[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
 RHETORIC V. REALITY, PART II: ASSESSING THE IMPACT OF NEW FEDERAL RED 
     TAPE ON HYDRAULIC FRACTURING AND AMERICAN ENERGY INDEPENDENCE 

=======================================================================

                                HEARING

                               before the

                SUBCOMMITTEE ON TECHNOLOGY, INFORMATION
                POLICY, INTERGOVERNMENTAL RELATIONS AND
                           PROCUREMENT REFORM

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 31, 2012

                               __________

                           Serial No. 112-148

                               __________

Printed for the use of the Committee on Oversight and Government Reform


         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

74-754 PDF                       WASHINGTON : 2012 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
Washington, DC 20402-0001 



              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

   Subcommittee on Technology, Information Policy, Intergovernmental 
                    Relations and Procurement Reform

                   JAMES LANKFORD, Oklahoma, Chairman
MIKE KELLY, Pennsylvania, Vice       GERALD E. CONNOLLY, Virginia, 
    Chairman                             Ranking Minority Member
JASON CHAFFETZ, Utah                 CHRISTOPHER S. MURPHY, Connecticut
TIM WALBERG, Michigan                STEPHEN F. LYNCH, Massachusetts
RAUL R. LABRADOR, Idaho              JACKIE SPEIER, California
PATRICK MEEHAN, Pennsylvania
BLAKE FARENTHOLD, Texas



                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 31, 2012.....................................     1

                               WITNESSES

Ms. Lori Wrotenberry, Director, Oil and Gas Conservation 
  Division, Oklahoma Corporation Commission
    Oral Statement...............................................     7
    Written Statement............................................     9
Mr. Michael McKee, County Commissioner, Uintah County
    Oral Statement...............................................    17
    Written Statement............................................    19
Mr. Robert Howarth, Director, Agriculture, Energy and Environment 
  Program, Cornell University
    Oral Statement...............................................    23
    Written Statement............................................    25
Mr. Michael Krancer, Secretary, Pennsylvania Department of 
  Environmental Protection
    Oral Statement...............................................    29
    Written Statement............................................    31
Ms. Nancy Stoner, Acting Assistant Administrator for Water, U.S. 
  Environmental Protection Agency
    Oral Statement...............................................    69
    Written Statement............................................    71
Mr. Mike Pool, Deputy Director, Bureau of Land Management, U.S. 
  Dept. of the Interior
    Oral Statement...............................................    79
    Written Statement............................................    81

                                APPENDIX

The Honorable James Lankford, A Member of Congress from the State 
  of Oklahoma, Opening statement.................................    94
The Honorable Gerald E. Connolly, A Member of Congress from the 
  State of Virginia, Written statement...........................    97
Testimony for the record from Clean Water Action.................    99
National Congress of American Indians, Re: Tribal Consultation on 
  BLM Hydraulic Fracturing Regulations...........................   100
National Congress of American Indians, Title: Seeking Meaningful 
  Tribal Consultation on the Bureau of Land Management's Proposed 
  Hydraulic Fracturing Regulations...............................   102
National Congress of American Indians, Re: Request for 
  Consultation on BLM Hydraulic Fracturing Regulations...........   104
Letter from Henry A. Waxman, A Member of Congress from the State 
  of California to Chairman Lankford and Ranking Member Connolly.   105
Statement of Sierra Club Executive Director Michael Brune before 
  the Committee on Oversight and Government Reform...............   108
Addendum to the testimony of Robert W. Howarth, Ph.D.............   112
Methane Emissions from Natural Gass Systems......................   114
Letter to The Honorable Ken Salazar, Secretary of the U.S. 
  Department of the Interior from Matthew H. Mead, Governor of 
  The State of Wyoming...........................................   127
The Honorable Elijah E. Cummings, A Member of Congress from the 
  State of Maryland, Opening statement...........................   129
News from Bloomberg, EPA Says water near Pennsylvania frack site 
  safe to drink, by Mark Drajem on May 11, 2012..................   131


 RHETORIC V. REALITY, PART II: ASSESSING THE IMPACT OF NEW FEDERAL RED 
     TAPE ON HYDRAULIC FRACTURING AND AMERICAN ENERGY INDEPENDENCE

                              ----------                              


                        Thursday, May 31, 2012,

                  House of Representatives,
   Subcommittee on Technology, Information Policy, 
Intergovernmental Relations and Procurement Reform,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 1:30 p.m. in 
room 2154, Rayburn House Office Building, the Honorable James 
Lankford [chairman of the subcommittee], presiding.
    Present: Representatives Lankford, Connolly, Kelly, 
Farenthold, Meehan and Labrador.
    Staff Present: Alexia Ardolina, Majority Assistant Clerk; 
Molly Boyl, Majority Parliamentarian; Joseph A. Brazauskas, 
Majority Counsel; Adam P. Fromm, Majority Director of Member 
Services and Committee Operations; Linda Good, Majority Chief 
Clerk; Ryan M. Hambleton, Majority Professional Staff Member; 
Ryan Little, Majority Professional Staff Member; Mark D. Marin, 
Majority Director of Oversight; Kristina M. Moore, Majority 
Senior Counsel; Laura L. Rush, Majority Deputy Chief Clerk; 
Jaron Bourke, Minority Director of Administration; Ashley 
Etienne, Minority Director of Communications; Chris Knauer, 
Minority Senior Investigator; William Miles, Minority 
Professional Staff Member; Safiya Simmons, Minority Press 
Secretary; and Cecelia Thomas, Minority Counsel.
    Mr. Lankford. The Committee will come to order.
    This is a hearing on ``Rhetoric v. Reality,'' the second 
part in a series today. We did an earlier one with the full 
committee this morning. This is ``Assessing the Impact of New 
Federal Red Tape on Hydraulic Fracturing and American Energy 
Independence.''
    This is part of the Oversight and Government Reform 
Committee. As a subcommittee, we exist to secure two 
fundamental principles. First, Americans have the right to know 
the money Washington takes from them is well spent and second, 
Americans deserve and efficient and effective government that 
works for them.
    Our duty on the Oversight and Government Reform Committee 
is to protect these rights. Our solemn responsibility is to 
hold government accountable to taxpayers because taxpayers have 
a right to know what they get from their government.
    We will work tirelessly in partnership with citizen 
watchdogs to bring the facts to the American people and bring 
them genuine reform to the Federal bureaucracy. This is our 
mission.
    As we heard this morning, after years of worry about 
America's supply of oil and gas, the industry has located 
significant new areas to explore energy and the results have 
been quite remarkable. In the last quarter, 58 percent of the 
oil we used in America came from America; 79 percent of the oil 
we used came from North America. The United States is currently 
in a tremendous American energy renaissance.
    Through hydraulic fracturing and horizontal drilling, 
domestic oil and gas reserves have the potential to create 
millions of new jobs and to finally make the United States 
energy independent.
    Increased energy exploration and production is one of the 
keys to turning our economy around and putting Americans back 
to work. It is no coincidence that States with low unemployment 
rates are high in energy production. While technology has 
greatly increased the ability to find new oil and gas, this 
morning we learned and heard testimony in the full committee 
about the many ways the Administration has stood in the way of 
American energy independence by slowing down additional 
production of coal, oil and natural gas. Under the Obama 
Administration, the red tape and endless government studies 
have discouraged new Federal permitting.
    The energy renaissance we heard of today is taking place 
almost exclusively on private lands. We have a chart to note 
how 96 percent of the new production is occurring on private 
lands rather than on public land. That is a loss of royalties 
and a loss of leases to the American taxpayers.
    Based on new regulations issued just last month by the 
Environmental Protection Agency and the Bureau of Land 
Management, it appears this trend of under utilization of 
Federal lands will continue and may also be pushed and spread 
into private lands as well.
    The Department of the Interior through the Bureau of Land 
Management just proposed sweeping regulations of hydraulic 
fracturing on Federal and Indian lands that duplicate State 
regulations and threaten the decades old primacy relationship 
of State regulations.
    In proposing the rules, the BLM did not assert the Federal 
Government is in any better position to regulate fracturing 
than the States and BLM did not claim the States are not doing 
a good job. The BLM merely asserts that they are proposing the 
regulation on the basis of public concern. Ironically, this 
public concern has arguably been fostered by the EPA.
    In a multi-pronged attack on the industry, the EPA has 
publicly lambasted specific energy producers in fracturing 
locations for alleged problems but later, the EPA has only 
whispered corrections when science proved the initial EPA 
assertion invalid. This all happened while continuing to issue 
a stream of regulations affecting hydraulic fracturing before 
the current Federally-mandated study had even been completed.
    EPA Administrator Jackson stated under oath before this 
committee, ``There is not a single documented case where 
hydraulic fracturing has demonstrably contaminated 
groundwater.'' That has not stopped EPA and BLM from creating a 
series of new Federal regulations.
    This positive report and this record was due in part to the 
physics. There is another chart I want to put up just to show 
and we will put into the record as well. Fracking activity 
takes place a mile and sometimes well more than a mile below 
the aquifer line and through several layers of rock, I might 
add.
    It also leads to an effective and comprehensive State 
regulatory regime. Regulators and energy resource States like 
Oklahoma and my State, Pennsylvania, Utah, North Dakota and 
Texas work closely with all interested parties, industry and 
environmental alike, to develop a regulatory regime that is 
responsive to advancements in industry while protecting the 
environment at the same time.
    No one--I repeat, no one cares more about the water 
resources of Oklahoma than Oklahomans and the people who live 
there. The assumption that Federal regulators from other States 
understand the geologic strata and energy process better than 
State enforcement is beyond credible.
    I also do not accept the assumption that local regulators 
cannot be trusted because they have political pressures that 
would discourage enforcement but Federal regulators have only 
pure motives and no political agenda. Look no further than the 
former EPA Region VI Administrator who stepped down in my 
region after it was revealed that he pursued and trained his 
staff in a strategy of crucifixion against oil and gas 
companies to keep the industry in line. This astonishing 
statement reveals that some in the EPA, see people in my 
district as the enemy and they assume their job is to control 
them instead of serving the public.
    State regulators work closely with the Groundwater 
Protection Council to develop a website known as ``Frack 
Focus'' which enables disclosure of fracking fluids while 
protecting trade secret information. State regulators also work 
with STRONGER, the State Review of Oil and Natural Gas 
Environmental Regulations, which is funded in part by the EPA 
and the U.S. Department of Energy.
    STRONGER is comprised of all interested parties, conducts 
exhaustive reviews of State regulation of hydraulic fracturing, 
and comparing the existing regulations to a set of hydraulic 
fracturing guidelines unanimously adopted in 2010. If the State 
falls short, they work with STRONGER to get them back up to 
code.
    Even so, EPA is moving forward with the confusing Diesel 
Fuels Guidance which turns the Safe Drinking Water Act on its 
head. In 2005, Congress specifically exempted hydraulic 
fracturing from regulations under the Safe Drinking Water Act 
because it is an ill-fitted regulatory framework. Congress 
granted EPA the authority to regulate hydraulic fracturing in a 
very narrow circumstance when diesel fuels were used.
    That simple statement seems very narrow and clear but the 
EPA appears to be attempting an end run around the statute by 
brazenly redefining diesel fuels to include virtually any 
petroleum product. This new regulatory overreach now threatens 
the entire system of State regulatory primacy and the Safe 
Drinking Water Act.
    We can have safe energy exploration and production overseen 
by States and local authorities. There is a role for the EPA 
but I am very skeptical that thousands of wells and many 
different types of rock and soil conditions across the country 
can be overseen from Washington better than by State leaders 
who know the people and the land.
    We are so close to energy independence. This is the moment 
when we will finally solve a decades old problem or the Federal 
Government will get in the way and slow or halt our economic 
future. Today is the pursuit of answers and clarity of the 
direction of the EPA and the Bureau of Land Management to 
determine the goal of an Administration who has stated they are 
for all of the above energy.
    With that, I recognize the distinguished Ranking Member, 
Mr. Connolly, for his opening statement.
    Mr. Connolly. Thank you so much, Mr. Chairman.
    I note that votes are occurring now, so I assume right 
after my statement we will probably go vote.
    Mr. Lankford. Yes.
    Mr. Connolly. I thank the Chair.
    I respect the Chair and I thank him for holding this 
hearing. Our philosophies could not be more different. I 
disagree with almost everything the Chairman has just said.
    Frankly, the Republican rhetoric in this body has been that 
the hob nail boot of government regulation that has stifled the 
ability for the United States to achieve anything like energy 
independence, despite the fact that with EPA regulation and 
other regulation, our production of oil, gas and fossil fuels 
is going up, not down.
    We are on a trajectory to match Saudi production, the 
number one producer in the world. We are on a trajectory to 
come close to eliminating our dependence on foreign oil 
entirely. Somehow that happened in a robust regulatory 
environment. Somehow that happened with this President and his 
support for having everything on the table, including 
fracturing.
    That does not mean there aren't legitimate questions to be 
answered so that we can move forward with fracturing in an 
environmentally safe and humanly safe and healthy way. Those 
questions are not to be dismissed.
    The idea that we are going to pit State regulators against 
Federal regulators, and one is good and one is bad, is to me to 
invite serious regression in America. The truth of the matter 
is Federal regulation seemed to be required by Republicans and 
Democrats not so long ago precisely because of the failure at 
the local level--lack of resources, lack of will, sometimes 
political interference.
    Yes, gas and oil producing States sometimes skirted serious 
regulations in the name of economic advancement--understandable 
but not always in the public interest or a competing public 
interest.
    I say we need reasonable regulation. We can all debate what 
reasonable is but the idea that we don't need any regulation at 
the Federal level at all, especially on something as 
potentially serious to environmental safety and human health as 
fracturing, is a notion I reject. I believe most Americans will 
reject it.
    We have evidence of toxic chemicals that are involved in 
the fracturing process; we have evidence of seismic events that 
may have been triggered by some of that process. That is not a 
reason to say absolutely no to fracturing. It is a reason to 
try to be able to ensure the public that its interests are also 
being protected as we try to accelerate U.S. independence when 
it comes to fossil fuels.
    I look forward to hearing the testimony but I want to make 
very clear my sharp difference with the statements made by the 
Chairman here today. There couldn't be a more profound 
philosophical difference in our approach in this Congress to 
the subject.
    With that, I thank the Chair.
    Mr. Lankford. Thank you.
    All the members will have seven days to submit opening 
statements and extraneous materials for the record.
    When you mentioned evidence of contamination of water 
sources, Mr. Connolly, I would like to have any evidence you 
have to back that up because the EPA Administrator actually 
told us that she was not aware of any contamination of 
groundwater at this point. Any evidence you may know of on that 
point would help the record as well.
    Mr. Connolly. Certainly. I would remind the Chairman, the 
Energy and Commerce staff conducted a study of chemicals used 
in fracturing and found at least 29 toxins including 
carcinogens such as benzene, napolene and acrylomide. The study 
found that at least 10.2 million of gallons of fracturing fluid 
contained at least one known carcinogen. I would be glad to 
submit the study for the record.
    Mr. Lankford. Would not have a problem with the carcinogens 
being there in that. I understand that is used. The issue is, 
is it getting into the drinking water.
    I would like to recognize my colleague from Utah, Mr. 
Bishop, to introduce one of his constituents who will sit on 
our panel today. We will introduce the panel but actually get 
into your testimony as soon as we come back from votes.
    Mr. Bishop. I thank you, Mr. Chairman.
    Apparently you have had one speech for and one against. Do 
I get to do the tie breaking vote here?
    Mr. Lankford. Let us do an introduction. How about that?
    Mr. Bishop. That is okay. You win anyway, Mr. Chairman.
    I do wish to introduce Mr. McKee, who is going to be 
testifying today probably in a half hour or so. He is the 
Uintah County Chairman in my State of Utah. He has been the 
Chairman since 2002. He is the Chairman of the Commission at 
this time--close enough.
    The importance of Uintah County is very simple--50 percent 
of all the jobs in that particular county are tied up with the 
extraction industry; 65 percent of all of the natural gas that 
is produced in Utah comes from this particular county. This is 
somebody who can give you expert testimony as somebody who 
lives it and knows who is on there.
    He can testify that even though regulations are established 
to solve problems, sometimes when you actually establish 
regulation when there is no problem, the usual result is some 
kind of overreach in coming up with an abstract that does not 
fit the reality that happens to be there at the time.
    I am appreciative of you giving close attention to his 
testimony because he can tell you about this particular issue 
of fracking from somebody who does not have to take a four hour 
airplane flight through three time zones to see the situation 
but someone who actually lives it every day with his 
constituency.
    With that, I welcome him here and I appreciate this 
committee taking on this important topic because fracking is a 
significant issue for the State and it is a significant issue 
for the future of the Federal Government. I appreciate your 
bringing expert witnesses like Commissioner McKee here as well.
    Mr. Lankford. Thank you, Mr. Bishop.
    Let me introduce the other three panelists. Ms. Lori 
Wrotenbery is Director, Oil and Gas Conservation Division, 
Oklahoma Corporation Commission, also someone he knows well. We 
have done hydraulic fracking in Oklahoma since the 1940s, so 
this is not new, though I assume Ms. Wrotenbery has not 
overseen it since the 1940s. We are very, very familiar with 
over 100,000 fracks in Oklahoma alone. It is something we are 
very, very familiar with.
    Next we have Robert Howarth, PhD, Director, Agriculture, 
Energy and Environment Program, Cornell University. Thank you 
for being here as well. We also have Mr. Michael Krancer, is on 
a return engagement. He was on the panel at the full hearing 
this morning. Thank you for staying over. He is Secretary of 
the Pennsylvania Department of Environmental Protection.
    Obviously there is a lot going on and this is a new thing 
in Pennsylvania compared to where we are in Oklahoma where we 
have done fracking since the 1940s. He will bring a lot of 
insight on how Pennsylvania is continuing to handle the State 
regulatory environment.
    With that introduction, we will start with Ms. Wrotenbery's 
testimony as soon as we get back. We have three votes in this 
series. We will get them done as quickly as we can. We will be 
back and reconvene at that time.
    With that, we stand in recess.
    [Recess.]
    Mr. Lankford. We had to pause as we did votes. I think the 
next series of votes is around 5:30 p.m., so we will be halfway 
done at that point, right?
    Pursuant to committee rules, all witnesses do need to be 
sworn before they testify. Please stand and raise your right 
hands.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witnesses respond in the affirmative.]
    Mr. Lankford. May the record reflect that all witnesses 
answered in the affirmative. You may be seated.
    In order to allow time for discussion, I would like you to 
limit your testimony to five minutes. I think most of you have 
been around this before, Mr. Krancer obviously just a few hours 
ago on this. You will see a clock in front of you to give you a 
quick countdown. Just be as close to that as you possibly can.
    Ms. Wrotenbery, you may begin.

