[Federal Register Volume 64, Number 204 (Friday, October 22, 1999)]
[Proposed Rules]
[Pages 56986-56991]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27516]


-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 147

[FRL-6461-5]


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: EPA announces a proposed rulemaking, public hearing and public 
comment period regarding approval of Alabama's Class II Underground 
Injection Control (UIC) Program Revision to regulate as ``underground 
injection'' hydraulic fracturing associated with coal bed methane gas 
production. Section 1422(b)(4) of the Safe Drinking Water Act (SDWA) 
requires that prior to approving, disapproving, or approving in part a 
State's UIC program, the Administrator provide opportunity for a public 
hearing. This notification advises the public of the date, time and 
location of the public hearing. The public comment period and public 
hearing will provide EPA with information and public opinion necessary 
to approve, disapprove, or approve in part under provisions of section 
1425 of the SDWA, the revision application from the Alabama Oil and Gas 
Board to regulate hydraulic fracturing of coal beds. The proposed 
rulemaking is the Agency's preliminary determination to approve 
revision to Alabama's Class II UIC program administered by the State 
Oil and Gas Board.

DATES: Written comments on EPA's proposed rule approving the Alabama 
Class II UIC Program Revision must be received by the close of business 
Monday, November 29, 1999. A public hearing will be held Monday, 
November 22, 1999, at 5:00 p.m. Central Standard Time (CST) to discuss 
approval of the Alabama Class II UIC Program revision to regulate 
hydraulic fracturing of coal beds. Registration for the hearing will 
begin at 4:00 pm; however, speakers may also register prior to the 
meeting.

ADDRESSES: Persons wishing to comment upon or object to any aspects of 
this proposed approval action of Alabama's revision to its Class II 
Program 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 for 
inspection and copying between 8:30 a.m. and 4:00 p.m. Monday through 
Friday at the following locations: 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.
    The public hearing will be held at the University of Alabama in the 
Sellers Auditorium of the Bryant Conference Center, 240 Bryant Drive, 
Tuscaloosa, Alabama 35401. Those interested should contact the Bryant 
Conference Center at (205) 348-8751 for directions.

FOR FURTHER INFORMATION CONTACT: 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 
coal bed 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; and hydraulic fracturing associated with coal bed 
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 ruling regarding hydraulic fracturing, EPA 
should withdraw approval of Alabama's UIC Program. The Writ also stated 
that once hydraulic fracturing associated with methane gas production 
is regulated as underground injection by the State of Alabama and the 
program revision is approved by EPA, the withdrawal proceedings may 
cease. To date, EPA has been following the Writ of Mandamus withdrawal 
schedule pending approval of Alabama's program revision.

Withdrawal Activities to Date

    Section 1425 of the SDWA and subsequent published EPA guidance 
documents do 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 light of the Court's Writ 
of Mandamus, which essentially tracks the withdrawal procedures in 
section 145.34(b), EPA followed these procedures 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

[[Page 56987]]

