Regulation of Shale Gas Development, Including Hydraulic Fracturing

Abstract

This paper provides one of the first detailed surveys of current oil and gas and hydraulic fracturing (also called fracing, fracking, or hydrofracking) regulation. It identifies and compares the environmental laws and regulations that apply to most stages of the oil or gas development process in shales and tight sands, from conducting seismic testing to constructing a well pad, drilling, withdrawing water, completing a hydraulic fracture treatment, and storing and disposing of waste. It briefly describes municipal ordinances and federal regulations, including recently-announced EPA regulatory efforts, but focuses primarily on the states, comparing regulations in sixteen states. The paper's comparison tables show that state regulations in some areas vary substantially, and the paper attempts to connect the potential risks of oil and gas development from shales and tight sands -- which are addressed in another Energy Institute paper by Professor Ian Duncan -- to the regulation. The paper concludes that states should modify certain regulations to address these risks. Some states do not require specific types of blowout prevention, for example, offering only a narrative standard, yet well blowouts are an important concern at the drilling and fracturing stage. States also should update their casing and cementing regulations to protect well integrity during drilling and fracturing and ensure long-term well integrity, and they should require the testing of water around proposed wells before site construction begins. Ideally, states also would consider implementing a presumption of oil and gas operator liability for water well contamination, as Pennsylvania and West Virginia have done. For risks at the well surface, states should update spill prevention requirements at well sites and consider whether federal Department of Transportation regulations addressing the movement of fracturing chemicals adequately protect against spills. States also must explore better options for disposing of large quantities of new wastes and regulating the withdrawal of large volumes of water for fracturing to prevent adverse impacts to streams and overuse of underground sources of water. Further, states and the federal government must enhance air quality monitoring around sites and consider additional controls. Finally, the collection of more and better data, including information from baseline and post-production water testing, is essential. With states at the regulatory helm, comparison of public law strategies to address development risks can produce fruitful cross-jurisdictional lessons. The Energy Institute at the University of Texas funded the research for this paper.