                    STATEMENTS OF WITNESSES

                  STATEMENT OF LORI WROTENBERY

    Ms. Wrotenbery. Thank you, Mr. Chairman, Ranking Member 
Connolly and members of the committee. I appreciate the 
opportunity to be here today to talk to you about State 
regulatory programs for hydraulic fracturing.
    I am the Oil and Gas Director in the State of Oklahoma. I 
am the Director of the Oil and Gas Conservation Division of the 
Oklahoma Corporation Commission. We are the agency that 
regulates oil and gas drilling and production operations in the 
State of Oklahoma. I am also here talking today as a member of 
the board of STRONGER. I am currently serving as Chairman of 
that board and a member of the Board of the Groundwater 
Protection Council as well.
    I am going to talk a bit about a couple of the programs 
those organizations have underway that are addressing hydraulic 
fracturing issues. I do want to emphasize though how important 
it is for everyone to understand that States do regulate 
hydraulic fracturing. Just how they go about regulating 
hydraulic fracturing is documented in the STRONGER report that 
I will describe in a little more detail.
    These programs the States administer have been around for 
many years. They are comprehensive, are continually improving 
and I think you can summarize them by saying they are strong, 
they are responsive, they are flexible and they are adaptive. 
For all those reasons, I believe they are effective in ensuring 
hydraulic fracturing operations are conducted safely.
    The States do face challenges. Many of those challenges are 
associated with the development of new technologies, the use of 
hydraulic fracturing in different places and in different ways 
than it has been used in the past. There is no doubt that there 
are issues associated with hydraulic fracturing in today's 
environment. I will say the nature of those challenges varies 
from State to State. I can also say States are acting to 
address those issues in a way that is fitting to their specific 
circumstances.
    I will give you an example. In Oklahoma, the ramp up in 
horizontal drilling and hydraulic fracturing activity within 
the last decade occurred during a period of severe drought. We 
did face some serious issues about the sources of water for 
hydraulic fracturing operations. We also needed to do what we 
could to encourage recycling of the flowback waters from 
hydraulic fracturing operations to minimize the demand on our 
freshwater resources.
    For that reason, we had to take another look at our 
regulations for the management of produced waters in oil and 
gas operations. For many years, we had prohibited basically 
pits that we used to store produced waters. Those had been 
phased out decades ago. Now we were in a situation where we 
needed to accommodate the temporary storage of flowback waters 
in pits so that water could be used in future hydraulic 
fracturing operations and we could save our freshwater 
resources.
    To address the issue, the Corporation Commission worked 
with the industry and other interested parties to develop new 
rules for the large pits that were used to store flowback 
waters on a temporary basis so they could be reused and 
recycled.
    There are more examples from other States about what issues 
they face and how they have addressed those issues in the 
STRONGER reports. I will just refer you to those. STRONGER, as 
the Chairman said, is a stakeholder process. The board of 
STRONGER, all of the guideline development workgroups, all of 
the review teams that STRONGER puts together are stakeholder 
bodies that include representatives of State regulatory 
programs, industry and environmental organizations.
    In the last few years, STRONGER has developed guidelines 
for State hydraulic fracturing regulations and has conducted 
reviews of State hydraulic fracturing programs. We have done 
these reviews in Pennsylvania, Ohio, Oklahoma, Louisiana, 
Colorado and Arkansas. We are open to doing reviews in other 
States as they volunteer.
    What the guidelines and reviews do is help the States 
benchmark their regulatory programs and identify areas for 
improvement. The process works. If you look back over the 
history of STRONGER, it does do follow up reviews to see how 
States have responded to the recommendations they make and over 
time, when STRONGER has done follow up reviews, we have seen 
that fully 75 percent of the recommendations have already been 
met at the time of the follow up reviews and others were in 
process. The States do take these reviews seriously.
    In Oklahoma, for instance, received some recommendations 
which were welcome to us about how we could strengthen our 
program under the hydraulic fracturing guidelines that STRONGER 
put together. We amended a couple of our rules, we have also 
worked with our legislature and our governor to address some of 
the funding and staffing issues that arose in recent years, 
especially during the budget crisis we have all been struggling 
through. We have taken those recommendations from the STRONGER 
review seriously and have acted to address those 
recommendations.
    We also recently adopted a chemical disclosure rule. I 
wanted to talk about FracFocus. FracFocus is another example of 
what the States are accomplishing by working together and with 
the stakeholders to address the issues that have arisen. 
FracFocus was put together in a very short time frame by the 
Groundwater Protection Council and the Interstate Oil and Gas 
Compact Commission, two organizations that represent the oil 
and gas producing States. The Groundwater Protection Council 
includes the Drinking Water Program administrators as well.
    Since that system went into effect in April 2011, over 
18,000 wells have been posted to that site with full 
information about the chemical constituents of the frack 
fluids. The new rule in Oklahoma is similar to rules that have 
been adopted in six or seven other States. The rule will 
require the posting of chemical information on hydraulic 
fracturing operations in Oklahoma to the FracFocus website. We 
are trying to make sure that information is available to the 
public.
    Thank you very much.
    [Prepared statement of Ms. Wrotenbery follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Lankford. Thank you.
    Mr. McKee.