``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 coal bed 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, and indicated 
that the State Oil & Gas Board rule would be made permanent prior to 
the expiration of the Emergency Order.
    By letter dated May 18, 1999, the Regional Administrator notified 
the Supervisor of the State Oil and Gas Board that, in order for the 
regulation of hydraulic fracturing for coal bed methane to become part 
of an EPA approved UIC program, Alabama should submit a revised UIC 
program package containing new regulations to EPA for review and 
approval. That action constituted the second step in the withdrawal 
process set out in 40 CFR 145.34(b) and the Writ of Mandamus.
    On May 21, 1999, Region 4 announced in the Federal Register a 
public hearing in the Tuscaloosa Public Library on July 28, 1999 giving 
the public the opportunity to comment on withdrawal of Alabama's Class 
II Underground Injection Control Program. Region 4 received written and 
oral comments at the hearing, but the hearing was canceled prior to 
conclusion by the Tuscaloosa Fire Marshall due to overcrowding. In the 
August 10, 1999, Federal Register, Region 4 rescheduled the July 28, 
1999 public hearing for September 9, 1999, and extended the public 
comment period until September 16, 1999, allowing the public the 
opportunity to make comments concerning withdrawal of Alabama's Class 
II UIC program. At the September 9, 1999, public hearing, Region 4 
received comments from concerned citizens, the Legal Environmental 
Assistance Foundation, industry representatives, and the Alabama 
Chapter of the Sierra Club. Comments obtained from both of those public 
hearings and written comments received until the close of business on 
September 16, 1999, are part of Region 4's administrative record on the 
proposed withdrawal of Alabama's UIC program.
    EPA received a wide range of comments. Some considered Alabama's 
hydraulic fracturing rule, originally adopted by the Oil and Gas Board 
in March 1999, and revised by the Board in August 1999, adequate to 
protect underground sources of drinking water; others did not. Some 
comments at the public hearing reflected environmental concerns from 
hydraulic fracturing activities beginning in September of 1989. Other 
comments recommended adding a tracer to the hydraulic fracturing fluid 
in order to verify if the fracturing fluids are endangering USDWs. Some 
commented that potential over-regulation of the coal bed industry could 
place an undue economic burden on industry. Written and oral comments 
received at both public hearings, plus written comments received during 
the public notice comment period were reviewed by EPA Region 4 after 
the public notice comment period ended on Thursday, September 16, 1999.
    On September 23, 1999, the Regional Administrator of Region 4 
notified the Supervisor of the State Oil and Gas Board of Alabama's 
Class II UIC program's continuing specific deficiencies and necessary 
remedial actions. That action constituted the third step in the 
withdrawal process set out in 40 CFR 145.34(b). If the State of 
Alabama's program revision correcting the deficiencies is not approved 
by EPA through rulemaking by December 22, 1999, the Writ of Mandamus 
directs EPA to withdraw approval of Alabama's UIC Program.

Alabama Class II UIC Program Revision

    The Safe Drinking Water Act required EPA to implement a regulatory 
program to prevent underground injection activities from endangering 
Underground Sources of Drinking Water (USDWs) which are aquifers 
capable of yielding a significant amount of drinking water containing 
less than 10,000 milligram per liter (mg/liter) of total dissolved 
solids. The State of Alabama currently has primary responsibility for 
implementing a UIC program preventing endangerment of USDWs. The 
Alabama Oil and Gas Board has held primary enforcement authority for 
the Class II UIC program since the program was originally approved by 
EPA pursuant to section 1425 of the SDWA on August 2, 1982. The 
application for program revision submitted by the Alabama Oil and Gas 
Board on October 6, 1999, requests that EPA approve the program 
revision for primary administrative and enforcement authority for the 
regulation of hydraulic fracturing of coal beds on all lands subject to 
the State's police power and taxing authority and all lands owned or 
under the jurisdiction of the United States, except those wells located 
on Indian lands as defined in 40 CFR 144.3. The application includes a 
program description, copies of all applicable rules and forms, a 
statement of legal authority and appropriate memoranda of agreement.
    EPA is proposing to approve Alabama's UIC program revision 
addressing hydraulic fracturing pursuant to section 1425 of the SDWA. 
Section 1425 provides that EPA may approve that portion of a State's 
UIC program which relates to ``any underground injection for the 
secondary or tertiary recovery of oil or natural gas'' if the program 
meets certain requirements of section 1421 and ``represents an 
effective program (including adequate recordkeeping and reporting) to 
prevent underground injection which endangers drinking water sources.'' 
EPA interprets section 1425 broadly as establishing an alternative 
method (in lieu of the showing required by section 1422(b)(1)(A)) for a 
State to obtain primary enforcement responsibility for those portions 
of its UIC program related generally to the recovery and production of 
oil and natural gas (46 FR 27333 (May 19, 1981)). Accordingly, EPA is 
proposing to approve the hydraulic fracturing component of Alabama's 
UIC program under section 1425.
    Although section 1425 of the SDWA does not specifically refer to 
hydraulic fracturing for methane production, it is reasonable to assume 
that Congress would have intended that approval of State underground 
injection programs relating to this type of gas production activity 
would fall within the more flexible approval standards Congress 
established for oil- and gas-related injection programs in section 
1425. The legislative history of section 1425 indicates that Congress 
intended it to cover the same set of underground injection practices 
related to oil and gas production as had been covered by section 1422, 
i.e., all of them. Nothing suggests that Congress, in creating an 
alternative demonstration for ``secondary or tertiary recovery''-
related injection under section 1425, was leaving behind another 
undefined category of oil- and gas-related injection activities for 
approval exclusively pursuant to section 1422. Congress' use of the 
terms ``secondary or tertiary recovery'' in section 1425 in all 
likelihood reflects nothing more than Congress' belief that those terms 
covered all relevant oil- and gas-related

