What Is Fracking Wastewater and How Should We Manage It?

Vol. 28 No. 3

Mr. Mills is a partner in the Sacramento, California, office, and Ms. Seifried is an associate in the Portland, Oregon, office of Stoel Rives LLP.

Today, one cannot browse through the environmental news without finding an article touting the environmental hazards arising from, or the economic benefits derived from, hydraulic fracturing (commonly known as “fracking”). On the hazards side, concerns relating to fracking are as broad and diverse as the potential for contamination of drinking water by oil, gas, or fracking fluids; earthquakes induced by fracking activities; and livestock ailments induced by nearby fracking operations. On the benefits side, there are increases in domestic oil and gas production and a reduced reliance on foreign sources of hydrocarbons and energy. This article will not provide a definitive answer as to whether fracking is ultimately “good” or bad” for our society considering all the potential economic and environmental impacts that technology may create. Rather, this article addresses more specific, tangible questions: what are the potential environmental impacts of hydraulic fracturing specifically relating to the wastewater that results from fracking operations, and how should those impacts be addressed under current and developing laws?

One of the primary concerns cited by government, industry, academic, and environmental experts alike relating to fracking is the management of wastewater. Among most of these experts, there is a high degree of consensus that the on-site storage and the disposal of fracking wastewater pose some risk to the quality of surface water and groundwater. These risks relate directly to the chemical constituents in fracking wastewater, originating from the fracking fluids themselves or the composition of naturally occurring produced water associated with oil or gas extraction, and whether or not these chemicals can or do migrate to surface waters or groundwater aquifers at concentrations significant enough to harm human health or the environment. Another potential risk commonly discussed in association with fracking wastewater, is induced seismicity. However, regulators have indicated that this risk is more accurately associated with oil and gas drilling operations generally and not specifically with fracking. Although disposal by injection may be related to induced seismicity in some circumstances, it is only in connection with deep injection over long periods of time, which is not typically required to dispose of fracking wastewater.

Most of the potential environmental risks associated with fracking wastewater are already regulated to some degree by local, state, and federal agencies. These agencies regulate the major areas of potential risk identified by experts: the on-site storage of fracking wastewater and the disposition of fracking wastewater, including disposal by injection, indirect discharge through wastewater treatment plants, and reuse for fracking or other purposes. Of course, environmental groups and industry representatives disagree as to whether the current regulations are adequate and as to the type and extent of additional regulations necessary to minimize the potential risks associated with fracking wastewater and to ensure storage and disposal of these fluids in a manner that is safe for human health and the environment.

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There are proposals at all levels of government for varying degrees of increased regulation of fracking wastewater management. With the media and the public focused on the impacts of fracking, the prospects for, and enactments of, increased regulation of fracking wastewater at all levels of government vary widely and change regularly. Regulatory authorities in some areas have banned fracking outright, while others have imposed fracking moratoriums pending further study and the implementation of additional rules governing the practice. As of mid-2013, Vermont was the only state to have banned fracking outright, while other states and some localities had implemented moratoriums pending further study and regulation of the impacts of fracking. Local bans on fracking were recently upheld by a state court of appeals in New York. But lawmakers in most areas where fracking is commonly occurring have refused to prohibit the practice. In California, for example, legislators just recently rejected several proposed fracking moratoriums, while the state’s oil and gas regulatory agency has released a draft of proposed fracking regulations that would require a fracking permit and prescribe fracking wastewater management practices. Meanwhile, legislators in Illinois also rejected bills proposing fracking moratoriums, while enacting legislation imposing what analysts are calling the nation’s toughest fracking regulations.

In addition to fracking-specific regulations, fracking wastewater management is also subject to more general oil and gas drilling rules, laws governing spills and releases, water quality regulations, and underground injection control programs. While there are some exemptions from certain federal laws for fracking associated with oil and gas drilling operations, these do not generally extend to the management of wastewater associated with these operations or to the disposal of fracking wastewater in particular. For example, while the Energy Policy Act of 2005 exempts the injection of fracking fluids for the purpose of oil and gas production from underground injection control program requirements, this exemption does not apply to the injection of fracking wastewater that results from that process for the purpose of disposal.