                   STATEMENT OF MICHAEL MCKEE

    Mr. McKee. Thank you, Mr. Chairman and members of the 
committee.
    I appreciate the opportunity to take a couple of minutes on 
this.
    My name is Michael McKee. I am County Commissioner in 
Uintah County, Utah. My primary focus over the year as a County 
Commissioner related to public lands issues, natural resources, 
specifically the extractive industry and our natural resource 
development.
    In Uintah County today, we have approximately 6,000 active 
oil and gas wells. Approximately 65 percent of the natural gas 
produced in the State of Utah comes from the area where I live 
in Uintah County. The industry has provided many families with 
very good jobs with above average paying salaries. It is a way 
of life because 50 percent of the jobs and 60 percent of the 
economy in our area does come from the extractive industry.
    I am concerned about over regulation, I am concerned about 
the stifling effect that over reach has on investment in our 
economy. In regards to the new fracking proposals rules, I am 
concerned that the Federal Government is trying to fix 
something that is not broke. It isn't even limping.
    In my ten years as a county commissioner, I have never 
heard of one valid violation or concern with hydraulic 
fracturing. This includes the fluids used, the depth, the 
method of injection or any other concern being associated with 
fracturing. We just do not have that problem.
    Hydraulic fracturing is not a new technology but a process 
that has been responsibly used for over 60 years. Hydraulic 
fracturing is a safe, well tested technology that has enabled 
the U.S. to develop unconventional natural gas and increase 
reserves to an over 100 year supply. Fracturing has been 
performed in over 1 million wells with an exemplary safety 
record--90 percent of the wells utilize hydraulic fracturing.
    Hydraulic drilling and fracturing allows operators to 
produce ten times the amount of energy by drilling fewer than 
one-tenth the number of wells. We are delivering cleaner 
burning domestic energy and more of it while drilling fewer 
holes to get to it.
    Regulatory decisions such as hydraulic fracturing are best 
made at the State level and not regulated by a Federal 
bureaucracy far removed from the issue. This is why individual 
States can better tailor their specific needs since they have 
the experience and understanding of the geology/hydrology 
infrastructure and other factors unique to each producing 
basin.
    State regulators understand the needs of the communities 
they regulate much better than a far, removed Federal 
government and also have the specific technical expertise, 
resources and experience.
    On March 14, 2012, now former BLM Director Bob Abbey 
testified in the Senate that there has been a shift in oil and 
gas production to private lands to the east and the south where 
there is lesser amount of Federal mineral estate. We have seen 
investment from public lands to other areas. Part of the 
concern we have is the shift in investment that can happen from 
this.
    Only 15 percent of my county is privately owned. These 
decisions can have a tremendous effect on the entire west where 
we have vast holdings of public lands. Adding additional 
burdens to development on Federal lands could have an adverse 
effect, forcing operators to shift investment away from my 
State and public land areas thus depriving our citizens of 
needed jobs and income.
    The natural gas industry employs over 600,000 people in the 
United States. According to API, it accounts for nearly 4 
million jobs and that is more than $385 billion to the national 
economy. Oil and gas royalties on public lands are a 
significant revenue source for the Federal Government, the 
State of Utah and to the counties from where it comes. In 2008, 
there were over $200 million in mineral lease money collected 
from my county alone.
    Shale gas and hydraulic fracturing has single handedly 
turned the United States from a nation of declining gas 
production to one of rising production.
    I was approached by tribal attorneys, this is an issue they 
have as well. The oil and gas producing Indian tribes are very 
much against the BLM's proposed rule. As some members of this 
subcommittee may be aware, a large portion of the UN&RA 
Reservation of the Ute Indian Tribe rests within the boundaries 
of Uintah County, Utah.
    The Ute Indian Tribe is one of the Nation's largest oil and 
natural gas producing Indian tribes. The BLM's proposed rule 
would severely impact the development of tribal minerals in 
Uintah County. Yet despite this fact, the BLM has failed to 
comply with its legal obligation and duty to consult with 
impacted Indian tribes. BLM's proposed rule will kill tribal 
jobs in the oil and gas industry. The BLM has failed to work 
with the Ute Indian Tribe regarding the proposed rule.
    In summary, local governments, many mineral producing 
States and affected Indian tribes are all very concerned with 
this ill-advised, unneeded and redundant rule.
    I would be happy to answer questions. Thank you.
    [Prepared statement of Mr. McKee follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Lankford. Thank you
    I would like to enter into the record, with unanimous 
consent, a letter from the National Congress of American 
Indians outlining some of the things you just said.
    Mr. Connolly. Mr. Chairman?
    Mr. Lankford. Yes, sir.
    Mr. Connolly. Without objecting, I would ask for similar 
courtesy. I ask at this time a response to Mr. Krancer's 
testimony this morning from our colleague, Mr. Waxman, be 
entered into the record. I also ask that a similar response 
rebutting Mr. Krancer's characterization of Dr. Howarth's 
research from the Sierra Club that Mr. Krancer cited this 
morning also be entered into the record at this time.
    Mr. Lankford. Without objection.
    Mr. Connolly. I thank the Chair.
    Mr. Lankford. Mr. Howarth.

                  STATEMENT OF ROBERT HOWARTH

    Mr. Howarth. Thank you, Mr. Chairman.
    My name is Robert Howarth. I have been a tenured member of 
the faculty at Cornell University since 1985.
    I am here today as an individual. I do not represent the 
University. As are the opinions I express are informed by my 
research conducted at Cornell.
    I have worked on the environmental risk assessment and 
consequences of environmental pollution, including the effects 
of oil and gas development since the mid-1970s. I was invited 
today to present information on the environmental and public 
health consequences of hydraulic fracturing. I will try to very 
briefly do so.
    Hydraulic fracturing is not new as we just heard. The 
process has existed for decades but it has existed on a small 
scale, using very small volumes of water. What is new is the 
combination of high precision directional drilling with high 
volume hydraulic fracturing. The new combination uses 50 to 100 
times more water than was ever used in fracturing until a 
decade or so ago, five million gallons or so per well.
    This new technology has indeed opened up new resources, 
shale gas and other unconventional gas. The technology is very, 
very new. I want to stress that. As a result, the science or 
understanding the consequences is also very, very new. For 
context, half of all the shale gas that has ever been developed 
in the world has been produced in the last three years, so a 
new technology and the science is new.
    In terms of peer review literature on what the 
environmental consequences are, it almost all in the last year. 
The very first papers were published 14 months ago. The science 
is new. It is very rapidly changing. I will try to give you a 
sense of that today.
    One issue is surface water pollution. Very briefly, I want 
to say there is good evidence that hydraulic fracturing in this 
new form has contaminated surface waters. One of the major ways 
is through improper waste disposal through sewage treatment 
plants. The City of Pittsburgh had a serious water quality 
problem from that with bromides entering their system. It is 
now outlawed in Pennsylvania but not outlawed in some other 
States. We still don't really have good alternatives for 
disposing of the hydraulic waste in much of the country.
    Groundwater contamination appears to be a big issue. The 
science behind that is very iffy at the moment. A lot of the 
information is not publicly available making the science 
difficult. The U.S. Environmental Protection Agency is 
undertaking a long, detailed study on that and I think most 
scientists would say we should hold off and see what they come 
up with but there is certainly anecdotal evidence of this 
problem. I could talk more about that in questions if you like.
    There is excellent evidence of methane contamination from 
hydraulic fracturing in wells. It is well documented in 
Pennsylvania. Local air pollution is an issue and there are two 
I will point to. One is benzene which is admitted to the 
atmosphere routinely from hydraulic fracturing. The State of 
Texas routinely reports values that are hazardous, sometimes at 
near acutely lethal doses. Pennsylvania reports much lower 
concentrations so far but they are concentrations which, in my 
opinion, pose a significant cancer risk from chronic exposure.
    We have a big problem from the ozone pollution from 
hydraulic fracturing. The methane and other hydrocarbons that 
are released to the atmosphere make ground level ozone 
pollution. We are seeing large amounts of ozone pollution in 
the western States where it has almost never been seen as a 
problem before. In the winter in Wyoming, Utah and Colorado, 
ozone concentrations are now higher than they are in Los 
Angeles or New York City. This is undoubtedly a direct relation 
to hydraulic fracturing.
    My own research has been on the role of methane released 
from shale gas and how that affects the greenhouse gas 
footprint. We published the very, very first analysis of that 
13 and a half months ago. Our conclusion was that because 
methane is 105 fold more powerful as a greenhouse gas over the 
time period 20 years after emission, methane leakage even at 
small rates is a serious greenhouse gas concern, giving shale 
gas a larger greenhouse gas footprint than other fossil fuels. 
I will come back to that in just a minute.
    I want to briefly mention one other issue and that is radon 
in gas supplies. Radon is a gas that is carcinogenic, the major 
exposure of ionizing radiation to the public in the United 
States currently. Natural gas is already a major root of 
exposure to getting radon into the homes and shale gas, at 
least from the Marcellus shale is far, far richer in radon than 
conventional natural gas has been. This is something I think 
deserves a lot more attention and scrutiny and a lot more 
study. In my opinion, it poses a significant public health risk 
that has gone under appreciated so far.
    I believe the Federal agencies have a central role in 
regulating oil and gas development generally but also 
particularly with development of this unconventional oil and 
gas by high volume hydraulic fracturing. The issues involved 
are complex, they are new, the technologies are new and are 
continually evolving.
    The scientific issues are difficult. From my experience 
interacting with agencies, scientists and managers in many 
States and many Federal agencies in the last 35 years, I 
believe most States lack the technical expertise to deal with 
these complex issues.
    Finally, I note that the pollution from unconventional oil 
and gas in water, in air and in pipelines moves across State 
lines, so there is clearly a role for Federal involvement.
    I would like to take a final minute to briefly respond to 
the written testimony of my fellow witness, Mr. Krancer. The 
written testimony I heard is very critical of our work on 
greenhouse gas so I would like to set the record straight on 
that. I have written an addendum to my testimony to do so.
    I would also ask the committee to make a formal part of 
this paper, ``Methane Emissions from Natural Gas Systems,'' 
which I and many other co-authors wrote for the U.S. National 
Climate Assessment at the request of the Office of Science and 
Technology Policy Assessment in February in which our work is 
explicitly compared with all other studies ever done on this 
topic.
    Mr. Lankford. Without objection, we accept that into the 
record.
    Mr. Howarth. The bottom line is that our estimates of 
methane emissions were the first, there have been many 
estimates since then and one of the things we called for was 
further direct study. Most of the information is available only 
from industry sources and it is poorly documented. We called 
for direct, independent studies and they are starting to 
happen. The first is now being published by NOAA and University 
of Colorado scientists.
    It shows that we are conservative and low--the methane 
emissions are worse than we said. I would be happy to go into 
more detail on that work if the committee is interested.
    My time is over. Thank you very much for the opportunity to 
talk with you today.
    [Prepared statement of Mr. Howarth follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Lankford. Thank you.
    Mr. Krancer.