[[Page 56988]]

injection activities. To conclude otherwise would require States to 
seek approval for their oil- and gas-related UIC program under both 
section 1425 and 1422. This would be both inefficient and inconsistent 
with Congress' expressed admonition that EPA not prescribe unnecessary 
requirements related to oil- and gas-related injection (42 U.S.C. 
300h(b)(2)).
    Pursuant to the State of Alabama's authority under section 9-17-
6(c)(3) and (13) of the Code of Alabama and in accordance with the 
Eleventh Circuit's LEAF decision, the State Oil and Gas Board of 
Alabama adopted on August 20, 1999, a rule to regulate hydraulic 
fracturing of coal beds. This rule, submitted to EPA along with 
Alabama's program revision package, embodies the State's requirements 
for such fracturing activities. In summary, the new rule (Rule 400-4-
5-.04) establishes standards and procedures which the State Oil and Gas 
Board of Alabama will apply when evaluating proposals to hydraulically 
fracture coal beds. Among other things, Rule 400-4-5-.04 of the State 
Oil and Gas of Alabama Administrative Code specifically provides that 
each coal bed shall be hydraulically fractured so as not to endanger 
any underground source of drinking water (USDW), and coal beds shall 
not be hydraulically fractured in a manner that allows the movement of 
fluid containing any contaminant into a USDW, if the presence of that 
contaminant may cause a violation of any applicable primary drinking 
water regulation under 40 CFR part 141 or otherwise adversely affect 
the health of persons. It is EPA's interpretation that this is 
consistent with part C of the Safe Drinking Water Act.
    The rule establishes requirements that, should hydraulic fracturing 
of coal bed operations occur in a USDW, the operator must certify that 
the injectate meets drinking water standards before approval for 
injection can be obtained. Additional requirements pertaining to the 
depth of the hydraulic fracturing operation and geologic confining 
strata were established to prevent impacts on private and public 
drinking water supplies. For example, hydraulic fracturing of coal beds 
is prohibited at depths of less than 300 feet from the surface. 
Fracturing at lower depths also requires additional demonstrations 
including delineation of drinking water use around the fracturing 
operation and assurances for the prevention of upward movement of 
fluids. For every proposal to hydraulically fracture a coal bed, 
written approval from the Oil and Gas Supervisor must be obtained 
before the operation can commence.
    EPA Region 4 believes that Rule 400-4-5-.04's requirements, 
together with the additional elements of Alabama's revision package, 
represent an effective program to prevent underground injection which 
endangers drinking water sources. Section 1425 requires a State to 
demonstrate that its Underground Injection Control (UIC) Program meets 
the requirements of section 1421(b)(1)(A) through (D) and represents an 
effective program (including adequate record keeping and reporting) to 
prevent underground injection which endangers drinking water sources. 
Accordingly, section 1425 requires that a State, in order to receive 
approval under the optional demonstration, makes a successful showing 
that its program meets the following five conditions:

    (1) Section 1421(b)(1)(A) requires that an approvable State 
program prohibit any underground injection in such State which is 
not authorized by permit or rule.
    (2) Section 1421(b)(1)(B) requires that an approvable State 
program shall require that: (i) the applicant for a permit must 
satisfy the State that the underground injection will not endanger 
drinking water sources; and (ii), no rule may be promulgated which 
authorizes any underground injection which endangers drinking water 
sources.
    (3) Section 1421(b)(1)(C) requires that an approvable State 
program include inspection, monitoring, record keeping, and 
reporting requirements.
    (4) Section 1421(b)(1)(D) requires that an approvable State 
program apply to: (i) underground injection by Federal agencies; and 
(ii), underground injection by any other person, whether or not 
occurring on property owned or leased by the United States.
    (5) Section 1425(a) requires that an approvable State program 
represent an effective program to prevent underground injection 
which endangers drinking water sources.

