[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
H.R. 2728, PROTECTING STATES' RIGHTS TO PROMOTE AMERICAN ENERGY
SECURITY ACT
=======================================================================
LEGISLATIVE HEARING
before the
SUBCOMMITTEE ON ENERGY AND
MINERAL RESOURCES
of the
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
Thursday, July 25, 2013
__________
Serial No. 113-36
__________
Printed for the use of the Committee on Natural Resources
Available via the World Wide Web: http://www.fdsys.gov
or
Committee address: http://naturalresources.house.gov
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COMMITTEE ON NATURAL RESOURCES
DOC HASTINGS, WA, Chairman
PETER A. DeFAZIO, OR, Ranking Democratic Member
Don Young, AK Eni F. H. Faleomavaega, AS
Louie Gohmert, TX Frank Pallone, Jr., NJ
Rob Bishop, UT Grace F. Napolitano, CA
Doug Lamborn, CO Rush Holt, NJ
Robert J. Wittman, VA Raul M. Grijalva, AZ
Paul C. Broun, GA Madeleine Z. Bordallo, GU
John Fleming, LA Jim Costa, CA
Tom McClintock, CA Gregorio Kilili Camacho Sablan,
Glenn Thompson, PA CNMI
Cynthia M. Lummis, WY Niki Tsongas, MA
Dan Benishek, MI Pedro R. Pierluisi, PR
Jeff Duncan, SC Colleen W. Hanabusa, HI
Scott R. Tipton, CO Tony Cardenas, CA
Paul A. Gosar, AZ Steven A. Horsford, NV
Raul R. Labrador, ID Jared Huffman, CA
Steve Southerland, II, FL Raul Ruiz, CA
Bill Flores, TX Carol Shea-Porter, NH
Jon Runyan, NJ Alan S. Lowenthal, CA
Mark E. Amodei, NV Joe Garcia, FL
Markwayne Mullin, OK Matt Cartwright, PA
Chris Stewart, UT Vacancy
Steve Daines, MT
Kevin Cramer, ND
Doug LaMalfa, CA
Jason T. Smith, MO
Todd Young, Chief of Staff
Lisa Pittman, Chief Legislative Counsel
Penny Dodge, Democratic Staff Director
David Watkins, Democratic Chief Counsel
------
SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES
DOUG LAMBORN, CO, Chairman
RUSH HOLT, NJ, Ranking Democratic Member
Louie Gohmert, TX Steven A. Horsford, NV
Rob Bishop, UT Matt Cartwright, PA
Robert J. Wittman, VA Jim Costa, CA
Paul C. Broun, GA Niki Tsongas, MA
John Fleming, LA Jared Huffman, CA
Glenn Thompson, PA Alan S. Lowenthal, CA
Cynthia M. Lummis, WY Tony Cardenas, CA
Dan Benishek, MI Raul M. Grijalva, AZ
Jeff Duncan, SC Colleen W. Hanabusa, HI
Paul A. Gosar, AZ Joe Garcia, FL
Bill Flores, TX Vacancy
Mark E. Amodei, NV Vacancy
Chris Stewart, UT Vacancy
Steve Daines, MT Peter A. DeFazio, OR, ex officio
Kevin Cramer, ND
Doc Hastings, WA, ex officio
------
CONTENTS
----------
Page
Hearing held on Thursday, July 25, 2013.......................... 1
Statement of Members:
Cartwright, Hon. Matt, a Representative in Congress from the
State of Pennsylvania...................................... 4
Prepared statement of.................................... 5
Flores, Hon. Bill, a Representative in Congress from the
State of Texas............................................. 7
Prepared statement of.................................... 9
Lamborn, Hon. Doug, a Representative in Congress from the
State of Colorado.......................................... 1
Prepared statement of.................................... 3
Statement of Witnesses:
Craddick, Christi, Commissioner, Railroad Commission of Texas 16
Prepared statement of.................................... 17
Response to questions submitted for the record........... 23
Epstein, Lois N., P.E., Arctic Program Director, The
Wilderness Society......................................... 29
Prepared statement of.................................... 30
Response to questions submitted for the record........... 33
Foerster, Catherine P., Chair and Engineering Commissioner,
Alaska Oil and Gas Conservation Commission................. 11
Prepared statement of.................................... 13
State Review of Oil and Natural Gas Environmental
Regulations (STRONGER), Link to ``STRONGER Guidelines''
submitted for the record............................... 50
Rogers, John C., Associate Director, Utah Division of Oil,
Gas, and Mining............................................ 25
Prepared statement of.................................... 27
Additional materials supplied:
Energy Producing States Coalition (EPSC), Letter to The
Honorable John Boehner and The Honorable Nancy Pelosi dated
July 25, 2013, submitted for the record.................... 49
LEGISLATIVE HEARING ON H.R. 2728, A BILL TO RECOGNIZE STATES' AUTHORITY
TO REGULATE OIL AND GAS OPERATIONS AND PROMOTE AMERICAN ENERGY
SECURITY, DEVELOPMENT, AND JOB CREATION. ``PROTECTING STATES' RIGHTS TO
PROMOTE AMERICAN ENERGY SECURITY ACT.''
----------
Thursday, July 25, 2013
U.S. House of Representatives
Subcommittee on Energy and Mineral Resources
Committee on Natural Resources
Washington, D.C.
----------
The Subcommittee met, pursuant to notice, at 9:36 a.m., in
room 1334, Longworth House Office Building, Hon. Doug Lamborn
[Chairman of the Subcommittee] presiding.
Present: Representatives Lamborn, Benishek, Flores, Cramer,
Mullin, Cartwright, Lowenthal, and Garcia.
Mr. Lamborn. The Committee will come to order. The
Committee notes the presence of a quorum, which, under
Committee Rule 3(e), is two Members.
The Subcommittee on Energy and Mineral Resources is meeting
today to hear testimony on an legislative hearing on Mr. Flores
and my bill to recognize States' authority to regulate oil and
gas operations and promote American energy, security,
development, and job creation, known as the ``Protecting
States' Rights to Promote American Energy Security Act.''
Under Committee Rule 4(f), opening statements are limited
to the Chairman and Ranking Member. However, I ask unanimous
consent to include any other Members' opening statements in the
hearing record if submitted to the clerk by close of business
today.
[No response.]
Mr. Lamborn. Hearing no objection, so ordered. Also, I ask
unanimous consent that Mr. Markwayne Mullin of Oklahoma be
allowed to participate in today's hearing, when he is able to
join us.
[No response.]
Mr. Lamborn. Hearing no objection, so ordered. I also ask
unanimous consent that the author of the legislation under
consideration today be permitted to give a 5-minute opening
statement.
[No response.]
Mr. Lamborn. Hearing no objection, so ordered. I now
recognize myself for 5 minutes.
STATEMENT OF THE HON. DOUG LAMBORN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Mr. Lamborn. I would like to start by thanking our
distinguished panel of State official witnesses for being here
today. Today we are meeting on the title of a bill,
``Protecting States' Rights to Promote American Energy Security
Act.'' This legislation, introduced by Congressman Flores and
myself, would require the Department of the Interior to defer
to State regulations, permitting, and guidance regarding
hydraulic fracturing on Federal lands within the States'
borders.
Since taking office, the Obama Administration has pursued
the nationalization of hydraulic fracturing regulations,
determining that a big government solution is the best
solution. While the Administration claims these regulations are
meant as a baseline, the reality is that these are burdensome
and duplicative regulations that could significantly inhibit
hydraulic fracturing on Federal land, thereby inhibiting energy
production, American job creation, and continuing our
dependence on foreign energy imports.
At a hearing last week, Secretary Jewell testified to our
Committee that baseline standards covering flowback control,
wellbore integrity, and other basic requirements were needed at
the Federal level. However, the States have proactively taken
the lead in managing hydraulic fracturing development on their
lands, and have been successfully doing so for decades.
Nevertheless, the Administration continues to pursue
implementation of its own unnecessary, one-size-fits-all
Federal regulations, with practically no acknowledgment of the
work that the States have been doing for years in managing
energy production, while taking into consideration their own
unique geography, hydrology, and production issues. This big
government, one-size-fits-all generic approach to energy
regulation will not work. Yet this Administration continues to
approach energy regulation treating all 50 States the same.
While the Administration and Secretary Jewell claim they
will accept existing State rules, in reality the proposed
regulations place the burden nearly entirely on the shoulders
of the energy producer to prove to the BLM on a well-by-well
basis that the States they are operating in has adequate or
comparable regulations.
The Administration's own reporting said that 99 percent of
the impact of this rule will fall on small businesses and
independent producers who will bear the brunt of these
regulations. And these are people who are less able to absorb
the additional regulatory cost, and less capable of moving off
Federal land for their production.
In addition to being burdensome and duplicative, these
regulations are unnecessary. State regulations have proven
successful in managing hydraulic fracturing on their lands. The
BLM claims the regulations are needed to prevent drinking water
contamination as a result of energy development. However,
multiple studies and witnesses have testified that extensive
testing has shown no evidence of water contamination through
hydraulic fracturing. Repeatedly we have seen the EPA retreat
from radical statements on water contamination when the facts
come forward, including in Pennsylvania, Wyoming, Ohio, and
Texas. Time and time again, we have seen these false claims
yield to science.
More recently, on Monday, DOE's National Energy Technology
Laboratory in Pittsburgh released preliminary results showing
no evidence that chemicals from natural gas drilling operations
have contaminated drinking water. Additionally, witnesses from
Utah, Colorado, Ohio, and multiple other States have testified
before our Committee that there have been no instances of
environmental contamination due to hydraulic fracturing.
The Protecting States' Rights to Promote American Energy
Security Act will require the BLM to defer to existing State
regulations and prohibit the Department from enforcing needless
and duplicative Federal regulations in States that have
existing regulations in place. This will allow domestic energy
development to move forward, create and save American jobs,
increase Federal revenue, and decrease our reliance on
Federal--excuse me, foreign imports.
I would like to thank our witnesses for coming before our
Committee today, and I look forward to hearing your testimony.
[The prepared statement of Mr. Lamborn follows:]
Statement of The Honorable Doug Lamborn, Chairman,
Subcommittee on Energy and Mineral Resources
I'd like to start by thanking our distinguished panel of State
witnesses for being with us today. Today we are meeting on the
``Protecting States' Rights to Promote American Energy Security Act.''
This legislation, introduced by Congressman Flores, would require the
Department of the Interior to defer to State regulations, permitting,
and guidance regarding hydraulic fracturing on federal lands within the
State's boundaries.
Since taking office, the Obama Administration has pursued the
nationalization hydraulic fracturing regulations, determining that a
big government solution is the best solution. While the Administration
claims these regulations are meant as a ``baseline,'' the reality is
these burdensome and duplicative regulations could significantly
inhibit hydraulic fracturing on federal land--thereby inhibiting energy
production, American job creation, and continuing our dependence on
foreign energy imports.
At a hearing last week, Secretary Jewell testified to our Committee
that baseline standards covering flowback control, wellbore integrity,
and other basic requirements were needed at the federal level. However,
the States have proactively taken the lead in managing hydraulic
fracturing development on their lands and have been successfully doing
so for decades. Nonetheless, the Administration continues to pursue
implementation of its own needless one size fits all federal
regulations, with practically no acknowledgement of the work the States
have been doing for years in managing energy production while taking
into consideration their own unique geography, hydrology, and
production issues. This big government one size fits all generic
approach to energy regulation will not work, yet this Administration
continues to approach energy regulation like all 50 states are exactly
the same.
While the Administration and Secretary Jewell claim they will
accept existing state rules, in reality, the proposed regulations place
the burden nearly entirely on the shoulders of the energy producer to
prove to the BLM on a well by well basis, that the State they are
operating in has adequate or comparable regulations. The
Administration's own reporting said that 99% of the impact of this rule
will fall on small businesses and independent producers who will bear
the brunt of these regulations and are less able to absorb the
additional regulatory cost and less capable of moving off federal land
for their production.
In addition to being burdensome and duplicative, these regulations
are unnecessary. State regulations have proven successful in managing
hydraulic fracturing on their lands. The BLM claims the regulations are
needed to prevent drinking water contamination as a result of energy
development. However, multiple studies and witnesses have testified
that extensive testing has shown no evidence of water contamination.
Repeatedly we have seen the EPA retreat from radical statements on
water contamination when the facts come forward including in
Pennsylvaina, Wyoming, Ohio and Texas. Time and time again, we have
seen these false claims yield to the facts of science. More recently,
on Monday DoE's National Energy Technology Laboratory in Pittsburgh
released preliminary results showing no evidence that chemical from
natural gas drilling operations contaminated drinking water.
Additionally witnesses from Utah, Colorado, Ohio, and multiple other
states have testified before our Committee that there have been no
instances of environmental contamination due to hydraulic fracturing.
The ``Protecting States' Rights to Promote American Energy Security
Act'' will require the BLM to defer to existing State regulations and
prohibit the Department from enforcing needless and duplicative federal
regulations in states that have existing regulations in place. This
will allow domestic energy development to move forward, create and save
American jobs, increase federal revenue, and decrease our reliance on
foreign imports. I'd like to thank our witnesses for coming before our
Committee today and I look forward to hearing your testimony.
______
Mr. Lamborn. I would now like to recognize the Ranking
Member for his opening statement.
STATEMENT OF THE HON. MATT CARTWRIGHT, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF PENNSYLVANIA
Mr. Cartwright. Thank you, Mr. Chairman. Mr. Chairman,
natural gas reserves, now accessible all across the United
States through the use of hydraulic fracturing techniques, have
the potential to reduce our dependence on foreign oil, lessen
pollution that leads to global warming, reshape our
manufacturing sector, and boost our economy overall. In fact,
we are now producing more natural gas in America under
President Obama than we ever have before.
But we have to ensure that we develop this resource safely
and in a way that protects our American environment. According
to the Interior Department, 90 percent of all new wells drilled
on public lands now employ hydraulic fracturing. As a result,
the Interior Department has begun the process of conducting a
rulemaking to govern the safety of hydraulic fracturing on
public lands.
Hydraulic fracturing, or fracking, is a topic with which we
are all well acquainted. Just a few months ago the full
Committee held an oversight hearing on BLM's upcoming
regulation. Last week Secretary Jewell discussed the issue in
testimony when she appeared before this Committee. And in less
than 1 month, the public comment period on those revised
regulations will close.
Establishing minimum safety and environmental standards for
fracking processes has been my top priority since being elected
to the Congress. Now, this is why the first bill I introduced,
the FRESHER Act, closed loopholes for oil and gas companies in
the Clean Water Act, and has garnered 55 cosponsors so far. And
that is why today I am introducing the CLEANER Act, which will
ensure that oil and gas companies are required to test their
waste to determine if it is hazardous and, if so, dispose of it
using safe methods that other industries already are employing.
I believe these reforms are crucial to implement basic
standards for the entire country. And while the Congress
refuses to hold votes on these bills, the Administration really
must lead the way on our public lands.
Now, the Majority has claimed that Federal regulation of
fracking on America's public lands is not needed because States
already have regulations in place. But State regulations vary
widely in their requirements, in the stringency of those
requirements, and the efficacy with which they are implemented.
That is why it is important for the Interior Department to put
in place a regulatory floor to ensure that there are minimum
protections in place on public lands in all States. As stated
by Secretary Jewell last Wednesday, part of her job is to make
sure the Interior Department is watching over the Federal
estate effectively.
Now, the bill we are considering today, however, has a far
broader reach than just the proposed regulations on hydraulic
fracturing. This bill purports to take away from the Department
of the Interior all authority to regulate any part of the
hydraulic fracturing process on public lands. Now, these are
very broad terms that have severe implications.
For example, this bill would allow hydraulic fracturing to
occur within any unit of the National Park System or any other
Federal land, if permitted to do so under State law. Now,
imagine a hydraulic fracturing well located next to the Grand
Canyon National Park Visitors Center. If this bill were passed,
the Federal Government would have absolutely no power to
prevent just that from occurring.
It should also be noted as well that this bill does not
mention tribal authority, nor does it distinguish between
Federal lands and tribal lands held in trust by the Federal
Government. As a result, the bill would grant States full
control of tribal lands so long as any ``component of the
hydraulic fracturing process'' is involved. This Committee has
had multiple hearings over the past two congresses focusing on
the important distinction between Indian lands and public
lands. Yet this bill fails to make such a distinction. This
neglect is an affront to the repeated unanimous testimony we
have received from tribal witnesses over the past several
years.
In short, the public lands in this country belong to the
American people, and the Interior Department has a
responsibility to ensure that companies drilling on them are
doing so safely, and protecting our air and water. We already
know that oil and gas companies are committing serious safety
violations when drilling on public lands. A report issued last
year by Democratic members of this Committee found that there
were a total of 2,025 safety and drilling violations on Federal
land that were issued to 335 companies drilling in 17 States
between 1998 and 2011.
Moreover, the current drilling regulations that companies
repeatedly violate for well construction have not been updated
in nearly 25 years, and reflect neither the significant
technological advantages of hydraulic fracturing, nor the
tremendous growth in its use.
I look forward to hearing the testimony from our witnesses
today, and I yield back.
[The prepared statement of Mr. Cartwright follows:]
Statement of The Honorable Matt Cartwright, a Representative
in Congress from the State of Pennsylvania
Thank you Mr. Chairman.
Mr. Chairman natural gas reserves now accessible all across the
United States through the use of hydraulic fracturing techniques have
the potential to reduce our dependence on foreign oil, lessen pollution
that leads to global warming, reshape our manufacturing sector, and
boost our economy. In fact, we are now producing more natural gas in
America under President Obama than we ever have before. But we must
ensure that we develop this resource safely and in a way that protects
the environment.
According to the Interior Department, 90 percent of all new wells
drilled on public lands now employ hydraulic fracturing. As a result,
the Interior Department has begun the process of conducting a
rulemaking to govern the safety of hydraulic fracturing on public
lands. Hydraulic fracturing, or ``fracking,'' is a topic with which we
are well acquainted: just a few months ago the Full Committee held an
oversight hearing on the BLM's upcoming regulation; last week Secretary
Jewell discussed the issue in testimony when she appeared before this
committee; and in less than one month the public comment period on
those revised regulations will close.
Establishing minimum safety and environmental standards for
fracking processes has been my top priority since being elected to
Congress. This is why the first bill I introduced, the FRESHER Act,
closed loopholes for oil and gas companies in the Clean Water Act, and
has garnered 55 cosponsors. And that is why today I am introducing the
CLEANER Act, which will ensure that oil and gas companies test their
waste to determine if it is hazardous, and if so, dispose of it using
the safe methods that other industries already employ. I believe these
reforms are crucial to implement basic standards for the entire
country, and while Congress refuses to hold votes on these bills the
Administration must lead the way on our public lands.
The Republican Majority has claimed that federal regulation of
fracking on America's public lands is not needed because states already
have regulations in place. But state regulations vary widely in their
requirements, the stringency of those requirements, and the efficacy
with which they are implemented. That is why it is important for the
Interior Department to put in place a regulatory floor to ensure that
there are minimum protections in place on public lands in all states.
As stated by Secretary Jewell last Wednesday, part of her job is to
make sure the Interior Department is watching over the federal estate
effectively.
The bill we are considering today, however, has a far broader reach
than just the proposed regulations on hydraulic fracturing. The bill
purports to take away from the Department of the Interior all authority
to regulate any part of the ``hydraulic fracturing process'' on public
lands. These are very broad terms that have severe implications. For
example, this bill would allow hydraulic fracturing to occur within any
unit of the National Park System or any other federal land if permitted
to do so under state law. Imagine a hydraulic fracturing well located
next to the Grand Canyon National Park Visitors Center--if this bill
were passed, the federal government would have absolutely no power to
prevent that from occurring.
It should be noted as well that this bill does not mention tribal
authority, nor does it distinguish between federal lands and tribal
lands held in trust by the federal government. As a result, the bill
would grant states full control of tribal lands, so long as any
``component of the hydraulic fracturing process'' is involved. This
committee has had multiple hearings over the past two Congresses
focusing on the important distinction between Indian lands and public
lands, yet this bill fails to make such a distinction. This neglect is
an affront to the repeated, unanimous testimony we have received from
tribal witnesses over the past several years.
