UNCONVENTIONAL OIL AND GAS DEVELOPMENT Key Environmental and Public Health Requirements

August 10, 2014

www.gao.gov/assets/650/647782.pdf.

September 2012

GAO-12-874

United States Government Accountability Office

GAOUnited States Government Accountability Office

Highlights of GAO-12-874, a report to congressional requesters

summary chart on pg 51 of regulatory exemptions for O and G development

September 2012

UNCONVENTIONAL OIL AND GAS DEVELOPMENT

Key Environmental and Public Health Requirements

Why GAO Did This Study

Technological improvements have

allowed the extraction of oil and natural

gas from onshore unconventional

reservoirs such as shale, tight

sandstone, and coalbed methane

formations. Specifically, advances in

horizontal drilling techniques combined

with hydraulic fracturing (pumping

water, sand, and chemicals into wells

to fracture underground rock

formations and allow oil or gas to flow)

have increased domestic development

of oil and natural gas from these

unconventional reservoirs. The

increase in such development has

raised concerns about potential

environmental and public health effects

and whether existing federal and state

environmental and public health

requirements are adequate.

GAO was asked to review

environmental and public health

requirements for unconventional oil

and gas development and (1) describe

federal requirements; (2) describe

state requirements; (3) describe

additional requirements that apply on

federal lands; and (4) identify

challenges, if any, that federal and

state agencies reported facing in

regulating oil and gas development

from unconventional reservoirs. GAO

identified and analyzed federal laws,

state laws in six selected states

(Colorado, North Dakota, Ohio,

Pennsylvania, Texas, and Wyoming),

and interviewed federal and state

officials and representatives from

industry, environmental, and public

health organizations.

GAO is not making recommendations.

In commenting on the report, agencies

provided information on recent

regulatory activities and technical

comments.

What GAO Found

As with conventional oil and gas development, requirements from eight federal

environmental and public health laws apply to unconventional oil and gas

development. For example, the Clean Water Act (CWA) regulates discharges of

pollutants into surface waters. Among other things, CWA requires oil and gas

well site operators to obtain permits for discharges of produced water—which

includes fluids used for hydraulic fracturing, as well as water that occurs naturally

in oil- or gas-bearing formations—to surface waters. In addition, the Resource

Conservation and Recovery Act (RCRA) governs the management and disposal

of hazardous wastes, among other things. However, key exemptions or

limitations in regulatory coverage affect the applicability of six of these

environmental and public health laws. For example, CWA also generally

regulates stormwater discharges by requiring that facilities associated with

industrial and construction activities get permits, but the law and its regulations

largely exempt oil and gas well sites. In addition, oil and gas exploration and

production wastes are exempt from RCRA hazardous waste requirements based

on a regulatory determination made by the Environmental Protection Agency

(EPA) in 1988. EPA generally retains its authorities under federal environmental

and public health laws to respond to environmental contamination.

All six states in GAO’s review implement additional requirements governing

activities associated with oil and gas development and have updated some

aspects of their requirements in recent years. For example, all six states have

requirements related to how wells are to be drilled and how casing—steel pipe

within the well—is to be installed and cemented in place, though the specifics of

their requirements vary. The states also have requirements related to well site

selection and preparation, which may include baseline testing of water wells

before drilling or stormwater management.

Oil and gas development on federal lands must comply with applicable federal

environmental and state laws, as well as additional requirements. These

requirements are the same for conventional and unconventional oil and gas

development. The Bureau of Land Management (BLM) oversees oil and gas

development on approximately 700 million subsurface acres. BLM regulations for

leases and permits govern similar types of activities as state requirements, such

as requirements for how operators drill the well and install casing. BLM recently

proposed new regulations for hydraulic fracturing of wells on public lands.