    EPA Region 4 has concluded that the current Rule 400-4-5-.04, 
(Protection of Underground Sources of Drinking Water during the 
Hydraulic Fracturing of Coal Beds), along with the rest of Alabama's 
revision package, satisfies the above five conditions of section 1425 
for approving a State's program. The basis for our conclusion for each 
condition is as follows:
    (1) Rule 400-4-5.-04 (4) states, ``Coal beds shall not be 
hydraulically fractured until the written approval of the Supervisor is 
obtained.'' This satisfies the requirement of section 1421(b)(1)(A).
    (2) Section 1421(b)(1)(B)(i) is satisfied because, while the 
Alabama regulation does not establish a permit requirement, Rule 400-4-
5-.04(4) states, ``Coal beds shall not be hydraulically fractured until 
the written approval of the Supervisor is obtained.'' Section 
1421(b)(1)(B)(ii) is also satisfied because Rule 400-4-5-.04(2) states, 
``Coal beds shall not by hydraulically fractured in a manner that 
allows the movement of fluid containing any contaminant into a USDW, if 
the presence of that contaminant may: (a) cause a violation of any 
applicable primary drinking water regulation under 40 CFR part 141; or 
(b) otherwise adversely affect the health of persons.''
    (3) Section 1421(b)(1)(C) is satisfied since Rule 400-4-5-.04 
includes inspection, monitoring, recordkeeping and reporting 
requirements. The State rule provides adequate inspection of a 
hydraulic fracturing operation in accordance with section 
1421(b)(1)(C). The last sentence of Rule 400-4-5-.04(4) states that 
``In accordance with Rule 400-4-3-.01(2), the Supervisor may send a 
duly authorized representative to witness the fracturing operation.'' 
Additionally, Rule 400-4-5-.04(5)(c)(3), which covers coal beds in the 
depth interval 300 to 749 feet states that, ``A representative of the 
Board shall conduct a field reconnaissance within a \1/4\-mile radius 
of the coalbed methane gas well to determine the location of any 
additional fresh-water supply wells that may not be identified in the 
previous described documents.''
    The rule also provides for adequate monitoring of fracturing 
operations. Rule 400-4-5-.04(3) states that, ``the operator shall 
certify in writing to the Supervisor that the proposed fracturing 
operation will not occur in a USDW,'' and provide evidence supporting 
how the determination was made. Otherwise, if the proposed fracturing 
occurs in a USDW, the operator shall certify in writing to the 
Supervisor that the mixture of fluids to be used to hydraulically 
fracture the coal beds does not exceed the maximum contaminant levels 
contained in 40 CFR part 141, subpart B and G. EPA believes these 
requirements of the Alabama State Rule adequately fulfill the 
monitoring requirements of an effective State program.
    The rule provides for adequate reporting requirements. In addition 
to Rule 400-4-5-.04(3) mentioned above, Rule 400-4-5-.04(5)(a)(3) 
requires the submittal of Form OGB-7, Well Record and Completion 
Report, for casing and cementing specifications. If the coal bed 
methane gas well is in a state of completion or recompletion, and Form 
OGB-7 is not required to be filed with the Board prior to the 
fracturing operation, then the Supervisor shall require the operator to 
submit a wellbore schematic showing the specifications of the casing 
and cementing program.

[[Page 56989]]