In short, the public lands in this country belong to the American
people and the Interior Department has a responsibility to ensure that
companies drilling on them are doing so safely and that our air and
water is protected. We already know that oil and gas companies are
committing serious safety violations when drilling on public lands--a
report issued last year by Democratic members of this Committee found
that there were a total of 2,025 safety and drilling violations on
federal land that were issued to 335 companies drilling in seventeen
states between February 1998 and February 2011, 549 of which were
classified as ``major'' by committee staff.
Moreover, the current drilling regulations that companies
repeatedly violate for well construction have not been updated in
nearly 25 years and reflect neither the significant technological
advances of hydraulic fracturing nor the tremendous growth in its use.
Rather than relying on state regulations that vary widely in their
requirements, the stringency of those requirements, and the efficacy
with which they are implemented, we should be ensuring that DOI's rule
is strengthened in a number of key areas such as public disclosure and
availability of information, management of waste water and well
construction. This bill proposes to nullify proper regulation of
hydraulic fracturing by the Interior Department and will have severe
consequences for all public and Indian lands.
I look forward to hearing the testimony from our witnesses.
______
Mr. Lamborn. Thank you.
And now we will hear, as earlier stated, from the author of
the legislation, along with myself, Representative Flores of
Texas for 5 minutes.
STATEMENT OF THE HON. BILL FLORES, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF TEXAS
Mr. Flores. Thank you, Mr. Chairman. Chairman Lamborn, I
want to thank you for holding this important hearing on H.R.
2728, the Protecting States' Rights to Promote American Energy
Security Act. I have submitted a comprehensive set of comments
on the bill for the record, and I will summarize those key
points in a few minutes.
I would like to start out by exercising a little bit of
personal privilege and recognize three important guests today.
My wife, Gina, is with us today. My nephew, Landon, is with us.
And also, we have an up-and-coming rising star among Texas
elected officials, and that is Christi Craddick, the
Commissioner of the Railroad Commission of Texas. I welcome
each of you here.
I have also told them about what comedy we have in this
Committee, and how we all get along. And so I am hoping that
will be on display today.
This bipartisan-sponsored bill takes an important step
toward reaffirming States' rights in determining energy
production while providing a path forward for the House
Republicans' goal of American energy security by the year 2020.
This bill is also an important tool to grow good, American
manufacturing jobs and reduce greenhouse gas emissions through
the increased production use of abundant and efficient natural
gas for our Nation's energy needs. You also heard the Ranking
Member agree with those things just a few minutes ago.
Before we go too much further today, I think it is
important to look at several important facts when it comes to
American energy.
First, we are in the midst of an energy transformation in
the way that we produce energy in this country cleanly, safely,
affordably, and responsibly, through the use of proven
technologies that continue to improve each year.
Second, because of this energy revolution, we are now in a
position to be energy secure by the year 2020. This is a goal
we should pursue, just as we did in the 1960s to put a man on
the moon in less than a decade.
Third, this energy revolution has created hundreds of
thousands of well-paying American jobs in the energy industry.
More importantly, however, the energy from affordable and
abundant natural gas has put America in a position to become
globally competitive in manufacturing, and to create millions
of great jobs for hard-working Americans that are currently
worried about their family's future because of Washington
policies.
Fourth, the expanded use of clean-burning natural gas has
helped us improve the environment by reducing greenhouse gas
emissions. In fact, because of this, the U.S. has reduced its
emissions of GHGs by nearly 12 percent over the last 10 years.
It ranks first among major nations in the reduction of its
carbon footprint.
And if I could bring up chart number one, fifth, this
resurgence of American energy production has occurred on State
and privately owned lands, while energy production on Federal
taxpayer-owned lands has declined over the last 5 years,
because of the Obama Administration's war on America's oil and
gas and coal companies, and the jobs that come from the
employers in these industries.
Sixth, increased production of American energy has huge
potential to help fix our fiscal imbalances in two ways: by
balance of trade improvements and by Federal deficit reduction.
Seventh, with respect to hydraulic fracturing, there are at
least 10 different Federal agencies--we will bring up chart
number two--that are studying the potential imposition of new
Federal rules to restrict hydraulic fracturing. This is being
done, even though congressional statutes specifically exempt
many oil and gas activities, including hydraulic fracturing,
from relevant statutes. These statutes essentially leave the
bulk of the regulation of the oil and gas operations to the
States.
Nonetheless, the Obama Administration is attempting to
circumvent these exemptions by new rulemaking, change
performance standards, and coordinate lawsuits with third-party
environmental groups. This has resulted in numerous Federal
agencies, including the Department of the Interior, attempting
to restrict the use of this essential American energy
technology.
Eighth, the Obama Administration's assault on hydraulic
fracturing is a solution in search of a problem that does not
exist. Despite lots of rhetoric and innuendo, the Federal
Government has found no evidence of groundwater pollution or
significant environmental issues from hydraulic fracturing
technology.
If we go to chart three, you will see the testimony from
one of two EPA Administrators, including Lisa Jackson, that
have said that, ``I am not aware of any proven case where the
fracking process itself has affected water.''
If we go to the next chart, former BLM Director Bob Abbey
testified that hydraulic fracturing is safe, and there have
been no proven cases where hydraulic fracturing itself has
affected groundwater.
In chart number five, we see testimony from newly appointed
Energy Secretary Ernest Moniz. He testified, ``There has been
no incidents of groundwater pollution from the hydraulic
fracturing process.'' He has also been a strong advocate for
States having the primary role in regulating hydraulic
fracturing.
Just last week, the Department of Energy released results
from an ongoing Federal study of hydraulic fracturing,
suggesting that this drilling technique is not contaminating
drinking water aquifers in the Marcellus Shale.
These are eight important facts regarding today's American
energy revolution. This discussion brings us to why we are here
today, to stop the Federal Government's next big threat to the
current American energy revolution, the assault on hydraulic
fracking.
In Congress we frequently address the powers of the States
versus federalism on a myriad of issues, from health care to
labor to education. The bill before us today is not a question
of regulating or not regulating hydraulic fracturing. The bill
before us today is about empowering local self-government and
placing a check on the growth of an out-of-control, one-size-
fits-all Federal Government.
I will end by posing a question. Why do we need two sets of
regulation on any industry, when one set of effective and
proven regulations is already working?
Mr. Chairman, thank you again for holding this hearing on
H.R. 2728, and I yield the balance of my time.
[The prepared statement of Mr. Flores follows:]
Statement of The Honorable Bill Flores, a Representative
in Congress from the State of Texas
Chairman Lamborn, I want to thank you for holding this important
hearing on H.R. 2728, the Protecting States' Rights to Promote American
Energy Security Act.
This bill takes an important step toward reaffirming states' rights
in determining energy production while providing a path forward for the
House Republicans' goal of American Energy Security by the year 2020.
This bill is also an important tool to grow good American manufacturing
jobs and to reduce greenhouse gas emissions through the increased
production and use of abundant and efficient natural gas for our
nation's energy needs.
Before we go too much further today, I think it is important to
look at several important facts when it comes to American Energy:
1. First, we are in the midst of an energy transformation in
the way that we produce energy in this country--cleanly,
safely, affordably, and responsibly through the use of proven
technologies that continue to improve each year.
2. Second, because of this energy revolution, we are now in a
position to be ``energy secure'' by the year 2020; this is a
goal we should pursue, just as we did in the 60's to put a man
on the moon in less than a decade.
3. Third, this energy revolution has created hundreds of
thousands of well-paying American jobs in the energy industry.
More importantly, however, energy from affordable and abundant
natural gas has put America to be in a position to become
globally competitive in manufacturing and to create millions of
great jobs for hard working Americans that are currently
worried about their families' futures because of Washington
policies. This manufacturing revolution has happened in my very
own Texas district where low-cost electricity generated by
clean burning-natural gas has made the steel products produced
by Nucor Steel globally competitive. This plant in Jewett,
Texas employs almost 400 hard working Texans in well-paying
jobs and it is one of the largest taxpayers to the local school
district.
4. Fourth, the expanded use of clean burning natural gas has
helped us improve the environment by reducing greenhouse gas
emissions. In fact, because of this, the U.S. has reduced its
emissions of GHG's by nearly 12% over the last five years, it
ranks first among major nations in the reduction of its carbon
footprint.
5. Fifth, this resurgence of American energy production has
occurred on state and privately owned lands while energy
production on federal taxpayer owned lands has declined over
the past five years because of the Obama administration's war
on America's oil and gas and coal companies and the jobs that
come from the employers in these industries.
6. Sixth, the reduced importation of crude oil from unstable
regimes in the Middle East as well as the potential export of
liquefied natural gas, or LNG as it is more commonly known, has
the potential to improve American national security and to make
a huge change in the world's geopolitical balance. Imagine
this, what if we were no longer buying oil from the Middle East
and having our dollars being used to fund terrorist operations
against our interests at home and around the world.
7. Seventh, increased production of American energy has huge
potential to help fix our fiscal imbalances in two ways--by
balance of trade improvements and by federal deficit reduction.
Similarly, by manufacturing more American products here at
home, exporting energy, and importing less energy, abundant and
affordable energy can have dramatically improve our huge trade
deficits. By producing more American energy on federal taxpayer
owned lands and offshore areas, we can generate more revenues
from lease bonus payments and royalties that can be used to
reduce federal deficits. Furthermore, tax receipts from more
American manufacturing jobs and economic growth could help us
balance the budget in just a few years.
8. Eighth, one of the most important tools that has enabled
this American energy revolution is the improved use of
hydraulic fracturing technology. Without this technology, there
would be no American energy revolution and no way to be talking
about American Energy Security by 2020.
9. Ninth, with respect to hydraulic fracturing, there are at
least 10 different federal agencies that are studying the
potential imposition of new federal rules to restrict hydraulic
fracturing. This is being done even though Congressional
statutes specifically exempt many oil and gas activities,
including hydraulic fracturing, from relevant statutes. These
statutes essentially leave the bulk of the regulation of oil
and gas operations to the states. Nonetheless, the Obama
administration is attempting to circumvent these exemptions by
new rulemaking, changed performance standards, and lawsuits
with third party environmental groups. This has resulted in
numerous federal agencies, including the Department of
Interior, attempting to restrict the use of this essential
American energy technology.
10. Tenth, the Obama administration's assault on hydraulic
fracturing is a solution in search of a problem that does not
exist! Despite lots of rhetoric and innuendo, including a
couple of very misleading movies, the federal government has
found no evidence of ground water pollution or significant
environmental issues from hydraulic fracturing technology. This
fact is evidenced by the testimony of the last two EPA
Administrators, including Lisa Jackson; they and former BLM
Director Bob Abbey have testified that hydraulic fracturing is
safe and that there have been no proven cases where hydraulic
fracturing itself has affected groundwater. Recently, in
testimony before the House Science and Technology Committee,
newly appointed Department of Energy Secretary Earnest Moniz
testified that there has been no incidence of groundwater
pollution from the hydraulic fracturing process. Secretary
Moniz has also been a strong advocate for states having a
primary role in regulating hydraulic fracturing. Just last
week, the Department of Energy released results from an ongoing
federal study of hydraulic fracturing suggesting that this
drilling technique is in fact not contaminating drinking water
aquifers in a targeted area within the Marcellus Shale. During
that same time, energy production in the area where this DOE
study took place, has produced 234,000 jobs and added 1.6
billion in tax revenue to the state of Pennsylvania.
These are ten important facts regarding today's American energy
revolution. In general, it happened in spite of Washington, rather than
because of it. As stated above, the effects of the energy policies of
the Obama administration are most clearly evidenced by reduced energy
production from federal taxpayer owned lands and offshore areas, the
shutdown of 20% of our nation's coal-fired electricity generation, the
loss of thousands of jobs from those shutdowns, and the blocking of the
Keystone XL pipeline.
This discussion brings to us to why we are here today--to stop the
federal government's next big threat to the current American energy
revolution--the federal assault on Hydraulic Fracturing. In particular,
the Department of Interior, over which this Committee has Congressional
oversight authority, has ignored our Constitution and ignored
Congressional statutes by attempting to issue new federal regulations
to control hydraulic fracturing. One of the reasons that my bill, HR
2728, ``Protecting States' Rights to Promote American Energy Security
Act'' was introduced is to recognize the most important fact not
discussed above. That reason is simple--the reason that we have not
experienced environmental problems with hydraulic fracturing is that
the hydraulic fracturing operators and the states have effectively
regulated this technology based upon real world experience over 60
years and over one million hydraulic fracturing operations in the U.S.
I think it would be helpful to first look at an analogy to
understand the importance of hydraulic fracturing in the production of
American oil and natural gas. Take this IPAD for instance; it is game-
changer that has transformed many aspects of the way we do business and
communicate in America. This IPAD needs energy to operate, however,
after a few hours of operation, it is useless without its charger; its
promise disappears.
Similarly, because of hydraulic fracturing and new drilling
technologies, we now have a plentiful supply of environmentally
friendly natural gas and growing supplies of American oil production;
we can call this the IPAD of American Energy Security. In this analogy,
hydraulic fracturing is the ``charger'' we need to enable these robust
supplies of natural gas. If the federal government stops or excessively
restricts hydraulic fracturing, it analogous to losing the charger to
this IPAD. Eventually, natural gas production will begin to fall,
supplies will diminish, prices will increase, and the opportunities to
grow our manufacturing base and to become energy secure will evaporate;
all because of misguided Washington policies.
Recent statistics have shown that oil and natural gas activities
have decreased significantly on federal lands compared to activity
levels on state and private lands across the nation. Burdensome and
duplicative federal regulations are largely responsible for this
inhibited activity. Our states have a long and successful track record
of regulating oil and natural gas operations including hydraulic
fracturing, well construction, and management of produced water. H.R.
2728 recognizes the effectiveness of state regulations by halting
overreaching federal involvement in hydraulic fracturing operations.
Today, you may hear a lot of rhetoric about the need to wean our
country off of carbon fuel--I agree; but, we must do it in a manner
that is based upon the technological realities of alternative fuels. We
also need to do this without destroying the American economy in the
process and without the federal government picking winners and losers.
In short, today's hearing should address the real world and not a world
that does not yet exist. Today's energy resources are the ``bridge''
that will power us to the carbon free world of the future. We shouldn't
burn that bridge before we get to that future world.
In Congress, we frequently address the powers of the states versus
federalism on a myriad of issues from health care, to labor, to
education. The bill before us today is not a question of regulating or
not regulating hydraulic fracturing. The bill before us today is about
empowering local self-government and placing a check on the growth of
out-of-control one size fits all government. I will end by posing a
question; why do we need two sets of regulations on any industry when
one set of effective and proven regulations is already working?
Mr. Chairman, thank you again for holding this hearing on H.R.
2728. I also would like to welcome Railroad Commissioner Christi
Craddick from my home state of Texas to testify before our
subcommittee. I look forward to hearing from our witnesses today.
______
Mr. Lamborn. All right. And I want to thank the Member for
his statement, my colleague from Texas, also for his background
and the knowledge he brings to this issue, and for the
legislation that we have in front of us.
We will now hear from our four witnesses. We have this
morning Ms. Catherine Foerster, Chair and Engineering
Commissioner of the Alaska Oil and Gas Conservation Commission;
we have Ms. Christi Craddick, Commissioner of the Railroad
Commission of Texas; we have Mr. John Rogers, Associate
Director of the Utah Division of Oil, Gas, and Mining; and we
have Ms. Lois Epstein, Arctic Program Director for the
Wilderness Society.
Like all of our witnesses, your written testimony will
appear in full in the hearing record, so I ask that you keep
your oral statements to 5 minutes. Our microphones are not
automatic, so you have to push the button before you can get
started.
And I want to explain how our timing lights work. When you
begin to speak, our clerk will start the timer and a green
light will appear. After 4 minutes, a yellow light comes on.
And after 5 minutes, a red light comes on. And I would ask that
you conclude at that time.
And we will now hear from Ms. Foerster. Thank you.
STATEMENT OF CATHERINE P. FOERSTER, CHAIR AND ENGINEERING
COMMISSIONER, ALASKA OIL AND GAS CONSERVATION COMMISSION
Ms. Foerster. Thank you, Chairman Lamborn, Ranking Member
Cartwright, and members of the Subcommittee, for inviting me to
testify today. The Alaska Oil and Gas Conservation Commission
applauds Congressmen Flores and Lamborn for introducing this
bill. The last thing the United States needs right now is
duplicative regulation of an already stringently regulated
process. Unless, of course, we need increased Federal spending
and bureaucracy, delays in providing jobs, revenue, and
affordable domestic energy, and one-size-fits-all regulations
that are ignorant to regional differences. I believe my
testimony will explain why I whole-heartedly support this bill.
In arguing my support, let me first take you back a week to
a hearing with this Committee and Secretary Sally Jewell. I
feel that hearing created the potential for several
misperceptions, and I would like to clear those up.
Secretary Jewell's answers to questions from
Representatives Lamborn, Fleming, and Mullin gave the
perception that no national standard exists for hydraulic
fracturing, that some States regulate using 30-year-old
technology, and that States new to hydraulic fracturing have
nowhere to go for help in establishing appropriate regulations.
None of these statements are true.
In America today, a State-funded NGO called the Interstate
Oil and Gas Compact Commission, or IOGCC, located in Oklahoma
City, represents the Governors of all oil and gas-producing
States. The purpose of the IOGCC is to help all States in their
regulation of oil and gas operations, including hydraulic
fracturing. All Canadian Provinces with oil and gas operations
also belong to IOGCC. IOGCC has guidance documents on a variety
of oil and gas operations. They are very general, but they help
States set high standards of environmental protection that are
consistent with the varying engineering and geologic needs of
each State.
In addition, an organization borne out of a joint effort
between DOE and API called STRONGER, for State Review of Oil
and Natural Gas Environmental Regulations, exists to provide a
national standard for environmental protection in all aspects
of oil and gas operations, and a critical review of individual
State regulations to ensure that the national standard is being
met, and that the local issues are also being addressed.
STRONGER consists of representatives from industry,
environmental NGO's and State regulators, and addresses the
concerns of all three groups. STRONGER convenes subgroups to
address individual issues. One such subgroup deals specifically
with hydraulic fracturing. I am part of that group. And this is
a copy of the 2013 STRONGER guidelines. Section IX deals with
hydraulic fracturing. To imply, as Secretary Jewell did, that
no national standard for hydraulic fracturing exists, is not
true.
As for States needing help to address any new aspect of oil
and gas regulations, States can, should, and do use the work
already done by STRONGER and by the IOGCC and its member
States. In fact, IOGCC even reaches out to States and provinces
new to oil and gas, and invites them to join our compact. Also,
during IOGCC's biannual meetings, members and guests sharing
learning, so that if one State or province encounters a problem
or issue, we all collaborate on the solution. So, to imply that
State regulators have nowhere to go for help when they
encounter hydraulic fracturing or any other new operation or
technology, also not true.
As for the State's regulations being old and out of date,
again, not true. The IOGCC member States meet twice a year to
review the latest technology advances and operating practices,
with an eye to the need for regulatory changes. The IOGCC seeks
out industry representatives to provide information at these
meetings on new and changing technologies and operating
practices. And as a State regulator for over 8 years, I assure
you we are almost constantly updating one regulation or another
to keep up with these changes.
Almost 80 years ago the IOGCC had the good idea to develop
model statutes, which they did. On top of that, we revisit the
standards and our individual State regulations constantly, to
ensure that they are up to date. More recently, STRONGER has
developed a comprehensive set of guidelines for State
regulation, specifically of hydraulic fracturing, and one that
I helped to update less than a year ago. We certainly don't
need to duplicate any of these efforts.
There was also some discussion at that hearing of FracFocus
and trade secret protection. I just want to remind the
Subcommittee that the Uniform Trade Secrets Act is in place in
47 States and the District of Columbia, and that FracFocus is,
and any other disclosure mechanism would be, bound by the
provisions of that Act.
And keep in mind also that FracFocus requires that all
ingredients be disclosed, it's just the quantities, in other
words, the recipe of those ingredients, that is withheld as a
trade secret.
I would like to clear up one more misperception from the
hearing. Representative Lowenthal suggested that FracFocus is
privately run and there is no guarantee it will be maintained.
Although funded by DOE and industry, it is maintained by
another State-funded NGO, the Groundwater Protection Council,
in association with the IOGCC. So the concern about FracFocus
not being around in the future is also unwarranted.
