[Federal Register Volume 64, Number 98 (Friday, May 21, 1999)]
[Proposed Rules]
[Pages 27744-27747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12747]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 147

[FRL-6347-5]


State of Alabama; Underground Injection Control (UIC) Program 
Revision; Withdrawal of Alabama's Class II UIC Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking, public hearing and public 
comment period on withdrawal.

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SUMMARY: EPA announces a proposed rulemaking, public hearing and public 
comment period regarding withdrawal of Alabama's Class II Underground 
Injection Control (UIC) Program from the State Oil and Gas Board of 
Alabama on the grounds that it does not regulate as ``underground 
injection,'' hydraulic fracturing associated with coalbed methane gas 
production. This program is currently approved by EPA under section 
1425 of the Safe Drinking Water Act (SDWA), as amended. This action is 
being taken in accordance with paragraph 2(a) of the Writ of Mandamus 
issued on February 18, 1999, by the U. S. Court of Appeals for the 
Eleventh Circuit and the requirements in 40 CFR 145.34(b)(2).
    By court order, the Regional Administrator for EPA's Region 4 
Office informed the State Oil and Gas Board of Alabama of specific 
areas of alleged noncompliance regarding its approved UIC Program. 
Specifically, EPA informed the State that, consistent with the Eleventh 
Circuit's ruling in LEAF v. EPA, hydraulic fracturing associated with 
coalbed methane gas production must be regulated as an ``underground 
injection'' under Alabama's UIC Program. Withdrawal of the Alabama 
program would, if completed, divest Alabama of primary enforcement 
authority under the SDWA to regulate Class II Wells, including 
hydraulic fracturing associated with coalbed methane gas wells within 
Alabama.
    EPA is proceeding at this time with this proposed rulemaking, 
notice of public hearing, and notice of public comment period in order 
to comply with paragraph 2(a) of the Writ of Mandamus because hydraulic 
fracturing associated with coalbed methane gas production is not 
currently regulated as underground injection (by permit or rule) 
pursuant to the EPA-approved underground injection control program for 
Alabama.
    At the public hearing, all interested persons shall be given the 
opportunity to make written or oral presentations on EPA's proposed 
action to withdraw approval of Alabama's Section 1425 approved Class II 
Program on the grounds of its failure to regulate as ``underground 
injection'' hydraulic fracturing associated with coalbed methane gas 
production. In addition, comments may be submitted as provided herein.

DATES: The public hearing will be held Wednesday, July 28, 1999, at 
5:30 p.m. Central Standard Time (CST).
    Written comments on EPA's proposed rule must be received by the 
close of business Thursday, August 5, 1999.

ADDRESSES: The public hearing will be held at the Tuscaloosa Public 
Library, Rotary Room, 1801 River Road, Tuscaloosa, Alabama 35401. Those 
interested should contact the Tuscaloosa Public library at (205) 345-
5820 for directions.
    Persons wishing to comment are invited to submit oral or written 
comments at the public hearing or submit written comments to the Ground 
Water/Drinking Water Branch, Ground Water & UIC Section, United States 
Environmental Protection Agency, Region 4, Sam Nunn Atlanta Federal 
Center, 61 Forsyth Street, S.W., Atlanta, GA 30303-8960, Attention: Mr. 
Larry Cole.
    Copies of documents regarding this action are available between 
8:30 a.m. and 4:00 p.m. Monday through Friday at the following 
locations for inspection and copying: Environmental Protection Agency, 
Region 4, 9th Floor Library, Sam Nunn Atlanta Federal Center, 61 
Forsyth Street, S.W., Atlanta, GA 30303-8960, PH: (404) 562-8190; and 
the State Oil & Gas Board of Alabama, 420 Hackberry Lane, Tuscaloosa, 
AL 35489-9780, PH: (205) 349-2852.

FOR FURTHER INFORMATION CONTACT: Ms. Nancy Marsh, at (404) 562-9450, or 
Mr. Larry Cole, at (404) 562-9474 or at the following address: 
Environmental Protection Agency, Water Management Division, Ground 
Water/Drinking Water Branch, Ground Water & UIC Section, Sam Nunn 
Atlanta Federal Center, 61 Forsyth Street, S.W., Atlanta, GA 30303-
8960.