    The rule also provides for adequate recordkeeping. Rule 400-4-
5-.04(7) requires that operators maintain records until such time that 
the coalbed methane gas well has been plugged for permanent 
abandonment, but not less than three (3) years following completion of 
the fracturing operation.
    (4) Section 1421(b)(1)(D) is satisfied since the State's Rule and 
Alabama's existing UIC Program applies to all relevant entities. The 
Alabama Oil and Gas Board has the authority to regulate operators who 
hydraulically fracture coal beds. Rule 400-1-1.03(32) defines operator 
as ``any person who, duly authorized, is in charge of the development 
of a lease or the operation of a producing well, and, in addition, for 
the purpose of assigning responsibility, may also be the person 
indicated as operator by the most current records of the Board.'' Rule 
400-1-1-.03(34) defines person as ``any natural person, firm, 
corporation, association, partnership, joint venture, receiver, 
trustee, guardian, executor, administrator, fiduciary, representative 
of any kind, or any other group acting as a unit, and the plural as 
well as the singular number.'' Therefore, this program revision applies 
to underground injection by Federal agencies and underground injection 
by any other person, whether or not occurring on property owned or 
leased by the United States.
    (5) Finally, the requirement of section 1425 is met because the 
current revision application package and Rule 400-4-5-.04, represents 
an effective program under section 1425(a) to prevent underground 
injection which endangers drinking water sources. State Rule 400-4-
5-.04 (2) states, ``Coal beds shall not be hydraulically fractured in a 
manner that allows the movement of fluid containing any contaminant 
into a USDW, if the presence of that contaminant may: (a) cause a 
violation of any applicable primary drinking water regulation under 40 
CFR part 141; or (b) otherwise adversely affect the health of 
persons.'' This statement embodies and is consistent with the 
``endangerment'' standard in section 1421(d)(2) of the SDWA. This 
statement provides the basic prohibition against hydraulic fracturing 
which endangers drinking water sources.
    The State has also adopted a number of regulatory provisions 
preventing underground injection which endangers drinking water 
sources. State Rule 400-4-5-.04(3) states, ``The operator shall certify 
in writing to the Supervisor that the proposed fracturing operation 
will not occur in a USDW. Evidence that supports how the determination 
was made shall accompany such certification and be acceptable to the 
Supervisor. Otherwise, the operator shall certify in writing to the 
Supervisor that the mixture of fluids to be used to hydraulically 
fracture the coal beds does not exceed the maximum contaminant levels 
contained in 40 CFR part 141, subpart B and G.'' This provision 
requires a certification that fracturing fluids will not be injected 
into a USDW or establishes specifications for the specifications for 
the quality of the injectate should the injection occur into the USDW. 
Specifically, it states that the injectate must meet drinking water 
standards. Therefore, EPA concludes that adequate provisions have been 
established to prevent endangerment from hydraulic fracturing 
operations.
    State Rule 400-4-5-.04(5)(a)5 states, ``A geophysical log, or gamma 
ray log, shall be evaluated to determine the type and thickness of 
strata overlying the uppermost coal bed to be fractured. Impervious 
strata, such as shale, must overlie the uppermost coal bed and be of 
sufficient thickness and consistency to serve as a barrier to the 
upward movement of fluids. Otherwise, a fracturing proposal will be 
denied.'' This provision will ensure that underground injection will 
not cause movement of fluids from the fracturing zone, which may be of 
lesser quality, into upper underground sources of drinking water. 
Should injection occur below the USDW, where injectate quality will not 
be addressed by 400-4-5-.04(3), this provision prohibits the upward 
movement of injectate and other formation fluids into the USDW. The 
quality (measured as total dissolved solids) of aquifers in the 
formations where hydraulic fracturing of coal beds occurs generally 
decreases as depth of the aquifer increases (Passion et al, 1991; 
Passion and Hinkle, 1997). In other words, if injection does not occur 
in a USDW, it is probably below the lowermost USDW. Therefore, 
injection occurring below the USDW is prevented from moving upwards 
into the USDW and downward movement would not be towards a USDW. EPA 
concludes that adequate provisions have been established to prevent 
endangerment from movement of injection fluids and formation fluids 
into a USDW.
    Additional protection is afforded because operators will be 
required to follow the requirements of Rule 400-4-3-.02, Casing 
Requirements, which will be evaluated by the Supervisor to ensure 
compliance. Hydraulic fracturing will not be allowed unless the coalbed 
methane well is constructed in accordance with Rule 400-4-3.02. Rule 
400-4-3.02 provides requirements to ensure the integrity of the surface 
casing and provides minimum criteria for cased hole and open-hole 
completion of coalbed methane wells. In accordance with Rule 400-4-
5.04(2), ``any coalbed methane gas well that is not constructed in 
accordance with Rule 400-4-3-.02 shall not be allowed to produce and 
may be required to be immediately plugged and abandoned.'' Therefore, 
EPA concludes that adequate provisions have been established to prevent 
endangerment during hydraulic fracturing caused by well integrity 
failure.
    Additionally, a Cement Bond Log shall be evaluated for coal bed 
proposals in the 750-1000 feet depth range and is required for Coal Bed 
proposals in the 300-749 feet depth range to ascertain the top of 
cement and degree of bonding above the upper most coal bed to be 
fractured. Rule 4004-5-.04(5)(c) also requires that records of fresh-
water supply wells within a \1/4\-mile radius of the coal bed gas well 
shall be used in delineating the construction and completion depth of 
such supply wells. A field reconnaissance within a \1/4\-mile radius to 
determine the location of any additional fresh-water supply wells shall 
be conducted by the Board. Fracturing operations shall not be allowed 
if the Supervisor determines that any fresh-water supply well located 
within \1/4\-mile radius of the coal bed methane gas well could be 
adversely impacted in a manner described in part 400-4-5.04(2) of the 
rule as a result of the fracturing operation. All of these provisions 
provide additional assurances that underground injection does not 
endanger drinking water sources.
    Rule 400-1-1.06, referenced in Alabama's revision package, requires 
operators to allow and assist State agents in making any and all 
inspections that may be required by the Board. The agents are to have 
access to all records and shall be permitted to come upon any property 
at all times to make such inspections. This ensures an adequate 
surveillance program is in place to determine compliance with its 
requirements of Rule 400-4-5.04 and State regulations and provides an 
effective means to enforce against violators.
    EPA concludes that Alabama's UIC revision application satisfies 
section 1425(a) which requires that an approvable State program 
represents an effective program to prevent underground injection which 
endangers drinking water sources.
    At the public hearing EPA will accept comments on its proposal to 
approve Alabama's review to its Class II UIC