I am out of time. Thank you again, Mr. Chairman and Ranking
Member, for allowing me to testify. I hope from my testimony
you can see the rationale for my strong support of this bill,
and my concern with adding unnecessary Federal regulations.
[The prepared statement of Ms. Foerster follows:]
Statement of Catherine P. Foerster, Chair and Engineering Commissioner,
Alaska Oil and Gas Conservation Commission
Thank you, Chairman Lamborn, ranking member Holt, and members of
the Subcommittee on Energy and Mineral Resources for inviting me here
today to discuss hydraulic fracturing regulation.
The Alaska Oil and Gas Conservation Commission applauds Congressman
Flores for introducing this bill and the members of this sub-committee
for their interest in considering it. The last thing the United States
needs right now is duplicative regulation of an already stringently
regulated process, unless, of course, we need increased federal
spending and bureaucracy; delays in providing jobs, revenue, and
affordable domestic energy; confusion among operators and regulators;
and one-size-fits-all regulations that are ignorant to regional
differences.
In my testimony I believe you will hear why I wholeheartedly
support Representative Flores' proposed legislation. In arguing my
support for this legislation, let me first take you back one week ago
to a hearing with this very committee and Secretary Sally Jewell. I
feel that hearing created the potential for several misperceptions and
I'd like to clear those up.
Secretary Jewell's answers to questions from Representatives
Lamborn, Fleming, and Mullin gave the perception that no national
standard exists for hydraulic fracturing, that some states regulate
properly but others use 30-year-old technology, and that states that
are just starting to deal with hydraulic fracturing have no place to go
for help in establishing appropriate regulations. None of these
statements is true.
In America today a state-funded NGO called IOGCC (Interstate Oil
and Gas Compact Commission), officed in Oklahoma City, represents the
governors of all oil and gas producing states. Its very purpose is to
help all states in their regulation of oil and gas operations,
including hydraulic fracturing. All Canadian provinces with oil and gas
operations also belong to the IOGCC.
The IOGCC has a base set of guidance documents on a variety of oil
and gas operations that is very general but that helps states set high
standards of environmental protection that are consistent with the
varying engineering and geologic needs of each state.
In addition an organization born out of a joint effort between the
DOE and API, called STRONGER (State Review of Oil and Natural Gas
Environmental Regulations), exists to provide a national standard for
environmental protection in all aspects of oil and gas operations and a
critical review of individual state regulations to ensure that the
national standard is being met and that the local issues are also being
taken into account. STRONGER consists of representatives from industry,
environmental NGOs and state regulators and addresses the concerns of
all three groups. STRONGER convenes sub-groups to address individual
issues. One such sub-group deals specifically with hydraulic
fracturing. I am a member of that sub-group.
To imply, as I believe Secretary Jewell did, that no national
standard for hydraulic fracturing exists, is not true.
As for states needing help to address any new aspect of oil and gas
regulations, they can, should, and do use the work already done by
STRONGER and by the IOGCC and its member states. In fact, IOGCC even
reaches out to states and provinces new to oil and gas and invites them
to join the compact commission. Also, during bi-annual meetings,
members of the IOGCC and guests share learnings so that, if one state
or province encounters a problem or issue, we all collaborate on the
solution.
To imply that state regulators have nowhere to go for help when
they encounter hydraulic fracturing or any other new operation or
technology is also not true.
As far as the states' regulations being old and out-of-date, that
is, again, not true. The IOGCC member states meet twice a year to
review the latest technology advances and operating practices with an
eye to whether any regulatory changes are warranted. The IOGCC seeks
out industry representatives to provide information at these meetings
on new or changing technologies and operating practices. And as a state
regulator for over eight years, I assure you that we are almost
constantly updating one regulation or another to keep up with
technology advances and operating changes.
Almost eighty years ago, the IOGCC had the good idea to develop
model statutes, which they did. On top of that, we revisit the
standards and our individual state regulations constantly to ensure
that they are up-to-date. More recently STRONGER has developed a
comprehensive set of guidelines for state regulation of hydraulic
fracturing--one that I helped update less than one year ago. We
certainly don't need to duplicate these efforts.
There was also some discussion during that hearing of FracFocus and
trade secret protection. I just want to remind the subcommittee that
the Uniform Trade Secrets Act is in place in 47 states and the District
of Columbia and that FracFocus is (and any other disclosure mechanism
would be) bound by the provisions of that act. I'm not an attorney but
I suggest you ask an attorney to answer the question of how this act
affects access to the data industry wants held confidential. Another
thing to keep in mind is that FracFocus requires that ALL ingredients
be disclosed; it is simply the mix of those ingredients that is
withheld as a trade secret.
I'd like to clear up one more misperception from that hearing.
Representative Lowenthal suggested that FracFocus is privately run and
may not be maintained. Although funded by the DOE and industry, it is
maintained by another state-funded NGO, the Groundwater Protection
Council (GWPC) in association with the IOGCC. Thus, the concern about
it being around in the future is unwarranted.
As for Alaska in particular, approximately 25% of Alaska's wells
have been hydraulically fractured and we have been performing hydraulic
fractures for about forty years. Moreover in its history of oil and gas
operations, Alaska has yet to suffer a single documented instance of
subsurface damage to an underground source of drinking water. As long
as each well is properly constructed and its mechanical integrity is
maintained, (in other words as long as operators follow our
regulations) hydraulic fracturing should have no potential to damage
any fresh groundwater.
The following paragraphs describe the current state of Alaska's
regulation of hydraulic fracturing. However it should be noted that my
commission is currently engaged in the deliberative process on proposed
changes to these regulations. Proposed changes include fluid disclosure
requirements (although all Alaska operators are currently disclosing
voluntarily via FracFocus), water well sampling requirements, and
adding a section titled ``hydraulic fracturing'' that either cites or
refers to all our existing regulations that impact hydraulic fracturing
operations. We are not creating this section because we currently have
no regulations on hydraulic fracturing. Rather we are creating this new
section simply to make it easier for the lay person to find the
regulations that are currently scattered across a number of existing
sections. For example the casing requirements are in the casing
section, the cementing requirements are in the cementing section, and
so on.
The AOGCC's statutes and regulations, found in Chapter 5 of Title
31 of the Alaska Statues and Title 20, Chapter 25 of Alaska's
Administrative Code, apply to all oil, gas, and geothermal wells
drilled in the state. These statutes and regulations include stringent
well construction requirements that are designed to protect underground
sources of water and ensure mechanical integrity during production and
injection operations. The AOGCC has no specific section of its
regulations entitled ``hydraulic fracturing'' but the requirements for
mechanical integrity are found throughout our regulations.
Additionally, the AOGCC is required by statute to take extra measures
to protect underground sources of drinking water in ``nonconventional
gas'' operations, including hydraulic fracturing operations. Non-
conventional gas includes coal bed methane and shale gas, both of which
usually require production and disposal of significant amounts of water
to establish and maintain gas flow.
The AOGCC does not yet have any rules regarding disclosure of
hydraulic fracturing fluids or baseline water well sampling, but we are
in the deliberative process to consider these change and others. Under
our current regulations, proposed fracturing programs are described in
the application for permit to drill a new well (Form 10-401) or in an
Application for Sundry Approvals (Form 10-403) when such work is
planned on an existing well. Disclosure of the chemical composition or
the anticipated volume of fluid is not currently required for either
permit. However, Material Safety Data Sheets are required by federal
law to be available on location. For hydraulic fracturing operations,
these sheets list every chemical used in the fracturing process and
must be disclosed to the AOGCC if requested. In instances where
fracturing is proposed in a drilling permit application, volumes may or
may not be included because completion interval thickness, permeability
and other characteristics that determine required fluid volumes
generally are not known before the well is drilled. The volume of fluid
actually used must be disclosed in the final completion report for each
fractured well.
On the North Slope, Alaska's most prolific oil and gas province,
freshwater is not a concern. In this part of Alaska, a thick layer of
soil is underlain by permafrost--ground that remains frozen year
round--so there is no liquid water, other than surface water, to a
depth of 1,000 to 2,000 feet. Below the permafrost, only salt water is
present, with very few exceptions. Regardless, wells on the North Slope
are held to the same stringent construction requirements as other wells
throughout the State.
Wherever underground sources of drinking water are present, they
are protected by Commission regulations. All operators are required to
obtain advance approval for well work, including drilling. AOGCC staff
engineers and geologists review all applications to ensure the proposed
well construction is appropriate for the well's planned use. Well
mechanical integrity requirements are the primary means for protecting
drinking water. In order to operate, all wells must demonstrate
competent barriers to prevent the flow of any fluids from the well to
the surrounding rocks. These barriers are supplied by strings of pipe
in the wells as well as cement and mechanical devices that pack-off
(i.e., seal) the pipe. Every well must have a surface casing that is
set below the base of the deepest formation that could potentially be a
source of drinking water. That casing must be cemented completely to
the surface. As a well is drilled deeper, every additional casing
string must also be cemented sufficiently to restrict fluids to their
native reservoirs. Testing of the barriers and evaluation of cementing
records verify a well has competent barriers installed. Wells which
cannot demonstrate competent barriers are required to be shut-in unless
the operator can demonstrate to the Commission's satisfaction that
redundant barriers exist to adequately protect the surface and
subsurface environment.
To assure compliance, every operator is required to install
pressure measurement devices on every well and monitor those devices.
If a measurement device indicates a compromise of the well's mechanical
integrity, the operator is required to shut-in the well immediately and
notify the Commission. In addition to these monitoring devices, the
Commission requires periodic mechanical integrity tests on all
injection wells. The AOGCC has six field inspectors who randomly
witness the tests as they are performed. Regardless of whether or not
an inspector is present for a pressure test, the operators are required
to submit to the AOGCC documentation for every test conducted. All test
information is reviewed thoroughly by AOGCC engineers. Unannounced
inspections also assure regulatory compliance.
A little more historical detail on the formation of STRONGER:
In 1989, the Interstate Oil and Gas Compact Commission (IOGCC)
formed a Council on Regulatory Needs composed of environmental and oil
and gas regulators representing the major producing areas of the
country. There were nine advisors and nine official observers. The
Council was funded by a grant from EPA. At the first Council meeting
all participants were invited to the table and the stakeholder process
was established. This Council was charged with developing guidelines
for state oil and gas exploration and production waste regulatory
programs. In early 1990 the Council produced the 1990 Guidelines. The
1990 Guidelines were organized by subject matter. They established
environmental objectives for state regulatory programs. Fundamental
differences exist from state to state, and within regions within a
state in terms of climate, hydrology, geology, economics, and methods
of operation. Consequently, regulatory programs vary in order to
accommodate the differences in state administrative procedures, laws,
and regulatory history. The Guidelines were used as a basis for state
reviews. In 1993 the Guidelines were updated and revised to include
abandoned sites and naturally occurring radioactive materials (NORM).
Follow-up reviews to document changes resulting from recommendations
contained in reports of initial reviews were initiated. In 1999, State
Review of Oil and Natural Gas Environmental Regulations (STRONGER) was
formed to manage the state review process. STRONGER received funding
from EPA, DOE and API. The 1994 Guidelines were revised in 2000, 2005
and 2010. Important additions were Spill Prevention, Performance
Measures to evaluate how well state programs achieve their goals,
Stormwater Management, and Hydraulic Fracturing. Hydraulic fracturing
guidelines are currently being revised and air guidelines are under
development.
Thank you again, Chairman Lamborn and ranking member Holt, for
inviting me to appear before your Subcommittee.
______
Mr. Lamborn. Thank you.
Ms. Craddick.
STATEMENT OF CHRISTI CRADDICK, COMMISSIONER, RAILROAD
COMMISSION OF TEXAS
Ms. Craddick. Chairman Lamborn, Ranking Member Cartwright,
and members of the Committee, my name is Christi Craddick,
Commissioner of the Railroad Commission of Texas. Thank you for
the opportunity to provide testimony in support of H.R. 2728.
Texas has successfully regulated oil and gas production for
almost 100 years, and knows better than the Federal Government
how both to serve and protect the unique interests of our
State. I am here today to provide my knowledge regarding the
rules, regulations, and practices the State of Texas and the
Commission have in place to safely and effectively regulate oil
and gas exploration and production, and specifically the
industry method of hydraulic fracturing, or fracking.
Fracking has been a common industry practice in Texas for
more than 60 years, and horizontal drilling, another pioneering
technology, was developed in Texas by George P. Mitchell during
the 1980s and 1990s. The energy industry in Texas has become
the number-one job creator in terms of jobs created and
compensation with over 427,000 oil and gas jobs in Texas in
2012, averaging about $120,000 a year in salary. Also, the
largest economic contributor, the oil and gas industry paid $12
billion in State taxes in Fiscal Year 2012.
The Commission has in place a successful and comprehensive
regulatory framework to ensure that all oil and gas activities,
including fracking, do not impact groundwater or surface water.
Commission records do not indicate a single documented water
contamination case associated with the process of fracking in
Texas. And this is due to consistent and thoughtful regulation
from within our State by regulators who know Texas best.
In addition to the Commission's strict well construction
requirements and rigorous regulatory oversight, Texas is
blessed with geology that aids in our water protection efforts.
With Texas's experience in exploration and production, free-
market practices and prime production conditions, the
Commission has proactively developed regulatory oversight while
allowing vast industry growth in innovation and increased
production. In keeping pace with the advancements in the energy
industry, the Commission has spent the past year evaluating
rules to enhance our State's regulatory structure.
In February 2012, the Commission implemented one of the
Nation's most comprehensive chemical disclosure rules for
fracking a well in Texas. It requires oil and gas operators to
disclose chemical ingredients and water volumes used in the
fracking treatment of oil and gas wells on the FracFocus
Internet Web site, hosted by the Groundwater Protection Council
and the Interstate Oil and Gas Compact Commission.
In May of this year, the Commission amended its rules to
update standards relating to the requirements for integrity
testing of casing, cementing, drilling, well control, and well
completion requirements. A recent case serves as an example to
the differences in Texas and the Federal process.
In 2010, the EPA issued an endangerment order for Southern
Parker County while the Railroad Commission had an active and
ongoing investigation into whether Range Resources' gas wells
had contaminated water wells in the area. After the EPA issued
an endangerment order, the Commission held an extensive
evidentiary hearing regarding the matter to which the EPA was
invited, but chose not to participate. From the time a
complaint was received by the Commission to the signing of the
final order, it took the Commission 7\1/2\ months to determine
that Range's gas wells were not the source of the natural gas
in the water wells. A full year after the Commission's final
order, the EPA vacated its endangerment order against Range.
Comparatively, Texas utilizes science and data to
effectively and efficiently assess production activities that
affect business within our State, while the Federal process is
ineffective, inefficient, and cumbersome. A one-size-fits-all
model does not work in Texas, as different rules for different
States are most effective in adhering to different geography,
geology, and environments. Texas energy regulation is based on
rules, in contrast to permit or study-driven regulation. Free-
market principles guided by rules and processes in Texas allow
companies to drill, so long as the rules are followed.
While the oil and gas industry is one of the top economic
drivers in Texas, we know that efficient and consistent
predictable regulation within the energy industry is key to our
State's economic success, and the success of domestic U.S.
energy production.
Thank you again for allowing me to testify, and for
sponsoring this bill. And I look forward to questions.
[The prepared statement of Ms. Craddick follows:]
Statement of Christi Craddick, Commissioner,
Railroad Commission of Texas
Chairman Lamborn, ranking member Holt, and members of the Committee
and Subcommittee:
Thank you for the opportunity to provide testimony in support of
H.R. 2728 (Flores), the Protecting States' Rights to Promote American
Energy Security Act, recognizing States' authority to regulate oil and
gas operations and promote American energy security, development, and
job creation.
Texas has successfully regulated oil and gas production for almost
100 years and knows better than the federal government how to both
serve and protect the unique interests of our state. As Commissioner of
the Railroad Commission of Texas (Commission and/or RRC), I am here
today to provide my knowledge regarding the rules, regulations and
practices the State of Texas and the Commission have in place to safely
and effectively regulate oil and gas exploration and production, and
specifically the energy industry method of hydraulic fracturing, or
fracing.
Fracing has been a common industry practice in Texas for more than
60 years. After Stanolind Oil introduced fracing in 1949, Halliburton
conducted the first two commercial fracturing treatments in Stephens
County, Oklahoma, and Archer County, Texas. Through the `80s and `90s,
horizontal drilling, another pioneering technology was developed in
Texas by George P. Mitchell. This technique combined with fracing, has
opened the door and allowed operators to economically extract natural
gas and other hydrocarbons from shale rock formations.
As of December 2012, an estimated 2.5 million fracture treatments
have been performed worldwide. It is estimated that approximately 60
percent of all wells drilled today are hydraulically fractured. Fracing
not only increases a well's production rate, but it is credited with
adding 9 billion barrels (BBL) of oil and more than 700 trillion cubic
feet (Tcf) of gas to U.S. reserves alone, which otherwise would have
been too costly to develop.
Much of the immense growth in production related to fracing and
horizontal drilling has occurred in Texas, where energy production is
booming. The Commission issued 22,479 drilling permits in 2012, a
number consistent with a steady increase in drilling permits in the
state from 9,716 permits issued in 2002. Well completions increased
from more than 9,900 in 2010 (http://www.rrc.state.tx.us/data/drilling/
drillingsummary/2010/annual2010.pdf) to more than 15,000 in 2012
(http://www.rrc.state.tx.us/data/drilling/drillingsummary/2012/
annual2012.pdf). Texas produces almost one third of total U.S. crude
oil today. Currently, Texas' crude oil production averages 1.68 million
barrels (MMbbl) per day. Natural gas production averages 19.31 billion
cubic feet (Bcf) per day.
Because the energy industry in Texas is exceedingly active, it has
quickly become the number one job creator in terms of jobs created and
compensation. In 2012, there were a total of 427,761 oil and gas jobs
in Texas in every sector of the oil and gas industry arena including
drilling, extraction, distribution, refining, manufacturing, machinery
and equipment operation, wholesale, transportation and support
activities, with an average salary of about $120,000 per year.
An active energy industry in Texas has also generated substantial
revenue for our state coffers. In fiscal year 2012, the oil and gas
industry paid $12 billion in state taxes, up from $9.25 billion in 2011
and $7.4 billion in 2010. In the last fiscal year, oil and gas
severance tax income from oil production was 43 percent higher than
estimated at $2.1 billion, and the natural gas production tax brought
in $1.5 billion, 38 percent higher than estimated. Severance taxes make
up the state's Rainy Day Fund, which currently has reserves of
approximately $8 billion, and that number is projected to rise to $11.8
billion by the end of the 2014-2015 biennium. Another $3.6 billion was
collected in property taxes from oil and gas interests in fiscal year
2012 and sales taxes totaled $2.5 billion.
Not only is Texas the number one oil and gas producer in the United
States with more than 298,000 active oil and gas wells (http://
www.rrc.state.tx.us/data/wells/welldistribution/
welldistribution062913.pdf), the state has a stellar environmental and
public safety record, while fostering a job-creating industry. The
Commission is recognized as a world leader and serves as an example
across the globe in developing workable regulation for the energy
industry and for its leadership in ensuring that resource recovery
operations meet or exceed environmental and safety compliance
standards.
With experience comes knowledge, and the Commission has been
regulating the oil and gas industry for more than 90 years, including
oil and gas production, intrastate pipeline inspection and safety,
utility rate cases pertaining to natural gas, and surface mining and
reclamation oversight. While the Commission's headquarters is based in
Austin, the agency has nine field offices throughout the state that
work through inspections and case work in the field to ensure operators
are adhering to our rules.
Railroad Commission rules have set the precedent in guiding energy
production regulations throughout the world. It is the mission of the
Commission to serve Texas by the stewardship of natural resources and
the environment, concern for personal and community safety, and support
of enhanced development and economic vitality for the benefit of
Texans. The Commission has in place a successful and comprehensive
regulatory framework to ensure that all oil and gas activities,
including fracing, do not impact groundwater or surface water.
Commission records do not indicate a single documented water
contamination case associated with the process of fracing in Texas, and
this is due to consistent and thoughtful regulation from within our
state by regulators who know Texas best.