SUPPLEMENTARY INFORMATION:

I. Background Information

    On August 2, 1982, EPA granted primary enforcement responsibility 
(primacy) for the Class II Underground Injection Control (UIC) Program 
under section 1425 of the Safe Drinking Water Act (SDWA) to the State 
of Alabama. The SDWA requires EPA to approve an effective in-place 
state UIC Program to protect Underground Sources of Drinking Water 
(USDW) from endangerment that could result from the improper injection 
of fluids associated with, among other things, oil and gas production. 
On May 3, 1994, the Legal Environmental Assistance Foundation, Inc. 
(LEAF) submitted a petition to EPA to withdraw Alabama's UIC Program 
asserting that the State was not regulating activities associated with 
coalbed methane gas production wells. Following EPA's May 5, 1995 
denial of the petition, LEAF sought review of this decision by the 
United States Court of Appeals for the Eleventh Circuit. On August 7, 
1997, in LEAF v. EPA, 118 F. 3d 1467 (11th Cir. 1997), the Court held 
as follows: hydraulic fracturing activities constitute ``underground 
injection'' under Part C of the Safe Drinking Water Act, id. at 1478; 
all underground injection is required to be regulated (by permit or 
rule), id. at 1474;

[[Page 27745]]

and hydraulic fracturing associated with coalbed methane gas production 
is not currently regulated under Alabama's UIC Program, id. at 1471. On 
February 18, 1999, the Eleventh Circuit issued a Writ of Mandamus 
directed at EPA to enforce its August 1997 decision. The Writ 
established a schedule for EPA to follow to determine whether, in light 
of the Court's holding regarding hydraulic fracturing, EPA should 
withdraw approval of Alabama's UIC Program.
    In response to the LEAF decision and the Writ of Mandamus, EPA must 
review Alabama's UIC Program in accordance with federal regulations at 
40 CFR 145.34(b). The timing of EPA's review and decision-making 
process must adhere to the time frame contained in the Writ of 
Mandamus. In order to comply with the Writ of Mandamus and 40 CFR 
145.34(b)(2), EPA must hold a public hearing no less than 60 days nor 
more than 75 days, following the publication of this notice of the 
hearing in the Federal Register. In order to comply with this time 
frame, Region 4 has decided to hold a public hearing on July 28, 1999, 
at the time and place indicated in the previous section. All interested 
persons shall be given the opportunity to make written or oral 
presentation at the public hearing on whether EPA should withdraw 
Alabama's Class II UIC Program on the ground that it does not regulate 
as ``underground injection'' hydraulic fracturing associated with 
coalbed methane gas production.

Alabama Class II UIC Section 1425 Program Deficiencies

    The State Oil & Gas Board of Alabama is not regulating hydraulic 
fracturing of coalbed methane gas production wells as ``underground 
injection'' (by permit or rule) pursuant to its EPA-approved 
underground injection control program.

Withdrawal Procedure

    Section 1425 of the SDWA and subsequent published EPA guidance does 
not contain express procedures for the withdrawal of a Section 1425 
Program. EPA has promulgated procedures for withdrawing a Section 1422 
Program at 40 CFR 145.34(b). In lieu of different express regulatory 
provisions for the withdrawal of Section 1425 Programs and in light of 
the Court's Writ of Mandamus, EPA is following the procedures at 40 CFR 
145.34(b) in proposing to withdraw Alabama's Section 1425 Program.
    On March 19, 1999, the Regional Administrator of EPA Region 4 
notified the Supervisor of the State Oil and Gas Board of Alabama of 
EPA's decision to initiate the process to withdraw approval of the 
Alabama UIC Program. The Regional Administrator's notice to the 
Supervisor of the State Oil and Gas Board of Alabama constituted the 
first step in the withdrawal process. According to the procedures 
established in 40 CFR 145.34(b) and the Writ of Mandamus, the State was 
given 30 days after the notice to demonstrate that its UIC Program is 
in compliance with the SDWA and 40 CFR part 145 (i.e., that hydraulic 
fracturing associated with methane gas production is regulated as 
``underground injection,'' by permit or rule, pursuant to the EPA 
approved Underground Injection Control Program).
    The Supervisor of the State Oil and Gas Board responded to the 
Regional Administrator's letter by a letter dated April 15, 1999. The 
response indicated that on March 5, 1999, the State Oil & Gas Board of 
Alabama promulgated rules which regulate hydraulic fracturing of 
coalbed methane gas wells by rule authorization. These new regulations 
were added as an Emergency Order and sent to the Alabama Legislative 
Reference Service under Section 41-22-5 of the Code of Alabama (1975). 
They became effective on March 11, 1999, for a period of no longer than 
120 days. The State Oil & Gas Board expects the rules to be made 
permanent prior to the expiration of the Emergency Order. To become 
part of the EPA approved UIC Program, Alabama should submit a revised 
UIC Program package containing new regulations to EPA for review and 
approval. These new regulations must protect current and potential 
USDWs from endangerment.
    The State will not have fully corrected the identified program 
deficiencies consistent with the requirements of the Writ of Mandamus 
until a revised Alabama Section 1425 Program has been approved by EPA. 
Therefore, in accordance with 40 CFR 145.34(b)(2), the Regional 
Administrator of Region 4 is soliciting comments on the appropriateness 
of withdrawing the Class II UIC Program from the State Oil & Gas Board 
of Alabama on the grounds that it does not, as currently approved by 
EPA, regulate as ``underground injection'' hydraulic fracturing 
associated with methane gas production. This action constitutes the 
second step in the withdrawal process set out in 40 CFR 145.32(b) and 
the Writ of Mandamus. Following the public hearing and close of the 
public comment period, EPA will fully evaluate the record in this 
matter. If EPA determines that the State is still not in compliance, 
the Administrator will notify the State.
    Within 90 days of receipt of that notification, the State of 
Alabama must fully implement any required remedial actions regarding 
regulating hydraulic fracturing or the State's Class II UIC Program 
will be withdrawn. Class II program approval will, however, not be 
withdrawn if Alabama can demonstrate that hydraulic fracturing 
associated with methane gas production is regulated as ``underground 
injection'' (by permit or rule) pursuant to the EPA approved 
underground injection control program. If EPA withdraws approval of the 
Alabama Class II Program pursuant to the requirement of 40 CFR 
145.32(b) and the Writ of Mandamus, it will propose and promulgate a 
federal program for Class II wells located in Alabama, including 
hydraulic fracturing associated with methane gas production.
    EPA is providing a public comment period regarding withdrawal of 
the Alabama Class II UIC Program for failure to adequately regulate 
hydraulic fracturing associated with methane gas production as 
``underground injection.'' Public comments received on or before close 
of business on August 5, 1999, will be considered in EPA's final 
evaluation of the State of Alabama Section 1425 Program. Comments may 
be submitted at the public hearing to be held on July 28, 1999, at 5:30 
p.m., CST in the Rotary Room of the Tuscaloosa Public Library located 
at 1801 River Road, Tuscaloosa, Alabama 35401.