This article will discuss how the current and proposed regulatory schemes address the potential environmental risks associated with fracking wastewater. The first part defines fracking wastewater, describes how it is generated, and identifies how its contents may impact human health and the environment. The second part explains the environmental impacts associated with the management of fracking wastewater, focusing on the storage and disposal practices of particular concern. The third part discusses existing federal laws governing the management of fracking wastewater, including storage and disposal practices, and provides an overview of current state regulations. Finally, this article concludes with a discussion of the status of key efforts to impose more stringent rules on fracking wastewater management at the federal and state level and the potential impact of these efforts on the oil and gas industry.

What Is Fracking Wastewater?

Fracking is a production technique used to stimulate the flow of produced oil or gas after a well has been drilled. Fracking is essentially the injection of fracking fluid at high pressure and typically thousands of feet below the surface to create fractures that allow oil and gas to escape from low-permeability rock. The fractures can extend up to hundreds of feet, generally horizontally but also vertically depending on the type, orientation, and condition of the formation and other potential geologic barriers to reaching the oil or gas from the surface. With computer-generated modeling, fracking operators determine and control the amount of fluid and pressure to minimize the resources necessary for maximum result. Fracking operators may also vary the components of the fracking fluid used depending on the type of geologic formation and the type and orientation of the hydrocarbon produced.

Water that comes to the surface as produced water during fracking operations, fracking wastewater, consists of both injected fracking fluid and formulation water. Fracking fluid is typically made up of about 95 percent water, 4.5 percent proppants, and 0.5 percent chemical additives. Proppants are solid materials used to keep the fracture open and are generally treated sand or man-made ceramic materials. Well operators report approximately 750 components that may be used in fracking fluids. A study of chemicals used in fracking operations from 2005 to 2009 identified only about twenty-nine of those that were known or possible carcinogens, considered human health risks in drinking water under the Safe Drinking Water Act, 42 U.S.C.§§ 300f et seq. (SDWA), or listed as hazardous air pollutants under the Clean Air Act. 42 U.S.C. §§ 740l et seq. FracFocus, the web-based independent fracking chemical disclosure registry managed by the Ground Water Protection Council and Interstate Oil and Gas Compact Commission that is mandatory in ten states and voluntary in several others, lists just over fifty chemicals that are the most commonly used in fracking. These chemical additives serve various functions: some are biocides that eliminate bacteria in the water or inhibitors to protect the pipes used in the process from corrosion, rust, and scale deposits; others are used to stabilize the product or as carriers or pH adjustors to transport and maintain the effectiveness of other components of the fluid. These chemicals also help to ensure the integrity of the well and maximize the capture of produced hydrocarbons at the surface. Depending on the geological characteristics of the well, anywhere from 10 percent to 50 percent of the fracking fluid will eventually return to the surface in produced water.

Formulation water is the water existing naturally in geologic formations that is released by fracking and comes to the surface with the oil or gas product. The volume of formulation water that comes to the surface varies widely between wells, depending on the type of hydrocarbon produced, the geographic location, and the type of geologic formation. The volume also varies throughout the life of a well—the production of gas typically results in more wastewater early on in the process, while the production of oil typically results in more wastewater as the process progresses. Consequently, the volume of produced water varies with the volume of formulation water, as well as the volume of fracking fluid used. Like formation water, the volume of fracking fluid used varies depending on the geologic formation and the type of hydrocarbon produced. For example, fracking operators in Pennsylvania and Texas typically use 2 million gallons of water or more, while operators in California use less than 200,000 gallons on average.

After combining with formulation water, the concentration of chemical additives from the fracking fluid is even lower in the wastewater that comes to the surface during fracking operations. In addition to low concentrations of chemical additives, fracking wastewater may contain salts, metals, dissolved organics, and naturally occurring radioactive materials. It is important to note that fracking wastewater is not the same as drilling wastes. Fracking is a production process and not a drilling technique. The drill rig is removed before fracking activities even begin. Consequently, fracking wastewater does not include drill cuttings and other wastes associated with the process of drilling the well.