Texas' success in energy regulation has resonated throughout the
world, driving many other nations' government officials to Texas to
learn about our successful oversight processes. Last year, the agency's
subject matter experts provided technical information on how the
Commission regulates oil and gas exploration and production to
dignitaries from Brazil, Turkmenistan, South Africa, Norway, China,
Iraq, Italy, Canada, and Mexico. The Commission works to provide
insight on processes in place that have allowed Texas to effectively
oversee energy production for economic development while protecting the
environment and public safety, so that others may replicate our state's
successful model. As our agency has worked to continuously update and
develop new rules and processes for effective regulation of an ever-
changing industry, regulators throughout the world have made efforts to
learn from Texas' tried and true methods.
Many of those methods have become standard practice within Texas
and across the globe. Any time a well is drilled in Texas, including an
oil, gas or injection/disposal well, Commission rules require that
surface casing in the well be set below the depth of usable quality
water to protect the state's water resources. Because usable quality
water levels vary throughout the state, the Commission's Groundwater
Advisory Unit performs an essential function in determining specific
groundwater protection depths for each new well.
The Commission's rules include strict well construction
requirements that require several layers of steel casings and cement to
protect groundwater. The first protection layer for usable quality
groundwater in a well is the surface casing, a steel pipe that is
encased in cement that reaches from the ground surface to below the
deepest usable quality groundwater level. Surface casing acts as a
protective sleeve through which deeper drilling occurs.
The second protection layer for groundwater is the production
casing, a pipe placed in the wellbore to the well's total depth and
permanently cemented in place. Some operators inject fracturing fluid
in this casing. Depending on the fracturing pressure needed, other
operators use a third protection layer by injecting fracturing fluid in
the tubing string that conducts the fracturing fluid to the zone to be
fractured and then produced.
For fracturing fluid to affect the usable quality water, a leak
would have to escape several layers of casing protection and flow
outside of the wellbore. For monitoring purposes, Commission rules
require gauges for observation of these casings at the surface. If
there is a problem down-hole, it is easily and quickly identified.
In addition to the Commission's strict well construction
requirements and rigorous regulatory oversight, Texas is blessed with
geology that aids in our water protection efforts. Depending on the
shale, fracing in Texas can typically occur a mile or more below
aquifers, with many thousands of feet of isolating rock in between
fresh water zones and the hydrocarbon-bearing zones that are
hydraulically fractured.
For example, freshwater zones vary throughout the Barnett Shale
region in North Texas, which can range from the surface to a depth of
2,000 feet. Before you get to the Barnett Shale formation, there is
another 4,000 to 6,000 feet of isolating rock protecting the fresh
water zones. The tight shale fracing that is occurring in the Barnett
Shale is more than a mile deep at depths of between 6,000 and 7,500
feet.
In the Eagle Ford Shale in South Texas, the Carrizo Aquifer may be
found from the surface to a 6,000 foot depth, while 3,000 to 8,000 feet
of isolating layers of rock is found between the aquifer and the zone
that is undergoing tight shale fracing at depths of between 8,000 and
15,000 feet (Note: These dimensions are not uniform throughout the
Eagle Ford Shale). While there are some areas in Texas where operators
drill to shallower depths and use small-volume hydraulic fracture
stimulation, the Commission's new rules address any increased risk.
With Texas' experience in exploration and production, free market
practices, and prime production conditions, the Commission has learned
to proactively develop regulatory oversight, while allowing vast
industry growth in innovation and increased production. In keeping pace
with advancements in the energy industry, the Commission has spent the
past year evaluating rules and processes to enhance our state's
regulatory structure.
In February 2012, the Commission implemented one of the nation's
most comprehensive chemical disclosure rules for fracing a well in
Texas. As of Feb. 1, 2012, the Commission requires Texas oil and gas
operators to disclose chemical ingredients and water volumes used in
the fracing treatment of oil and gas wells on the FracFocus internet
website hosted by the Ground Water Protection Council (GWPC) and the
Interstate Oil and Gas Compact Commission (IOGCC) at: http://
fracfocus.org/. Texas is one of the first states to require making this
information accessible to the public.
In May 2013, the Commission amended its rules to update standards
relating to the requirements for integrity testing of casing,
cementing, drilling, well control, and well completion requirements.
For wells spudded on or after Jan.1 2014, operators in Texas will be
required to: Adhere to new minimum standards for casing and cement to
reflect best management practices already being used by most operators;
Set minimum cement sheath thicknesses for various casing strings;
Control annular gas migration; Test casing integrity throughout the
drilling process; Isolate potential flow zones, zones with corrosive
formation fluids, and zones being used for underground injection;
Follow additional requirements for wells on which hydraulic fracturing
treatment(s) will be conducted; and Receive Commission approval of any
proposal to set surface casing to a depth of 3,500 feet or greater;
Recognizing concerns about water use, several companies have
applied for, and the Commission has approved, recycling projects to
reduce the amount of fresh water used for fracing statewide and
specifically in South Texas, a result of increased development in the
Eagle Ford Shale. In March of this year, the Commission amended its
rules to remove regulatory roadblocks and encourage recycling of such
production fluids. In April, the amended recycling rules became
effective and were designed to encourage recycling and reduce the use
of fresh water to continue operators' water conservation efforts during
fracing operations.
By removing regulatory hurdles, the Commission fosters industry
recycling efforts as operators continue to examine ways to reduce
freshwater use when fracing wells. The new rules are designed to
authorize non-commercial recycling under specified conditions if
operators are recycling fluids on their own leases or transferring
those fluids to another operator's lease for recycling. The new rules
identify more clearly the Commission's commercial recycling permit
application requirements and permit conditions. The Commission also
adopted amendments to its commercial recycling rules. The revisions
clarify the application requirements for commercial recycling
operations for both solids and liquids and expand the two existing
categories to five, to more accurately reflect the range of recycling
practices currently used in the industry. The amendments establish a
tiered approach for the reuse of treated fluid, including both
authorized reuse of treated fluids in oil and gas operations and
provisions for reusing the fluid for other non-oilfield related uses.
Through thoughtful processes and careful assessments, the
Commission ensures that we have the sophistication to effectively
regulate one of the most technologically advanced industries in the
world. A recent case serves as an example to the differences in the
Texas and federal process in assessing and efficiently and effectively
regulating drilling. In 2010, EPA issued an endangerment order for
southern Parker County even though the Railroad Commission had an
active and ongoing investigation into whether Range Resources gas wells
had contaminated water wells in the area.
After EPA issued an endangerment order, the Commission held an
extensive evidentiary hearing regarding the matter to which EPA was
invited but chose not to participate. The outcome of the hearing was
that Range's gas wells were not the source of the natural gas in the
water wells.
The primary difference between EPA findings and the Commission's
findings is that the EPA relied solely on a comparison of isotope data
from Barnett Shale production gas to natural gas that occurred in Mr.
Lipsky's water well, whereas the Commission's findings were based on
multiple lines of evidence (i.e., well integrity testing, microseismic
data, an evaluation of local geology and other sources of natural gas,
and testing of both production gas and gas in the bradenhead) that
showed that Range's Barnett Shale gas wells were not causing
contamination.
The mindset in Texas and federal processes in using science and
data to effectively assess and regulate oil and gas exploration and
production activities appear to be vastly different in this case.
Moreover, it cannot be emphasized enough that EPA has since vacated its
order against Range. A timeline of EPA and Commission actions in the
Range Investigation is set out in the attached Appendix A.
Like all forms of energy production, fracing entails risks, but
offers the prospect of economic and environmental benefits when
properly regulated. As the production of energy through fracing
continues, we must continue to study this technology and ensure that it
is done safely. Texas and state regulatory bodies alike are best fitted
for the task of overseeing the safe production of their resources
within their boundaries for a number of reasons.
Texas and other energy producing states are quickly adapting and
familiarizing their communities with oil and gas exploration and
production processes. We are working to strengthen shale gas
regulations to tighten well construction and waste disposal standards
and requiring disclosure of fracing fluid ingredients, bringing
together all interested parties, industry and environmental groups, in
the process.
Texas has developed a regulatory system that fits our state's
varying drilling conditions throughout different regions. A one size
fits all model does not work in Texas, as different rules for different
states are most effective in adhering to differing geography, geology,
and environments. Operators will use different drilling specifications
and methods, depending upon the location of the well site; and Texas'
rules reflect these considerations. Regulatory bodies throughout the
U.S. have overseen oil and gas development in their respective states
for decades, and they know their issues well.
Not only are states more familiar with the intricacies of the
geology in which their operators are drilling, but the majority of both
the benefits and costs of fracing fall on states and local communities.
Texas has experienced a direct gain from added jobs and tax revenue;
and also properly manages pollution risks (the Commission does not have
jurisdiction over traffic & noise). Therefore, the Commission is in the
best position to figure out how best to balance the positive and
potential negative facets of fracing.
Individual regulatory bodies are balancing benefits and risks in
their own ways. We should continue to let individual regulatory bodies
devise local solutions to local conditions. As our nation nears energy
independence due to increased domestic production, it is important now
more so than ever that energy producing states are not over-burdened by
federal regulations that may stifle production growth.
While every regulatory body has their own model of how to regulate
energy production within their borders, Texas too has developed its own
case study on how to best regulate oil and gas exploration and
production. Texas energy regulation is based on rules in contrast to
permit- or study-driven regulation. Texas regulation is based in free
market principles guided by rules and processes that allow companies to
drill, so long as rules are followed. The cost to drill a well in Texas
depending on geological location of the drill site and techniques used
can be anywhere from $1 million to $5 million. Operators invest vast
amounts of money in time in drilling operations that they hope to see
successful.
Furthermore, Texas drilling permits are issued somewhere between 2-
5 days. Unnecessary, cumbersome federal oversight will slow Texas'
current efficient processes. While the oil and gas industry is one of
the top economic drivers in Texas, we know that efficient, consistent
and predictable regulation within the energy industry is the key to our
state's economic success, and the success of domestic U.S. energy
production.
Thank you again, Chairman Lamborn and ranking member Holt, for the
opportunity to testify before your Subcommittee and for your attention
to this legislation. The Railroad Commission of Texas applauds
Congressman Flores for introducing this bill and the members of this
subcommittee for their interest in considering it. I would be happy to
answer any questions you might have regarding my testimony.
Appendix A
Timeline of EPA and Commission Actions in the Range Investigation
August 6, 2010: Water well owner, Mr. Steven Lipsky, filed a
complaint of natural gas in a domestic water well. In response to the
complaint, Commission District 7B (Abilene) staff initiated an
investigation that included testing the domestic water well for
presence of oil field contamination and inspecting the nearby Range gas
production wells [Butler Unit Well No. 1H (Butler Well) and Teal Unit
Well No 1H (Teal Well) in the Newark, East (Barnett Shale) Field, Hood
County, Texas].
August 17, 2010: U.S. EPA, Region 6, Water Enforcement Branch first
contacted the RRC Abilene District Office, which agreed to carbon copy
EPA on all complaint correspondence.
August 26, 2010: Mr. Lipsky advised RRC Abilene District Office he
intended to disconnect his water well from the house.
October 2010: EPA technical staff contacted Abilene District Office
staff requesting to discuss plans to collect gas samples from the
Lipsky water well and the Butler Well. EPA staff informed District
Office staff that the EPA was considering issuing an endangerment
order; however, EPA did not issue formal communication on this point to
the Abilene office or RRC staff in Austin.
October 21, 2010: In a phone conversation, EPA technical staff
informed RRC staff that EPA planned to collect a gas sample from the
Lipsky well and a gas sample from the production casing of the Range
production wells. RRC staff recommended that EPA also sample the
bradenhead gas of the Range production wells, but EPA staff declined
the recommendation.
October 26, 2010: EPA staff collected several samples from the
Range production site including gas samples and produced water samples.
RRC staff witnessed the collection of the samples. Range also collected
samples of gas, including bradenhead gas. During discussion among the
parties present about previous environmental investigations, RRC was
informed that air monitors had been placed at various locations in the
Lipsky home. However, no specific date of placement was noted.
November 23, 2010: EPA staff emailed analytical results to RRC
staff and invited RRC staff to a meeting with Range scheduled for
December 2, 2010.
December 1, 2010: EPA technical staff contacted RRC technical staff
to advise that the meeting with Range will not occur because Range has
declined the invitation. EPA staff also notified RRC staff that EPA
planned to issue an endangerment order under Section 1431 of the Safe
Drinking Water Act [42 U.S.C. Sec. 300(i)(a)], based on recent isotope
data that it believed connects Range's operations to gas in the Lipsky
well.
December 2, 2010: EPA staff calls the RRC to share same
information. RRC technical staff and EPA technical staff discuss the
endangerment order. EPA staff read a statement from the draft
endangerment order indicating that ``RRC has not taken action to
date.'' RRC staff disagreed with that statement and suggested the
following alternate statement ``although RRC is investigating the
complaint, the RRC has not taken enforcement action to date.'' EPA
staff also said that it would issue a press release, not to occur
before the following Monday, December 6, 2010.
December 3, 2010: EPA regional administrator contacted RRC chairman
to advise of the planned endangerment order. EPA called RRC staff to
ask about other occurrences of gas in shallow sands. RRC returned call
and advised of two other complaints in area. EPA requested copies of
the files. RRC staff began gathering information on other water well
complaints, per EPA request. Range sends a letter to RRC agreeing to
take additional actions. RRC staff notifies EPA staff of the Dec. 3
letter from Range and emails a PDF of the letter to EPA staff.
December 6, 2010: EPA sent the following email to RRC staff: ``As
you are aware, the EPA is concerned about the safety of the private
drinking water wells in Parker and Hood County that are near the Butler
and Teal gas production wells. The EPA wants to make sure that all of
the drinking water wells in this area are safe and not subject to
methane contamination. Does the Railroad Commission of Texas have plans
to sample these wells in the near future?''
December 7, 2010: RRC staff replied to EPA's December 6 email, and
advised EPA staff that the RRC has an ongoing investigation and is
gathering information about occurrences of gas in other water wells in
the area. RRC sends PDF's of two other water well complaints in the
area to EPA staff.
December 7, 2010: EPA issues the Emergency Administrative Order
(Docket No. SDWA-06-2011-1208) against Range.
December 8, 2010: RRC issues a Notice of Hearing to consider
whether operation of the Range Production Company Butler Unit Well No.
1H and Teal Unit Well No. 1H in the Newark, East (Barnett Shale) Field,
Hood County, Texas are causing or contributing to Contamination of
Certain Domestic Water Wells in Parker County, Texas.
January 19-20, 2011: RRC hearings examiners hold a 2-day hearing in
Austin. Appearances were made by Range, RRC staff, Enervest Operating
Company, and the Texas Alliance of Energy Producers. Neither EPA nor
the owners of the two water wells participated in the hearing.
March 22, 2011: Commissioners Elizabeth Ames Jones, Michael
Williams and David Porter signed a Final Order, which stated that,
based on the evidence presented at the Hearing, the examiners
concluded, and the Commissioners agreed, that gas in the water wells is
from the Strawn Formation, which is in direct communication with the
Cretaceous aquifer in which the water wells are completed. There was no
evidence to indicate that either natural gas production well is the
source of the gas in the water wells. This conclusion was supported by
the following evidence found by the Commission hearing examiners:
The appropriate geochemical parameters for
fingerprinting to distinguish Strawn gas of Pennsylvania age
from Barnett Shale gas of Mississipian age are nitrogen and
carbon dioxide, not carbon. Gas from Pennsylvanian age rock,
including Strawn, has higher nitrogen concentration and lower
carbon dioxide concentration than Barnett Shale gas. Gas found
in the water wells does not match the nitrogen fingerprint of
Barnett Shale gas. The gas found in the water wells matches
Pennsylvanian gas.
Bradenhead gas samples from both water wells do not
match Barnett Shale gas, confirming that gas is not migrating
up the wellbores and that the Barnett Shale producing interval
in the Butler and Teal wells is properly isolated.
3-dimensional seismic data indicates no evidence of
faulting in the area of the water wells.
Microseismic data available for more than 320
fracture stimulations in Parker County indicated a maximum
fracture height of approximately 400 feet, meaning that almost
one mile of rock exists between the highest fracture and the
shallow groundwater aquifer.
______
Response to Questions Submitted for the Record by Christi Craddick,
Commissioner, Railroad Commission of Texas
Chairman Lamborn:
I am happy to provide the below responses to Rep. Holt's subsequent
questions following my testimony in support of H.R. 2728 (Flores), the
Protecting States' Rights to Promote American Energy Security Act,
recognizing States' authority to regulate oil and gas operations and
promote American energy security, development, and job creation, before
the Committee on Natural Resources, Subcommittee on Energy and Mineral
Resources legislative hearing on July 25, 2013.
1. Commissioner Craddick, you state that, ``Unnecessary, cumbersome
federal oversight will slow Texas' current efficient
processes.'' Is there a lot of federal land in Texas? Is there
a lot of federal production in Texas? It appears that the BLM's
proposed rules would have negligible, if any, impact on Texas'
regulatory program, since their proposal only applies to
operations on federal oil and gas leases.
RESPONSE: Approximately 1.8 percent of land in Texas is held in
trust by the federal government, and that 1.8 percent encompasses
2,977,950 acres of land. As of December 2012, the total number of
leases in effect on federal land in Texas is 648. Since 2003, Texas has
averaged 680.2 leases in effect on federal land. The number of federal
acres under lease as of the last day of fiscal year 2012 in Texas is
377,454 acres. Since fiscal year 2003, Texas has averaged 446,098.6
federal acres of land under lease. The number of producing acres on
federal lands as of the last day of fiscal year 2012 in Texas is
155,006 acres. Since fiscal year 2003, Texas has averaged 129,554.8
producing acres on federal lands. There are a number of producing
states with similar successful regulatory policies that have much
larger percentages of federal land and production occurring on that
land; specifically, Alaska (69.1), California (45.3), Colorado (36.6),
Idaho (50.2), Montana (29.9), New Mexico (41.8), Utah (57.4), and
Wyoming (42.3).
In my testimony, I commented on the impact duplicative federal
oversight would have on Texas' energy production. I expressed my firm
belief and will stress again that any policy allowing for dual
oversight of Texas' energy production would have negative repercussions
on that production in Texas, and in any state already having similar
successful regulatory policies in place.
2. Commissioner Craddick, you mention that ``many of [Texas']
hydraulic fracturing practices have become standard practice
across the globe.'' Indeed, the BLM has taken yours and other
states' regulatory systems into account in creating their draft
regulations. But the proposed legislation today takes away the
authority of the federal government to regulate its own lands,
and instead creates a state by state approach--potentially with
50 different regulatory bodies--that have no minimum standards.
If your system can be used as a model for China, Brazil,
Mexico, and others, why is it not good enough for the American
people on public lands?
RESPONSE: My testimony reinforces that states' regulatory policies
for energy production are best for the American people on public and/or
private land, and affirms that duplicative federal regulations on
public land will hinder that production. As we are collaborating with
governments throughout the world, Texas has first and foremost
communicated directly with other states in working towards developing
and revising regulations within our state. Texas and the Railroad
Commission, as well as other states, have been active for decades in
several collaborative national organizations in an effort to facilitate
discussion and problem strategy amongst energy producing states. These
organizations include the Interstate Oil and Gas Compact Commission
(IOGCC), the Ground Water Protection Council (GWPC), and State Oil and
Natural Gas Environmental Regulations (STRONGER, Inc.).
The Railroad Commission and other states are in constant contact to
discuss possible solutions to mutual issues. For example, the Railroad
Commission recently updated its drilling and completion rules (16 Texas
Administrative Code Sec. 3.13) and reviewed and discussed other states'
regulations to determine whether they faced similar issues and how they
handled those issues. In addition, the Railroad Commission and the
Louisiana Department of Natural Resources entered into a memorandum of
agreement with respect to proposed disposal wells close to our
respective borders, including in the Haynesville Field, which is
located in West Louisiana and East Texas.
I feel strongly that states should develop, maintain and carry out
regulatory policies related to energy production within their
respective borders versus federal regulation of states' energy
production. States are most efficient and effective in this
responsibility, and States are much more effective in encouraging oil
and gas exploration, development and production, while still protecting
the environment and human health. It is clear that federal law and
regulations detract operators from investments on federal lands,
driving them towards production on non-federal land that is governed by
greater regulatory certainty. Since 2012, all of the increases in oil
and gas production have been on non-federal lands. A recent
Congressional Research Service report (U.S. Crude Oil and Natural Gas
Production in Federal and Non-Federal Areas, Congressional Research
Service Report for Congress, March 7, 2013) demonstrates that, since
2007, production of natural gas on federal lands fell by 33 percent,
while production on state and private lands grew by 40 percent. In
2012, crude oil production on federal lands was below 2007 levels but
grew by 35 percent on non-federal lands.