II. Regulatory Impact/Administrative Requirements

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:

    (1) Have an annual effect on the economy of $100 million or more 
or adversely affect in a material way the economy, productivity, 
competition, jobs, the environment, public health or safety, or 
state, local, or tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.


[[Page 27746]]


    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.

B. Executive Order 13045: Children's Health Protection

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997), applies 
to any rule that:
    (1) Is determined to be ``economically significant'' as defined 
under Executive Order 12866; and,
    (2) Concerns an environmental health or safety risk that EPA has 
reason to believe may have a disproportionate effect on children.
    If the regulatory action meets both criteria, the Agency must 
evaluate the environmental health or safety effects of the planned rule 
on children, and explain why the planned regulation is preferable to 
other potentially effective and reasonably feasible alternatives 
considered by the Agency.
    EPA interprets E.O. 13045 as applying only to those regulatory 
actions that are based on health or safety risks, such that the 
analysis required under Section 5-501 of the Order has the potential to 
influence the regulations. This rule is not subject to E.O. 13045 
because it is not economically significant as defined in E.O. 12866. 
Further, this rule does not establish an environmental standard 
intended to mitigate health or safety risks. This rule proposes to 
withdraw federal approval of Alabama's UIC Class II Program in response 
to a court order to do so. However, the requirements of the Alabama UIC 
Class II Program relating to underground injection will remain in 
effect as a matter of State law. Additionally, if EPA withdraws the 
State approved Class II UIC Program, EPA will promulgate a replacement 
federal program. Therefore, this proposed rule does not present any 
foreseeable effect on children's health and well being.

C. Paperwork Reduction Act

    There are no information collection requirements established by 
this proposed rule. Therefore, the Paperwork Reduction Act does not 
apply.

D. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., 
as amended by the Small Business Regulatory Enforcement Fairness Act 
(SBREFA), EPA generally is required to conduct a regulatory flexibility 
analysis describing the impact of the regulatory action on small 
entities as part of rulemaking. However, under section 605(b) of the 
RFA, if EPA certifies that the proposed rule will not have a 
significant economic impact on a substantial number of small entities, 
EPA is not required to prepare a regulatory flexibility analysis. 
Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 
605(b), the Regional Administrator certifies that this proposed rule 
will not have a significant economic impact on a substantial number of 
small entities. The proposed rule merely proposes to withdraw federal 
approval of the UIC Program for Class II wells in the State of Alabama, 
except for those in Indian lands. Withdrawal of such approval does not 
change the regulatory requirements that currently apply to such wells 
as a matter of State law, nor does it add additional federal regulatory 
requirements.

