EPA Establishes New Guidelines for Use of Diesel Fuels for Oil and Gas Hydraulic Fracturing

On February 5, 2014, The United States Environmental Protection Agency issued a Memorandum from the Office of Ground Water and Drinking Water implementing a “technical guidance” governing the use of diesel fuels by oil and gas industry in fracturing operations.   Generally, all oil and gas development is exempt from UIC permitting under the Safe Water  Drinking Act.  However, the EPA  has chosen to regulate those operations which use “diesel fuels” in fracturing fluids or propping agents.  The EPA asserts that the new guidance does not “establish any new permitting requirements” but is merely an explanation of existing legal requirements and contains “non-binding” recommendations for EPA permit writers. 

The EPA identifies in the “guidance” five diesel fuels which if used in fracturing fluids are subject to the regulatory process.  Those diesel fuels (“DFs”) are: Diesel Fuel No. 1 – CASRN 68334-30-5, (automotive diesel oil), Fuel, Diesel, No. 2 – CASRN 68476-34-6; Fuel Oil No. 2 – CASRN 68476-30-2 (including heating oil, home heating oils, distillate fuel oils, light), Fuel Oil No. 4- 68476-31-3 (cat cracker feed stock, EPA Pesticide Chemical Code 063514) and Kerosene – 8008-20-6.  The EPA recognized that not all diesel fuels used in hydraulic fracturing operations are subject to the regulatory process.  The EPA excluded those diesel fuels which are a component of drilling muds or pipe joint compounds used in the well construction process or those used (as fuel) in motorized surface equipment.

The “guidance” addresses the following:  (1) Considerations in Submission and Review of Permit Applications; (2) Information to be included in the permit: (3) Can multiple wells be authorized by one permit; (4) Application of Permit Duration and UIC Class II regulations after HF ceases at a well;  (5) applicability of the area review requirements in 40 CFR §146.6; (6) Application of Class II Well Construction Requirements; (7) Application of the Construction Requirements to previously constructed wells; (8) Application of the Class II Requirements governing operation, mechanical integrity, monitoring and reporting; (9) Application of the Financial Responsibility requirements; and, (10) What, if any, public notice and environmental justice considerations are applicable to such wells.

Probably the most pressing questions facing any company currently using DFs in their fracturing fluids is: Do I need a permit?  Yes.  The EPA asserts its authority to require existing operations to obtain a “permit”  based upon its beliefs that leaks into the surrounding ground waters may occur due to the age of existing wells or that the existing wells were constructed when less stringent construction standards applied.  The EPA suggests permit writers “may” permit existing wells using DFs in HF operations, if the owner or operator can demonstrate that injection will not result in movement of fluids into underground drinking water supplies.  Apparently, if the permit writers believes that the owner or operator has not submitted sufficient information, the EPA suggests that permit writers can require the owners or operators of existing wells to “perform” actions to ensure that underground drinking waters are not endangered before the writer issues a permit allowing the use of the designated diesel fuels in the hydraulic fluids.

Bob Pollitt is a member of Steptoe & Johnson's professional staff assisting attorneys with research and client retention. Before focusing his efforts on research, Bob represented clients in administrative and civil environmental matters and related toxic tort litigation, including environmental permitting, compliance and enforcement in the areas of coal, water and groundwater resources, solid and hazardous waste and both above and underground storage tanks.
 
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