States are more efficient in reviewing and processing permit
applications. For example, in Texas, an operator generally may obtain a
drilling permit in two to five days. Other states have similar permit
processing timeframes. Although this most recent proposal eliminates
some requirements that would have greatly delayed the processing of
applications and approval to drill and perform hydraulic fracturing,
the proposed revised rule will still cause further delay in drilling
for and producing oil and gas resources. I understand that BLM
currently takes 180-290 days to process an application for a permit to
drill. I am aware that it can take up to a year for BLM to issue a
permit to drill. BLM has indicated that it will need an additional
28,560 man hours per year to implement the proposed rules. Imposition
of additional regulations are likely to result in an increase in the
amount of time needed by BLM for approval of drilling permits and,
therefore, a greater delay in production on federal lands.
States are more knowledgeable about the unique basins within their
boundaries. State regulators base standards and requirements on known
risk, accepted science, and proven engineering practices, as well as
acknowledged differences between regions based on geography, geology,
hydrology, and historic conditions. I understand that BLM has no staff
actually posted in Texas and that the nearest staff is posted in New
Mexico. While states do a good job in regulating hydraulic fracturing
and work towards fine-tuning their regulatory frameworks, the federal
government should applaud these efforts, not undercut states'
authority.
The BLM proposed rule that you mention would unnecessarily
duplicate state regulation. BLM stated that the proposed rule is
intended to complement the efforts of some states, including Texas,
that have recently revised their hydraulic fracturing regulations.
However, the rule duplicates, rather than complements, existing state
regulations of hydraulic fracturing that address well-bore integrity,
flowback water, and require the disclosure of hydraulic fracturing
constituents. And, BLM has not indicated how it believes that the state
regulations are inadequate. BLM stated in the preamble that ``a major
impetus for a separate BLM rule is that States are not legally required
to meet the stewardship standards applying to public lands and do not
have trust responsibilities for Indian lands under Federal laws.''
However, BLM includes no discussion of how BLM's ``stewardship
standards applying to public lands'' differ from similar state
responsibilities. As stated in the preamble, the ``Federal Land Policy
and Management Act (FLPMA) directs the BLM to manage the public lands
so as to prevent unnecessary or undue degradation, and to manage those
lands using the principles of multiple use and sustained yield. FLPMA
defines multiple use to mean, among other things, a combination of
balanced and diverse resource uses that takes into account long-term
needs of future generations for renewable and nonrenewable resources.
FLPMA also requires that the public lands be managed in a manner that
will protect the quality of their resources, including ecological,
environmental, and water resources.'' This directive is virtually the
same directive given to responsible state agencies for all lands within
the boundaries of the state.
BLM has failed to note any state with insufficient hydraulic
fracturing regulations already in place. As this proposed rule is
duplicative and cumbersome and creates undue cost to operators with no
further safeguard to our environment, this rule is unnecessary in
states currently regulating hydraulic fracturing. Furthermore, it is
clear that leaving the management of federal lands up to state
regulators would result in an increase in exploration, development and
production of oil and natural gas, and a subsequent increase in federal
revenues to offset the nation's staggering and rapidly growing debt.
Thank you again, Chairman Lamborn, for the opportunity to present
my thoughts on this legislation. I would be happy to answer any further
questions you might have regarding my testimony.
______
Mr. Lamborn. Thank you, Ms. Craddick.
Now, Mr. Rogers.
STATEMENT OF JOHN C. ROGERS, ASSOCIATE DIRECTOR, UTAH DIVISION
OF OIL, GAS, AND MINING
Mr. Rogers. Good morning, Chairman Lamborn and Committee
members. I appreciate the opportunity to appear before you
today.
The Utah Division of Oil, Gas, and Mining manages the
permitting of regulation and monitoring of oil and gas and
drilling class two injection wells, and oil and gas disposal
facilities in Utah. This includes hydraulic fracturing, which
it has regulated for many years, which is a primary focus of
today's hearing.
Hydraulic fracturing has been operational practice for
completing and stimulating oil and gas wells in Utah since the
early 1960s. In all the historical records of the Division,
there has never been a verified case of hydraulic fracturing
causing or contributing to contamination of water resources.
The Division has always had very stringent rules concerning
wellbore construction and the protection of water resources.
However, to make the process of hydraulic fracturing more
transparent and alleviate the recent public fear of the
process, the Division adopted a formal rule in October of 2012.
This rule combined many of the Division's existing rules
concerning overall best management practices for oil and gas
production related to safe, efficient operations, as well as
requiring public disclosure of the chemicals used in the
hydraulic fracturing process.
There are three major concerns that have come to the
forefront concerning hydraulic fracturing. The BLM has
presented these in their proposed rules, and Utah has addressed
them both historically and with their current rule: first, to
provide public disclosure of the chemicals used in hydraulic
fracturing; second, to include regulations to ensure wellbore
integrity; and, third, to address issues related to flowback
water.
First, public disclosure. The Utah rule requires operators
to report to FracFocus within 60 days of completion of a
hydraulic fracturing operation of the chemicals used in the
process. The primary purpose of FracFocus is to provide factual
information concerning hydraulic fracturing and groundwater
protection.
FracFocus is a national hydraulic fracturing chemical
registry accepted by both industry and government. It is
managed by the Groundwater Protection Council and the
Interstate Oil and Gas Compact Commission, two organizations
whose missions both revolve around conservation and
environmental protection. The site was created to provide the
public access to reported chemicals used for hydraulic
fracturing at specific well locations. This reporting process
that the Division uses is the exact same as proposed by the BLM
rule.
Second, wellbore integrity. Existing rules are already in
place to ensure wellbore integrity and construction. This
includes detailed rules on casing and cementing, blowout
prevention and uncontrolled flow, protection of freshwater
aquifers, and casing pressure tests. The Utah rule emphasizes
the use of already-existing rules that have managed oil and gas
production in Utah for many years. The regulatory process of
the Division are effective in ensuring the responsible
development of Utah's resources with due regard for protection
of environment. This begins with wellbore integrity.
The professional staff at the Division have local knowledge
and expertise to address the technical and scientific
challenges posed by Utah's unique geology and geography. A
nationwide process of hydraulic fracturing and rulemaking would
be no more effective in achieving better oversight of hydraulic
fracturing operations than exist at the State level in Utah and
other States with similar rules.
In addition, substantial cost of manpower and time for both
government and private-sector organizations would be incurred.
On-site inspections of oil and gas wells are a key
component of the Division's regulatory program. All wells
drilled on State or private lands in Utah are subject to a
rigorous inspection program that includes inspection and
witnessing of well control equipment tests, casing and
cementing operations, and drilling operations, to name a few.
In 2012, 8,983 such onsite inspections were performed by
the Division's field operations staff. Through a detailed and
very comprehensive geologic study, the depth of the usable
groundwater has been mapped in the primary oil and gas-
producing areas of Utah, the Uintah Basin, recognizing the
usable water and its protection is of primary concern when
developing a casing program for a potential well.
Third, the management of flowback water and surface
protection. The Division's rules state the operators shall take
all reasonable precaution to avoid polluting lands, streams,
lakes, reservoirs, natural drainages, and underground water.
Prior to any drilling operations, all drill sites have onsite
inspection and are analyzed for surface conditions, and best
practices are employed to prevent any contamination of surface
water or ground water. The Division Board has recently approved
new rules entitled ``Waste Management and Disposal.'' These
rules update methods for disposal of RCRA-exempt waste for oil
and gas production. This would include the management of
hydraulic fracturing fluid flowback.
Most wells in Utah, the production water is injection, 94
percent of that amount, with 6 percent going to evaporative
ponds.
The Board has recently approved new rules which include
chemical testing, subsurface and surface geology, size and
depth limitations to these wells.
I believe that Utah Division does an excellent job in
monitoring hydraulic fracturing and oil and gas operations in
Utah. It is also my experience that other States also perform
at this similar exceptional level. It would seem redundant to
add further rules, as proposed by the EPA's fracturing study
and the proposed BLM rule, when many States have been managing
the oil and gas operations, including hydraulic fracturing, for
many years. Thank you.
[The prepared statement of Mr. Rogers follows:]
Statement of John C. Rogers, Associate Director of
The Division of Oil, Gas and Mining for The State of Utah
My name is John Rogers and I am the Associate Director of the
Division of Oil, Gas and Mining for the State of Utah (DOGM). The
Division manages the permitting, regulation and monitoring of oil and
gas drilling, Class II UIC injection wells and oil and gas disposal
facilities in Utah. This includes hydraulic fracturing which it has
regulated for many years, which is the primary purpose of this hearing.
Hydraulic fracturing (HF) has been an operational practice for
completing and stimulating oil and gas wells in Utah since the 1960's.
State government regulation of the oil and gas industry commenced with
creation of the Utah Oil and Gas Conservation Commission in 1955. In
all of the historical records of DOGM, there has never been a verified
case of hydraulic fracturing causing or contributing to contamination
of water resources. The Division has always had very stringent rules
concerning well bore construction and the protection of water
resources. However, to make the the process of hydraulic fracturing
more transparent and alleviate the recent public fear of hydraulic
fracturing, the Division adopted a formal hydraulic fracturing rule in
October 2012. This rule combined many of the Division exiting rules
concerning overall best management practices for oil and gas production
as related to safe and efficient operations, as well as a public
disclosure of chemicals used in the hydraulic fracturing process.
There are three major concerns that have come to the forefront
concerning hydraulic fracturing. The BLM has presented these in their
proposed rule and Utah has also addressed them historically and with
their current hydraulic fracturing rule.
(1) Provide public disclosure of chemicals used in hydraulic
fracturing
(2) Include regulations to insure well-bore integrity
(3) Address issues related to flowback water
PUBLIC DISCLOSURE
The Utah rule requires operators to report to fracfocus.org within
60 days of completion of the hydraulic fracturing operation of the
chemicals used in the process. The primary purpose of fracfocus.org is
to provide factual information concerning hydraulic fracturing and
groundwater protection. FracFocus is the national hydraulic fracturing
chemical registry accepted by both industry and government. It is
managed by the Ground Water Protection Council (GWPC) and the
Interstate Oil and Gas Compact Commission (IOGCC), two organizations
whose missions both revolve around conservation and environmental
protection. The site was created to provide the public access to
reported chemicals used for hydraulic fracturing at specific well
locations. To help users put this information into perspective, the
site also provides objective information on hydraulic fracturing, the
chemicals used, and the purposes they serve and the means by which
groundwater is protected.
This reporting process that The Division uses and is also proposed
by the BLM rule.
WELL BORE INTEGRITY
Existing rules were already in place to insure well bore integrity
and construction. This included detailed rules on:
Casing and cementing programs
Blowout prevention and uncontrolled flow
Protection of freshwater aquifers
Casing pressure tests
The Utah hydraulic fracturing rule emphasizes the the use of
already existing rules that have manage oil and gas production in Utah
for many years. The regulatory processes of The Division (that include
permitting, inspection, compliance, and enforcement) are effective in
ensuring the responsible development of Utah's resources with due
regard for and protection of the environment. This begins with well
bore integrity. The professional staff of DOGM has the local knowledge
and expertise to address the technical and scientific challenges posed
by Utah's unique geology and geography. A nationwide process of
hydraulic fracturing rulemaking would be no more effective in achieving
better oversight of hydraulic fracturing operations than exits at the
state level in Utah and other states with similar rules. In addition,
substantial cost of manpower and time for both government and the
private sector organizations would be incurred.
On-site inspection of oil and gas wells are a key component of The
Division's regulatory program. All wells drilled on state or private
lands in Utah are subject to a rigorous inspection program that
includes: inspection and witnessing of well control equipment tests,
casing/cementing operations, follow up to third party complaints,
general compliance verification, drilling operations, emergency
response, final land restoration/bond release, well plugging,
production/environmental, and workover/recompletion. In 2012, 8,983
such on-site inspections were performed by DOGM field operations staff.
Through a detail and very comprehensive geologic study, the depth
to the usable ground water has been mapped in the primary oil and gas
producing area of Utah, the Uintah Basin. Recognizing the usable water
and its protection is the primary concern when developing a casing
program for a potential well.
MANAGEMENT OF FLOWBACK WATER AND SURFACE PROTECTION
The Division's rules state that the operators shall take all
reasonable precautions to avoid polluting lands, streams, lakes,
reservoirs, natural drainages and underground water. Prior to any
drilling operations all drill sites have on-site inspections and are
analyzed for surface conditions and best practices are employed to
prevent any contamination of surface water or ground water. The
Division's Board has recently approved (July 1, 2013) a revised set of
rules entitled ``Waste Management and Disposal'' These rules update
methods and restraints for disposal of RCRA (Resource Conservation
Recovery Act) exempt waste from oil and gas production. This would
include the the management of hydraulic fracturing fluid flow back.
Utah production water is dispose of by two methods:
UIC Class II injection wells (94%)
Evaporative disposal ponds (6%)
DOGM has primacy from EPA region 8 to permit Class II injection
well on all non-Indian Country. The Division just recently went under
an extensive review of the process from EPA and was found to be in
compliance with their rules and regulations.
The Board at DOGM has recently approved new rules that revised the
regulations concerning surface disposal facilities that accept
hydraulic fracturing flowback. This includes:
Chemical testing as needed
Surface and sub-surface geology
Size and depth limited to 10 acre-feet
Protection of drinking water, flood plains and ground
water
Duel liners with leak detection system
Bermed area to contain any catastrophic failure
Safety and emergency plans
Increased and escalated bonding.
The management of hydraulic fracturing flow back is monitored
through both surface disposal and UIC Class II wells as directed by the
EPA. No other regulation is necessary.
FEDERAL/STATE INTERACTION
The Division has worked very well with federal agencies when
concerned with spacing, flaring and split estate issues. However, there
is no collaboration concerning hydraulic fracturing. The Division
believes that a state wide standard as defined by The Division's
hydraulic fracturing would be beneficial, rather than several
regulations as proposed.
STATE AND INDUSTRY
State and industry have worked very well together to establish a
win-win situation concerning hydraulic fracturing flowback that is
injected into the ground for water floods. Facilities, both permanent
and temporary have been used to clean flowback water and use it in the
water flood of an oil field. This recycled water greatly reduces the
amount of fresh water that is used in hydraulic fracturing. In
addition, water flow lines have been constructed in order to greatly
reduce truck traffic and improve air quality.
CONCLUSION
I believe that Utah DOGM does an excellent job in monitoring
hydraulic fracturing in Utah. Also, it is my experience that other
States also perform at a similar exceptional level.
______
Mr. Lamborn. OK, thank you.
Ms. Epstein?
STATEMENT OF LOIS N. EPSTEIN, P.E., ARCTIC PROGRAM DIRECTOR,
THE WILDERNESS SOCIETY
Ms. Epstein. Good morning, Chairman Lamborn and other
Subcommittee members, and thank you for inviting me to testify.
My name is Lois Epstein, and I am an Alaska-licensed engineer
representing The Wilderness Society. The Wilderness Society is
a national public interest conservation organization with over
500,000 members and supporters.
My background in oil and gas issues include serving on the
Department of the Interior's Ocean Energy Safety Advisory
Committee, established after the BP Gulf spill in 2010;
testifying before Congress on numerous previous occasions;
analyzing the environmental performance of Alaska's Cook Inlet
and North Slope onshore and offshore oil and gas
infrastructure. I have worked for three private consultants and
for national and regional conservation organizations in both
Washington, D.C. and Anchorage, Alaska.
Today's hearing addresses H.R. 2728. This bill prohibits
the Federal Government from regulating hydraulic fracturing
operations, including associated operations such as chemical
and wastewater storage and disposal on Federal lands, even if
States have issued only hydraulic fracturing ``guidance,'' or
have developed ineffective regulatory programs.
The bill is indifferent to how well such programs protect
surface and groundwater, wildlife habitat, and the public. And
it is a fact that surface activities associated with hydraulic
fracturing operations have caused water contamination. So
statements focusing only on the fracking process itself being
benign are misleading. And that is an important distinction.
For example, a State agency could issue a vague guidance on
wellbore cementing for fracturing operations and any Bureau of
Land Management regulation, no matter how specific on wellbore
cementing, would be rendered void under the language of the
bill.
Section 2(a) is sufficiently vague, in fact, that BLM might
be unable to enforce any Federal regulation with any
relationship to oil, gas, or geothermal energy, simply because
States have guidances or regulations regarding hydraulic
fracturing. States potentially could argue that their oil and
gas guidance or regulations supersede any Federal oversight
program, thereby allowing fracturing, as we heard by the
Ranking Member, in national parks, national wildlife refuges,
wilderness areas, where such activities currently are
prohibited.
Currently, BLM and tribal lands are subject to a patchwork
of State hydraulic fracturing regulations. Some States require
best practices, and we have heard from the States represented
here that many of those practices are in place in these States,
while other States, however, do not require such practices. And
that is an important point. According to the FracFocus
information Web site, ``While nearly all States''--this is a
quote--``require the circulation of cement on surface casing,
it is not a universal requirement.''
Additionally, in some States it is common for State
personnel to witness the running of cementing of casing
strings, while in other States the submission of a completion
report which details the amounts and types of casing and cement
used in the completion of the well is considered sufficient
evidence of proper well construction.
As an engineer, it does not make technical sense to have
non-protective or inadequately enforced requirements in place
in particular States. In fact, all States care about their
usable groundwater and surface water resources. So a national
baseline of technical measures ensuring wellbore integrity,
including proper cementing and casing, suitable management of
flowback water, and robust chemical disclosure makes sense,
such as that developed by BLM.
From a policy perspective, Federal lands which are owned by
all Americans should be protected at roughly equivalent levels
throughout the country, and not subject to the oversight whims
of particular States and their powerful industries.
Moreover, the Federal Government has a congressionally
mandated stewardship requirement for these lands, and trust
responsibilities for Indian lands, unlike States. Baseline
Federal standards, which are applicable across the country,
have been a common feature of our Nation's approach to ensuring
that all Americans enjoy protection from harm from industrial
activities. The Clean Air and Clean Water Acts, for instance,
provide minimum Federal standards, while allowing States to
impose more stringent or specific requirements. The benefit to
this approach, which has remained in place on a bipartisan
basis for decades is that it brings needy consistency for
companies operating in multiple States.
For States, this approach saves governmental resources,
particularly in States without the ability to do their own
analyses to establish the regulations. And there are several
States that are currently entering oil and gas drilling, and
they don't have a lot of expertise at this time.
The regulations proposed by BLM earlier this year for
hydraulic fracturing will not undercut State programs. There
are strong technical and policy reasons for Federal baseline
requirements, especially regarding wellbore integrity and water
resource protections. States should not be allowed to undermine
Federal requirements because the end result will be
contamination problems.
Thank you very much for your attention to these concerns. I
look forward to answering your questions.
[The prepared statement of Ms. Epstein follows:]
Statement of Lois N. Epstein, P.E., Engineer and Arctic Program
Director,
The Wilderness Society, Anchorage, Alaska
Good morning and thank you for inviting me to testify today. My
name is Lois Epstein and I am an Alaska-licensed engineer and the
Arctic Program Director for The Wilderness Society. The Wilderness
Society, or TWS, is a national public interest conservation
organization with more than 500,000 members and supporters. TWS's
mission is to protect wilderness and inspire Americans to care for our
wild places.
My background in oil and gas issues includes membership from 1995-
2007 on the U.S. Department of Transportation's Technical Hazardous
Liquid Pipeline Safety Standards Committee which oversees oil pipeline
regulatory and other agency activities, serving on the Department of
the Interior's Ocean Energy Safety Advisory Committee established after
BP's Gulf spill in 2010, testifying before Congress on numerous
occasions, and analyzing the environmental performance of Alaska's Cook
Inlet and North Slope onshore and offshore oil and gas infrastructure.
I have worked on oil and gas environmental and safety issues for more
than 25 years for three private consultants and for national and
regional conservation organizations in both Washington, DC and
Anchorage, AK, and currently am actively engaged in development of
hydraulic fracturing requirements in Alaska. I have a bachelor's degree
in mechanical engineering from MIT and a master's degree in civil
engineering from Stanford University.