How Does Fracking Wastewater Impact the Environment?

Several studies have identified potential risks of hydraulic fracturing to the environment, but few have examined the actual risks that fracking poses to the environment. And we have seen no credible studies confirming that fracking activities have actually contaminated water resources. The U.S. Environmental Protection Agency’s (EPA’s) own efforts to study the impact of fracking on water resources have waned over the past year. In June, EPA announced that the completion date for its study examining the potential risks of fracking to sources of drinking water had been delayed. Previously estimated for release in 2014, the study release date has now been pushed back to 2016. EPA also recently dropped its investigation into contamination of a drinking water aquifer below the town of Pavillion, Wyoming, allegedly caused by fracking activities at natural gas wells in the area. The preliminary results of EPA’s examination—finding evidence of methane, ethane, phenol, and diesel-range organics in test wells—drew criticism of EPA’s methodology from both the drilling company whose wells were under investigation and from state regulators. EPA has since handed the investigation over to the state of Wyoming to complete.

Many of the risks that critics often associate with fracking are, in fact, related to well drilling or oil and gas production more generally, rather than fracking activities. For example, although the potential for induced seismicity is a risk frequently cited by fracking critics, risk of induced seismic activity actually arises from the disposal by injection of any waste fluids, not just fracking wastewaters, and even then only in connection with deep injection over long periods. Although fracking wastewater is commonly disposed of by injection, it does not typically require deep injection over long periods of time more akin to the type that may be associated with earthquakes. Another risk often cited in association with fracking is groundwater contamination resulting from well leaks. While the integrity of well casings is important and is particularly at risk with respect to the increased pressurization during fracking operations, fracking typically occurs thousands of feet below the ground surface at depths well below any aquifers that may be used for drinking water. These fractures are also so far beneath the surface that they are often separated from groundwater by several layers of impermeable rock through which the fractures do not encroach. The much greater risk of groundwater contamination arises not from fracking activities themselves, but from the drilling of the well and the integrity of the well casing near the surface, which is an issue common to oil and gas production and already regulated.

It is after the produced water returns to the surface and exits the well that it poses the greatest risk to the environment. And, as noted above, the chemical additives in fracking fluid and natural components of formation water that return to the surface are already significantly diluted. Nonetheless, there is potential for a release of fracking wastewater to the land, surface water, or, ultimately, groundwater if it is not properly managed at the surface. Fracking wastewater is most likely to be released into the environment as the result of a leak from on-site storage, a spill during transportation to a treatment facility, or improper disposal. Experts in government, industry, academics, and environmental organizations, in a survey conducted by the Resources for the Future’s Center for Energy Economics and Policy, agreed that the greatest risks to the environment associated with fracking wastewater arise from the on-site storage of produced water and the subsequent disposal of that water. Krupnick, Alan, Hal Gordon, and Shelia Olmstead, Pathways to Dialogue: What the Experts Say about the Environmental Risks of Shale Gas Development (Feb. 2013). A study completed by the University of California, Berkeley, School of Law’s Center for Law, Energy & the Environment also concluded that the primary risks associated with fracking wastewater are from improper handling and storage on-site and the injection of wastewater into disposal wells. Kiparsky, Michael and Jayni Foley Hein, Regulation of Hydraulic Fracturing in California: A Wastewater and Water Quality Perspective (Apr. 2013).

The environmental risks relating to the storage and disposal of fracking wastewater relate primarily to the quality of surface water and groundwater. Storage risks arise from leaks in on-site storage tanks or pits, particularly when unlined, as well as the potential for spills during handling that may migrate to surface water or infiltrate to groundwater. If the wastewater is sent to an off-site plant for treatment, there is some risk of spills to the land or surface water during transportation. Fracking wastewater may also cause contamination if it is insufficiently treated before disposal, either by discharge to surface water or, more commonly, disposal by injection into the ground. These risks can be managed by the implementation of best management practices, many of which are already required under state and federal laws.

