HYDRAULIC FRACTURING

EPA's diesel fracking rules are credibility test for companies and regulators

The recommendations U.S. EPA issued yesterday for hydraulic fracturing with diesel ingredients aren't likely to slow drilling or even increase paperwork.

For one thing, in most states they're just that -- recommendations (E&ENews PM, Feb. 11).

And diesel isn't a component in many wells. EPA says fewer than 2 percent of wells appear to have been fracked with diesel in the mix, and only once as a "base fluid" in place of water.

The diesel fracking issue has been more about the credibility of companies and regulators rather than what is actually going underground. And its use in questioning regulators' credibility is now only likely to grow.

The guidance could be used as a benchmark against which people -- primarily environmentalists and other critics -- can measure state and local regulations.

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"It is a good point of comparison, given EPA's long experience with regulating underground injection," said Briana Mordick, staff scientist at the Natural Resources Defense Council.

EPA appears to be encouraging such comparisons. In a recent letter to environmental groups, EPA Administrator Gina McCarthy said the diesel guidance, calling for base-line testing and cementing standards, will be useful "wherever hydraulic fracturing occurs."

Industry officials are wary of the rule and the effect it could have on state oversight, which the industry prefers to federal regulation.

"By perpetuating this regulatory process, the rule threatens the primacy of states' underground injection control programs," Lee Fuller, vice president of government relations for the Independent Petroleum Association of America, said in a statement yesterday.

But the credibility issue goes further back than that, to the creation of the legal exemption that environmentalists call the "Halliburton loophole."

The exemption, written into the Energy Policy Act of 2005, said hydraulic fracturing wasn't covered by the underground injection control provisions of the Safe Drinking Water Act. But there was an exemption to the exemption -- when diesel fuel is used.

The law doesn't explain the significance of singling out diesel rather than many other toxic chemicals used in fracking. But most trace it to a 2004 EPA study of fracking for coalbed methane. It said the issue of water contamination did not merit further study but flagged the use of diesel as a concern. The language of the study is unclear, but some portions indicate the authors are referring to diesel as a base fluid, in place of water, rather than as part of a minor additive.

"Because much more gel can be dissolved in diesel fuel as compared to water, the use of diesel fuel increases the efficiency in transporting proppant in the fracturing fluids," the 2004 report stated. "Diesel fuel is the additive of greatest concern."

As Congress debated the exemption in 2005, industry representatives said the use of diesel was nearly nonexistent.

EPA officials took them at their word and never moved to regulate. But congressional inquiries later showed there were many frack jobs in which diesel was added to the water injected downhole.

To critics, that showed that industry's assertions about the safety of fracking weren't credible and EPA was too willing to believe the industry.

EPA faced questions about its credibility from industry as well. In 2010, EPA posted rules about fracturing with diesel on its website without notice, indicating that such operations required a "Class II" permit for underground injection. The change came without comment or press release and drew a lawsuit from industry groups.

And in 2011, EPA Deputy Administrator Bob Perciasepe said drillers who frack with diesel are supposed to get a permit, and if they do not, they are violating the law (Greenwire, April 12, 2011).

That prompted howls from oil and gas companies, which noted that there was no way to get such a permit. Industry officials say they have no need to use any of the chemicals covered by the guidance but worry that they could be punished for unpermitted uses in the past, even though there was no permit to get.

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