The Language of the Bill
Today's hearing addresses H.R. 2728, the stated purpose of which is
``To recognize States' authority to regulate oil and gas operations and
promote American energy security, development, and job creation.''
Because there is no controversy regarding states' authority to regulate
oil and gas operations, we must look to the bill's language to see what
it actually does. The key provisions in the bill are contained in Sec.
2(a), which states that ``The Department of the Interior shall not
enforce any Federal regulation, guidance, or permit requirement
regarding . . . the hydraulic fracturing process, or any component of
that process . . .'' and Sec. 2(b) which states that ``The Department
of the Interior shall recognize and defer to State regulations,
permitting, and guidance, for all activities . . . on Federal land
regardless of whether those rules are duplicative, more or less
restrictive, shall have different requirements, or do not meet Federal
guidelines.'' In other words, the bill prohibits the federal government
from regulating hydraulic fracturing operations--including associated
operations such as chemical and wastewater storage and disposal--on
federal lands even if states have issued only hydraulic fracturing
``guidance'' or have developed ineffective regulatory programs. The
bill is indifferent to how well state regulatory programs protect
surface and groundwater, wildlife habitat, and the public.
For example, a state agency could issue a vague guidance on
wellbore cementing for fracturing operations such that any Bureau of
Land Management (BLM) regulation on wellbore cementing, no matter how
specific, might be rendered void. The language in Section 2(a) is
sufficiently vague that BLM might be precluded from enforcing any
federal regulation with any relationship to oil, gas, or geothermal
energy, simply because states have guidelines or regulations regarding
hydraulic fracturing. This includes federal regulations issued pursuant
to the Mineral Leasing Act, the Federal Lands Policy Management Act
(FLPMA),\1\ as well as other acts.
---------------------------------------------------------------------------
\1\ FLPMA requires BLM to issues rules and regulations to prevent
unnecessary or undue degradation of public lands, and to protect
ecological, environmental, and water resources for future generations.
See 43 U.S.C. Sec. Sec. 1702(c), 1733, 1740.
---------------------------------------------------------------------------
The bill's effort to nullify federal law where it conflicts with
state law turns on its head the principle behind the Constitution's
Supremacy Clause, whereby state law is preempted to the extent it
conflicts with federal law.\2\
---------------------------------------------------------------------------
\2\ See, e.g., Florida Lime & Avocado Growers, Inc. v. Paul, 373
U.S. 132, 142-143 (1963), Guarino v. Wyeth, LLC, No. 12-13263, 2013 WL
3185084 (June 25, 2013).
---------------------------------------------------------------------------
Federal and State Roles Regarding Hydraulic Fracturing
Currently, BLM and tribal lands are subject to a patchwork of state
hydraulic fracturing regulations, with some states not having performed
much work on this issue. Some states require best practices in some
areas, while other states do not. According to the FracFocus
website:\3\
---------------------------------------------------------------------------
\3\ See http://fracfocus.org/hydraulic-fracturing-how-it-works/
casing.
---------------------------------------------------------------------------
While nearly all states require the circulation of cement on
surface casing, it is not a universal requirement. In some
states, cement is required only across the deepest ground water
zone . . .
[Additionally,] [i]n some states it is common for state
personnel to witness the running and cementing of casing
strings, while in other states the submission of a completion
report which details the amounts and types of casing and cement
used in the completion of the well is considered sufficient
evidence of proper well construction. In a few states such as
Alaska, Michigan and Ohio, an additional verification method
using geophysical logs such as Cement Bond Logs (CBL) and
Variable Density Logs (VDL) may be required. By measuring the
travel time of sound waves through the casing and cement to the
formation, the CBL shows the quality of bonding between the
casing and the cement. The VDL performs a similar function to
measure the bond between the cement and the borehole. By
measuring the quality of the cement to casing and cement to
formation bond, the sealing quality of the cement in the space
between the casing and the borehole (called the annulus) can be
evaluated.
Clearly, not all states have similarly-protective requirements, nor
do they have equivalent resources or enforcement efforts related to oil
and gas development. In Pennsylvania, for instance, where flowback
water has been legally taken to wastewater treatment plants, several
rivers were contaminated with chemicals that could create carcinogens
in drinking water. According to the Scranton Times-Tribune:\4\
---------------------------------------------------------------------------
\4\ See http://thetimes-tribune.com/news/gas-drilling/state-calls-
for-halt-to-shale-wastewater-treatment-at-15-plants-1.1135095 (April
20, 2011).
---------------------------------------------------------------------------
Citing concerns about high levels of bromides in western
Pennsylvania rivers, acting Department of Environmental
Protection Secretary Michael Krancer gave the drillers until
May 19 to stop taking the waste to treatment facilities that
were grandfathered into state rules that curb how much salt can
be discharged into streams.
The request--which does not have the legal weight of an order--
comes after federal environmental regulators, scientists and
drinking water suppliers raised concerns about the drilling
wastewater, which is laden with salts, metals and naturally
occurring radioactive material that cannot be completely
removed by conventional treatment plants.
The request came on the same day that the Marcellus Shale
Coalition, an industry group, acknowledged that drilling
wastewater is contributing to elevated bromide levels in the
Allegheny and Beaver rivers.
Reducing the amount of salts, or total dissolved solids, in the
wastewater also reduces bromides, which are nontoxic but can
turn into cancer-causing compounds called brominated
trihalomethanes when combined with chlorine at drinking water
treatment facilities.
``Now is the time to take action to end this practice,'' Mr.
Krancer said, citing ``more definitive scientific data,
improved technology and increased voluntary wastewater
recycling by industry'' since the facilities were given special
exemptions to the state total dissolved solids standards when
they were implemented last year.
As an engineer, it does not make technical sense to have non-
protective requirements in place in certain states. In fact, all states
care about their usable groundwater and surface water resources, so a
national baseline of technical measures ensuring wellbore integrity
including proper cementing and casing,\5\ suitable management of
flowback water, and robust chemical disclosure makes sense from an
engineering perspective.
---------------------------------------------------------------------------
\5\ Notably, the Western Energy Alliance (WEA) report on the
Economic Impact of Revised BLM Completion Rule issued on May 24. 2013,
(see the report at http://westernenergyalliance.org/wp-content/uploads/
2013/07/Final-Economic-Analysis-of-the-BLM-Fracing-Rule-Revision.pdf,
July 19, 2013) shows that 90% of the compliance cost of BLM's proposed
rule on hydraulic fracturing is from enhanced casing, an essential
component of well integrity. The WEA acknowledges that operators have
an obligation to protect actual drinking water sources (footnote 14 in
the study, which does not mention an obligation to protect potential
drinking water sources). If that is the case, there will be some cost
to doing so effectively and that cost will be debatable as it is
difficult to predict on a nationwide basis.
---------------------------------------------------------------------------
From a policy perspective, federal lands--which are owned by all
Americans--should be protected at roughly equivalent levels throughout
the country, and not subject to the regulatory or enforcement whims of
particular states. Moreover, the federal government has
Congressionally-mandated stewardship requirements under FLPMA and trust
responsibilities for Indian lands,\6\ unlike states. BLM must ensure
that:
---------------------------------------------------------------------------
\6\ E.g., Indian Mineral Leasing Act, 25 U.S.C. Sec. 2103(b);
Indian Energy Act, 25 U.S.C. Sec. 3504(e)(6).
---------------------------------------------------------------------------
``. . . public lands be managed in a manner that will protect
the quality of scientific, scenic, historical, ecological,
environmental, air and atmospheric, water resource, and
archeological values; that, where appropriate, will preserve
and protect certain public lands in their natural condition;
that will provide food and habitat for fish and wildlife and
domestic animals; and that will provide for outdoor recreation
and human occupancy and use.\7\
---------------------------------------------------------------------------
\7\ 43 U.S.C. 1701(a)(8).
---------------------------------------------------------------------------
FLPMA also directs BLM to manage the public lands so as to prevent
unnecessary or undue degradation, and to protect the ecological,
environmental, and water resources for future generations.\8\
---------------------------------------------------------------------------
\8\ 43 U.S.C. Sec. Sec. 1702(c), 1740.
---------------------------------------------------------------------------
It is essential that the federal government ensure adequate
regulations are in place for industrial activities occurring on the
lands it manages while providing states with the ability to exceed
those requirements or to address atypical conditions. This regulatory
model--where baseline federal standards are applicable across the
country--has been a common feature of our nation's approach to ensuring
that all Americans enjoy protection from harm from industrial
activities. The Clean Air and Clean Water Acts, for instance, are
structured to provide minimum federal standards, while allowing states
to impose more stringent or specific requirements. A benefit to this
approach, which has remained in place on a bi-partisan basis for
decades, is that it brings needed consistency for companies operating
in multiple states. For states, this approach saves governmental
resources because each state can rely on the federal government with
its greater capacity to develop an adequate set of minimum regulatory
requirements.
Deferring to State or Tribal Requirements
BLM currently is developing regulations to set a baseline for
hydraulic fracturing operations on the lands it manages. Earlier this
year, BLM issued a revised draft version of these regulations for
public comments.\9\ The proposed regulations would allow BLM to issue a
variance for all wells within states or within Indian lands, or to
specific fields or basins within states or Indian lands (proposed
section 3162.3-3(k)). BLM specifically requested comments on whether
compliance with proposed chemical disclosure requirements (section
3162.3-3(i)(1)) should be satisfied by compliance with state or tribal
requirements for the same or more information about the chemical
constituents of hydraulic fracturing fluids.
---------------------------------------------------------------------------
\9\ 78 Federal Register 31636-31676 (May 24, 2013), http://
www.gpo.gov/fdsys/pkg/FR-2013-05-24/pdf/2013-12154.pdf.
---------------------------------------------------------------------------
TWS supports allowing federal compliance to be achieved where state
or tribal disclosure requirements meet or exceed the federal standard
and where states or tribes have adequate systems for conveying
information about hydraulic fracturing activities to the public (though
such an approach is unwieldy and a single database is preferable).
Conclusion
In its proposal to address several important issues that have
arisen around hydraulic fracturing on federal public lands, BLM is
attempting to fulfill its legal responsibilities to ensure a baseline
level of regulatory protection and consistency for the American public.
The regulations proposed by BLM earlier this year for hydraulic
fracturing will not undercut state regulatory initiatives in this area.
BLM's proposed hydraulic fracturing requirements operate like Clean Air
and Clean Water Act requirements, allowing states to exceed federal
requirements to meet state-specific technical needs or public desires
for increased protection. On federal lands, there are strong technical
and policy reasons for federal baseline requirements--especially
regarding wellbore integrity and water resource protections--to ensure
equitable standards throughout the country. States should not be
allowed to undermine federal requirements because the end result will
be contamination problems that will adversely affect regions and the
industry as a whole.
Thank you very much for your attention to these concerns. I look
forward to answering your questions.
______
Response to Questions Submitted for the Record by Lois N. Epstein,
P.E., Arctic Program Director for The Wilderness Society
Questions from Rep. Holt
1.) Ms. Epstein, can you summarize how hydraulic fracturing
operations--not just the fracking process itself--can
contaminate water resources?
Hydraulic fracturing, a well treatment process used to enhance oil
and gas production, has been used in a number of places in the U.S.
with underground shale formations. Use of hydraulic fracturing
increased tremendously in recent years following refinement of these
well stimulation techniques and federal deregulation of hydraulic
fracturing in the Energy Policy Act of 2005. Shale formations generally
are located in different areas than ``conventional'' oil and gas
reservoirs.
The process of fracturing is not the only activity associated with
these wells, however. In order to fracture, operators also must store
chemicals, and manage wastewater (i.e., storage, reinjection,
discharge, and/or transport operations) and oil and gas drilling
wastes. These activities--if not done well--can contaminate water
resources near drilling sites.
Fracturing, itself, hypothetically can contaminate groundwater
resources though the data on that has not been robust so far and
research is continuing. This situation can occur with inadequate well
integrity close to groundwater resources, if fractures extend beyond
projected locations due to inadequate modeling and/or poor
implementation of well stimulation, if fractures intersect faults or
fractures from other wells, or if inadequate well closure/abandonment
occurs.
Additionally, wastewater discharges to surface water of bromide
generated at hydraulic fracturing sites at legal, permitted levels have
combined with chlorine at downstream drinking water treatment plants to
form trihalomethanes, which are carcinogens.
2.) Ms. Epstein, we talk a lot about ``certainty'' in this committee.
The Majority has consistently argued that extractive industries
need more certainty from this administration. Yet, the Majority
also insists--as evidenced by this bill--that we need a state
by state approach to regulating hydraulic fracturing. How does
that provide certainty to industry?
Developing and enforcing clear federal rules that apply when
operating on Bureau of Land Management (BLM) lands would provide
certainty and consistency to industry on federal expectations for
hydraulic fracturing and the associated operations described in the
answer to Question 1. Because H.R. 2728 allows a variety of still-
developing state rules and guidance--no matter how inadequate--to
preempt federal rules covering fracturing, operators would not have
certainty and consistency for their fracturing operations when
operating on BLM lands in multiple states.
3.) Ms. Epstein, as you testify, this bill purports to reverse
traditional notions of authority over federal land by giving
states complete control over hydraulic fracturing, drilling and
gas operations. Are there any safeguards against abuse of power
by the states? Do the states have comparable authority in other
laws which allow them to fully dictate the use of federal
lands?
There are no safeguards in the bill to prevent abuse of power by
the states. H.R. 2728 Section 44(b) is vague regarding which state laws
would require federal deference. Presumably the bill does not intend to
override EPA's authority under the Clean Water Act. But what if a
state's laws or guidance conflict with the Bureau of Land Management's
mandate under the Federal Land Policy Management Act (FLPMA) to manage
public lands under the principles of multiple and sustained use? \1\
Would state ``guidance''--a term included in Sec. 44(b)--trump FLPMA?
This is a concern, as states are not legally required to meet the
stewardship standards in place for federal lands.\2\ Nor do states
share in the federal government's trust responsibilities for Indian
lands.\3\
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\1\ 43 U.S.C. Sec. 1732.
\2\ FLPMA directs BLM to manage the public lands so as to prevent
unnecessary or undue degradation, and protect the ecological,
environmental, and water resources for future generations. 43 U.S.C.
Sec. Sec. 1702(c), 1740.
\3\ E.g., Indian Mineral Leasing Act, 25 U.S.C. Sec. 2103(b);
Indian Energy Act, 25 U.S.C. Sec. 3504(e)(6).
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The Wilderness Society's (TWS's) review of U.S. laws has not
revealed a comparable federal law allowing states to fully dictate the
use of federal lands. The Clean Water Act (CWA) \4\ and the Clean Air
Act (CAA) \5\ are carefully designed to allow states to serve as
partners in implementing federal baseline standards, while enabling
states to implement more stringent state-specific standards if
desired.\6\ States may tailor federal standards (e.g., water quality
criteria under the CWA), establish compliance strategies (e.g., state
implementation plans under the CAA), implement permit programs (e.g.,
state pollutant discharge elimination systems under the CWA), and
enforce rules (e.g., state administrative and judicial procedures). A
similar cooperative approach could be applied to hydraulic fracturing
through BLM's proposed rulemaking.\7\
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\4\ 42 U.S.C. 7401, et seq.
\5\ 33 U.S.C. 1251, et seq.
\6\ See 33 U.S.C. Sec. 1370; 42 U.S.C. Sec. 7416.
\7\ BLM, Oil and Gas; Hydraulic Fracturing on Federal and Indian
Lands, 78 Fed. Reg. 31636 (May 24, 2013).
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4.) Ms. Epstein, the Majority has forgotten that we are talking about
the federal mineral estate. Should we grant state police
departments the authority to control military operations on
federal bases within state lines? Is there any precedent for
granting states full authority over drilling and gas operations
on all public lands?
As a nation, we have collectively decided that issues of national
importance with trans-state implications should not be regulated solely
by states. This is the principle behind the Commerce Clause of the U.S.
Constitution, which allows Congress to regulate interstate commerce and
navigable waters. Additionally, we also have given federal agencies the
authority to oversee the lands and resources belonging to the citizens
of our nation for the benefit of all Americans through various laws
governing the management of federal public lands, forests, and waters.
While many aspects of oil and gas operations are regulated by
states,\8\ the federal government retains influence through overarching
laws such as the CWA, the CAA, the Oil Pollution Act,\9\ the Natural
Gas Act,\10\ and the Energy Policy Act.\11\ With respect to federal
lands, the federal government is explicitly required by statute to
manage the oil and gas resources owned by all Americans under the
auspices of the Mineral Leasing Act, FLPMA, as well as other relevant
statutes. Federal land managers such as the BLM are subject to federal
laws governing how they manage public lands. These laws have provided
the basis for regulations, guidance and orders on oil and gas leasing,
exploration, and production. BLM has acted on its responsibility to
manage lands by developing a proposed rule that provides minimal
standards for hydraulic fracturing on BLM lands. The proposed rule
gives states the option to substitute their own regulations if the
regulations provide equivalent or greater protection.\12\
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\8\ For example, in Alaska, the Alaska Oil and Gas Conservation
Commission regulates the drilling for and production of oil and gas
resources, the principles of oil and gas conservation, and the
underground injection for both waste management and enhanced recovery.
See Alaska Stat. Sec. 31.05.030, Sec. 31.05.110. The Alaska Department
of Natural Resources is responsible for leasing state lands and
prescribing unit plans. See Alaska Stat. Sec. 31.05.110,
Sec. 31.05.180. The Alaska Department of Environmental Conservation
oversees pollution-related industrial activities including storage and
spill prevention for oil and hazardous substances, air and water
discharges, and solid waste management. See Alaska Stat. Title 46.
\9\ 33 U.S.C. Sec. 40, et seq.
\10\ 15 U.S.C. Sec. 717, et seq.
\11\ 42 U.S.C. Sec. 13201 et seq.
\12\ Proposed 43 C.F.R. Sec. 3162.3-3(k).
---------------------------------------------------------------------------
5.) Ms. Epstein, an oft-repeated concern of the Majority is that
proposed regulation by the federal government doesn't take into
account that geology and hydrology may differ between states.
In testimony before this Committee last week, Secretary Jewell
clearly responded to this concern by stating that the three
main topics addressed in the BLM regulations--1) chemical
disclosure, 2) well construction standards, and 3) managing
flowback--are necessary in any fracking operation and are not
dependent on ground characteristics. Would you agree that these
three focus areas are applicable to all fracturing operations?
Yes, these three focus areas are applicable to all fracturing
operations. In the comments TWS submitted to BLM on September 15, 2013,
attached, TWS supports BLM's efforts to develop this rule, though we
also stated our disappointment that BLM did not include other
requirements essential to ensure adequate fracturing (and other forms
of well stimulation such as ``acidizing'') oversight regardless of
geology and hydrologic differences. These needed requirements include
pre- and post-fracturing water monitoring, pre-fracturing notice of
chemical constituents, measures to reduce flaring, the use of enclosed
tanks for storing fracturing fluids, proper well abandonment and
remediation, and a prohibition on the use of diesel-based and other
toxic chemical-based fracturing fluids as water-based alternatives are
available.
As an engineer who has worked on oil- and gas-related technical
issues for over 25 years, I understand the consequences of inadequate
well integrity/well construction, i.e., contamination of water and soil
that must be cleaned up. I don't believe anyone on the Committee is in
favor of poor well integrity for wells on BLM lands, which is what
could result if we rely on existing or future inadequate state
regulations or guidance. Many states currently are in a learning phase
regarding hydraulic fracturing as they have not had major oil and gas
operations there for many years (or perhaps ever), and do not have the
technical staff needed to ensure adequate standards.
Regardless of geology and hydrology, chemical disclosure allows the
public and emergency responders from any state who spend time near
fracturing operations to know what chemicals are in use. As for
managing flowback wastewater, this is an essential, technical measure
that ensures states will not adversely contaminate surface or
groundwater through poor wastewater recycling, treatment and/or
disposal practices.
6.) Ms. Epstein, as you point out in your testimony, the Clean Air Act
and the Clean Water Act both provide minimal federal standards
while allowing states to impose more stringent or specific
requirements. Isn't it true that the same principle applies
with BLM's proposed hydraulic fracturing rule?