How Is Fracking Wastewater Currently Regulated?

Fracking operations are already regulated by most states through the regulation of oil and gas production. For wastewater in particular, the on-site storage of any fluids associated with oil and gas development and the discharge of these fluids to surface water or to the ground is addressed both by the regulation of oil and gas operations and of water quality. Although there are several exemptions for fracking that preclude otherwise applicable federal laws from regulating the technique, including the SDWA; the Resource Conservation and Recovery Act (RCRA); the Clean Water Act (CWA); and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), these exemptions either exclude fracking wastewater from their purview or are designed to prevent duplicate regulation. For example, the often cited Energy Policy Act of 2005 exemption from the SDWA underground injection control program applies specifically to the activity of fracking and does not extend to the management of fracking wastewater produced from the well during that activity. As such, the disposal of fracking wastewater by underground injection is subject to SDWA regulations. Other federal exemptions, such as the RCRA exemption from hazardous waste regulations for oil and gas development and the CWA exemption from industrial stormwater permitting requirements, are based on determinations that oil and gas activities do not pose any risks in these areas that are not adequately addressed under existing state and federal regulatory programs. Similar to the RCRA and CWA exemptions, the CERCLA exemption for petroleum and natural gas is designed to avoid duplicate regulation of releases of these materials, which are separately addressed under the Oil Pollution Act.

The management and disposal of fracking wastewater is regulated under federal laws, often through state-administered programs, and by state oil and gas resource conservation and water quality regulatory agencies. Although these regulations are not always focused on fracking activities in particular, the regulation of oil and gas operations generally includes the management of associated wastewaters and, therefore, also applies to the on-site handling and storage of wastewater generated by fracking operations. The regulation of discharges to surface water and groundwater, generally through underground injection control programs, also applies to the disposal of fracking wastewater. The oil and gas and water quality regulatory agencies in most states acknowledge potential overlaps in their jurisdictions regarding oil and gas operations and in many cases operate under intergovernmental agreements allocating regulatory responsibilities between them.

Except as regulated under federal laws, the extent of regulation of fracking activities varies among the states. As of the beginning of 2013, one state (Vermont) had banned fracking outright, while three other states had statewide fracking moratoriums in place. The statewide moratoriums were enacted by legislators in New York, New Jersey, and North Carolina for the purpose of completing further study on the impact of fracking on human health and the environment and to implement corresponding regulations governing the practice in more detail as necessary. In addition to the statewide moratoriums, several local governments have banned or placed moratoriums on fracking activities through their local zoning laws. A state appellate court in New York recently upheld these local bans, finding that they were within local government authority to control land use.

In states where fracking is allowed, the on-site storage and handling of fracking wastewater is typically governed by state oil and gas regulations, while the disposal of fracking wastewater is more generally addressed by federal water quality laws under state-administered programs. State oil and gas regulations prescribe requirements for the storage of fluids associated with oil and gas production, which may apply generally to wastewaters associated with oil and gas operations or specifically to fracking wastewaters in states where there are regulations addressing fracking operations in particular. Under these regulations, wastewater may be stored on-site in tanks and often also in “pits,” a term that includes what may commonly be referred to as ponds, sumps, or surface impoundments.

By the end of 2012, nearly thirty states regulated hydraulic fracturing either directly or by oil and gas regulations affecting fracking operations, and several states had pending fracking regulations. Of the states that regulated fracking, nineteen had regulations applying specifically to wastewater management. A study completed in June 2013 by Resources for the Future examined in more detail the regulation of fluids associated with oil and gas operations in thirty-one states with the potential for shale gas development, including Vermont, New York, New Jersey, and South Carolina, where fracking activities are not currently allowed. Richardson, Nathan, Madeline Gottlieb, Alan Krupnick, and Hannah Wiseman, The State of State Shale Gas Regulation (June 2013). The 2013 study found that all of the states where fracking was allowed regulated wastewater storage to some extent. Of those states, ten required storage of at least some types of fluids in tanks and twenty-one required some type of pit liner. In the states that allowed fluid storage in pits, seventeen had freeboard requirements varying from 1 to 3 feet.

