Friday, October 21, 2011

EPA Launches Natural Gas Water Rule Making Process

As expected, the U.S. Environmental Protection Agency has embarked upon a lengthy process - up to three years - to create new standards to address how natural gas drillers dispose of wastewater.  Responses by the usual characters were typical, with one side applauding the EPA's proactive stance and the other decrying federal regulation.

(It is interesting that the rules are only targeting natural gas, which has become a national punching bag, when fracking is used to produce other underground products, most notably oil.  Does oil get a free pass from the media circus?)

The EPA is walking a well worn path, one that has been trod upon since the 1700's, namely balancing the powers of state and federal governments.  Evidence from this battle can be seen in every major piece of legislation dating back to the Constitution.  Hydraulic fracturing certainly fits the mold because of the myriad of different rules for drilling and water disposal at the state and local levels that need to be reconciled with overlying regulation (is three years enough?!?).

The concern over wastewater disposal is particularly acute in the Marcellus Shale region.  In Louisiana and Texas, wastewater is often deposited into injection wells (although I'm hearing scuttlebutt from multiple sources that these wells are becoming harder to permit in east Texas - not sure if that's true), but that option is generally not available in Pennsylvania because of its geology.  Sending wastewater, even pre-treated water, to municipal disposal sites that are not designed to handle it is a legitimate concern.  Retrofitting these facilities is not cheap, and I don't see a lot of governments willing or able to make municipal infrastructure improvements these days, no matter how much they may be needed or how many jobs may be created.

The trick will be creating a one size fits all rule from above.  Balance is always the best approach.  If none of the factions are happy with the end product, it is probably the best result.  I think the ultimate result if this process goes to fruition (i.e. if Rick Perry is not elected president) is a set of federal guidelines and limits that leaves it to the states to determine the best disposal methods for their regions.

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