Yes. As stated in TWS's comments submitted to BLM on September 15,
2013:
The Clean Air and Clean Water Acts both are structured to
provide minimum federal standards. This approach brings needed
consistency for companies operating in multiple states. For
state governments, this approach saves resources, as each state
can rely on the federal government with its greater capacity to
provide an adequate regulatory baseline.
Based on experience to date regarding hydraulic fracturing, if
the states alone regulate these operations, there will be gaps
in those standards (i.e., no state has ``model'' regulations),
and inadequate stringency or delays in implementation in states
with powerful hydraulic fracturing interests. (pp. 3-4)
The federal government can help ensure adequate technical and
public disclosure requirements until such a time that states meet or
exceed those standards.
7.) Ms. Epstein, the discrepancies in state standards are why a
federal standard is needed. But
BLM's proposed rule is significantly weaker than the draft issued
last year. For example:
1. In the proposed rule, cement evaluations now don't have to
be submitted until after the well is stimulated. Do you think
cement evaluations should be submitted prior to the stimulation
of a well?
2. In the proposed rule, operators don't have to provide BLM
with information (depth, volume of fluids, chemicals, water
source, size of fracturing) about each well and instead can
just use one packet of generic information to be submitted for
all ``similar wells.'' Do you think oil and gas companies
should be required to submit information on individual wells?
3. In the leaked (sic) rule, disclosure of fracking chemicals
would not have to be disclosed (sic) until after a well is
drilled using FracFocus. Do you think disclosure should be
required before fracking, as is required in Wyoming?
Cement evaluations
TWS believes that cement evaluations should be submitted prior to
well stimulation. Doing so would enable BLM to ensure that stimulation
would not proceed until mechanical integrity tests prove successful.
``Type well'' testing vs. individual well testing
TWS's comments provide extensive discussion on use of ``type
wells'' vs. providing BLM with testing (cement evaluation logs or CELs
and mechanical integrity tests or MITs) results on individual wells.
According to proposed 43 C.F.R. section 3162.3-3(h)(i), however, ``The
information required in paragraphs (i)(1) through (i)(8) of this
section must be submitted . . . for each well, even if the BLM approved
fracturing of a group of wells.'' Sections (i)(1) through (i)(8) cover
true vertical depth, volume of fluids, and other items listed in
Question 7.
Regarding ``type wells'' vs. individual well testing information,
TWS's comments to BLM state:
The proposed regulations in sections 3162.3-3(d) and 3162.3-
3(e) would require CELs only on ``type wells,'' wells that are
not preceded by approved type wells or are not part of an
approved field development proposal, and whenever there is
evidence of a problem with cement jobs. The definition provided
for ``type well'' in section 3160.0-5 is ``an oil and gas well
that can be used as a model for well completion in a field
where geologic characteristics are substantially similar within
the same field, and where operations such as drilling,
cementing, and completions using hydraulic fracturing are
likely to be successfully replicated using the same design.''
But the proposed rule does not require the operator to certify
that it will use similar cement composition, fracturing fluids
or drilling practices in subsequent wells. Nor does it require
the operator to submit proof that subsequent wells have
substantially similar geological characteristics. The use of
type wells assumes that geologic zones are compositionally,
texturally, and mechanically homogeneous media, even though
this is often not true. Faults can remove or add sections of
rock over short distances. Folding can result in reoriented or
repeated sections of rock. Tilting can result in formations at
differing depths with missing sections. Missing sections can
also result from the presence of unconformities. Even if the
geology is perfectly consistent, operator inconsistencies
during drilling could result in unexpected differences in
borehole geometry that could affect the cement as it is
squeezed into the annulus.
BLM acknowledges some uncertainty about the benefits of the
type well concept in the preamble to the proposed rule: ``there
is uncertainty about the effectiveness of the type well
concept, and how reliably the CEL results on casing strings of
a type well assure adequate cementing for subsequent wells in
the same geologic area.''\13\ We recommend that BLM require
cement evaluation logs on all wells where casing serves as a
barrier between fracturing operations and usable water (similar
to what was proposed in 2012); or to ensure the similarity of
wells, cementing, fracturing fluids and processes, and
homogeneous, non-complex geologic characteristics prior to
utilizing ``type well'' approval procedures.\14\ (p. 13)
---------------------------------------------------------------------------
\13\ Proposed Rules, 75 Fed. Reg. 31664 (May 24, 2013).
\14\ See DNV Recommended Practice, p. 33 (``Cement logging
represents a core quality control procedure in the construction of
shale gas wells. Casing cement that forms part of the well barrier
envelope in the fracturing or production operation shall be verified by
cement bond logs. . . . It is important to track local changes of the
production casing/liner and the interface between the casing wall,
cement and formation.'')
---------------------------------------------------------------------------
We further suggest that BLM clarify that MITs are required for
each and every well--not just for a type well. The Federal
Register description of the proposed rule at page 31652 states
that it is ``necessary to perform a MIT prior to each
refracturing operation,''\15\ but the rule itself at section
3162.3-3(f) does not specifically state that a MIT must be
performed on each well. MITs are as important for older wells
being refractured as for new wells. According to oil and gas
technology supplier Schlumberger, by the time an oil or gas
well is 15 years old there is a 50 percent probability that it
will have measurable sustained casing pressure--an indicator of
compromised zonal isolation in a well.\16\ (p. 14)
---------------------------------------------------------------------------
\15\ See also 78 Fed. Reg. 31654 (explaining that BLM received some
comments stating that an MIT is not needed on every well, but that BLM
decided not to change this requirement).
\16\ Claudio Bruffato et al, From Mud to Cement: Building Gas
Wells, Oilfield Resources (Autumn 2003), 63, available at http://
www.slb.com/ /media/Files/resources/oilfield_review/ors03/aut03/
p62_76.ashx
---------------------------------------------------------------------------
Pre-fracturing disclosure
As discussed in TWS's comments to BLM:
Pre-fracturing public disclosure is important to allow land
owners, public land managers, and users of nearby water sources
to conduct independent baseline water quality testing to
determine if water resources are uncontaminated or if they
contain any of the chemicals planned to be injected during
hydraulic fracturing. If specific chemical data are not
provided until after hydraulic fracturing occurs, a concerned
person would not know which chemicals may have been used and
therefore which analytical tests should be performed. Without
the ability to conduct effective baseline testing, it will be
difficult if not impossible to establish causal responsibility
when chemicals are discovered where they do not belong. Pre-
fracturing, baseline water quality testing avoids the defense
that ``the contamination was there before we arrived.'' If
fracturing chemicals are safe and leaks are unlikely, then
there should be little resistance to pre-fracturing disclosure.
Prior disclosure is particularly important in areas that will
be fractured by multiple operators. For example, in North
Dakota's Bakken formation, over 3,000 new wells have been
drilled in the past five years with over 80 companies leasing,
drilling and hydraulically fracturing in the area.\17\ Without
prior disclosure, a landowner cannot know which operator will
be fracturing a particular well, or if fracturing fluids used
by different operators differ. (pp. 5-6)
---------------------------------------------------------------------------
\17\ Natural Resources Defense Council and Sierra Club's Response
to Questions for the Record from Chairman Wyden Regarding Disclosure
Senate Committee on Energy and Natural Resources, May 23, 2013 Hearing,
p. 4, submitted June 5, 2013, available at http://www.eenews.net/
assets/2013/06/07/document_ew_01.pdf.
---------------------------------------------------------------------------
8.) Ms. Epstein, what would be your recommendations for strengthening
the Obama administration's proposed fracking rule? What are the
main issues that you think should be addressed before the rule
is finalized.
See the first paragraph in our answer to Question 5.
______
Mr. Lamborn. OK, thank you. We will now do our question
portion of the hearing. And we do have votes coming up around
10:45, so we are going to try to conclude at that time. But we
will get in as many questions as we can between now and then.
And they may go a little bit longer. We will find out.
Commissioner Foerster, does the hydraulic fracturing
section of the STRONGER guidelines that you referred to provide
comprehensive guidelines for all issues relating to hydraulic
fracturing?
Ms. Foerster. Chairman Lamborn, yes, it does. I know you
are in a hurry, but let me quickly go to Section IX and read
you some of the things.
Mr. Lamborn. Is your microphone on?
Ms. Foerster. It is. I am just bad at using it. Yes. Yes,
it does. Let me just read you--go to Section IX, ``Standards
for Casing and Cementing; Standards for Water Handling;
Standards for Fluid Disposal; Wastewater Treatment; Reuse and
Recapture; Well Water Sampling.''
Mr. Lamborn. OK, thank you.
Ms. Foerster. Yes.
Mr. Lamborn. Would you be able to leave us a copy of that?
Ms. Foerster. I will leave you a copy of this.
Mr. Lamborn. Now, what is your response when Secretary
Jewell says that we need national minimum standards?
Ms. Foerster. Again, Chairman Lamborn, sure, we need them,
but we have already got them. The IOGCC, the STRONGER, API
provide those standards. And the States can use them and do use
them. And any new State that needs a standard has got it. It is
right here.
Mr. Lamborn. What has been the record of BLM in regulating
energy development in Alaska?
Ms. Foerster. In one word, abysmal. But the BLM operates
over 100 wells in Alaska that have been in violation of Alaska
regulations, especially those on safety and environmental, for
a long time. And their answer is, ``Federal law trumps State
law; you can't make us clean them up.'' Some of the wells are
currently leaking hydro-carbon gas, and they are not doing
anything about it. Some have leaked oil. Some of the sites are
drowning hazards for children and small animals. Some of the
sites are just a mess, littered with glass, plastic, metal,
wood debris, piles of dried-up drilling mud of various
concentrations and compositions. I will go back to the word
``abysmal.''
Mr. Lamborn. And with that record, they want to tell all 50
States how to run their business?
Ms. Foerster. Yes, they do. And another thing that they do,
they recently, after the Macondo disaster, came to Alaska and
drilled some coal bed methane wells, and they failed to use
blowout prevention equipment. And then, when we tried to
investigate that, they tried to hide it from us, after we had
told them that they had to use it.
Mr. Lamborn. That is amazing.
Ms. Foerster. It is not amazing----
Mr. Lamborn. That is amazing.
Ms. Foerster [continuing]. It is disgusting.
[Laughter.]
Mr. Lamborn. Yes. Commissioner Craddick, in your testimony,
you say because of the success of Texas in regulating energy,
dignitaries from countries around the world, including Brazil,
South Africa, Canada, and Mexico have visited Texas to learn
about how you do things. Has the BLM or other Federal
Government agencies come to you to likewise seek advice on how
Texas is successful in regulating energy?
Ms. Craddick. No, unfortunately. And actually they won't
participate in our hearings when we have things. So we would be
glad to visit with them at any time, but we feel like we have
had a long history. People do come and ask us questions, and we
now have, I believe, using API and STRONGER standards, one of
the best casing rules now in the country that we have just
done. So we would be glad to explain to them how we have done
it.
Mr. Lamborn. Well, here is another amazing thing. They are
not even willing to take advice from the States and admit they
can learn something.
Mr. Rogers, in your testimony you point out that in 2012
almost 9,000 onsite inspections were performed by DOGM field
staff. In the course of these inspections, has your staff found
any problems or issues with these wells that led you to believe
further regulation at the Federal level is necessary?
Mr. Rogers. Well, concerning hydraulic fracturing, there
has been no incidents. There are obviously other issues that we
may find, violations, but nothing that could be enforced by a
Federal--I think we do a fine job on the local level.
Mr. Lamborn. OK, thank you. Now, if someone raises a scare
tactic and says, ``Oh, someone is going to set up an oil well
next to Old Faithful Geyser,'' or something like that, what is
the actual state of affairs when it comes to Federal iconic
national parks and things like that?
Mr. Rogers. Well, that would be fairly straightforward. To
put a well beside Old Faithful, you would have to have a lease
from that property to drill there, and I doubt any national
park or Federal agency would lease that land to drill. So there
would never be an opportunity to frack near anything of that
sort.
Mr. Lamborn. And you are aware that--because in Utah there
are five national parks and a number of national monuments.
Mr. Rogers. Yes. There would be no drilling there. As you
know, in the past we have had leases pulled just because they
are nearby a park or a wilderness area. So to drill right
actually on a park would be--it just wouldn't happen.
Mr. Lamborn. Thank you for setting the record straight. I
would now like to recognize the Ranking Member for 5 minutes.
Mr. Cartwright. Thank you, Mr. Chairman. And I want to move
quickly, I want to get to each of you. I will start with you,
Ms. Epstein. From your testimony, it seems that you are
implying that under this bill, if any State has regulations
pertaining to hydraulic fracturing operations, that oil and gas
operations could occur on lands where such activities are
currently prohibited. Is that what you are saying?
Ms. Epstein. I am not a lawyer, but several attorneys have
looked at this and said that the language is sufficiently broad
and vague that perhaps it could be interpreted that if a State
has a rule on hydraulic fracturing, that would trump any sort
of Federal ability to oversee oil and gas----
Mr. Cartwright. So, for example----
Ms. Epstein [continuing]. Operations on Federal lands.
Mr. Cartwright [continuing]. If a State law would trump
Federal prohibitions on development in national parks, is it
possible that Arizona could authorize drilling and hydraulic
fracturing in the Grand Canyon?
Ms. Epstein. I don't know that. Arizona could do that. We
just heard a discussion about leasing in the Grand Canyon. If,
perhaps, there is a portion of a park that Congress felt ought
to be leased, it is possible. This is a theoretical
possibility, given the language that we have right now.
Mr. Cartwright. OK. Ms. Foerster, you state in your
testimony that Secretary Jewell may have misled this Committee
last week when she said there is no national standard for
hydraulic fracturing. You then cite voluntary participation in
NGO's, such as the Interstate Oil and Gas Compact Commission,
which actually have no authority to regulate as a reason for
this rebuttal.
In my humble opinion, sharing information and promotion of
best management practices, while important, is not a valid
substitute for inspection, enforcement, and required
construction standards. Does that IOGCC enforce any national
standard over Federal lands, as your testimony implies?
Ms. Foerster. Ranking Member Cartwright, through the Chair,
as a State regulator, I can't think of any one of us who would
refuse to take advantage of the best practices and guidelines.
And I can't think of a single State who doesn't do it and who
isn't already putting forth guidelines. We are all statutorily
required----
Mr. Cartwright. But it is voluntary, right?
Ms. Foerster. We are all statutorily required by our State
constitutions to do this job right, and this is the way we do
it.
Mr. Cartwright. But it is voluntary, right?
Ms. Foerster. Well, it is voluntary for every one of us to
do the job that it is statutorily required. And we can get
fired if we don't.
Mr. Cartwright. All right. Now, Ms. Craddick, in your
testimony you wrote, ``Commission records''--the Railroad
Commission in Texas records--``do not indicate a single
documented water contamination case associated with the process
of fracking in Texas.'' Did you write that?
Ms. Craddick. Yes, sir.
Mr. Cartwright. And I wanted to follow that up. You talked
about Parker County, Texas, and you talk about, oh, a study
that was done there by the Texas Railroad Commission that ended
up agreeing that there was natural gas in the water wells of
neighbors, but they concluded that the causation was an issue.
In other words, they agreed there was natural gas in the
water wells. And we all know from Pennsylvania what happens
when natural gas gets in water wells. That is what leads to a
video of people turning on the tap at home and they can light
their tap water on fire. That is what happens, right?
Ms. Craddick. Well, I would say, one, we know that in that
part of our State we have naturally occurring natural gas in
the water table already. And that was there before the----
Mr. Cartwright. We will get to that. But that is what leads
to those videos lighting your tap water on fire when there is
natural gas in your well water, right?
Ms. Craddick. Well, not in Texas, but potentially in
Pennsylvania, I guess.
Mr. Cartwright. OK. And the only thing that you came to
issue with was the causation. Where did that natural gas come
from that got in the water wells? Right?
Ms. Craddick. The causation was the main part of the case.
Yes, sir. And, frankly, if you already have naturally occurring
gas, which we all knew, that is a well-known fact in that part
of our State, that methane and natural gas exist in the water,
so we knew that.
Mr. Cartwright. I understand that was the conclusion of the
Texas Railroad Commission. But what I am asking you is to get
to that conclusion, did they use tracer elements? You know they
are talking about putting regulations in to have tracer
elements in the fracking process. That would just button down
the proof about where the natural gas came from that got in
people's water wells, wouldn't it?
Ms. Craddick. Not necessarily. There are other ways to
prove that. And one of the things that we did do in Texas is
prove it by the type of natural gas, and where the gas came
from, and where the type of gas you get out of a formation is
like a tracer in some respects. It is very specific to where
you get gas in different formations and----
Mr. Cartwright. So do you oppose tracer regulations?
Ms. Craddick. I think it is a potential tool, but I don't
think it should be mandated any place at this time.
Mr. Cartwright. All right. My time has expired.
Mr. Lamborn. OK, thank you. Representative Flores?
Mr. Flores. Thank you, Mr. Chairman. Ms. Foerster made a
comment a few minutes ago saying my bill may affect leasing
activities on Federal lands. I just want to assure everybody
that it doesn't.
During his opening testimony, the Ranking Member said that
tribal issues had been ignored by my bill. That is a fact. It
wasn't intentional. And we are going to work with members of
this Committee whenever we have a mark-up on this bill to
address that issue. And I think my friend from Oklahoma, Mr.
Mullin, has an amendment that he may introduce to fix that. So
we will address that.
Let's pull up chart one, if we can. This gives, I think, a
good overall view of what happens under a Federal regulatory
structure, versus a State structure. So I would like Ms.
Craddick, let's start with Commissioner Craddick, let's start
with you. What happens if the Federal Government--actually,
let's go to the third chart in this deck.
Let's go to this one. This shows how the two different
regulatory structures work in terms of permit processing time.
Let's assume that the BLM goes where they would ultimately like
to go, and that is have one standard for everybody. What would
happen to oil and gas operations in the State of Texas if we
wind up with this sort of Federal overlay?
Ms. Craddick. I think it would basically shut us down
because, one, we are doing it quickly and doing it well in
Texas. And, like I stated, we do by rulemaking, we don't do by
studies, we don't elaborate your permits. And what happens, if
you don't follow the rules in Texas, we don't allow you to
produce. And so, that is a real incentive, first and foremost,
to get our business done. And frankly, we have been doing it
well for a long time.
Mr. Flores. And, Ms. Foerster, I apologize for the
statement I said when I started this series. It was actually
what Ms. Epstein said about leasing, it wasn't you. I apologize
for that.
Ms. Epstein, can you address the same question?
Ms. Epstein. Yes, I can. Actually----
Mr. Flores. I am sorry, I meant Ms. Foerster.
Ms. Epstein [continuing]. I would like an opportunity, if I
could, as well.
Mr. Flores. For some reason I am getting my right and left
confused today. So, Ms. Foerster, can you address that?
Ms. Foerster. Well, I think Ms. Craddick pretty much summed
it up, but----
Mr. Flores. OK. Well, let's look at it this way. Under this
you said it would shut us down. And so, presumably we would
have a decrease in natural gas production. What would that do
to greenhouse gas emissions in the country? Ms. Foerster, we
will start with you.
Ms. Foerster. Oh. Natural gas production is--even if you
are strongly opposed to fossil fuels--natural gas is the
bridging fuel to green technology and green fuel. And we don't
have a green technology that is affordable right now and that
can replace oil and natural gas.
So, holy smokes, we need natural gas, because it is not a
big greenhouse producer. If we don't have natural gas, we are
going to use coal. And I apologize to the coal people in the
audience. But, relatively, the greenhouse effect is much----
Mr. Flores. Understand.
Ms. Foerster [continuing]. Less with natural gas.
Mr. Flores. Mr. Rogers, what would happen to the tax base
in Utah? And I realize most of your tax base belongs to the
Federal Government. But what would happen to the tax base in
Utah if you had this type of a Federal overlay on top of what
is a working State regulatory system?
Mr. Rogers. The impression I get from industry is that
people would tend to move out, because of the issue of trying
to get a Federal permit. Right now we are seeing similar
trends, where the people are moving away from Federal into
State lands.
But the problem is we have large tracts of lands with
tribal, private, and State. And the industry is not going to
just simply produce State and fee, they want the whole block.
