Laws and Regulations

Federal Regulations:  

The EPA summarizes the federal regulatory role in Providing Regulatory Clarity and Protections against Known Risks.  There is considerable complexity surrounding the details of the federal regulations which apply to hydraulic fracturing operations and those from which the industry is exempt.

Federal legislation such as the Safe Water Drinking Act, Clean Water Act, Water Pollution Control Act, Resource Conservation and Recovery Act, National Environmental Policy Act, and the Toxic Release Inventory would be expected to provide oversight of the oil and gas industry.  However, the Energy Policy Act of 2005, often referred to as the “Halliburton Loophole”, provides many exemptions to hydraulic fracturing operations.  Some, including Pennsylvania’s Department of Environmental Protection Secretary, Michael Krancer, object to elements of  the Energy Policy Act being dubbed a loophole since state regulation and enforcement do a sufficient job of overseeing the oil and gas industry.  However, the EPA is conducting a study of its practice to remain out of the oversight of hydraulic fracturing.  StateImpact, a public media outlet focused on the environmental and fiscal impact of Pennsylvania’s energy economy, provides an interesting overview of what federal regulation would look like if the natural gas industry were held to the same standards as other federally regulated industries at Burning Question: What Would Life Be Like Without the Halliburton Loophole?

Safe Water Drinking Act:  The “Haliburton Loophole” or the Energy Policy Act of 2005, clarifies the exclusion of hydraulic fracturing operations from the Safe Drinking Water Act, particularly the Underground Injection Control (UIC) program, which regulates the underground injection of hazardous materials in order to protect the safety of drinking water sources.  Since hydraulic fracturing fluids and propping agents are considered a tool of oil and natural gas production rather than a “waste”, they are not regulated by the SDWA.  Read a good summary of EPA’s Regulation of Hydraulic Fracturing Under the Safe Drinking Water Act.

Clean Water Act:  The EPA does have authority to regulate the disposal of flowback from hydraulic fracturing operations into surface waters under the National Pollutant Discharge Elimination System (NPDES) of the Clean Water Act.  However oil and gas production are exempted, also through the “Haliburton Loophole”, from the stormwater runoff regulations of the Clean Water Act which would otherwise apply to pipelines and well pads, leaving runoff regulation solely to the state.

Resource Conservation and Recovery Act: The EPA regulates industrial wastes from “cradle to grave”, however flowback wastewater when at the well site or being transported are considered residual wastes rather than hazardous wastes and therefore not regulated.

National Environmental Policy Act:  Environmental impact statements, required by this act, are less stringent for the oil and gas industry due to the “Halliburton Loophole”.

Toxic Release Inventory:  The oil and gas industry are exempt from reporting toxic chemical usage to the EPA.

Pennsylvania State Regulations:  

Oil and gas exploration in Pennsylvania is regulated by the Department of Environmental Protection’s Office of Oil and Gas Management and multiple environmental protection laws. The DEP offers an overview of the regulations, statutes, policies and manuals relevant to the oil and gas industry at the Office of Oil and Gas Management’s Laws, Regulations and Guidelines.  Understanding all the state regulations can be complex due to revisions and amendments over the years.  STRONGER, the State Review of Oil and Natural Gas Environmental Regulations, formed cooperatively by the EPA and the Interstate Oil and Gas Compact Commission, carries out reviews of state regulatory programs with the goals of sharing effective environmental protection strategies and identifying opportunities for improvement.  The 2010 state review of Pennsylvania  includes many details about state regulation strengths and weaknesses but does not yet account for the changes enacted in Act 13.

Act 13:  The most significant legislation pertaining to deep shale drilling and hydraulic fracturing is Act 13 of 2012.  Signed into law by Governor Corbett, Act 13 updated and recodified the Oil and Gas Act into 58 Pa.C.S. (Oil and Gas) and created six chapters (Unconventional Gas Well Fee, Oil and Gas Lease Fund, Natural Gas Energy Development Program, Development, Local Ordinances Relating to Oil and Gas Operation, and Responsibility for Fee).  Most significantly, Act 13 includes new provisions specifically targeting unconventional  (i.e., shale) natural gas development using hydraulic fracturing.  Act 13 has both been lauded as legislation that bolsters environmental and safety provisions as well as criticized for limiting local municipalities’ ability to regulate drilling operations through zoning provisions (tied up in the courts as of late 2012), requiring physicians to sign non-disclosure agreements when treating patients affected by a trade-secret chemical used by the industry, and potentially still falling short on environmental protection measures.

        • Permit fees were increased from $100 to an average of $3,220 with the fee increasing as the length of the well increases.  The increased well permit fee is intended to allow the DEP to further staff the oil and gas program.
        • Well construction, casing, and cementing standards were updated with the aim of further preventing gas migration and protecting water supplies.
        • Well completion reporting requirements were expanded, including disclosure of hydraulic fracturing chemicals.
        • Wastewater treatment requirements were revised to limit the discharge of total dissolved solids, chlorides and radium from new or expanded water treatment facilities used to process oil and gas wastewater to drinking water standards.
        • Reuse of recycled water and development of alternative forms of disposal are promoted.  Marcellus operators were called upon to stop delivering oil and gas wastewater to 15 water treatment facilities.
        •  Well setbacks were extended to 500 feet from buildings and water wells, 300 feet from streams and water bodies, and 1000 feet from public water supplies.
        • The rebuttable presumption distance was extended to 2500 feet from a water supply and the duration to 12 months after well completion, meaning an unconventional well operator’s window of presumed liability for impacts to drinking water are expanded.
        • Additional resource protection is provided through enhanced floodplain protection, standards for containment on well sites, and a required annual inventory of air emissions.  
        • Enhanced inspection and transparency requires on-site inspection after erosion and sediment controls are put in place but prior to drilling, disclosure of hydraulic fracturing chemicals, and the online posting of site inspections, violations and remedial actions taken.
        • Repealed the 5 year confidentiality of production reports and began the requirement of production reporting from Marcellus operators every six months instead of annually.
        • PA DEP Oil & Gas Reporting Website (developed in response to Act 15, and amended by Act 13)

Earlier State Regulations

        • Chapter 78 – Oil and Gas Wells
        • Chapter 79 – Oil and Gas Conservation
        • Chapter 91 – General Provisions
        • Chapter 95 – Wastewater Treatment Requirements
        • Chapter 102 – Erosion and Sediment Control
        • Chapter 105 – Dam Safety and Waterway Management

Earlier State Statutes

Local Ordinances:  coming soon