                  STATEMENT OF MICHAEL KRANCER

    Mr. Krancer. Thank you and thank you for the opportunity to 
be here.
    I am not sure the last time Washington, D.C. saw a duel out 
in front of the congressional offices but me and my good 
colleague, Bob Howarth, might have to have one after this.
    In all seriousness, we in Pennsylvania have a comprehensive 
program to regulate what is not a new activity in Pennsylvania, 
oil and gas exploration and hydraulic fracturing. We have been 
doing it for about 60 years. Each State is different. That is 
the key. Pennsylvania is not the same as Oklahoma, not the same 
as Texas, not even the same as New York necessarily.
    We have regulations regarding well casing and cement for 
the drilling process. We have regulations for water handling 
and surface water. We have regulations for air impact. We are 
doing short term air impact studies; we are going to do long 
term impact studies. One of the things just mentioned by 
Professor Howarth, the sewage treatment plants in Pittsburgh, 
he did say it is now outlawed in Pennsylvania. That is proof in 
the pudding that the States are very capable, agile and know 
enough about what is going on in their backyard to take the 
appropriate steps.
    My colleague, Ms. Wrotenbery, testified about STRONGER, 
STRONGER did review Pennsylvania regulations in 2010. Those 
regulations were reviewed very well by STRONGER. Just recently, 
SUNY Buffalo in May issued a report that in essence followed up 
on that and brought it current. That report concluded there was 
a compelling case that Pennsylvania's oversight of oil and gas 
regulation has been effective.
    We have a brand new statute in Pennsylvania, again proving 
the agility of the State to act and our knowledge of our own 
State at 13 which brought on some new requirements regarding 
setbacks, regarding disclosure and we have one of the most 
forward thinking advance disclosure provisions of any State in 
the Union, for the first time ever requiring disclosure to 
medical professionals.
    I heard what Professor Howarth said about the methane study 
and his criticism of my criticism of it. I just have to note 
that I will have to take a number and get in line for the folks 
critiquing Professor Howarth's report. That is part of the 
academic process and that is all fair. That is what we should 
be doing.
    I do have to take some exception to some of the points. 
Atmosphere benzene levels near ``some drilling sites''--what 
drilling sites? They are not mentioned in his testimony. I am 
not sure what he is talking about with respect to chronic 
exposure and so forth. That is a toxicologist and 
epidemiologist purview.
    The report that there have been several reported 
contaminations of drinking water wells and surface aquifers by 
frac fluids in Pennsylvania is just not true. That is simply 
not true. Not even Duke, which I have also had issues with the 
study from Duke, even the Duke study drew any connection 
between any frac fluid being in the water in Pennsylvania.
    Let me remind everyone, methane migration has been a 
creature in Pennsylvania for generations and probably been a 
creature in other States as well. Any drilling, if it is not 
done right, can cause contamination or can cause methane 
migration. That is why in Pennsylvania we have our well casing 
and cementing regulations we put into place because we knew 
what our geology was like and we knew what was necessary on the 
floor.
    I would agree with what Professor Howarth says, that this 
area is complex, it is evolving, it is difficult, but that is 
actually a reason the States should be on top of regulating. 
The States know how to react to these things. It is a proven 
record in Pennsylvania. We know the science in the States. We 
are not idiots in the States compared to the Federal 
Government, for example, who knows everything. That is not the 
way it works.
    I would take a little bit of discussion point with the 
Ranking Member. The way environmental regulation works in this 
country is primarily based on State delegation, States running 
with the ball to regulate environmental matters. In terms of 
hydraulic fracturing, I talk about it in my testimony, the 
history is clear. The Federal Government has never indicated an 
interest, any Administration, any Congress, any EPA, in 
regulating hydraulic fracturing until all of a sudden now there 
is a huge interest to get into it from various different 
aspects.
    That is all borne out in the history of the Safe Drinking 
Water Act, in the bipartisan 2005 Energy Policy Act which did 
nothing more than restate what the longstanding policy had been 
with respect to the Safe Drinking Water Act's non-regulation of 
fracking.
    With that, I will conclude and look forward to questions 
and some more discussion.
    [Prepared statement of Mr. Krancer follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Lankford. Thank you.
    With that, I yield to myself for just a moment.
    I want to bring in a quick prop. This is shale rock. For 
those of you who are State regulators, you are very aware of it 
but sometimes we lose track of the fact, when we talk about 
pulling out oil and natural gas from the ground, many people 
are used to conventional wells where there is a pocket of oil 
or a pocket of gas.
    The gas or oil is not around this, it is inside of this. 
How it gets pulled out in this process is technology that is 
impressive in the way it is done, to drill down to put a well a 
mile deep, sometimes two miles long then underground through 
this rock, just like this, solid rock, to frac it with water 
and then pull out of this oil or gas is revolutionary. This is 
why we have such a tremendous supply that is coming online, 
because we are now actually pulling energy out of rocks, not 
out of a pool, not around this, from this.
    It is somewhat revolutionary, I understand that, but it is 
not new in just the past couple of years. Mr. Krancer mentioned 
as well, in 2005, Congress was very specific on this, that EPA 
had regulatory oversight only if it had diesel fuels in the 
fracking fluid but to leave that back up to the States as well.
    My question is why has this become such an issue, dealing 
with fracking, right now? In the last couple of years, why has 
there been such a rise in so many areas about fracking? I know 
this is just an opinion guess for you. Mr. Howarth? We have to 
make responses short because we are short on time.
    Mr. Howarth. As I stressed in my testimony, the ability to 
get that fantastic resource out of the shale, you are right, it 
is incredible technology, but it is new technology. It was 
developed first in Texas, somewhat in Oklahoma, in the south 
areas which are very different.
    Mr. Lankford. I understand. Right now there has been an 
incredible shift on it. This has been known for several years, 
as I mentioned, the 2005 legislation. Why right now has there 
been such a rush to it? Has there been some new break through 
because the EPA Administrator has told us repeatedly that they 
have not found from EPA a single site of groundwater 
contamination from hydraulic fracking.
    Mr. Howarth. I believe what EPA probably told you was that 
they are not aware of a single case where the action of the 
fracking itself led to water contamination. There are multiple, 
publicly known cases where there was water contamination 
associated with the development of shale gas or other types.
    Mr. Lankford. You are talking about from the surface?
    Mr. Howarth. No, including from wells. There is a 
documented incidence of at least 1 percent, perhaps up to 6 
percent.
    Mr. Lankford. Here is what I know typically. There have 
been some very, very public cases of this from EPA in the past 
year and a half where EPA comes out and says we have a major 
problem, we have to take over this area. They begin testing all 
of those wells and it comes back, oh, that was just methane, it 
is naturally occurring and migrating into an area. That is a 
chemical already present there.
    Most recently on May 11, 2012, in Dimock, Pennsylvania, EPA 
quietly released what was initially a panic to say that frac 
fluids caused all that, they have come back now and said, we 
were wrong. That was not a source of that. There has been quite 
a shift that has occurred. Let me move on to a couple of other 
areas as well.
    Mr. Horwarth. The methane contamination is clearly a result 
of the hydraulic fracturing of the shale. The study from Duke 
University published in the proceedings of the National Academy 
of Sciences is unambiguous.
    Mr. Lankford. If you can pull some of that for us, we would 
be glad to receive that as well, but EPA has disagreed on 
several of those. Methane obviously is a natural occurring 
substance that does move in the ground and does release.
    Is the geology the same in Utah as in Pennsylvania and 
Oklahoma, the same rock, same depth of water, same soils? Are 
things the same under ground in all three of your States?
    Mr. Krancer. No, absolutely not. They are not the same 
geologically, topographically, meteorologically, weather, or on 
the surface.
    On the Duke study, I would take issue with Professor 
Howarth again. The Duke study was very limited and other 
studies have come out, including one from the Center for Rural 
Pennsylvania which seems to lead to another conclusion.
    In your more fundamental question of why all this 
attention, there is a great article about this called 
Everything You Have Heard About Fossil Fuels May Be Wrong, by 
Michael Lind it's in the New America Foundation. It is all 
about what he thinks why all this attention has grown. It is 
because natural gas, which used to be viewed as maybe a bridge 
fuel, a fossil fuel that the people who don't like fossil fuel 
could hold their nose and get through, it now could be the fuel 
of the century. That has caused some cognitive dissidence among 
some significant interest groups ergo the push back.
    Mr. Lankford. Mr. McKee, you mentioned in your testimony 
that you have seen and there is a perception there is a shift 
of investment out of the west to the east. I assume you mean 
out of BLM lands and you have a fear that you are about to lose 
the potential of getting energy. Is it because you are running 
out of energy underground in your area? What would be the 
reason for the sense that investment is moving away from your 
area?
    Mr. McKee. First of all, there is a tremendous resource of 
energy in our area. As I mentioned, there is 111 trillion cubic 
feet of natural gas, there is an immense amount of oil shale, 
all these different resources, so it is not because of lack of 
opportunity to help us with great energy independence.
    Public policy definitely makes these changes and we have 
seen investment shift just because of public policy.
    Mr. Lankford. When you say public policy, what do you mean?
    Mr. McKee. BLM policy, having to do with leases, different 
types of policies that come out of the Bureau of Land 
Management. When it becomes much easier to invest on private 
lands compared to public lands, as I mentioned, in my county 
only 15 percent of my county is privately held. In the west, 
much of our land is public land. If we take that opportunity 
off the table, what are we doing to the national security and 
the opportunity of energy independence when we have unneeded, 
redundant policies.
    More to the specific question, at least in our area, most 
of our wells are at least a mile deep. Some of them will go a 
couple miles deep. We are not dealing with shale gas. That is 
why I think it is valuable that these decisions are made at the 
State level because when you have a one size fits all type of 
regulation--I have visited with consultants and some of the 
proposed rules make absolutely no sense. The States best handle 
these kinds of policies.
    Mr. Lankford. Thank you.
    Let me recognize the Ranking Member. I will also recognize 
him for an additional two minutes beyond the normal questioning 
time.
    Mr. Connolly. You are very gracious and I thank the Chair.
    Welcome to our panel.
    Mr. Krancer, I unfortunately had to be at a funeral for a 
close friend this morning and I did not hear your testimony, 
but had it described to me. If I understood correctly, your 
testimony in essence says, based on your experience in 
Pennsylvania, you believe the other 49 States can also live 
with pure State regulation, that we don't need Federal 
regulation in this particular enterprise. Is that an accurate 
characterization of your testimony?
    Mr. Krancer. Based on my experience in Pennsylvania, 
Pennsylvania is very well able to regulate fracking. Based on 
my experience with the Environmental Council of the States, my 
experience with other colleagues of mine in other States that 
do this work, I am convinced they can do it in their States.
    It is not done in every State and based on the experience 
of STRONGER, that is why we have groups like STRONGER that help 
us do this.
    Mr. Connolly. Based on what I just heard you testify, it 
sounds like Pennsylvania has a robust regulatory framework. You 
cited, for example, chemical disclosure laws which you have to 
enforce and you feel it works very well in Pennsylvania, is 
that correct?
    Mr. Krancer. That is correct. I invite you to come visit 
Pennsylvania and I can show you firsthand how it works. I can 
take you to a well site.
    Mr. Connolly. I would be glad to do it. I went to high 
school in Pennsylvania, got married in Pennsylvania. I have a 
lot of ties to Pennsylvania. I would be glad to do it.
    Does your expertise extend to the other 49 States? Surely, 
you are not in a position or are you to testify that you are 
satisfied based on empirical evidence that the other 49 States 
are as robust and as diligent as Pennsylvania?
    Mr. Krancer. That question, I don't know how to respond 
because it is not a other 49 State issue. Many other States do 
not do fracking at all. The ones that do do it have a track 
record that indicates they can do it--Oklahoma, Texas, West 
Virginia, Ohio--but even if they don't have an existing program 
now, as States, and I can say this in my experience as a State 
regulator--are in the best position to know their States, know 
what to do and get the regulatory plan that they need in their 
State.
    Mr. Connolly. You would concede, at least as an 
intellectual, that there could be a State where fracturing is 
occurring that is not as robust and diligent as Pennsylvania.
    Mr. Krancer. I could concede also that Sasquatch is in the 
woods but that doesn't get us anywhere.
    Mr. Connolly. This is my time. The point is you don't have 
expertise with respect to the other States. You do with 
Pennsylvania.
    Mr. Krancer. That is a red herring because you don't 
either.
    Mr. Connolly. Mr. Krancer, the issue here is whether or not 
the Federal Government has a role. You testified you think it 
should not have a role.
    Mr. Krancer. No, I don't think the issue is whether the 
Federal Government necessarily has a role. The issue is whether 
the Federal Government should have a preemptive role or why 
shouldn't it have a preemptive role. I am here to say it should 
not have a preemptive role. It certainly should have a role in 
which we discuss things together. I often communicate with my 
counterpart at Region 3 and I am sure my other counterparts do 
that as well.
    The question on the table is the fundamental one, Ranking 
Member. Who is in the better place? Are you in the better place 
in Washington to tell Oklahoma what to do? Are you in the 
better place in Washington to tell us in Pennsylvania what to 
do? The bottom line answer is no.
    Mr. Connolly. Thank you, Mr. Krancer. I would simply say 
those are the same kinds of arguments that have been used for 
generations against Federal involvement. If we were talking 40 
or 50 years ago about, for example Jim Crow laws and the civil 
rights movement, we would have heard testimony right here at 
this table.
    Mr. Chairman, I insist that the committee rules be adhered 
to. This is my time. Mr. Krancer, I gave you the benefit of the 
doubt and allowed you to answer as you wished. It is now my 
time and I believe that philosophy is an error. I don't share 
it.
    Mr. Krancer. That philosophy was enacted in 2005.
    Mr. Connolly. Mr. Chairman, I insist on regular order.
    Mr. Lankford. Mr. Krancer, allow the member to speak.
    Mr. Connolly. Thank you, Mr. Chairman.
    I believe the philosophy that there is no role for the 
Federal Government or there should never be any preemptive role 
for the Federal Government has been proven false by history. 
That is clearly what this hearing is designed to do, as was the 
hearing this morning. I don't share the philosophy.
    The fact that you have had a good experience in 
Pennsylvania I don't believe can necessarily be extrapolated to 
the rest of the country. As you have indicated, you don't have 
the expertise actually to say here at this table under oath 
that you are satisfied based on empirical evidence that all of 
the other States that are involved have similar, robust 
regulatory regimes.
    Mr. Howarth, you talked about methane. What is wrong with 
methane?
    Mr. Howarth. Methane comes from lots of sources but the 
single largest source of methane to the atmosphere of the 
United States is the natural gas industry. At least 39-40 
percent or more of methane pollution comes from there.
    Mr. Connolly. So what?
    Mr. Howarth. Why do we care? It is an incredibly powerful 
greenhouse gas. It is low hanging fruit in terms of trying to 
start to address global warming. If we get methane under 
control, we are far better along than CO2. I can go into more 
detail on that. It also is a major contributor ground level 
ozone. I mentioned that briefly in my statement. I should point 
out that ground level ozone already causes 30,000 premature 
deaths in the United States every year.
    Mr. Connolly. So methane, in and of itself, is not a danger 
except for the global warming part of it?
    Mr. Howarth. Methane is not toxic.
    Mr. Connolly. It helps create increased levels of ozone?
    Mr. Howarth. It definitely leads to increased levels.
    Mr. Connolly. Ozone is a danger to human health?
    Mr. Howarth. It releases other things such as benzene which 
is also a contributor.
    Mr. Connolly. Is ozone regulated by the EPA?
    Mr. Howarth. Ozone definitely is regulated.
    Mr. Connolly. Ground level ozone, for example?
    Mr. Howarth. Ground level ozone is regulated by the EPA.
    Mr. Connolly. Right here in the National Capital Region, I 
seem to recall that we are subject because we are a non-
attainment area, serious EPA regulation with respect to ground 
level ozone, correct?
    Mr. Howarth. That is correct.
    Mr. Connolly. That might be a concern.
    I am running out of time but one of the other concerns that 
has come up and help us understand the science of it a little 
bit, what about reports of seismic events associated with the 
return I guess of fracking effluent.
    Mr. Howarth. There has been an increase in earthquakes, 
relatively small earthquakes but still a large number of small 
earthquakes in several places--Ohio, Oklahoma and elsewhere. 
The U.S. Geological Survey, after a thorough study, has 
attributed this to disposal of frac return waste into ground 
disposal wells that has changed the geology in such a way as to 
increase that. They have seen the increase.
    I should point out that the industry is moving more towards 
