Safe Drinking Water Act requirements for oil and gas hydraulic fracturing operations utilising diesel fuels. The final guidance is a revised version of draft guidance issued by the EPA in May 2012, on which the EPA received hundreds of comments. One of the main purposes of the new guidance is to clarify which materials may qualify as diesel fuels. The guidance also recommends to permit writers the factors that the EPA considers when issuing permits for hydraulic fracturing operations that use diesel fuels to ensure protection of underground sources of drinking water.

Background

Under 2005 amendments to the Safe Drinking Water Act, the definition of 'underground injection' excludes the underground injection of fluids or propping agents "other than diesel" for hydraulic fracturing operations.(1) Therefore, hydraulic fracturing operations are exempt from the requirement to obtain an underground injection control permit unless the injectate contains diesel. According to the final guidance, hydraulic fracturing activity requires a underground injection control permit if any portion of the injectate contains diesel fuels. The type of underground injection control permit required would be a Class II permit.

Through an analysis of data on hydraulic fracturing fluids on FracFocus, the EPA found that diesel fuel was used in less than 2% of the wells for those posted to the site in 2012. However, industry representatives had expressed concern that the EPA's intention was to interpret the term 'diesel fuels' to be broad enough to cover substances not traditionally considered diesel (eg, highly refined mineral oils and vegetable oil).

Guidance

In the final guidance, the EPA interprets the statutory term 'diesel' to mean any of the following five Chemical Abstract Service Registry Numbers (CASRNs):

  • "68334-30-5 Primary Name: Fuels, diesel Common Synonyms: Automotive diesel oil; Diesel fuel; Diesel oil (petroleum); Diesel oils; Diesel test fuel; Diesel fuels; Diesel fuel No. 1; Diesel fuel [United Nations-North America (UN/NA) number 1993]; Diesel fuel oil; European Inventory of Existing Commercial Chemical Substances (EINECS) 269-822-7."
  • "68476-34-6 Primary Name: Fuels, diesel, No. 2 Common Synonyms: Diesel fuel No. 2; Diesel fuels No. 2; EINECS 270-676-1; No. 2 Diesel fuel."
  • "68476-30-2 Primary Name: Fuel oil No. 2 Common Synonyms: Diesel fuel; Gas oil or diesel fuel or heating oil, light [UN1202] No. 2 Home heating oils; API No. 2 fuel oil; EINECS 270-671-4; Fuel oil No. 2; Home heating oil No. 2; No. 2 burner fuel; Distillate fuel oils, light; Fuel No. 2; Fuel oil (No. 1,2,4,5 or 6) [NA1993]."
  • "68476-31-3 Primary Name: Fuel oil, No. 4 Common Synonyms: Caswell No.14 333AB; Cat cracker feed stock; EINECS 270-673-5; EPA Pesticide Chemical Code 063514; Fuel oil No. 4; Diesel fuel No. 4."
  • "8008-20-6 Primary Name: Kerosene Common Synonyms: JP-5 navy fuel/marine diesel fuel; Deodorized kerosene; JP5 Jet fuel; AF 100 (pesticide); Caswell No. 517; EINECS 232-366-4; EPA Pesticide Chemical Code 063501; Fuel oil No. 1; Fuels, kerosine; Shell 140; Shellsol 2046; Distillate fuel oils, light; Kerosene, straight run; Kerosine, (petroleum); Several Others."

In the draft guidance issued in May 2012, the EPA had listed six CASRNs. The sixth CASRN, which was not included in the final guidance, was: "68410-00-4 Primary Name: Distillates (petroleum), crude oil; Common Synonyms: Fuel, diesel (VDF) (EPA SRS14), Straight PWN diesel (EPA SRS), Aruba gas oil; EINECS 270-072-8."

Industry representatives had expressed particular concern about the inclusion of this CASRN for petroleum distillates in the definition of 'diesel' because it was overly broad and included many substances not considered diesel.(2)

In addition to defining the term 'diesel' under the Safe Drinking Water Act, the guidance sets out recommended practices for hydraulic fracturing operations where diesel fuels are used. The EPA contends that these practices are:

"consistent with best practices for hydraulic fracturing in general, including those found in state regulations, voluntary standards from the American Petroleum Institute (API), and model guidelines for hydraulic fracturing developed by industry and stakeholders."

According to the guidance, in issuing a Class II permit for hydraulic fracturing activity, the permit writer should consider:

  • the extent and orientation of the planned fracture network, any nearby underground sources of drinking water and their connections to surface waters;
  • seismic history;
  • baseline geochemical parameters on accessible underground sources of drinking water and other sub-surface formations; and
  • anticipated true vertical depths of the formations to be hydraulically fractured and the anticipated pressure range for the proposed fracturing activities.

Water monitoring may be needed for permits that run shorter than the full life of the well. The wells must be cased and cemented in a manner that prevents the movement of fluids into or between underground sources of drinking water for the life expectancy of the well. In determining casing and cementing requirements, consideration should be given to:

  • the geology of the injection and confining zones;
  • the depth between the injection zone and water sources; and
  • proposed injection pressures.

Additional testing may be needed to ensure that the well maintains mechanical integrity before, during and after the use of diesel fuels in hydraulic fracturing operations.

Implementation

The EPA's underground injection control directors will implement the guidance directly in some states, such as Pennsylvania and New York, where the EPA is the permitting authority for Class II wells. The guidance says that EPA regional offices directly implementing the existing underground injection control Class II programme are the "primary audience" for the guidance. Nevertheless, as the guidance acknowledges, many states have responsibility for implementing the Class II underground injection control programme. Although the guidance purports to make only "non-binding recommendations", the guidance may create uncertainty in some states with underground injection control primacy, which may need to evaluate their programmes and amend state law, regulations or guidance to comply with the EPA's interpretations of the Safe Drinking Water Act reflected in the final guidance.

For further information on this topic please contact Janet L McQuaid, Shannon DeHont or Joshua Snyder at Fulbright & Jaworski LLP by telephone (+1 724 416 0400), fax (+1 724 416 0404) or email (janet.mcquaid@nortonrosefulbright.com, shannon.dehont@nortonrosefulbright.com or joshua.snyder@nortonrosefulbright.com).The Fulbright & Jaworski LLP website can be accessed at www.nortonrosefulbright.com.

Endnotes

(1) 42 USC § 300h(d).

(2) See, for example, the American Petroleum Institute's Comment to Draft Guidance on page 23.