Witnesses
Cynthia Dougherty
Director, Office of Ground Water and Drinking Water, Environmental Protection Agency
James Hanlon
Director, Office of Wastewater Management, Environmental Protection Agency
Dana Murphy
Chair, Oklahoma Corporation Commission
Michael Krancer
Secretary, Pennsylvania Department of Environmental Protection
Tom Stewart
Executive Vice President, Ohio Oil and Gas Association
Martie Groome
Vice Chair, Pretreatment and Pollution Prevention Committee, National Association of Clean Water Agencies

 

Subcommittee Members Present
Bob Gibbs, Chairman (R-OH)
Timothy Bishop, Ranking Member (D-NY)
Andy Harris (R-MD)
Chip Cravaack (R-MN)
Larry Buchson (R-IN)
Bill Schuster (R-PA)
Jason Altmire (D-PA)
Grace Napolitano (D-CA)
John Duncan, Jr. (R-TN)
James Lankford (R-OK)
Jaime Herrera Beutler (R-WA)

 

On Wednesday, November 16, 2011, the House Committee on Transportation and Infrastructure Subcommittee on Water Resources and Environment held a hearing to discuss regulatory approaches to hydraulic fracturing and shale gas production. The primary topics of interest were state versus federal regulation of shale gas production and the future of a potential national Environmental Protection Agency (EPA)-regulated effluent standard for wastewater treatment. EPA is currently working on a study, which will be released in two parts in 2012 and 2014, that will investigate the effects of hydraulic fracturing on drinking water and the need for management of produced waters, or wastewater, from the drilling wells. This issue has arisen because many Privately-Owned Treatment Works (POTW) do not have the capability to test or treat many of the wastewaters, a step that is required of waters that are not directly reinjected into the ground.

 

Chairman Bob Gibbs (R-OH) opened the hearing saying that the shale gas industry is currently causing an economic boom, creating thousands of jobs, and benefitting the nation’s national security. He said that wastewater from shale gas wells can contain salts and radioactive materials, but POTWs are not well-equipped to treat the waters. Because EPA is currently in undergoing a study to evaluate a national wastewater standard, Gibbs argued that states will “suffer” from “needlessly restrictive” regulations. Ranking Member Timothy Bishop (D-NY) read from his opening statement that he thought the hearing should focus on “what to do with the chemicals.” He dismissed the Republicans’ alarm from the EPA study, saying that the report will not come out until 2014 and that “we should not run from science.” He stated the need for a minimum national standard of regulation for wastewaters, though he supports an overall state regulation of the industry.

 

James Hanlon of the EPA listed from his testimony the agency’s upcoming actions, including the development of treatment standards for wastewater discharge, guidance for permitting diesel fuel use for drilling, and water quality permitting. He stressed the EPA’s desire to create “regulations that are affordable,” and promised the EPA will consider jobs and the local economies during its studies. Cynthia Dougherty, also of the EPA, did not provide an opening statement.

 

Dana Murphy of the Oklahoma Corporation Commission told the committee that the two goals of the shale gas industry, protection of water and a beneficial development of the nation’s gas resources, are “not mutually exclusive goals.” She asserted that states are the appropriate bodies to regulate the industry because of their proximity to the unique characteristics and needs of the wells, and because state officials are directly responsible to the citizens. Nevertheless, Murphy believed that the federal government can beneficially encourage state collaboration.

 

Michael Krancer of the Pennsylvania Department of Environmental Protection asserted in his opening statement that this hearing was held because the states originally took the initiative to create their own wastewater pretreatment regulations, but the federal government “followed” the example and is now attempting to get involved. In order to clarify popular “myths” about drilling fluids, Krancer told the committee that ninety-nine percent of the fluid is water and sand, and that there have never been any instances of groundwater contamination from hydraulic fracturing. Tom Stewart of the Ohio Oil and Gas Association focused his opening statement on positive collaborative efforts between states, rather than a reliance on federal regulation. Martie Groome of the National Association of Clean Water Agencies told the committee that her program has had great success with treating industrial wastewaters. Under the current National Pretreatment Program for industries other than shale gas, the regulatory authority is in the hands of the local authorities and the POTWs, yet they enforce a National Pretreatment Standard. She argued that a “scientifically and economically sound” national pretreatment standard for the shale gas extraction industry may provide protection to both the industry and to POTWs by providing a baseline for treatment of wastewater.