While state oil and gas regulators govern the on-site management of fracking wastewater, the disposal of fracking wastewater is regulated under water quality laws typically administered by state water quality agencies. Fracking wastewater is most often disposed of by injection into underground wells, which is regulated under the SDWA by EPA’s or the state’s underground injection control (UIC) programs. A 2012 report on the management of produced water by the U.S. Government Accountability Office (GAO) found that more than 90 percent of the water produced during oil and gas operations was disposed by underground injection. GAO, Information on the Quantity, Quality, and Management of Water Produced during Oil and Gas Production 15 (Jan. 2012). Regulation under UIC programs is generally sufficient to prevent the migration of injected fluids to groundwater and avoid the need for treatment of fracking wastewater prior to injection. As a result, underground injection is commonly the most cost-effective option for disposal of fracking wastewater, depending primarily on the distance between the production well to the disposal well and the associated transportation costs. After disposal by underground injection, the next most common disposal practice is indirect discharge through a wastewater treatment plant. This type of disposal is regulated under the CWA by industrial pretreatment requirements and the national pollutant discharge elimination system (NPDES) program. Wastewaters that are destined for discharge to surface waters become subject to water quality requirements through the treatment facility’s NPDES permit. Less common than disposal, fracking wastewater may be reused for various purposes, including for fracking fluid or land application, such as for dust control or for irrigation. The reuse of fracking wastewater generally also requires pretreatment and is not allowed, or at least limited to specific uses, in most states.

Likewise, in most states, the agency that regulates oil and gas operations also regulates the injection of fracking wastewaters through UIC programs under the federal SDWA (in some states, UIC programs are administered by EPA). UIC programs are designed to prevent the contamination of aquifers that are, or have the potential to be, a source of public drinking water. EPA’s minimum requirements for UIC programs include construction, operating, monitoring and testing, reporting, and closure regulations. Wells used to dispose fracking wastewaters are generally regulated as Class II—wells injecting fluid associated with oil and gas production. The disposal of fracking wastewater by injection was regulated in each of the thirty-one states in the Resources for the Future study. In most of these states, underground injection is the preferred method of disposal for fracking wastewaters, but this varies depending on local geology. Only one of these states, North Carolina, has prohibited the underground injection of fluids produced by oil and gas operations, while Arkansas and Ohio have placed moratoriums on deep injection wells in certain areas where seismic activity is common. But note again that the type of deep injection often associated with the potential for inducing seismicity relates to the disposal of any type of fluid, not specifically to the disposal by injection of fracking wastewaters.

After underground injection, the next most common form of fracking wastewater disposal found is at treatment facilities. Of the thirty-one states in the Resources for the Future study, thirteen allowed disposal of fracking wastewater at treatment facilities. Treated wastewaters are most often disposed of by discharge to surface waters under NPDES permits, generally issued by state environmental agencies, but treated wastewaters may also be applied to the land or to roads where allowed. Any spills associated with the transportation of fracking wastewater to these facilities are primarily regulated by state cleanup programs. Less common than disposal by underground injection or at a treatment facility, disposal of fracking wastewater directly to surface waters was allowed in only nine of the thirty-one states in the Resources for the Future study.

In addition to the regulation of the management and disposal of fracking wastewater, many states are now also requiring fracking operators or suppliers to disclose the specific chemicals used in their fracking fluids. By the end of 2012, seventeen states required disclosure of chemicals used in fracking fluids, and another three states had pending rules that would require disclosure. Most of these states provide trade secret protection, although most still require disclosure of the chemical family for each component. Ten states now require disclosure on FracFocus, while others strongly encourage voluntary disclosure on the website. As of the end of June 2013, FracFocus listed 625 participating companies.

How Should Fracking Wastewater Be Managed?

