[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
----------
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For sale by the Superintendent of Documents, U.S. Government Printing
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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
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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.]
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