Federal and state agencies reported several challenges in regulating oil and gas

development from unconventional reservoirs. EPA officials reported that

conducting inspection and enforcement activities and having limited legal

authorities are challenges. For example, conducting inspection and enforcement

activities is challenging due to limited information, such as data on groundwater

quality prior to drilling. EPA officials also said that the exclusion of exploration

and production waste from hazardous waste regulations under RCRA

significantly limits EPA’s role in regulating these wastes. In addition, BLM and

state officials reported that hiring and retaining staff and educating the public are

challenges. For example, officials from several states and BLM said that retaining

employees is difficult because qualified staff are frequently offered more money

for private sector positions within the oil and gas industry.

View GAO-12-874. For more information,

contact David C. Trimble at (202) 512-3841 or

trimbled@gao.gov. Page i GAO-12-874 Unconventional Oil and Gas Development

Letter 1

summary chart on pdf pg 51 (p. 44 printed text) of regulatory exemptions for O and G development

;

Table 2: Exemptions or Limitations in Regulatory Coverage for the Oil and Gas Exploration and Production Industry in Six
Environmental Laws
Law Description of exemption or limitation in regulatory coverage Source
Type of program related to
exemption or limitation in
regulatory coverage
Preventive Response
SDWA Hydraulic fracturing with fluids other than diesel fuel does not require a
UIC permit.
Statutory (2005) X
CWA Federal stormwater permits are not required for uncontaminated
stormwater at oil and gas construction sites or at oil and gas well sites.
Statutory (1987,
2005) X
CAA Emissions of hazardous air pollutants from oil and gas wells and their
associated equipment may not be aggregated together or with those of
pipeline compressors or pump stations to determine whether they are
a major source.
Statutory (1990)
X
In the Risk Management Program, many naturally-occurring
hydrocarbons in oil and gas are not included in the threshold
determination of whether a facility should be regulated.
Regulatory/EPA
decision (1988) X
RCRA Oil and gas exploration and production wastes are not regulated as
hazardous waste.
Regulatory/EPA
decision (1988) X
CERCLA Liability and reporting provisions do not apply to injections of fluids
authorized by state law for production, enhanced recovery, or
produced water.
Statutory (1980)
X
EPCRA Oil and gas well operations are not required to report releases of listed
chemicals to the TRI.
Regulatory/EPA
decision (1997) X
Source: GAO.
Note: In some cases, states may have requirements in these areas. State requirements are
discussed in the next section of this report.

Filed under Air Pollution, Environment, Health, Official Actions--Legislation, judgments,regulation, Regulation, Shale Gas Development-Hydrofracking, Water Tagged with environment, GAO, government report, health impacts, hydrofracking, regulation, Research reports

EPA Program to Protect Underground Sources from Injection of Fluids Associated with Oil and Gas Production Needs Improvement

July 31, 2014

www.gao.gov/assets/670/664499.pdf.

DRINKING WATER

EPA Program to Protect Underground Sources from Injection of Fluids Associated with Oil and Gas Production Needs Improvement

Why GAO Did This Study

Every day in the United States, at least

2 billion gallons of fluids are injected

into over 172,000 wells to enhance oil

and gas production, or to dispose of

fluids brought to the surface during the

extraction of oil and gas resources.

These wells are subject to regulation to

protect drinking water sources under

EPA’s UIC class II program and

approved state class II programs.

Because much of the population relies

on underground sources for drinking

water, these wells have raised

concerns about the safety of the

nation’s drinking water.

GAO was asked to review EPA’s

oversight of the class II program. This

report examines (1) EPA and state

roles, responsibilities, and resources

for the program, (2) safeguards to

protect drinking water, (3) EPA

oversight and enforcement of class II

programs, and (4) the reliability of

program data for reporting. GAO

reviewed federal and state laws and

regulations. GAO interviewed EPA and

state officials and reviewed class II

programs from a nongeneralizable

sample of eight states selected on the

basis of shale oil and gas regions and

the highest number of class II wells.

What GAO Recommends

GAO recommends that, among other

things, EPA review emerging risks

related to class II program safeguards

and ensure that it can effectively

oversee and efficiently enforce class II

programs. EPA agreed with all but the

enforcement recommendation. GAO

continues to believe that EPA should

take actions to ensure it can enforce

state class II regulations, as discussed

in the report.

