Drafts of new regulations relating to hydraulic fracturing in natural gas production were released for public comment Friday. This follows on the heels of the new rules for air emissions released two weeks ago. The US Environmental Protection Agency announced new guidance for obtaining permits when diesel fuel is included as a component of the fracking fluid used to fracture source rocks and free the gas trapped inside. As we laid out in a previous story, a 2005 amendment to the Safe Drinking Water Act exempted fracking from regulation as an underground injection, except when diesel fuel is used. Despite that caveat, the industry continued using diesel fuel without reporting it, saying that the EPA had never explicitly provided a process for them to do so. That process is now laid out in the new guidance. This may become a moot point, however, as public pressure is forcing the industry to move to more innocuous alternatives.

The US Department of the Interior also announced new rules for fracking on federal and Indian land, greatly increasing oversight. Fracking must now be explicitly approved as part of the normal drilling permits companies apply for when operating on federal land. This will require them to submit details on the layers of rock they plan to frack and how they will manage and dispose of the spent fracking fluids. They will also have to submit documentation of tests performed to ensure integrity of the seal around the well before the actual fracking begins. After the process is complete, drillers will have to publicly disclose the chemicals used in the fracking fluid.

In the press release, Secretary of the Interior Ken Salazar says, “As we continue to offer millions of acres of America’s public lands for oil and gas development, it is critical that the public have full confidence that the right safety and environmental protections are in place. The proposed rule will modernize our management of well stimulation activities—including hydraulic fracturing—to make sure that fracturing operations conducted on public and Indian lands follow common-sense industry best practices.”

Several states (most notably Wyoming and Texas) already have some similar requirements on the books, and others may use the federal rules as a template in the future. The drafts of both the EPA guidance and DOI rules will be revised and finalized following the 60 day public comment period.

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The US Environmental Protection Agency announced new rules for air emissions from oil and natural gas wells yesterday. The rules affect the pipeline transport of natural gas as well as production, but are mainly focused on hydraulic fracturing operations. No federal standards had existed previously, though some states had instituted their own.

After fracking fluid is used to hydraulically fracture natural gas source rocks, some of it is returned to the surface when the invigorated natural gas flow picks up. During this “flowback” process, which lasts several days, large volumes of natural gas often escape before the well is ready for routine collection to begin. Between now and the start of 2015, natural gas producers will have to either capture this natural gas or burn it off. After that point, they will be required to capture it.

Burning this fugitive gas cuts down on emissions of Volatile Organic Compounds (VOCs), which include carcinogenic compounds like benzene, and converts high-greenhouse-impact methane into carbon dioxide. After capturing is required in 2015, the EPA estimates a decrease in greenhouse emissions equivalent to taking about 2 to 4 million homes off the electric grid. Emissions of the VOCs, which can cause local health hazards, should be cut by 95 percent under the new rules.

Although environmental rules are often criticized for costing companies money, these new ones should actually enhance their profits. Because the captured gas can subsequently be sold, the EPA estimates that the new rules will save the oil and gas industry $11 to $19 million per year despite the cost of the equipment required to comply. The Agency notes that a number of well drillers have already begun using this kind of capture technology. 

In a press release, EPA Administrator Lisa P. Jackson said, “By ensuring the capture of gases that were previously released to pollute our air and threaten our climate, these updated standards will not only protect our health, but also lead to more product for fuel suppliers to bring to market.”

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