getting oil rather than gas out of shale because of the market 
considerations at the moment, the relative prices of the two. 
The largest oil reserves in shale in the United States are in 
the central valley of California and in the Los Angeles Basin. 
There the earthquake concerns with disposal of frac waste 
should give everyone pause.
    Mr. Connolly. I thank you.
    Thank you, Mr. Chairman, for your graciousness.
    Mr. Lankford. Thank you.
    Mr. Kelly?
    Mr. Kelly. Thank you, Chairman.
    I thank all of you on the panel today.
    We do have great differences of opinion as to where we are 
going with this. When I am back home in western Pennsylvania, 
there is a great deal of concern about the Federal Government 
getting involved in areas where those people in those States 
don't think they should. Why now? What is going on that all of 
a sudden the EPA has to get involved in fracking. This isn't 
new. It is 60 years old and has been going on for a long time. 
We are talking about eight times the Empire State Building, one 
on top of the other, on top of the other, it is that far below 
the surface, so this isn't right at the surface.
    I get a little bit concerned about that because we hear 
about this new technology. I know there is great innovation and 
the horizontal drilling but if you could, Mr. Krancer, you are 
from Pennsylvania and we talked before, why now? What is going 
on that there is this public concern and what brought it about?
    Mr. Krancer. I think it harkens back to the article I just 
mentioned that I would be happy to provide to the committee. I 
think Madison wrote about this in the Federalist papers, there 
is a tendency to want more power, so that may be part of what 
is going on here as well.
    Ms. Wrotenbery. First of all, you have to keep in mind some 
people are labeling all kinds of issues associated with oil and 
gas, drilling and production as hydraulic fracturing. There are 
certainly some issues associated with the rapid development of 
oil and gas in areas where it has not occurred before. We have 
seen that happen in various parts of the country. It has 
happened in certain areas of Oklahoma.
    Mr. Kelly. This has been around for 60 some years. We have 
never had this degree of concern before. There is a large swath 
of Marcellus shale through Pennsylvania, so why Dimock, PA, why 
this little town and why not some of the other areas?
    Mr. Krancer. If you are asking me, I could talk for an hour 
about Dimock and I won't. The State had been taking care of 
issues in Dimock for both an enforcement and technical 
standpoint for a long time. All of a sudden, the EPA, for 
reasons of which I have no idea, decided in January they have 
to come in, I suppose as a big brother, or as white knight or 
whatever, and do water testing and start supplying water to 
four families.
    As Representative Lankford correctly pointed out, it was 
interesting because the reports of no health impact would 
always come out on a Friday afternoon at about 4 p.m. and then 
they, of course, would die in the press. There have been four 
rounds of sampling and four nothings. Actually, Representative 
Marina was very interested in that because even at midcourse, 
they had spent $1 million out of the Superfund Response Fund 
which certainly could have gone a long way in northeastern 
Pennsylvania on a lot of Superfund Response projects.
    Mr. Kelly. In that case, they tested 59 wells and found 
nothing that indicated fracturing was causing a problem.
    Mr. Krancer. More than that, they found no health impacts 
whatsoever. Remember, when they came to Dimock in the first 
place, they never made a connection between hydraulic 
fracturing and what it is they were looking for. I asked them 
specifically and they said, no, we don't have an enforcement 
connection here.
    Mr. Kelly. So if Gasland doesn't come out, the movie 
doesn't come out, I won't call it a documentary, Dimock, PA 
probably doesn't get on anybody's radar?
    Mr. Krancer. Dimock was put on the radar, if I have my 
movie history correctly, by that film.
    Mr. Kelly. I think all of us are concerned. Sound science, 
I am totally in favor of. Political science, I wonder because a 
lot of this is the result of if you don't succeed at first, try 
it again. I am wondering where we are going with this and at 
what point does the EPA walk away from this and say we don't 
need this.
    I know in Pennsylvania you have done a great job, I know in 
Oklahoma, you have done a great job. I think the question does 
come down, and always in this town we talk about it, when is it 
that the Federal Government gets out of the way and lets the 
States take care of themselves.
    Mr. Krancer. That is a great question. I have never been 
compared to Jim Crow or in favor of Jim Crow for my views on 
Federal/State relationships, but let us remember the history is 
the Federal Government has never shown an interest, whatever 
Administration, whatever Congress, whatever EPA. That was what 
the Safe Drinking Water Act was about. That was what the 2005 
Energy Policy Act was about. That was a bipartisan Act which 
Ken Salazar and the current President of the United States 
voted for.
    Mr. Kelly. I would think that right now, this great 
abundance, the accessibility and the affordability of natural 
gas really had a great influence on a green agenda because this 
is supposed to be the bridge to get us there. Now we are 
finding out that instead of being the bridge, it is actually 
the bedrock of energy in this country.
    You and I talked earlier about this. I don't want to be in 
a fair fight with the rest of the world when we have natural 
resources right here provided by God and we are not taking 
advantage of them to put ourselves in the best position in the 
world economically. Why in the world would we continue to keep 
the government's boot on the throat of success and the great 
opportunities and jobs for this country and the revenue that 
could be produced?
    I know I am out of time. I want to thank you all for being 
here. I know it is frustrating but we will keep working on it 
and try to get to the bottom of it.
    Thank you.
    Mr. Lankford. Thank you.
    Mr. Farenthold.
    Mr. Farenthold. Thank you very much.
    I would like to thank the panel for being here.
    I would like to start with Ms. Wrotenbery since she is my 
neighbor to the north in Oklahoma and I am from Texas.
    Exxon Mobil put together a little graphic that I wanted to 
share with you. This basically shows a drilling. About 100 feet 
under, you typically will hit the groundwater. I realize you 
might have a little difficulty seeing that. Then to protect the 
groundwater, there are multiple layers of concrete and steel 
casing. This is true in both conventional wells that go down 
and hit a pool of oil or gas or a reservoir of oil and gas as 
well as in hydraulic fracking. Is that an accurate statement?
    Ms. Wrotenbery. Yes, the way the freshwater resources are 
protected.
    Mr. Farenthold. So in a case where there is hydraulic 
fracking as opposed to traditional, it is basically protected 
the same way, so similar risks of groundwater contamination 
exist from how we have been producing oil and gas since the 
Civil War, basically?
    Ms. Wrotenbery. We have had casing implementing 
requirements for oil and gas wells for many decades. They have 
actually evolved and improved over the years but a basic 
principle throughout the history of regulation has been we case 
the well through the freshwater zone to isolate that.
    Mr. Farenthold. When you frack a well, you are quite a bit 
below the water table. The water table is a couple hundred feet 
in Oklahoma?
    Ms. Wrotenbery. The geology varies.
    Mr. Farenthold. You are talking hundreds of feet, not 
thousands of feet?
    Ms. Wrotenbery. In a few isolated areas, it can be very 
deep. Typically though, you are right. We actually have that 
mapped. We have on our Internet the maps that show the base of 
fresh water throughout the State of Oklahoma.
    Mr. Farenthold. When you are fracking, you are 
traditionally much, much, much deeper. We are talking miles. 
Certainly in most Texas cases, it is at least a mile, sometimes 
two miles below the water table. The chance of something 
migrating up through the rock up two miles defies commonsense 
if that is an issue.
    Let me go on and visit with Mr. McKee. Most of your land, 
you have to get BLM permits and all sorts of permits. In Texas, 
we kind of fly through it in weeks and months but certainly not 
years in getting something permitted on private land. I assume 
there is a cost associated with this, not just with jobs, is 
that correct?
    Mr. McKee. Yes, that is correct. There is a study that was 
just released that shows the investment on every well is about 
$6 million in Utah. There is the mineral lease royalties and 
there are the jobs.
    Mr. Farenthold. When land is leased from the Federal 
Government, you pay a bonus to get the lease, buy the lease?
    Mr. McKee. Yes, that is correct.
    Mr. Farenthold. Then from everything that is produced, the 
Federal Government gets a royalty, so we get a percentage from 
the money the oil and gas is sold for that we can use to pay 
for roads and highways, we can bring into the Federal budget to 
help balance the budget. It is a source of income we are losing 
as a Federal Government.
    Mr. Mckee. Absolutely. Let me give one example. Recently, 
six leases were reinstated. I believe it was about 6,000 acres. 
The right to lease on those lands cost the bidders $48.6 
million just for those 6,000 acres, the right to drill and then 
there is a 12.5 percent royalty that comes in to the Federal 
Government. There is a sharing formula with the States. That is 
a tremendous source of revenue. I indicated there was over $200 
million of Federal mineral lease royalties coming out of my 
county.
    Mr. Farenthold. I also sit on the Transportation and 
Infrastructure Committee. One of the ways we are looking to pay 
for maintaining our deteriorating infrastructure of roads, 
bridges and the interstate highway system is using that royalty 
money. Those delays are costing the American people not just in 
dollars and cents but in much needed repairs and even the 
safety of our highway system.
    Mr. McKee. Absolutely.
    Mr. Farenthold. Let me go on to Mr. Krancer. Are you 
familiar with the statement of the former Region 6 EPA 
Director, Al Armendariz, when he wanted to crucify the oil and 
gas industry? Do you see that as actually happening?
    Mr. Krancer. You don't really want to lead me into that 
discussion, do you?
    Mr. Farenthold. I am from Texas. He was our EPA guy.
    Mr. Krancer. Actually I met Al once and I only know what I 
have read in the papers.
    Mr. Farenthold. Do you get a feeling the EPA is targeting 
the oil and gas industry unfairly?
    Mr. Krancer. I try to keep my eye on my own court and what 
we are doing. I do see permit delays and permit lags. I talked 
this morning about the rocket docket for regulations, historic 
regulations in air and so forth compared to the snail docket 
for getting permits done.
    Mr. Farenthold. I see I am out of time.
    Thank you very much, Mr. Chairman. Thank you, panel.
    Mr. Lankford. Thank you.
    We are going to do a couple minutes of questioning here to 
do some follow up.
    I just need some clarification on this and this is just a 
process question. A new guidance has been released by EPA 
dealing with the diesel fuels issue and EPA involvement. 
Obviously there has been traditional primacy in the oversight 
process for fracking in States.
    I am interested in how you are interpreting that, how that 
is working through the process of that guidance dealing with 
diesel fuels and fracking and expanding the definition of 
diesel fuels? Does that make sense? How is that going and what 
are you doing with that?
    Ms. Wrotenbery. It is in process. We are reviewing the 
document. I will say it does not directly apply to the State of 
Oklahoma because we administer the UIC Program for oil and gas 
operations under Section 1425 of the Safe Drinking Water Act, 
so we have a little bit different framework but we are looking 
at it closely because there is no doubt that EPA will be coming 
to visit with us about how we address the various elements that 
are in that guidance.
    There are some key issues in there that concern us. We are 
putting our comments together and we will be submitting those.
    Mr. Lankford. Is it your assumption that the guidance will 
become a rule or is it your assumption this is just an opinion 
piece that will probably affect BLM areas but won't affect 
private areas?
    Ms. Wrotenbery. We are concerned that EPA will implement it 
as if it were a rule.
    Mr. Lankford. That they apply the same?
    Ms. Wrotenbery. Yes.
    Mr. Lankford. Mr. Krancer?
    Mr. Krancer. I am sorry, were you talking about the BLM 
rule or the diesel fracking permitting guidance?
    Mr. Lankford. The diesel fracking permitting guidance.
    Mr. Krancer. Let me say first, I don't believe that is 
going to be an issue in Pennsylvania. There is no information 
that we have that diesel fuel is being used for fracking. I 
don't know whether that is going to be an issue in other 
States.
    EPA does have primacy of the UIC Program in Pennsylvania. 
That is because we don't do a lot of UIC disposal but I think 
you hit the nail on the head, we have to keep an eye on what 
the country does on_
    Mr. Lankford. The EPA is currently in the process of trying 
to redefine what is a diesel fuel. That was my question to you. 
That conversation is ongoing. How are you processing that with 
EPA at this point?
    Mr. Krancer. We are watching it very carefully because it 
is the proverbial nose in the camel's tent, to use a cliche. 
The 2005 Energy Policy Act did exclude fracking with diesel 
fuel. We all know that. If you define diesel fuel to be 
everything, then you have probably gone beyond what the law 
intended and you probably acted illegally to boot.
    Mr. Lankford. One quick last question, Ms. Wrotenbery, a 
comment was made earlier about earthquakes in Oklahoma based on 
fracking and a direct tie on that. Are you aware of earthquakes 
in Oklahoma based on the fracking itself?
    Ms. Wrotenbery. We are working with seismologists at the 
University of Oklahoma and the Oklahoma Geological Survey to 
study the possible connection between earthquakes and various 
types of oil and gas operations. Any statements that have been 
made that there has been some kind of conclusive link are 
premature.
    Mr. Lankford. Are earthquakes in Oklahoma common, small 
earthquakes?
    Ms. Wrotenbery. Yes. We live in a seismically active area. 
The records show that.
    Mr. Lankford. Thank you.
    I yield to the Ranking Member for three minutes.
    Mr. Connolly. Thank you, Mr. Chair.
    Mr. McKee, like you, I come from local government. I was 
the chairman of my county before I came here, so I appreciate 
your service. I think local government is very important.
    Did I understand your testimony to mean that you felt 
excessive Federal regulation, BLM regulation, inter alia, had 
served as an impediment to job creation in your community?
    Mr. McKee. That is correct.
    Mr. Connolly. What is the unemployment rate in Uintah?
    Mr. McKee. Today, it is only about 4.1 percent. However, 
when the downturn in the economy happened, because we are an 
extractive community, we didn't know there was even a recession 
going on as far as what we were feeling until we had new 
policies that came in and almost overnight, we lost a number of 
jobs because of new policies.
    Mr. Connolly. At 4.1 percent which is pretty low.
    Mr. McKee. Today, it is 4 percent.
    Mr. Connolly. Four percent. How does that rank with other 
counties in Utah?
    Mr. McKee. We are among the best.
    Mr. Connolly. Might it be the lowest rate in Utah?
    Mr. McKee. I would have to double check that. I am not sure 
but we are pretty good because of our oil and gas economy.
    Mr. Connolly. What percentage of your county is Federally-
owned or controlled land?
    Mr. McKee. I know we are only 15 percent privately held. I 
believe it is about 59 percent that is BLM, there is some 
forest and 17.5 percent with the tribe and a little bit of 
State institutional trust lands.
    Mr. Connolly. Do you have any idea on that Federal land how 
many leases have, in fact, or permits have been granted but not 
utilized?
    Mr. McKee. I know there is a fairly strong backlog on the 
permitting process today. I believe I was told there were over 
1,000 permits that are backlogged, that they have not been able 
to issue because of the backlog issue.
    Mr. Connolly. In some cases, it is also a utilization 
issue, isn't it, that some have been granted and not used?
    Mr. McKee. What I am told is many times it is very 
difficult because sometimes these permits show up in a category 
as though they have been issued but they are still waiting for 
the government to finalize what they are doing so they get held 
up.
    Mr. Connolly. Obviously one of the things we have talked 
about today is air pollution, whether attributed to fracking or 
whatever. Your county is largely a rural county, is it not?
    Mr. McKee. It is.
    Mr. Connolly. One would normally expect in a rural county 
relatively clean air. How does Uintah County stack up in that 
regard?
    Mr. McKee. Overall, our air quality is good with the 
exception of winter ozone. We do have a winter ozone issue, if 
I could touch on that quickly. If I could disagree a bit with 
my colleague to the left, it indicated the use of hydraulic 
fracturing was causing the winter ozone issue. I have 
personally been very involved with this issue, meeting with 
State and even the EPA offices in Denver. We have had 
roundtable discussions and extensive studies going on. I have 
never yet heard to this date of any tie to hydraulic 
fracturing.
    Mr. Connolly. I know my time is running out. I was stunned 
to learn that you actually topped Los Angeles on a number of 
occasions at 149 ppb with respect to ozone. In fact, the EPA 
called it unearthly at some point. What is the cause of such 
high ozone levels in Uintah County?
    Mr. McKee. There appears to be a number of factors the 
scientists are still trying to learn about. One of the things 
they recognize is it is tied with sunlight and snow. This past 
winter, we did not have very much snow on the ground, we did 
not have any exceedances. In fact, we were well below the 
number. A year ago, we had deep snow and the numbers were 
fairly high. The jury is still out and that is what they are 
trying to find out.
    Mr. Connolly. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Lankford. Thank you.
    We will now take a short recess to prepare for the second 
panel. Thank you very much for being here and staying for two 
rounds of questioning. I appreciate the time very much.
    [Recess.]
    Mr. Lankford. We will now welcome our second panel of 
witnesses. Thank you both for being here.
    Nancy Stoner is Acting Assistant Administrator for Water, 
U.S. Environmental Protection Agency and Mike Pool is Acting 
Deputy Director of the Bureau of Land Management as of 
tomorrow. We are breaking you in officially. We will try to be 
done before you are actually placed as Acting Administrator.
    As I mentioned to everyone, we do have votes that will be 
called shortly, so we will try to get in both your testimonies.
    Ms. Stoner, we would be glad to receive your testimony.