What GAO Found

The Environmental Protection Agency’s (EPA) role in the Underground Injection

Control (UIC) class II program is to oversee and enforce fluid injection into wells

associated with oil and gas production, known as class II wells. EPA has

approved 39 states to manage their own class II programs, and EPA regions are

responsible for managing the programs in remaining states. EPA regions and

states use a mix of resources to manage class II programs, including EPA grant

funding, state funding, and federal and state personnel. EPA’s UIC grant funding

has remained at about $11 million for at least the past 10 years.

Class II programs from the eight selected states that GAO reviewed have

safeguards, such as construction requirements for injection wells, to protect

against contamination of underground sources of drinking water. Programs in two

states are managed by EPA and rely on EPA safeguards, while the remaining six

programs are state managed and have their own safeguards that EPA deemed

effective at preventing such contamination. Overall, EPA and state program

officials reported that these safeguards are protective, resulting in few known

incidents of contamination. However, the safeguards do not address emerging

underground injection risks, such as seismic activity and overly high pressure in

geologic formations leading to surface outbreaks of fluids. EPA officials said they

manage these risks on a state-by-state basis, and some states have additional

safeguards to address them. EPA has tasked its UIC Technical Workgroup with

reviewing induced seismicity associated with injection wells and possible

safeguards, but it does not plan reviews of other emerging risks, such as high

pressure in formations. Without reviews of these risks, class II programs may not

have the information necessary to fully protect underground drinking water.

EPA is not consistently conducting two key oversight and enforcement activities

for class II programs. First, EPA does not consistently conduct annual on-site

state program evaluations as directed in guidance because, according to some

EPA officials, the agency does not have the resources to do so. The agency has

not, however, evaluated its guidance, which dates from the 1980s, to determine

which activities are essential for effective oversight. Without such an evaluation,

EPA does not know what oversight activities are most effective or necessary.

Second, to enforce state class II requirements, under current agency regulations,

EPA must approve and incorporate state program requirements and any

changes to them into federal regulations through a rulemaking. EPA has not

incorporated all such requirements and changes into federal regulations and, as

a result, may not be able to enforce all state program requirements. Some EPA

officials said that incorporating changes into federal regulations through the

rulemaking process is burdensome and time-consuming. EPA has not, however,

evaluated alternatives for a more efficient process to approve and incorporate

state program requirements and changes into regulations. Without incorporating

these requirements and changes into federal regulations, EPA cannot enforce

them if a state does not take action or requests EPA’s assistance to take action.

EPA collects a large amount of data on each class II program, but the data are

not reliable (i.e., complete or comparable) to report at a national level. EPA is

working on a national database that will allow it to report UIC results at a national

level, but the database will not be fully implemented for at least 2 to 3 years.

Filed under Environment, EPA, Regulation, Shale Gas Development-Hydrofracking, Water Tagged with drinking water contamination, EPA, GAO, groundwater, injection wells, underground water, waste disposal, waste water

PIPELINE SAFETY Collecting Data and Sharing Information on Federally Unregulated Gathering Pipelines Could Help Enhance Safety GAO-12-388, Mar 22, 2012

November 15, 2012

http://www.gao.gov/products/GAO-12-388

PIPELINE SAFETY

Collecting Data and Sharing Information on Federally Unregulated Gathering Pipelines Could Help Enhance Safety

GAO-12-388, Mar 22, 2012

Filed under Pipelines, Regulation, Shale Gas Development-Hydrofracking Tagged with GAO, gathering lines, pipelines, safety

U.S. GAO – Unconventional Oil and Gas Production: Opportunities and Challenges of Oil Shale Development

November 13, 2012

U.S. GAO – Unconventional Oil and Gas Production: Opportunities and Challenges of Oil Shale Development.