The major areas of risk associated with fracking wastewater that has been identified by experts—on-site storage and disposal of fracking wastewater—are already regulated in most oil- and gas-producing states. All of the thirty-one states in the Resources for the Future study regulated the on-site storage of fracking wastewater, several required tank storage in at least some circumstances, and the majority required storage pits to be lined. The most common form of disposal, by underground injection, is regulated by UIC programs to protect aquifers that may provide a source of public drinking water. The next most common form of disposal for fracking wastewater, at a treatment facility for discharge to surface water, is heavily regulated under the CWA by federal pretreatment standards and state or federally issued NPDES permits.

Oil and gas production and water quality regulators in several states are engaged in efforts to increase regulation of fracking activities; however, the potential impacts of these new regulations on fracking wastewater storage and disposal practices vary. In California, for example, the Department of Conservation’s Division of Oil, Gas, and Geothermal Resources (DOGGR) has issued a draft rule to regulate fracking activities that would require lining for pits and secondary containment for tanks storing fracking wastewater. DOGGR has also announced that it is reevaluating its UIC well construction requirements and plans to increase its oversight of disposal wells. On the other hand, the Alaska Oil and Gas Conservation Commission has proposed new rules to regulate fracking activities that do not specifically address fracking wastewater management practices, other than a related requirement to disclose chemicals used in fracking fluids. At the other end of the spectrum, the New York State Department of Environmental Conservation’s (DEC) rulemaking process for new fracking regulations, including fracking wastewater management requirements, has been stalled awaiting the outcome of the New York State Commissioner of Health’s determination of whether the proposed rules adequately address potential impacts to public health. Even if the Health Commissioner finds that the rules are adequate, DEC will not proceed with the rulemaking unless DEC itself also determines that fracking activities can be conducted safely. Meanwhile, the statewide moratorium remains in place. Despite similarities in the existing rules that apply to fracking wastewater management, states seem to disagree regarding the extent to which additional regulation is necessary.

Like the state regulators, state lawmakers have proposed varying degrees of increased regulation of fracking activities. But the proposed bills are most often focused on state moratoriums (generally in association with a study of the risks associated with fracking in the state), fracking fluid disclosure requirements, and impacts on groundwater from fracking during oil or gas production rather than from fracking wastewater management. Nonetheless, the Illinois legislature recently enacted legislation that implements what experts are calling the strongest fracking regulations in the country. Under the new regulations, Illinois will require the storage of most fracking fluids in above-ground tanks, a wastewater management plan, and disclosure of fracking fluid additives before operations begin.

At the federal level, the agency most connected to environmental concerns associated with fracking, EPA, has yet to take significant action on the regulatory side. Other than the delayed study of potential risks to drinking water, EPA has not concerned itself with fracking wastewater management in particular, nor has EPA undergone significant efforts to explore further regulation of fracking activities in general. The Bureau of Land Management (BLM), on the other hand, issued an updated draft rule regulating fracking activities. While the updated rule does not make any material changes to fracking wastewater management requirements, BLM did invite comments relating to the potential costs and benefits associated with requiring closed tank storage of fluids. On the related issue of fracking fluid disclosure, BLM and EPA seem to agree: both have recently undergone efforts to increase disclosure requirements. BLM’s updated draft includes fracking fluid disclosure requirements, and EPA has recently required reporting of the use of a particular type of chemical used in fracking fluids—quaternary ammonium compound—under the Toxic Substances Control Act.

As to whether the risks associated with the management of fracking wastewater are adequately regulated, the answer may depend on where you live. While state oil and gas agencies are already regulating fracking wastewater storage and disposal practices, which, as previously stated, experts have identified as the primary risks associated with fracking wastewater, the states do not agree as to whether adequately managing those risks requires additional regulation. In states where fracking activities have come under scrutiny, the most likely outcome of increased regulation of fracking wastewater management may include storage in lined pits or tanks with secondary containment and more stringent UIC disposal well requirements. Nonetheless, the current focus seems to be more on fracking fluid disclosure requirements than on the management of fracking wastewater itself, which may ultimately have greater impact on the chemical contents of fracking wastewater than on its management.

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