US EPA Appears to Put TSCA Fracking Rule On Ice

A November 2014 report on anticipated regulatory actions by the US Environmental Protection Agency (“EPA”) indicates that development of a potential rule requiring manufacturers and processors of fracking chemicals to report chemical data, including health and safety studies, is a low priority and is unlikely to be pursued by EPA in the short-term.

In 2011, a coalition of environmental groups petitioned EPA to promulgate a rule specific to fracking chemicals and mixtures used in oil and gas exploration and production. The petition asked the agency to regulate fracking chemicals pursuant to its authority under the Toxic Substances Control Act (“TSCA”).

More specifically, the petition asked EPA to adopt a rule:

• Requiring, pursuant to Section 4 of TSCA, that manufacturers and distributors of fracking chemicals conduct toxicity testing and make those testing results available to the public; and
• Imposing, pursuant to Section 8 of TSCA, recordkeeping and reporting requirements for fracking chemicals used in oil and gas exploration and production.

Shortly after receiving the petition, EPA concluded that the petitioners failed to “set forth sufficient facts” to support the request for a rule pursuant to Section 4 of TSCA. EPA further explained the basis for rejecting the request for a Section 4 rulemaking in a July 11, 2013, Federal Register notice (78 FR 41,768). In the same notice, EPA announced its intent to proceed with the publication of an Advance Notice of Proposed Rulemaking (“ANPR”) as a first step in evaluating the petitioners’ request that EPA adopt recordkeeping and reporting requirements for fracking chemicals pursuant to EPA’s authority provided by Section 8 of TSCA.

EPA published its ANPR addressing the potential regulation of fracking chemicals in May 2014 (79 FR 28,664). According to EPA, the purpose of the ANPR was to “initiat[e] a public participation process to seek comment on the information that should be reported or disclosed for hydraulic fracturing chemical substances and mixtures and the mechanism for obtaining this information.” The public comment period for the ANPR was extended by EPA and closed in September of this year. Nearly 2,500 public comments on the ANPR were received by EPA and have been placed into the administrative record.

If EPA chooses to proceed with a rulemaking, the Agency’s next steps would entail: (i) reviewing the ANPR public comments; (ii) developing a specific proposed rule to address fracking chemicals pursuant to EPA’s authority under Section 8 of TSCA; and (iii) publishing the proposed rule in the Federal Register for public comment.

On November 21, 2014, EPA published its semi-annual Regulatory Plan, which highlights priority areas for regulatory development. The TSCA rulemaking for fracking chemicals was not included as a priority in the Regulatory Plan. EPA’s summary of the status of a potential rulemaking, instead, provides the following information:

• EPA placed the potential rulemaking into its “long-term action” category. In submitting regulatory plans, agencies generally categorize actions into one of five stages: pre-rule, proposed rule, final rule, completed action, or long-term action. It is generally accepted that EPA lists rules in the long-term action category when it does not expect to take any significant steps to advance a potential rule over the next twelve months, and thus considers the rule to be a lower priority in the short-term.
• EPA indicates that the “Next Action [is] Undetermined” for the potential rulemaking, states that no legal deadlines apply to a potential rulemaking, and provides no specific date for future agency action on a potential rule.
• EPA classifies a potential rulemaking as “Other Significant,” which applies to those regulations that are considered by EPA to have a “substantial impact on the public interest,” but are not “Economically Significant,” i.e., do not have an annual effect of at least $100 million.

It appears unlikely, therefore, that EPA will publish a proposed rule to impose recordkeeping and reporting requirements for fracking on the oil and gas industry anytime in 2015. In the meantime, a number of states -- including, recently, California and Colorado -- have adopted recordkeeping, reporting, and/or public disclosures requirements related to fracking operations. For the time being, therefore, it appears that States, and not EPA, will take the lead in regulating chemical usage related to fracking operations.

Although EPA has put the brakes on proposing a TSCA rule applicable to fracking chemicals, EPA will continue to evaluate fracking. The Agency, for example, is proceeding with a comprehensive study originally announced in March 2010 that is intended to “better understand any potential impacts of hydraulic fracturing for oil and gas on drinking water resources.”  According to EPA, “work is underway” to prepare a draft report for public comment and peer review. Further information on the status of that study, which was requested by Congress via a fiscal year 2010 Appropriations Committee Conference Report, is available by clicking here.

 

--Tom Boer

For more information, contact Tom Boer at jtb@bcltlaw.com, or (415) 228-5413.