What GAO Found

In its October 2010 report, GAO noted that oil shale development presents the following opportunities for the United States:

Increasing domestic oil production. Tapping the vast amounts of oil locked within U.S. oil shale formations could go a long way toward satisfying the nation’s future oil demands. Oil shale deposits in the Green River Formation are estimated to contain up to 3 trillion barrels of oil, half of which may be recoverable, which is about equal to the entire world’s proven oil reserves.

Socioeconomic benefits. Development of oil shale resources could lead to the creation of jobs, increases in wealth, and increases in tax and royalty payments to federal and state governments for oil produced on their lands. The extent of these benefits, however, is unknown at this time because the ultimate size of the industry is uncertain.

In addition to these opportunities and the uncertainty of not yet having an economical and environmentally viable commercial scale technology, the following challenges should also be considered:

Impacts on water, air, and wildlife. Developing oil shale and providing power for oil shale operations and other activities will require large amounts of water and could have significant impacts on the quality and quantity of surface and groundwater resources. In addition, construction and mining activities during development can temporarily degrade air quality in local areas. There can also be long-term regional increases in air pollutants from oil shale processing and the generation of additional electricity to power oil shale development operations. Oil shale operations will also require the clearing of large surface areas of topsoil and vegetation which can affect wildlife habitat, and the withdrawal of large quantities of surface water which could also negatively impact aquatic life.

Socioeconomic impacts. Oil shale development can bring an influx of workers, who along with their families can put additional stress on local infrastructure such as roads, housing, municipal water systems, and schools. Development from expansion of extractive industries, such as oil shale or oil and gas, has typically followed a “boom and bust” cycle, making planning for growth difficult for local governments. Moreover, traditional rural uses would be displaced by industrial uses and areas that rely on tourism and natural resources would be negatively impacted.

GAO’s 2010 report found that federal research efforts on the impacts of oil shale development did not provide sufficient data for future monitoring and that there was a greater need for collaboration among key federal stakeholders to address water resources and research issues. Specifically, Interior and DOE officials generally have not shared information on their oil shale research efforts, and there was a need for the federal agencies to improve their collaboration and develop more comprehensive baseline information related to water resources in the region. GAO made three recommendations to Interior, which the department generally concurred with and has already begun to take actions to address.

Why GAO Did This Study

Fossil fuels are important to both the global and U.S. economies, and “unconventional” oil and gas resources—resources that cannot be produced, transported, or refined using traditional techniques—are expected to play a larger role in helping the United States meet future energy needs. With rising energy prices one such resource that has received renewed domestic attention in recent years is oil shale. Oil shale is a sedimentary rock that contains solid organic material that can be converted into an oil-like product when heated. About 72 percent of this oil shale is located within the Green River Formation in Colorado, Utah, and Wyoming and lies beneath federal lands managed by the Department of the Interior’s Bureau of Land Management, making the federal government a key player in its potential development. In addition, the Department of Energy (DOE), advances energy technology, including for oil shale, through its various offices, national laboratories, and arrangements with universities.

GAO’s testimony is based on its October 2010 report on the impacts of oil shale development (GAO-11-35). This testimony summarizes the opportunities and challenges of oil shale development identified in that report and the status of prior GAO recommendations that Interior take actions to better prepare for the possible future impacts of oil shale development.

For more information, contact Anu K. Mittal at (202) 512-3841 or mittala@gao.gov.

Filed under Community Impacts, Economics, Environment, Shale Gas Development-Hydrofracking, Water Tagged with economic impacts, GAO, hydrofracking

U.S. GAO – Oil and Gas: Information on Shale Resources, Development, and Environmental and Public Health Risks

November 13, 2012

U.S. GAO – Oil and Gas: Information on Shale Resources, Development, and Environmental and Public Health Risks.