                   STATEMENT OF NANCY STONER

    Ms. Stoner. Thank you, Mr. Chairman.
    Good afternoon, Chairman Lankford, Ranking Member Connolly 
and members of the subcommittee.
    I am Nancy Stoner, Acting Assistant Administrator for Water 
at USEPA. Thank you for inviting me to testify before you 
today.
    Mr. Lankford. Ms. Stoner, I apologize for this. I did not 
swear in everyone. Every hearing has to have some swearing in 
it.
    If I could ask you both to stand so I can swear you in. 
Please rise and raise your right hands.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witnesses respond in the affirmative.]
    Mr. Lankford. May the record reflect that all witnesses 
answered in the affirmative. I apologize for having to stall 
you in the moment. You may start over or pick up where you left 
off.
    Ms. Stoner. I think I will pick up right where I stopped.
    The EPA and this Administration recognize that natural gas 
represents an important energy resource for our country. 
Increased on reliance on gas has the potential to create jobs, 
promote energy, security, lower energy prices and reduce 
harmful emissions to air and water.
    At the same time, the Administration is committed to 
ensuring that production proceeds in a safe and responsible 
manner. We firmly believe we can protect the health of American 
families and communities while enjoying the benefits of 
expanded national energy reserves.
    While States are the primary regulators of onshore oil and 
gas activity, the Federal Government has an important role to 
play by regulating oil and gas activities on public and Indian 
trust lands, research and development aimed at innovation to 
improve the safety of natural gas development and 
transportation activities and setting sensible, cost effective, 
public health and environmental standards to implement Federal 
laws and complement State safeguards.
    As the senior policy manager for EPA's National Water 
Program, I would like to highlight a few of the EPA's recent 
actions under the Safe Drinking Water Act and the Clean Water 
Act intended to ensure that natural gas production can remain 
protective of human health and the environment.
    The Safe Drinking Water Act governs the construction, 
operation, permitting and closure of underground injection 
wells for the protection of underground sources of drinking 
water. Underground injection control or UIC programs 
administered by EPA or the States are responsible for 
overseeing these injection activities. However, the Energy 
Policy Act of 2005 excludes hydraulic fracturing from 
regulation under EPA's UIC Program, except when diesel fuels 
are used in fluids or propping agents.
    The EPA has heard from both industry and the public that we 
should clarify the applicability of the permitting requirement 
for diesel fuels, hydraulic fracturing as well as how those 
permits should be written.
    In response and in light of the significant increase in 
natural gas production in the United States, we have developed 
draft guidance to clarify requirements under the Safe Drinking 
Water Act and to help prevent the endangerment of underground 
sources of drinking water from hydraulic fracturing using 
diesel fuels.
    The EPA developed this draft guidance with input from 
industry, States, tribes and other Federal departments and 
agencies, environmental organizations and the public. I would 
like to emphasize that as is the case with all guidance, the 
draft document does not impose any new requirements. The draft 
clarifies existing statutory and regulatory requirements and 
provides technical recommendations for applying UIC Class II 
requirements to the diesel fuels hydraulic fracturing process.
    The guidance is intended for use by EPA permit writers 
under the UIC Program and will be applicable where EPA is 
directly responsible for the UIC Class II Program. We are 
taking public comments on the draft through July 9 and welcome 
comments from all affected parties and the public.
    The agency has also initiated efforts under the Clean Water 
Act to provide regulatory clarity and protection against risks 
to water quality. In October 2011, EPA announced a schedule to 
develop pretreatment standards for waste water discharges 
produced by natural gas extraction from underground, coal bed 
and shale formations.
    In addition, EPA is assisting State and Federal permitting 
authorities in the Marcellus Shale Region by answering 
technical questions concerning the treatment and disposal of 
wastewater from shale gas extraction. The EPA has also been 
conducting research to better understand the potential impacts 
of hydraulic fracturing on drinking water resources. That is 
through our Office of Research and Development.
    In conclusion, EPA's activities related to hydraulic 
fracturing help assure that public health and water quality 
remain protected as natural gas helps to promote our Nation's 
economic recovery and security.
    Thank you for the opportunity to testify before you today 
and I am happy to take any questions you may have.
    [Prepared statement of Ms. Stoner follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Mr. Lankford. Thank you very much.
    Mr. Pool.