[[Page 56990]]

Program covering hydraulic fracturing. Copies of Federal Register 
outlining this rule will be available at the public hearing and can be 
also be obtained by contacting Larry Cole at EPA.

II. Regulatory Impact

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:
    a. Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    b. Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    c. Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    d. Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    This rule does not meet any of the conditions described above and 
therefore, is not a ``significant regulatory action'' and is not 
subject to OMB review. The rule would only approve regulations adopted 
by the State of Alabama and effective as a matter of State law and, 
therefore, would not itself adversely affect in a material way any of 
the activities or entities referred to in the Executive Order.

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.
    This rule is not subject to E.O. 13045 because it is not 
economically significant as defined in E.O. 12866, and because the 
Agency does not have reason to believe the environmental health or 
safety risks authorized by this action impact children. The rule would 
merely approve regulations adopted by the State of Alabama and 
effective as a matter of State law and would not itself bring about any 
changes in environmental protection in the State of Alabama. Therefore 
it would not present any foreseeable effect on children's health and 
well being.

C. Paperwork Reduction Act

    EPA has determined that the Paperwork Reduction Act, 44 U.S.C. 3501 
et seq., does not apply to this proposed rule since no information 
collection requirements would be established by this rule.

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 prepare an initial regulatory 
flexibility analysis describing the impact of the regulatory action on 
small entities as part of any proposed 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 an initial regulatory 
flexibility analysis. Pursuant to section 605(b) of the Regulatory 
Flexibility Act, 5 U.S.C. 605(b), the Administrator certifies that this 
proposed rule would not have a significant economic impact on small 
entities.
    This rule would not have a significant economic impact on a 
substantial number of small entities because the rule would not create 
any new requirements but merely approve regulations adopted by the 
State of Alabama and effective as a matter of State law. Accordingly, 
the rule would impose no additional requirements on small entities 
beyond those already imposed under Alabama law and, therefore, would 
have no economic impact on such entities.