What GAO Found

Estimates of the size of shale oil and gas resources in the United States by the Energy Information Administration (EIA), U.S. Geological Survey (USGS), and the Potential Gas Committee–three organizations that estimate the size of these resources–have increased over the last 5 years, which could mean an increase in the nation’s energy portfolio. For example, in 2012, EIA estimated that the amount of technically recoverable shale gas in the United States was 482 trillion cubic feet–an increase of 280 percent from EIA’s 2008 estimate. However, according to EIA and USGS officials, estimates of the size of shale oil and gas resources in the United States are highly dependent on the data, methodologies, model structures, and assumptions used to develop them. In addition, less is known about the amount of technically recoverable shale oil than shale gas, in part because large-scale production of shale oil has been under way for only the past few years. Estimates are based on data available at a given point in time and will change as additional information becomes available. In addition, domestic shale oil and gas production has experienced substantial growth; shale oil production increased more than fivefold from 2007 to 2011, and shale gas production increased more than fourfold from 2007 to 2011.

Oil and gas development, whether conventional or shale oil and gas, pose inherent environmental and public health risks, but the extent of these risks associated with shale oil and gas development is unknown, in part, because the studies GAO reviewed do not generally take into account the potential long-term, cumulative effects. For example, according to a number of studies and publications GAO reviewed, shale oil and gas development poses risks to air quality, generally as the result of (1) engine exhaust from increased truck traffic, (2) emissions from diesel-powered pumps used to power equipment, (3) gas that is flared (burned) or vented (released directly into the atmosphere) for operational reasons, and (4) unintentional emissions of pollutants from faulty equipment or impoundments–temporary storage areas. Similarly, a number of studies and publications GAO reviewed indicate that shale oil and gas development poses risks to water quality from contamination of surface water and groundwater as a result of erosion from ground disturbances, spills and releases of chemicals and other fluids, or underground migration of gases and chemicals. For example, tanks storing toxic chemicals or hoses and pipes used to convey wastes to the tanks could leak, or impoundments containing wastes could overflow as a result of extensive rainfall. According to the New York Department of Environmental Conservation’s 2011 Supplemental Generic Environmental Impact Statement, spilled, leaked, or released chemicals or wastes could flow to a surface water body or infiltrate the ground, reaching and contaminating subsurface soils and aquifers. In addition, shale oil and gas development poses a risk to land resources and wildlife habitat as a result of constructing, operating, and maintaining the infrastructure necessary to develop oil and gas; using toxic chemicals; and injecting fluids underground. However, the extent of these risks is unknown. Further, the extent and severity of environmental and public health risks identified in the studies and publications GAO reviewed may vary significantly across shale basins and also within basins because of location- and process-specific factors, including the location and rate of development; geological characteristics, such as permeability, thickness, and porosity of the formations; climatic conditions; business practices; and regulatory and enforcement activities.

Why GAO Did This Study

New applications of horizontal drilling techniques and hydraulic fracturing–in which water, sand, and chemical additives are injected under high pressure to create and maintain fractures in underground formations–allow oil and natural gas from shale formations (known as “shale oil” and “shale gas”) to be developed. As exploration and development of shale oil and gas have increased–including in areas of the country without a history of oil and natural gas development–questions have been raised about the estimates of the size of these resources, as well as the processes used to extract them.

GAO was asked to determine what is known about the (1) size of shale oil and gas resources and the amount produced from 2007 through 2011 and (2) environmental and public health risks associated with the development of shale oil and gas. GAO reviewed estimates and data from federal and nongovernmental organizations on the size and production of shale oil and gas resources. GAO also interviewed federal and state regulatory officials, representatives from industry and environmental organizations, oil and gas operators, and researchers from academic institutions.

GAO is not making any recommendations in this report. We provided a draft of this report to the Department of Energy, the Department of the Interior, and the Environmental Protection Agency for review. The Department of the Interior and the Environmental Protection Agency provided technical comments, which we incorporated as appropriate. The Department of Energy did not provide comments.

For more information, contact Frank Rusco at (202) 512-3841 or ruscof@gao.gov.

Filed under Health, Regulation, Risk Assessment, Shale Gas Development-Hydrofracking, Water Tagged with DOE, DOI, EPA, GAO, health impacts, hydrofracking, risks