                     STATEMENT OF MIKE POOL

    Mr. Pool. Mr. Chairman Lankford and members of the 
subcommittee, thank you for the opportunity to discuss the 
Bureau of Land Management's development of hydraulic fracturing 
rules and their application on Federal and tribal trust lands.
    The BLM administers over 245 million acres of surface 
estate and approximately 700 million acres of onshore Federal 
mineral estate throughout the Nation. Together with the Bureau 
of Indian Affairs, we also provide permitting and oversight 
services on approximately 56 million acres of Indian trust 
minerals.
    Secretary of the Interior Ken Salazar has emphasized that 
as we move forward to the new energy frontier, the development 
of conventional energy resources from BLM-managed public lands 
will continue to play a crucial role in meeting the Nation's 
energy needs. Facilitating the safe, responsible and efficient 
development of these domestic oil and gas resources is the 
BLM's responsibility and part of the Administration's broad 
energy strategy to protect consumers and help reduce our 
dependence on foreign oil.
    In fiscal year 2011, onshore Federal oil and gas royalties 
exceeded $2.7 billion, approximately half of which was paid 
directly to the States in which the development occurred. 
Tribal oil and gas royalties exceeded $400 million with 100 
percent of those revenues paid to the tribes and individual 
Indians owning the land on which the development occurred.
    Oil and gas production from shale formation scattered 
across the United States has grown considerably and is expected 
to continue in the coming decades. Factors contributing to this 
success include technological advances in hydraulic fracturing 
and horizontal drilling.
    The BLM estimates that approximately 90 percent of the 
wells built on public lands and Indian lands are stimulated by 
hydraulic fracturing techniques. The increasing use of 
hydraulic fracturing has raised public concerns about the 
potential impact on water availability and quality, 
particularly with respect to the chemical composition of 
fracturing fluids and the methods used.
    The BLM recognizes that some, but not all, States have 
recently taken action to address hydraulic fracturing in their 
own regulations. One of the BLM's key goals in updating its 
regulations on hydraulic fracturing is to complement these 
State efforts by providing consistent standards across all 
public and Indian lands.
    The agency has a long history of working cooperatively with 
State regulators to coordinate State and Federal activities. 
The proposed rulemaking is not intended to duplicate various 
State or applicable Federal requirements. The BLM's intent is 
to encourage efficiency in the collection of data and the 
reporting of information.
    The development of the hydraulic fracturing rule includes 
tribal consultation under the Department's consultation policy. 
This policy emphasizes trust, respect and shared responsibility 
by providing tribal governments an expanded role to inform 
Federal policy that impacts Indian lands.
    In January 2012, the BLM conducted a series of meetings in 
the west where there is significant development of Indian oil 
and gas resources. Nearly 180 tribal leaders were invited to 
attend these meetings held in Tulsa, Oklahoma, Billings, 
Montana, Salt Lake City, Utah and Farmington, New Mexico. 
Eighty-four tribal members representing 24 tribes attended 
these meetings.
    On May 11, 2012, the BLM sent over 180 invitations for 
continued government-to-government consultation, to exchange 
information on the development of hydraulic fracturing rules. 
As the agency continues to consult with tribal leaders 
throughout the rulemaking process, responses from these 
representatives will inform our actions and define the scope of 
acceptable hydraulic fracturing rule options.
    The BLM's proposed rule is consistent with the American 
Petroleum Institute's guideline for well construction and 
integrity. On May 11, 2012, the BLM published the proposed rule 
in the Federal Register beginning a 60-day public comment 
period.
    Straightforward measures outlined in the proposed rule 
include disclosure of chemicals used in hydraulic fracturing 
operations with appropriate protections for trade secrets; 
assurance of a well born integrity to minimize the risk of 
fracturing fluids leaking into the nearby aquifers and water 
management requirements to apply to the fluids that flow back 
to the surface after hydraulic fracturing has taken place.
    The hydraulic fracturing proposed rule will strengthen the 
requirements for hydraulic fracturing performed on Federal and 
Indian trust lands in order to build public confidence and 
protect the health of American communities while ensuring 
continued access to important resources to our energy economy.
    Mr. Chairman, thank you for the opportunity to testify. I 
would be happy to answer any questions.
    [Prepared statement of Mr. Pool follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Lankford. Thank you. Thank you not only for your 
written testimony but your oral testimony and for allowing you 
to come in on your pre-first day.
    We are verifying right now, I think they may be calling the 
votes. If they are calling the votes right now, that is going 
to interrupt our schedule. We will hesitate for just a moment 
to see.
    It looks like they are calling the vote. If they are, we 
can do a round of questions and come back and do a second round 
or we can try to stall and do both rounds when we are back. We 
will try to do maybe three minutes in the first round and come 
back and do a second round. The second round we will do like 18 
minutes each or something like that.
    Let me yield to Mr. Kelly for the first round.
    Mr. Kelly. Thank you, Mr. Chairman.
    Ms. Stoner, I am trying to understand the change in EPA's 
interpretation of a regulation. Why was the 2010 announcement 
not subject to the notice and comment procedure? I am talking 
specifically when we go into the diesel element of it. That was 
kind of fast paced, was it not? It was just placed on your 
website and wasn't really the regular procedure taken?
    Ms. Stoner. This is a guidance document, so it is an 
interpretation of the statute and the regulations.
    Mr. Kelly. I am talking about before the guidance document 
that EPA posted on their website on the permit using the diesel 
in fracking.
    Ms. Stoner. The EPA has on its website information about 
what is in the Energy Policy Act including the fact that when 
hydraulic fracturing is done with diesel fuels, a permit is 
required. That is in the statute so we did include that 
information on our website. As you may know, we did have a 
lawsuit associated with that. Which has been_
    Mr. Kelly. I understand but that is different than the 
document that existed before the 2010. Is it true, that has 
changed?
    Ms. Stoner. I am not sure I understand your question.
    Mr. Kelly. There is a letter from Acting Assistant 
Administrator Ben Grumbles to the Senate Environment and Public 
Works Committee stating that the use of hydraulic fracturing 
using diesel does not fall within the scope of the UIC Class II 
Program. That is before 2010.
    Ms. Stoner. Was that before 2005?
    Mr. Kelly. No, it is before 2010 The EPA then decides to 
change that, just going on their website and saying it. It 
didn't go through the normal processing is what I am saying.
    Ms. Stoner. It is not my understanding the agency changed 
its position between 2001 and 2005. In 2001, there was a court 
decision that said hydraulic fracturing was within the Class II 
UIC Program. It was at that point that the agency changed its 
position in response to the Federal court.
    Mr. Kelly. Without objection, Mr. Chairman, I ask this 
letter be put in.
    Mr. Lankford. Without objection.
    Mr. Kelly. I think the concern is things change rather 
quickly and a process that all of a sudden that was not policy 
before becomes policy, does not go through the regular process. 
The fracturing was not part of what was in the policy, using 
diesel fuel. All of a sudden it did become part of it.
    Ms. Stoner. We are implementing the 2005 statute with the 
guidance that is going through public notice and comment now 
after a series of public meetings and discussions with a 
variety of different groups. We are undertaking that process. 
We agree with you it is important to have the involvement and a 
wide variety of partners and stakeholders in the process.
    Mr. Kelly. That is the intent of the whole process and that 
is why I wondered why it was fast tracked like that.
    Mr. Chairman, my time is up. I yield back.
    Mr. Lankford. I recognize Mr. Connolly.
    Mr. Connolly. Welcome to both of our panelists. Thank you, 
Mr. Chairman.
    Just to clarify, I am confused, EPA is not proposing a 
general broad regulation on fracturing. It is only proposing 
fracturing within the statutory framework provided in the 2005 
legislation and the subsequent court ruling, is that correct, 
Ms. Stoner?
    Ms. Stoner. Yes, that is correct. We are interpreting the 
statute and the regulation.
    Mr. Connolly. For example, if it does not involve diesel, 
you are not regulating the process?
    Ms. Stoner. That is correct. Diesel fuels is in the 
statute, that is what we are implementing. Congress imposed the 
obligation on hydraulic fracturing operations using diesel 
fuels to obtain a permit and the guidance explains how to do 
that.
    Mr. Connolly. This assertion of regulatory responsibility 
in this particular lane involving diesel was actually insisted 
upon, is that correct, or ruled upon by a court?
    Ms. Stoner. The court determined that hydraulic fracturing 
was covered under the UIC Class II Program. That was in 2001. 
Congress took action in 2005 that limited that permitting 
requirement only to hydraulic fracturing using diesel fuel. 
What the proposed guidance does is indicate how that should be 
implemented.
    Mr. Connolly. Why did it take seven years from that 
legislation to today to get around to proposed regulations?
    Ms. Stoner. Initially at the EPA we did a memorandum of 
agreement with companies involved in coal bed methane hydraulic 
fracturing indicating they would not use diesel fuels. A shift 
in the industry has happened so that there is now more 
hydraulic fracturing that is outside that realm of the coal bed 
methane. That is why we no longer view the initial steps as 
sufficient to comply with what Congress asked us to do
    Mr. Connolly. Are you aware of any cases where fracturing 
has come to a halt because of your pending regulatory rules?
    Ms. Stoner. No, I am not aware of any.
    Mr. Connolly. You are also proposing as an emission to 
regulate carcinogens, benzene and volatile organic compounds 
but not methane, is that correct?
    Ms. Stoner. That would be an air rule you are asking about. 
I don't know the answer to that question.
    Mr. Connolly. You don't know the answer. My understanding 
is you are not proposing anything with respect to methane.
    Ms. Stoner. I am sorry, I don't know the answer. We could 
submit that information for the record.
    Mr. Connolly. You will recall earlier the Professor's 
testimony that methane actually is a very serious concern of 
his and other academics and scientists looking at fracturing. 
The reason is because it is part of a family of organic 
compounds--methane in and of itself may not be dangerous but it 
is a precursor and other carcinogens.
    Mr. Pool, did you hear the testimony of Mr. McKee from 
Uintah, Utah?
    Mr. Pool. Yes, sir, I did.
    Mr. Connolly. He testified that essentially BLM, being the 
owner of 59 percent of the land mass in his county, is really 
putting the crimp in their style in terms of the ability to 
exploit natural resources because it is Federally-owned land 
and Federally-controlled land. Would you comment? I know this 
is your first day in this particular set of responsibilities.
    Mr. Pool. That is a very prolific region in terms of 
natural gas and potential development. We have issued quite a 
few leases up there and we have issued quite a few APDs. I 
think when it comes to leasing Federal land, we have other 
important responsibilities that we have to address in terms of 
biological and cultural considerations.
    When we go into a leasing process or a full development 
process, we need to work with the operators. These 
jurisdictions will vary depending on the sensitivity of these 
resources. I think between Wyoming and Utah, we have about 
6,800 APDs that are what we call front logged where we have 
issued the APDs but the companies have not taken action to 
activate those. I think a percentage of those are in Uintah 
County. I don't have that exact number.
    Mr. Connolly. Essentially the thrust of the testimony from 
at least two of the State officials was we don't need no 
stinking Federal Government, why not just let, for example, 
Utah regulate what happens on BLM land. What is wrong with 
that?
    Mr. Pool. As relates to hydrologic fracturing or fracking, 
we discovered in reviewing our own regulations that they are 