E. Executive Order 12875: Enhancing the Intergovernmental Partnership

    Under Executive Order 12875, EPA may not issue a regulation that is 
not required by statute and that creates a mandate upon a state, local 
or tribal government, unless the federal government provides the funds 
necessary to pay the direct compliance costs incurred by those 
governments or EPA consults with those governments.
    If EPA complies by consulting, Executive Order 12875 requires EPA 
to provide to the Office of Management and Budget a description of the 
extent of EPA's prior consultation with representatives of affected 
state, local and tribal governments, the nature of their concerns, any 
written communications from the governments, and a statement supporting 
the need to issue the regulation. In addition, Executive Order 12785 
requires EPA to develop an effective process permitting elected 
officials and other representatives of state, local and tribal 
governments ``to provide meaningful and timely input in the development 
of regulatory proposals containing significant unfunded mandates.''
    Today's proposed rule does not create a mandate on a state, local 
or tribal government. The proposed rule does not impose any enforceable 
duties on these entities. The rule merely proposes to withdraw federal 
approval of Alabama's UIC Class II Program. However, the requirements 
of that Program relating to underground injection will remain in effect 
as a matter of State law. Accordingly, the requirements of Section 1(a) 
of Executive Order 12875 do not apply to this proposed rule.

F. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for federal agencies to assess the 
effects of their regulatory actions on state, local and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement including a cost-benefit 
analysis for proposed and final rules with ``federal mandates'' that 
may result in expenditures to state, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year.
    Before promulgating an EPA rule for which a written statement is 
needed, section 205 of the UMRA generally requires EPA to identify and 
consider a reasonable number of regulatory alternatives and adopt the 
least costly, most cost-effective or least burdensome alternative that 
achieves the objectives of the proposed rule. The provisions of section 
205 do not apply when they are inconsistent with applicable law. 
Moreover, section 205 allows EPA to adopt an alternative other than the 
least costly, most cost-effective or least burdensome alternative if 
the Administrator publishes with the final rule an explanation why that 
alternative was not adopted.
    Before EPA establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments, it must have developed under section 203 of the UMRA a 
small government agency plan. The plan must provide for notifying 
potentially affected small governments, enabling officials of affected 
small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant federal 
intergovernmental mandates, and informing, educating, and advising 
small governments on compliance with the regulatory requirements.
    Today's proposed rule contains no federal mandates (under the 
regulatory provision of Title II of the UMRA), for state, local or 
tribal governments, or the private sector. The proposed rule imposes no 
enforceable duty on any state, local or tribal governments or the 
private sector. Thus, today's proposed rule is not subject to the 
requirements of sections 202 and 205 of the UMRA. EPA has also 
determined that this proposed rule contains no regulatory requirements 
that might significantly or uniquely affect small governments. Thus, 
today's proposed rule is not subject to the requirements of section 203 
of UMRA.

G. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement

[[Page 27747]]

Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 
note) directs EPA to use voluntary consensus standards in its 
regulatory and procurement activities unless to do so would be 
inconsistent with applicable law or otherwise impractical. Voluntary 
consensus standards are technical standards (e.g., material 
specifications, test methods, sampling procedures, business practices) 
that are developed or adopted by voluntary consensus standard bodies. 
The NTTAA directs EPA to provide Congress, through OMB, explanations 
when the Agency decides not to use available and applicable voluntary 
consensus standards.
    This proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any voluntary consensus 
standards.

H. Executive Order 13084: Consultation and Coordination with Indian 
Tribal Governments

    Under Executive Order 13084, EPA may not issue a regulation that is 
not required by statute, that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or EPA consults with those 
governments.
    If EPA complies by consulting, Executive Order 13084 requires EPA 
to provide to the Office of Management and Budget, in a separately 
identified section of the preamble to the proposed rule, a description 
of the extent of EPA's prior consultation with representatives of 
affected tribal governments, a summary of the nature of their concerns, 
and a statement supporting the need to issue the regulation. In 
addition, Executive Order 13084 requires EPA to develop an effective 
process permitting elected and other representatives of Indian Tribal 
governments ``to provide meaningful and timely input in the development 
of regulatory policies on matters that significantly or uniquely affect 
their communities.''
    Today's proposed rule does not significantly or uniquely affect the 
communities of Indian Tribal governments. This proposed rule does not 
affect the UIC Program on Indian Tribal lands. Accordingly, the 
requirements of section 3(b) of Executive Order 13084 do not apply to 
this proposed rule.

List of Subjects in 40 CFR Part 147

    Environmental protection, Intergovernmental relations, Water 
supply.

    Dated: May 13, 1999.
John H. Hankinson, Jr.,
Regional Administrator, Region 4.

    For the reasons set out in the preamble, 40 CFR part 147 is 
proposed to be amended as follows:

PART 147--[AMENDED]

    1. The authority citation for part 147 continues to read as 
follows:

    Authority: 42 U. S. C. 300h; and 42 U. S. C. 6901 et seq.

Subpart B--Alabama


Sec. 147.50  [Removed]

    2. Section 147.50 is removed.

[FR Doc. 99-12747 Filed 5-18-99; 11:31 am]
BILLING CODE 6560-50-P