 

During the question and answer period, Chairman Gibbs asked the panel to elaborate on any contamination problems that have happened in each of their states. Murphy told the congressman that Oklahoma has over five thousand wells, yet there have been no documented incidences of pollution to waters as a result of hydraulic fracturing. Krancer said “fracking has never caused groundwater contamination” in Pennsylvania; Stewart spoke of 80,000 wells in Ohio, but no correlation between hydraulic fracturing and groundwater contamination. Larry Buchson (R-IN) inquired about the reason of EPA’s study of hydraulic fracturing on drinking water, and if there was an incident of contamination that brought it on. Dougherty told the congressman that the House  Appropriations Conference Committee requested the study be done in 2010; there was no incident of contamination. Buchson told the committee that there needs to be a “specific reason that the federal government is trying to usurp the power of the states.”

 

Gibbs asked Hanlon if the states are equipped to protect the environment and if he thinks there should be a national pretreatment standard. He replied that EPA “has the expectation” the states are  equipped to do so and will do a good job; he also believed a national standard would be beneficial. Bill Shuster (R-PA) asked Stewart his opinion on state regulation of pretreatment standards. Stewart explained that individual wells differ greatly and the people “closest to the well” understand best what types of standards are needed.

 

Ranking Member Bishop asked Krancer if he sees Pennsylvania’s regulatory methods as a model for the rest of the county, to which Krancer said he does. Bishop asked Krancer why he would not want other states to adopt similar methods in order to protect Pennsylvania if, for example, New York did not abide by clean water standards and its wastewater disposal affected the freshwater resources of Pennsylvania. Krancer replied that he “is not in a position to answer a hypothetical.” He added that “common denominators” are not a good idea, since states know how to handle their own pretreatments. James Lankford (R-OK) asked Hanlon whether he had ever been to a “frack site.” Hanlon replied that he had not, but his staff had. Lankford recommended that he visit a site, as it is very informative.

 

Shuster asked Murphy about Oklahoma’s regulatory process and what she thought of national effluent standards. After describing her state’s open rule-making process that involves environmentalists, geologists, and engineers, she said EPA has a different approach that does not put “dialogue first.” She added that Oklahoma is working through the State Review of Oil and Natural Gas Environmental Regulations, STRONGER, as well as FracFocus, an online well information disclosure website. When Gibbs asked if EPA holds any public meetings for stakeholders, Hanlon said EPA is working with them as the study progresses. Lankford asked Hanlon to submit to the committee a detailed description of the EPA’s peer review process.

 

Grace Napolitano (D-CA) asked Groome about the relationship between wastewater and POTWs. Unless the POTW can characterize the constituents within the industrial wastewater, Groome said, the treatment plant will likely not accept the water because they do not have the facilities to treat it. Napolitano inquired about the benefit of a national pretreatment standard and if any research and development (R&D) has been done on the topic. Although produced waters can vary from well to well, Hanlon told the congresswoman that there are similarities in the waters that will allow for “consistent affordable standards.” According to him, the EPA is currently working on effluent standard R&D.

 

Jason Altmire (D-PA) asked Hanlon to offer an opinion of the 2010 Carnegie Mellon study that looked at high levels of bromide in hydraulic fracturing areas. Hanlon replied that some potential sources of the unusually high bromide levels include flowback water, mining operations, and power plants, but he believes that “fracking might be one of the causes.” Altmire asked Hanlon if the EPA will consider local jobs and economic impacts during its study. While it is not a focus of the appropriations committee’s request, EPA “will be looking at it” as it examines effluent guidelines. 

 

Witness testimonies and the hearing briefing memo and archived webcast can be found on the committee web site.