very outdated. Many of the States, including Colorado, Wyoming, 
Texas, and Arkansas, were starting to develop regulatory 
procedures to address various requirements associated with 
fracking.
    We looked at our regulations. I think the Secretary of 
Interior has done an incredible job in terms of public outreach 
with the forum he held in D.C. back in the fall of 2011. 
Subsequently we held regional meetings. We got recommendations 
from the Secretary of Energy, the Natural Gas Subcommittee, all 
of which was helping the BLM formulate what improved standards 
should we develop. We looked closely at what the State 
regulators have been doing. In many cases, they have been out 
in front of the BLM.
    The issue is the State fracking regulations don't pertain 
to Federal lands. In many provinces of the west, we have fee 
land, State land and we have public land. We would like to 
think with development of our proposed rule, with a high degree 
of outreach and public input--that is still ongoing during the 
comment period--that our regulations will be very much 
complementary to and very much in alignment with what States 
are doing as well. It is important that they be in line.
    Mr. Connolly. Thank you, Mr. Chairman.
    Mr. Lankford. Mr. Pool, let me ask about that. The public 
lands, you are saying the State rules would not apply. You are 
saying State regulations in Utah would not apply to fracking?
    Mr. Pool. That is correct.
    Mr. Lankford. Was there a consideration to say they would 
or is there a need for BLM to create a whole new group of 
regulators and go in and evaluate this?
    Mr. Pool. Yes, Mr. Chairman. Our authorities come under two 
principal statutes--the Mineral Leasing Act and the Federal 
Land Policy and Management Act. Our regulations have to be 
basically developed under those two statutes for us to enforce 
whatever requirements we want to impose on the operators.
    Mr. Lankford. You mentioned before your regulations were 
very out of date on this. Obviously States keep theirs up to 
date.
    Mr. Pool. That is correct.
    Mr. Lankford. Is there a process in place where BLM is 
going to keep up to date on all the different States?
    Mr. Pool. In developing our proposed rule, we looked at 
Colorado, Wyoming, Texas and we even looked at Arkansas. We 
have taken into account some of the standards they have 
developed over a period of time. We are using their information 
along with more recent public information to finalize our rule.
    Mr. Lankford. I would like to have unanimous consent to add 
to the record a letter from the Governor of Wyoming mentioning 
that he feels the rules are very duplicative to what they 
already do in Wyoming and this will create two different sets 
and a little frustration with that. I would like to add that to 
the record as well.
    Mr. Lankford. Let me ask a couple questions because they 
have called the votes and I want to be able to honor your time 
as well.
    How long will this process add, do you think, this 
additional set of regulations, to the permitting process? How 
many days do you think it will add?
    Mr. Pool. I don't have exact days but I think the 
requirements are very basic. In terms of the constituents or 
chemicals used primarily in many cases is a water/sand-based 
solution. We are asking that companies after they complete the 
fracking operation to file that information to us within 30 
days.
    Mr. Lankford. I asked because this morning in testimony we 
heard an estimate given that this would add 100 days to the 
process. I didn't know if you all had set an estimate on that 
as well.
    Mr. Pool. I don't have it with me today but we can provide 
that.
    Mr. Lankford. Ms. Stoner, my concern is on the expanded 
definition of diesel. It is very clear that diesel fuel is 
included in the 2005 but if I drove a diesel truck, which I 
don't, and then poured kerosene into it, I would not consider 
that a diesel fuel. If I drove a diesel truck and instead of 
filling it up with diesel, instead I put crude oil in there or 
home heating oil, it would not run because it is a diesel 
vehicle. The definition is fairly clear it is diesel fuel.
    I want to have dialogue about the new, expanded definition 
of diesel fuels. Many of the companies doing fracking saw the 
ruling in 2005, saw the statement from Congress saying diesel 
fuels will be regulated and so they shifted away from diesel 
fuel. This has the perception that because they no longer use 
diesel fuels, we have to redefine what is a diesel fuel to make 
sure what they are using is included. Does that make sense? 
Crude oil, home heating oil, kerosene, those are now suddenly 
diesel fuels.
    Ms. Stoner. In the Energy Policy Act of 2005, the term 
diesel fuels appears but there is no definition.
    Mr. Lankford. Correct.
    Ms. Stoner. This is the first attempt the agency has made 
to provide such a definition. It did so by looking at six 
Chemical Abstract Service or CAS numbers. There are six 
specific things, all of which are diesel fuels--diesel fuel 1, 
diesel fuel 2.
    Mr. Lankford. They are diesel fuel 1, 2 and 3 as designated 
by who, EPA or by some other group? For instance, the petroleum 
distillates could be just about anything that is a petroleum 
product.
    Ms. Stoner. It has a specific CAS number that doesn't come 
from the agency called crude oil/diesel fuel. Kerosene is 
marine diesel fuel. All six of them are diesel fuel and that is 
where we got the six CAS numbers from. We are taking comment on 
our proposed definition. We would like a very clear definition 
because it links specifically to those six CAS numbers.
    Mr. Lankford. I am second guessing whether Congress in 
2005--I was not in Congress in 2005, none of us on this panel 
were--was considering crude oil a diesel fuel or as broad as 
petroleum distillates as a diesel fuel. That is a very broad 
definition. The concern is that this suddenly seems to reach 
out with a net and be able to snag everything in it.
    I have one other quick comment and then want to share some 
additional time. Why redefining now, why BLM putting in the new 
regulatory environment now before EPA has finished its study? 
We have a study due in just a few months to define whether 
there is even a problem. We just created a new series of 
regulations, just greatly expanded what diesel fuels pertain to 
the common sense view of what is a diesel fuel in the past 
before EPA finalizes a study.
    Ms. Stoner. The ORD study will actually take a couple more 
years. We expect to have progress this year but not a final 
report this year. The information we do have about what 
Congress did in terms of diesel fuel is that Congress was 
focused on benzene, toluene, ethyl benzene and zylene or BTEX 
compounds which are associated with all six of those CAS 
numbers.
    We are doing our best to interpret what Congress was 
concerned about in terms of chemicals in underground sources of 
drinking water and the potential risk there. That is our 
proposed description of diesel fuels. Again, it is out for 
public comment.
    Mr. Lankford. Will this be retroactive permitting when the 
new definition is done?
    Ms. Stoner. The permitting requirements of the statute and 
the regulations apply now but the diesel fuel definition is a 
proposed interpretation of those and would of course not be.
    Mr. Lankford. If a State doesn't abide by the guidelines, 
will they lose primacy in this?
    Ms. Stoner. We don't intend to take away primacy from our 
State partners. We work closely with them on implementing these 
programs in a complementary way and don't intend to do that. 
The draft guidance applies only to those States where EPA is 
the permitting authority under the UIC Program.
    Mr. Lankford. Would this be mandatory in BLM areas?
    Ms. Stoner. It doesn't differentiate between private lands 
and Federal lands but it does apply only where EPA is the 
issuing, permitting authority for UIC. States assume that 
authority. Many States like Oklahoma have assumed that 
authority and it does not apply to those States, although they 
may find it useful.
    Mr. Lankford. Mr. Pool, obviously that would be your 
decision to make in days to come whether this applies, this 
guidance.
    I need to give additional minutes back to Mr. Kelly who 
only got three here.
    Mr. Kelly. I thank the Chairman.
    Ms. Stoner, I am going to ask you one thing and very 
quickly, Mr. Pool. The reason I ask is because of Pennsylvania. 
Dimock, PA, I think you are familiar with the movie Gasland.
    Ms. Stoner. I am sorry, familiar with what, sir?
    Mr. Kelly. The movie Gasland?
    Ms. Stoner. Yes, I am somewhat familiar with it.
    Mr. Kelly. On May 11, Roy Seneca, a spokesman for the 
regional EPA office said they tested 59 wells in Dimock and 
found the fracking had nothing to do with any contamination of 
the water. He says, this set of sampling did not show levels of 
contaminants that would give the EPA reason to take further 
action.
    The conclusion then would be that the EPA doesn't need to 
be concerned anymore with Dimock, PA with the testing, so the 
water is safe. It is not the result of fracturing, there is 
nothing that has been contaminated.
    Ms. Stoner. My understanding is there is some limited 
additional sampling occurring to verify there is no public 
health concern but that we have not found a public health 
concern to date.
    Mr. Kelly. All the testing has turned up nothing that would 
determine the water was affected by fracking?
    Ms. Stoner. My understanding is that we believe nothing 
required further action.
    Mr. Kelly. Okay, that is a settled issue.
    Mr. Pool, the President talks a lot about the increase in 
oil and gas. Where is the increase taking place? Is it taking 
place in the Federal lands? Where is it taking place?
    Mr. Pool. I think the BLM and the public lands has been a 
major contributor to the production of natural gas and oil. 
Currently we have about 85,000 producing wells on public lands, 
about 90 percent of which we do apply hydraulic fracturing to 
maximize the economic recovery of the resource.
    Mr. Kelly. When we talk about the increase, there has been 
a huge increase, but most of it has taken place in the private 
sector. Ninety-six percent of it by the way, we have a slide 
that shows that. The President is saying wow, look what we have 
done but 96 percent of the increase in U.S. oil production has 
occurred on non-Federal lands. This really has nothing to do 
with the Administration.
    Mr. Pool. As I mentioned earlier in my comments, we have a 
variety of statutes that we have to address when we authorize 
lands for lease.
    Mr. Kelly. I understand that.
    Mr. Pool. In recent years, we have been much more measured.
    Mr. Kelly. Do you think this chart is correct?
    Mr. Pool. Congressman, I can't compare that.
    Mr. Kelly. It is a CRS chart, by the way. I know this is 
your first day but I am trying to determine because I am 
hearing all the time about this tremendous increase under this 
Administration. The fact of the matter is it really has 
happened in the private sector; it hasn't happened on Federal 
lands. I think sometimes you have to clear up those things so 
people actually understand what is going on.
    I have a problem with people who take credit for things 
they didn't have anything to do with. I think the general 
public never sees these things and when they hear these 
numbers, they say this is incredible, what has happened. It has 
happened through the private sector; it has not happened on 
Federal lands.
    I think when you look at 96 percent has happened in the 
private sector and 4 percent on Federal, where there would have 
been some influence, it absolutely had nothing to do with it.
    I appreciate the indulgence. We are running short on time. 
I thank you both for being here today.
    Mr. Lankford. Thank you.
    Would either of you mind if we submit some written 
statements to you later on and get a chance to do some follow 
up. We do have additional questions and want to be able to do 
some follow up. Do either of you have a problem with that? I am 
sure, Mr. Pool, you will have nothing on your desk tomorrow. 
You will be eagerly awaiting these questions.
    Ms. Stoner. That would be fine.
    Mr. Connolly. Mr. Chairman, in that category could I just 
ask Mr. Pool if he would give us more detail in writing because 
I was intrigued by his answer with respect to the testimony of 
Mr. McKee on Uintah County and how BLM was an impediment to 
their economically being able to develop that land. I think the 
subcommittee would welcome more detailed explanation.
    Mr. Pool. I would be glad to give you a complete profile of 
that.
    Mr. Connolly. If I could piggyback on your request, that 
would be great.
    Mr. Lankford. That would be great for both the county and 
the committee as we do our research as well.
    Thank you for being here. We will follow up with additional 
questions to submit for the record.
    With that, we are adjourned.
    [Whereupon, at 4:08 p.m., the subcommittee was adjourned.]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                                 
