UNCONVENTIONAL OIL AND GAS DEVELOPMENT Key Environmental and Public Health Requirements

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

 

 

 

 

 

 

 

 

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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.

B