OIL AND GAS:

Democrats want broad definition of diesel in fracking rules

Democratic critics of industry's hydraulic fracturing practices are urging U.S. EPA to broadly define diesel fuel as it decides how to regulate the use of the toxic fuel in oil and gas drilling.

Rep. Diana DeGette (D-Colo.) and her colleagues say that if diesel is defined too narrowly, drillers will be able to evade regulation while still using diesel. Their fear is that benzene and similar toxic chemicals, often referred to as "BTEX," could contaminate drinking water.

"It could result in a scenario in which hydraulic fracturing companies could use many forms of diesel fuel -- even if the fuel contained BTEX compounds -- because the diesel formulation fell outside the scope of a narrow definition," said the letter to EPA Administrator Lisa Jackson.

The letter was also signed by some heavy-hitting Democratic colleagues: Rep. Henry Waxman of California, ranking member on the Energy and Commerce Committee; Rep. Rush Holt of New Jersey; and Rep. Ed Markey of Massachusetts, ranking member on the House Natural Resources Committee.

Industry says the law requiring a permit for hydraulic fracturing with diesel should cover only two products, defined by their "Chemical Abstracts Service," or CAS, numbers.

"Diesel fuel is a commercial product. From our review of the CAS numbers that fall under the term 'diesel fuel,' there are two applicable products," said Lee Fuller, executive director of Energy in Depth and vice president for government relations at the Independent Petroleum Association of America.

The lawmakers say that as industry makes its case, its representatives are misinterpreting a Democratic report issued earlier this year that listed three CAS numbers for diesel fuel. They say the list was meant to be an example of how diesel fuel is used in fracturing, not a comprehensive list.

The use of diesel fuel in fracturing fluid is far from widespread, but it has a tortuous history on Capitol Hill and at EPA headquarters. The current debate stems from a loophole in the law that environmentalists call the "Halliburton Loophole." The law exempted hydraulic fracturing from regulation by EPA under the Safe Drinking Water Act, unless diesel was in the mix.

A 2004 EPA study found that fracturing posed "little or no threat" to drinking water when used in drilling specific formations that yield coalbed methane. But the study did say that using diesel in fracturing fluid was worrisome.

At the time, Republicans in Congress were writing a massive energy bill and working to include the short provision exempting fracturing. Though the provision gained little media attention, Democrats blasted Republicans for allowing oil companies to inject diesel fuel into drinking water.

Bill drafters forged a compromise by allowing regulation when diesel was used.

When the bill passed in 2005, industry representatives said the use of diesel was essentially nonexistent. EPA officials, apparently believing that to be true, did not write any language implementing the regulation of diesel-laced fracturing water. But it turned out that drillers and the service companies that do "frack jobs" for them did still sometimes use diesel.

In January 2008, two such service companies acknowledged to Waxman, then the chairman of the House Oversight and Government Reform Committee, that they had used diesel fuel in fracturing. One of the companies continued to tell EPA that it was not using diesel. Waxman went public with the companies' admissions in 2010 (Greenwire, Feb. 19, 2010).

In April, EPA Administrator Lisa Jackson said her agency had begun working on "guidance" about how fracturing with diesel would be handled (Greenwire, April 29).

EPA is expected to issue draft guidance this summer -- which would be reviewed by the White House Office of Management and Budget -- and go out for public comment next fall, according to EPA documents. The final version would come out sometime after that, but the EPA documents did not give a time frame.

Industry officials say their key fear is not whether they will be allowed to use diesel or whether it will be regulated but whether they can be punished for having used it in the past without a permit. That would be unfair, they say, because there was no way to get a permit.

But they are also concerned that the new rules could become a de facto national standard for how to construct an oil well. That issue is currently handled by the states and industry trade associations.

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