E. Executive Orders on Federalism

    Under Executive Order 12875 (48 FR 58093, October 28, 1993), 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. If the mandate is 
unfunded, EPA must provide to the Office of Management and Budget a 
description of the extent of the EPA's prior consultation with 
representatives of affected State, local and tribal governments, the 
nature of their concerns, copies of any written communications from the 
governments, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 12875 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 rule would not create a mandate on state, local or tribal 
governments. The rule would not impose any enforceable duties on these 
entities. The rule would merely approve regulations adopted by the 
State of Alabama to ensure that hydraulic fracturing of coal bed seams 
in connection with methane gas production will not endanger underground 
sources of drinking water.
    On August 4, 1999, President Clinton issued a new Executive Order 
on Federalism, Executive Order 13132, (64 FR 43255 (August 10, 1999)), 
which will take effect on November 2, 1999. In the interim, the current 
Executive Order 12612, (52 FR 41685 (October 30, 1987)), on federalism 
still applies. This rule would not have a substantial direct effect on 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government, as specified in Executive Order 12612, 
because this rule would affect only one State. This rule would simply 
approve regulations adopted by the State of Alabama to ensure that 
hydraulic fracturing of coal bed seams in connection with methane 
production will not endanger underground sources of drinking water and 
make such regulations part of the federally-approved UIC program that 
the State has voluntarily chosen to operate.

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

[[Page 56991]]

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 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.
    EPA has determined that this proposed rule does not contain a 
federal mandate (under the regulatory provisions of Title II of UMRA) 
for state, local, and tribal governments, or the private sector. 
Today's rule would merely approve requirements already in place in the 
State of Alabama. The rule would impose no additional enforceable duty 
on any state, local or tribal governments or the private sector. Thus, 
today's rule is not subject to the requirements of sections 202 and 205 
of the UMRA. EPA has also determined that this rule contains no 
regulatory requirements that might significantly or uniquely affect 
small governments, thus, today's rule is not subject to the 
requirements of section 203 of UMRA.

G. National Technology Transfer and Advancement Act

    Under section 12(d) of the National Technology Transfer and 
Advancement Act (NTTAA), the Agency is required 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., materials specifications, test methods, sampling procedures, 
business practices, etc.) that are developed or adopted by voluntary 
consensus standard bodies. Where available and potentially applicable 
voluntary consensus standards are not used by EPA, the Act requires the 
Agency to provide Congress, through the Office of Management and 
Budget, an explanation of the reasons for not using such standards.
    EPA does not believe that this proposed rule addresses any 
technical standards subject to the NTTAA.

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. If the mandate is unfunded, 
EPA must provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the 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 would not significantly or uniquely affect 
the communities of Indian tribal governments. Accordingly, the 
requirements of section 3(b) of Executive Order 13084 do not apply to 
this rule.

List of Subjects in 40 CFR Part 147

    Environmental protection, Intergovernmental relations, Water 
supply.

    Dated: October 14, 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

    2. Section 147.52 is added to Subpart B to read as follows:


Sec. 147.52  State-administered program--Hydraulic Fracturing of Coal 
Beds.

    The UIC program for hydraulic fracturing of coal beds in the State 
of Alabama, except those on Indian lands, is the program administered 
by the State Oil and Gas Board of Alabama, approved by EPA pursuant to 
section 1425 of the SDWA. Notice of this approval was published in the 
Federal Register on [date of final rule]; the effective date of this 
program is 30 days after the date of publication of the Notice of 
Approval. This program consists of the following elements, as submitted 
to EPA in the State's program application:
    (a) Incorporation by reference. The requirements set forth in the 
State regulations, 400-4-5-.04. Protection of Underground Sources of 
Drinking Water during the Hydraulic Fracturing of Coal Beds, are hereby 
incorporated by reference and made a part of the applicable UIC program 
under the SDWA for the State of Alabama. This incorporation by 
reference was approved by the Director of the Federal Register on 
______ in accordance with 5 U.S.C. 552(a) and 1 CFR part 51.
    (b) The Memorandum of Agreement between EPA Region 4 and the 
Alabama Oil and Gas Board and addendums signed by the EPA Regional 
Administrator.
    (c) Statement of Legal Authority. ``Pursuant to my authority as 
Attorney General for the State of Alabama and for reasons set forth in 
this statement, I hereby certify that in my opinion, the laws of the 
State of Alabama provide the State Oil and Gas Board (hereinafter 
referred to as ``the Board'') adequate authority to carry out an 
Underground Injection Program for the control of underground injection 
activity related to the hydraulic fracturing of coal beds.'' Opinion by 
Attorney General dated October 8, 1999.
    (d) The Program Description and any other materials submitted as 
part of the application or as supplements thereto.

[FR Doc. 99-27516 Filed 10-18-99; 2:49 pm]
BILLING CODE 6560-50-P