And so, having that overlay of induced regulation for the
Federal Government, they tend to move elsewhere. So it would
reduce the tax base. And so it would be----
Mr. Flores. Ms. Craddick, what would happen to the tax base
for K-12 education in Texas under a Federal processing overlay,
Federal----
Ms. Craddick. Well, right now we have $12 billion worth of
taxes that the oil and gas industry pays. It is 25 percent of
our economy. And when I say $12 billion in taxes, that is
severance taxes, property taxes, sales taxes, our entire tax
base. So you would see a large reduction in our tax base, and
you would see our taxes increase, quite frankly, in the State.
And I think you would probably see companies move out. And
there are always other opportunities to go elsewhere in the
world. We have finite resources, but people are willing to
invest other places.
Mr. Flores. Ms. Epstein implied in her comments that each
of you are beholden to the oil and gas industry in your States.
Can each of you, in the next few seconds, tell me for whom you
work in your States? Ms. Foerster?
Ms. Foerster. Mr. Flores through the Chair, I work for the
people of Alaska.
Mr. Flores. OK. Commissioner Craddick?
Ms. Craddick. The people of Texas.
Mr. Flores. Mr. Rogers?
Mr. Rogers. The people of Utah, the State of Utah.
Mr. Flores. Thank you. I yield back.
Mr. Lamborn. I would like to now recognize Representative
Lowenthal.
Dr. Lowenthal. Thank you, Mr. Chair, and thank you to our
witnesses for being here today.
Well, I was very unhappy to see this bill introduced and
this hearing called. To be clear, I strongly oppose this
legislation. Instead, I think we should all want, and I know my
constituents want, a minimum level of public health and safety
for setting basic standards that all oil and gas operators
should comply with.
Now, again, I did not think that hydraulic fracturing is
inherently a bad thing. And natural gas has the potential, as
been pointed out, to be a low-carbon bridge fuel. But we have
to do it right.
Instead, this bill says that we shouldn't even try to put a
minimum floor for protecting human health and safety. The bill
says we should scrap any uniform public health and safety
assurances on Federal and Indian lands for hydraulic fracturing
all together.
And let me remind all the witnesses. We are talking here
about Federal Government setting public health and safety
standards on Federal lands that are owned and governed by
Federal law for the benefit and protection of all Americans. As
much as many of the witnesses' testimony seemed to forget,
these are not State lands.
But let me touch on one issue that I am concerned about in
the existing draft BLM fracking rule, and that is the long-term
integrity and the public accessibility of the fracking fluid
data in FracFocus.
I notice in both your written testimony and your oral
testimony today, Ms. Foerster, that you don't share my same
concerns. In fact, you think they are unwarranted.
Let me quote your prepared testimony. As you quote, ``I
would like to clear up one more misperception from the hearing.
Representative Lowenthal suggested that FracFocus is privately
run and may not be maintained. Although funded by the DOE and
industry, it is maintained by another State-funded NGO, the
Groundwater Protection Council, in association with the
Interstate Oil and Gas Compact Commission. Thus, the concerns
about it being around in the future--the concern is
unwarranted.''
Ms. Foerster, how can you be so certain that FracFocus will
exist in perpetuity? First, let me tell you that I have seen in
my many years in public service prior to this, being both a
city council member and a State legislator, that many NGO's
come and go. And you know what? Their Web site and their data
go with them.
I have also seen State funding come and go. And their
funding for NGO's come and go. So the fact that FracFocus is
partly funded by the State also does not allay my concerns.
So, I am wondering. Because we have been trying to get the
answer to this and maybe you know something special that the
BLM has not told us, Ms. Foerster, how can you be so certain
that FracFocus will exist in perpetuity?
Ms. Foerster. Representative Lowenthal through the Chair,
first, State funding does come and go, but so does Federal
funding. And the IOGCC has been around for 80 years, and as
long as States like Alaska, Texas, and Utah strongly support
it, it will continue to be around. And it funds and supports.
Dr. Lowenthal. Ms. Epstein, do you think this is a problem?
Ms. Epstein. I think it is an issue worth raising. We would
certainly rather see a national data base. There are a number
of reasons in addition to its perpetuity that a national data
base would be preferable, because there would be more ability
to be responsive to the public. FracFocus has a lot of issues
that haven't been well addressed, and the public----
Dr. Lowenthal. Yes, we will get back to that in just a sec.
Any other witnesses? Do you have anything? Yes.
Ms. Craddick. Well, I think one of the things that we have
done in Texas is say, in our statute, that if anything happens
to FracFocus you still have to continue reporting to the
Railroad Commission, and that information continues going to
us. So there is perpetuity----
Dr. Lowenthal. No, you just----
Ms. Craddick [continuing]. In our agency.
Dr. Lowenthal. You just mentioned ``if anything happens,''
so you realize it could happen.
Ms. Craddick. I don't think that it will. But if anything
happens----
Dr. Lowenthal. Thank you.
Ms. Craddick [continuing]. We have put a backstop in our
statute.
Dr. Lowenthal. Thank you. And Ms. Foerster, do you agree
with the BLM in the issue that was just raised by Ms. Epstein
and the DOE and previous expert witnesses before this Committee
that the data tools in FracFocus are insufficient for proper
data analysis?
Ms. Foerster. Representative Lowenthal through the Chair,
FracFocus was created to provide a resource that an individual
concerned entity could go to and find out the specific
details----
Dr. Lowenthal. Do you agree that the data----
Ms. Foerster [continuing]. And FracFocus was not developed
to allow Harvard to do sorting and collating of data. Harvard
has a lot of really smart IT people----
Dr. Lowenthal. Where else can one go for that data?
Ms. Foerster. I beg your pardon?
Dr. Lowenthal. Where else can one go?
Ms. Foerster. You can----
Dr. Lowenthal. Without a national data base.
Ms. Foerster. Oh. As far as a national data base? FracFocus
is that national data base.
Dr. Lowenthal. And it is insufficient?
Ms. Foerster. It is not sufficient for the purposes that--
--
Dr. Lowenthal. Thank you.
Ms. Foerster [continuing]. Harvard wants to use it for, but
it is for the individuals----
Dr. Lowenthal. I yield my time.
Mr. Lamborn. Thank you. Representative Mullin?
Mr. Mullin. Thank you, and thank you for my time. And,
Chairman Lamborn, if you would just give me just a second, I
know I am here to talk about sovereignty issues, but I have
just got to say this. From a guy that is from Oklahoma, I have
been in the plumbing industry my entire life. To hear my
colleagues from the opposite side bring up this scare tactic
about lighting tap water on fire, what a load of crap. I am
just going to say it as plain as that. And it is shameful that
they use such scare tactics.
It is funny how people comment on things that they don't
have, no offense, but a clue. And so I am just, I know that is
stepping away, but, Chairman, sorry, I had to get that off my
chest. I feel better now. So, anyway, my staff is probably just
really upset at me right now.
[Laughter.]
Mr. Mullin. I may not be invited back to this Committee.
All right.
Anyway, Chairman Lamborn, thank you for letting me join the
Subcommittee today. I applaud Representative Flores for his
work on this legislation. In Oklahoma, we know a thing or two
about fracking technology. We have been safely and effectively
fracking since 1949. In fact, we have 193,000 current active
wells in our State.
As a member of the Cherokee Nation and someone who
advocates for our Tribes, I do have some concerns with this
bill in its current form. In this bill, as written, Indian land
is not addressed. This Administration will continue to wrongly
treat Indian land like public land. When it comes to Federal
Indian policy, when we use the term ``Indian land,'' what we
mean is land held in trust for our Tribes. To put it in simpler
terms, Indians own this land. The public does not.
In this proposed hydraulic fracking rule, however, the
Administration treats Indian lands as though they are held for
the benefit of the public, as well as Indian beneficiaries.
This is contrary to the law. Unless Congress steps in, these
actions by this Administration will proceed to harm Indian
Tribes. Treating tribal land as public land is insulting, and a
clear violation of the agreement between our sovereign nations.
It is my hope that, as this bill continues to work its way
through the Committee process, that my colleagues will work
together to tighten up this proposal so we can assure the
sovereignty of our nations is respected. Mr. Chairman, I yield
back.
Mr. Lamborn. OK, thank you. And I can say, with
Representative Flores, as one of the two sponsors of the bill,
that we will work to address the important issue of tribal
lands. I thought we had already done so sufficiently, but we
are happy to go the next step to make sure that gets done.
Mr. Mullin. Thank you.
Mr. Lamborn. OK. I would now like to recognize
Representative Cramer.
Mr. Cramer. Thank you, Mr. Chairman, Ranking Member
Cartwright, and to the witnesses, for being here. I represent
the congressional district of North Dakota. And one of the
things I want to get into is this whole issue of a one-size-
fits-all national standard that we are talking about. And the
closest thing to a country at the witness table would be Texas,
of course.
And I say that because Texas is a big place. And I would
ask you, Commissioner, in Texas, do you have a statewide water
standard, or do you treat West Texas differently than East
Texas, in other words, do you have different hydrological sort
of understanding and methods and standards, depending on where
in Texas you are doing your work?
Ms. Craddick. Well, right now, I think our best example is
we do have a statewide casing rule that we have just passed.
However, we have 10 field offices in the State, and there is
lots of exemptions, because, you are correct, if you are in
East Texas, you have a lot of water over there. If you are in
West Texas, we have about 11 to 14 shale plays over there, and
there is a lot less water. In fact, we are in a drought in West
Texas. South Texas is very different, as well.
So, we do have allowances. We try to have a standard.
However, it is very difficult to have that across the board in
a State as big as we are. So I can't imagine how you do it in a
country as large as we are.
Mr. Cramer. Well, I think one of the great illustrations,
and thank you for this, but I think this Committee, the make-up
of this Committee, and certainly the make-up of this panel, is
Exhibit A, as to why we don't need a minimum standard.
And I am sorry that my friend from California had to leave,
because I think his point is an interesting point. He said
something to the effect that ``my constituents want this
minimum standard.'' And I don't doubt that they do. And, in
fact, they have one. It is called the California standard. And
for that they have high unemployment, they have a shrinking
economy, they have 50 percent dependance on foreign oil, 25
percent on oil from Saudi Arabia and Iraq, or Iran. They have
to ship it on big ships, and it has a greater carbon footprint
than if they piped it from North Dakota or Texas.
So, they have their standard. Good for them. Good for them.
But quite frankly, as I have said before, Mr. Chairman, I am
not really sure why we would want to have the Federal
Government impose its mediocrity on the excellence of our
States.
[Laughter.]
Mr. Cramer. I mean in North Dakota we meet all ambient air
quality standards. We have some of the cleanest water in the
country. We have some of the richest top soil in the world that
we use to feed hungry people. And, frankly, the sustainability
of that land is far, far more important to the people that have
been there for a couple of hundred years, and whose kin will be
there for a couple hundred more.
One other issue I want to explore just a little bit with
regard to EPA, I have noticed that there was reference to, I
think Ms. Epstein referenced to one of the questions something
to the effect, she said, ``Perhaps it could be interpreted.''
Perhaps it could be interpreted. In other words, the standard
is the possibility of things. As scientists, as engineers, do
we set regulations based on what is possible? Or do we do it as
the EPA is doing in their hydraulic fracturing investigation,
use what is possible as the standard to determine what we
should not allow?
That is a very different standard. Those are very different
standards. And I think, frankly, if we use what is possible as
a standard, as opposed to say what is likely, or at least test
the likelihood of it, we could stop pretty much everything from
happening. Because anything is perhaps possible.
Could somebody speak to that standard of possible, versus
likely, as a minimum standard? Perhaps, Ms. Foerster, you could
begin.
Ms. Foerster. Well, as an engineer on the panel, I guess we
put all of our regulations into place, not just in the oil and
gas industry. We do everything we do based on something that
has happened, or that science says could happen.
When man hit the planet, we didn't have regulations. When
this country came into place, we didn't have regulations. We
have slowly built up a number of regulations based on science,
based on facts, based on things that happen. And that is what
we have. If we put regulations in for things that might happen
or that we are worried could happen, I wouldn't have flown a
plane here today.
Mr. Cramer. Yes, that is a good point. Well, my time is
expiring, so I will just wrap up by saying, yes, you are right,
and we have been trying to add to the 10 Commandments and the
Constitution pretty regularly the last couple of hundred years,
and I don't think we have improved things much.
So, with that, my time has expired, Mr. Chairman.
Mr. Lamborn. OK, thank you. We will have 5 more minutes by
Representative Benishek, and then we will wrap up this hearing
so we can go vote
Dr. Benishek. Thank you, Mr. Chairman and Ranking Member
Cartwright. I appreciate the time. And thank you all for coming
to Washington to testify.
I have a question for Mr. Rogers. I have a great deal of
tribal land in my district, and I know Utah has a lot of tribal
land. And many Tribes would like to develop their land for oil
and gas production, and yet they are subject to Federal
regulations.
In your interaction with any of the Tribes, what are their
feelings versus the Federal versus the State regulatory
schemes?
Mr. Rogers. Right now, any kind of permitting done on a
tribal property is done through the BLM. And I know that the
Tribe has felt frustration of the length of the process, and
how it is not moving along fast enough. They see other lands
being permitted and drilled, and they are seeing they are sort
of left behind. And so they are hoping to change that. It is a
process that, we met with them and tried to help them and talk
them through how we could help them. But right now, they feel
frustration with the BLM process here right now.
Dr. Benishek. I understand their dealings with the Federal
Government are very frustrating. But do they feel if the State
had control of the regulatory process they would be in a better
position to develop their land?
Mr. Rogers. I can't speak for the Tribe. But certain
members of the Tribe and people I met with there feel that the
process that we have and the faster turnaround time would
certainly benefit them, compared to what they have right now.
And so they have alluded that they would like to learn from us
and do things similar to the way we are doing it, rather than
the way the Federal Government is doing it.
Dr. Benishek. Thanks. I want to follow up a little bit on
Mr. Cramer's thought, too. You know, Michigan, we have the
Antrim Shale, which is a large natural gas formation in my
district, and natural gas production is a huge employer in my
district. And he mentioned the differences in formations
around, even the State of Texas. But the State of Alaska has
different concerns, as well.
And Ms. Craddick, what is your opinion on this one-size-
fits-all regulatory plan for the State of Alaska? I mean your
formations are different than Texas. Explain to me a little bit
further why you don't feel a blanket plan is the answer.
Ms. Foerster. Which one of us were you asking?
Ms. Craddick. I am from Texas; do you want from the Alaska
or Texas----
Dr. Benishek. Oh, oh, I want the gal from Alaska, sorry.
Ms. Craddick. We will give you both, but----
Dr. Benishek. Sorry.
Ms. Foerster. Alaska?
Dr. Benishek. Yes.
Ms. Foerster. Well, Alaska has, as does every single State
that you talk to, we have things that make us different and
special.
One, we are probably the only State that deals with
permafrost, the first thousand feet or so of our land up on the
northern part of the State is frozen. So there are no fresh
ground waters, and there are engineering and geologic issues
that you have to address in how you drill and produce the wells
that deal with permafrost. Nobody else has that. A Federal
standard wouldn't address that.
We have some of the things that other States might be
concerned about, I know there is truck travel with the
increased activity. That is the least of our worries, because
most of our State doesn't even have roads. So, for us, it is
tundra travel, and it can only be done during the winter on
ice.
So, we are just rife with unique issues that we have to
address that aren't part of a national standard, and wouldn't
be appropriate in a national standard. But they are really
important to us. And we know about them, and we deal with them
every day, and that is why we are the best ones to regulate
them.
Dr. Benishek. Thank you. I will yield back, in view of the
votes. Thank you.
Mr. Lamborn. OK, thank you. Let me set the record straight.
On this legislation, besides the original sponsor,
Representative Flores, there are four cosponsors:
Representative Doc Hastings, who is the Chairman of the Full
Committee; myself; Representative Cynthia Lummis of Wyoming;
and Representative Henry Cuellar of Texas. This is a bipartisan
list of cosponsors that are happy to be on this legislation.
I want to say that I have chaired a lot of Subcommittee
meetings and I have sat in on a whole host of Committee
meetings over the last 6\1/2\ years. And of all of the witness
panels I have ever seen, this has been maybe one of the very
best. All four of you bring a lot to the witness table. You
have all been clear, passionate, articulate, persuasive. So I
just want to express appreciation for all four of you for being
here, giving of your time, and helping us understand this
important issue.
If any members of the Committee submit questions to you in
writing, I would ask that you would respond to those. And if
there is no further business, we stand adjourned.
[Whereupon, at 10:49 a.m., the Subcommittee was adjourned.]
[Additional material submitted for the record follows:]
[A letter submitted for the record by the Energy Producing
States Coalition (EPSC), follows:]
July 25, 2013
The Honorable John Boehner
Speaker of the U.S. House
U.S. House of Representatives
Washington, D.C. 20525
The Honorable Nancy Pelosi
Speaker of the House
House Democratic Leader
U.S. House of Representatives
Washington, DC 20515
Dear Speaker Boehner and Representative Pelosi:
As the Executive Committee of the Energy Producing States Coalition
(EPSC) and on behalf of the EPSC membership, we wish to express our
support of H.R. 2728, the ``Protecting States' Rights to Promote
American Energy Security Act,'' and encourage all Members of the House
of Representatives to support this important bill.
EPSC is a group of state legislators working together to develop
positions on matters of common interest to energy producing states and
advocate for sound public policy on issues that affect domestic energy
production and transmission. The group was founded in 2011 and
currently includes legislators representing 13 states including Alaska,
Arizona, Colorado, Idaho, Indiana, Mississippi, North Dakota, Ohio,
Oklahoma, Texas, Utah, Wisconsin and Wyoming.
EPSC believes that expanded domestic energy development is vital to
economic growth and job creation. In the midst of the recent economic
downturn, the energy sector led the economic recovery and job creation
and will likely continue to do so. The dramatic increase in domestic
natural resource development over the past few years has been largely
due to the innovative process of hydraulic fracturing. Currently,
states where this process takes place have established regulations that
developers are familiar with to ensure that necessary precautions are
taken to safely develop energy while at the same time protect the
environment. As legislators representing many of these states, as well
as other elected, community, business and labor officials, we are
committed to protecting our environment in addition to developing our
natural resources to provide needed economic growth and job creation.
Existing state regulations for hydraulic fracturing have proven
successful, providing strong environmental, health and safety
protections as well as regulatory certainty. As state legislators, we
understand the specific needs and concerns of our communities more so
than the federal government ever could. With different geologies among
the states, a standard federal regulation on hydraulic fracturing would
not be as effective as existing state by state regulations that take
into account state specific concerns.
The potential for delaying natural resource development would have
a serious negative impact on our states in terms of reduced employment,
economic growth and federal mineral revenues. Adding yet another layer
of regulation would increase federal spending and provide the federal
government with yet another excuse to reduce our state's share of
federal mineral revenues. Already this year, the Department of the
Interior has arbitrarily reduced state's share of federal mineral
revenues by nearly $110 million and adding additional federal
regulations will only limit state's share by reducing overall natural
resource development within our states on public lands.
H.R. 2728 allows those regulators who know the community best to be
the one's leading oversight of those communities. It would eliminate
the potential for duplicative regulations whose only goal would seem to
be to delay the production of natural resources on public lands.
Existing state regulations are already in place and as technology
improves, development should not be hindered by extended regulatory
delays brought on by the federal government.
Greater clarity about the ability to access and develop domestic
resources is necessary for long-term investment decisions. With so much
uncertainty due to regulatory adjustments advocated by Washington, DC,
potential investment in our states and workforce likely will be delayed
or even cancelled. In order for investment to remain in our
communities, the federal government must foster a more certain and
encouraging operating environment for energy producers. Approving H.R.
2728 would allow existing state hydraulic fracturing regulations to
remain the primary regulation entities must follow. The Department of
the Interior should recognize the value of and defer to existing state
regulations and focus on other more pressing issues currently facing
the Department.
In closing, EPSC urges both Republicans and Democrats to vote in
support of American energy development. Harnessing our domestic
resources is in the best interest of our nation's consumers. We look
forward to the House's action on this important measure.
Sincerely,
Representative Roger Barrus
Utah State Legislature
Chairman, EPSC
Speaker Thomas Lubnau
Wyoming Legislature
Past Chairman, EPSC
Senator Cathy Giessel
Alaska Legislature
Chairman-Elect, EPSC
______
[The web ink to ``STRONGER Guidelines'' issued by State
Review of Oil and Natural Gas Environmental Regulations
(STRONGER) submitted for the record by Catherine Foerster
follows:]
http://www.strongerinc.org/stronger-guidelines