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Federal law: loopholes & exemptions

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Oil and gas drilling generally, and fracking in particular, are provided with numerous loopholes and exemptions from federal law, including:

Safe Drinking Water Act
The Safe Drinking Water Act (SDWA) mandates regulation of underground injection activities in order to protect groundwater resources.  SDWA Sec. 1421, 42 U.S.C. § 300h.   However, in the 2005 Energy Policy Act, which arose out of Vice President Cheney’s Energy Task Force, Congress amended the definition of “underground injection” under the SDWA to specifically exclude “the underground injection of fluids or propping agents (other than diesel fuels) pursuant to hydraulic fracturing operations related to oil, gas, or geothermal production activities.”  § 300h(d)(1)(B)(ii).

Under this exemption, oil and gas companies can now inject anything other than diesel in association with fracking operations without having to comply with SDWA provisions intended to protect our nation’s water supplies.

Clean Water Act
The Clean Water Act was enacted to protect and improve water quality in the nation’s rivers, streams, creeks, and wetlands. One of the major mechanisms it uses to achieve this goal is by requiring permits for all discharges of pollutants to those waters. The law, however, exempts stormwater discharges (surface water runoff resulting from rain or snow) from oil and gas drilling and production activities from this permitting requirement. In addition, the 2005 Energy Policy Act, in addition to the SDWA exemption, broadened this exemption to include stormwater discharge from oil and gas construction activities. Although EPA’s rule to implement this provision was declared unlawful and vacated in NRDC v. EPA, 526 F.3d 591 (9th Cir. 2008), and the agency has not yet promulgated a replacement rule, the underlying statutory exemption remains in effect.”

Emergency Planning and Community Right to Know Act
The Emergency Planning and Community Right to Know Act was enacted in 1984 in the wake of the Bhopal chemical explosion and disaster in Bhopal, India, and generally requires companies to disclose information related to locations and quantities of chemicals stored, released, or transferred. Oil and gas exploration and production wastes are exempted from this requirement.

Resource Conservation and Recovery Act
The Resource Conservation and Recovery Act (RCRA) was enacted by Congress as a “cradle to grave” regulatory framework for managing solid waste, including hazardous waste. Under the 1980 amendments to RCRA known as the Solid Waste Disposal Act Amendments of 1980, Congress temporarily exempted oil and gas exploration and production wastes from regulation under RCRA. 42 U.S.C. § 6921(b)(2)(A). This exemption was to last for at least two years, until after the completion of an EPA study to determine whether such wastes should in fact be regulated as hazardous waste under RCRA. § 6921(b)(2)(B).

EPA finalized this study in 1988, during the final year of the Reagan Administration’s second term, and concluded that regulation of hazardous oil and gas waste under RCRA was unnecessary. EPA made its decision despite acknowledging that exempted wastes (including oily sludges, workover wastes, and well completion and abandonment wastes), are known to contain toxic substances including benzene, lead, arsenic, phenatnthrene, barium, and uranium at levels that exceed 100 times EPA’s health-based standards.

Comprehensive Environmental Response, Compensation, and Liability Act (Superfund Program)
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) was enacted by Congress in 1980, creating a framework for cleanup of toxic materials through creation of the Superfund Program. In a political compromise, the oil and gas industry was taxed in order to pay into the Superfund and in exchange was exempted from CERCLA’s requirements. The tax expired in 1985, but the industry continues to enjoy the exemption.

Clean Air Act
The 1970 Clean Air Act was passed in an effort to “protect and enhance the quality of the Nation’s air resources so as to promote the public health and welfare.” Section 101(b)(1). Oil and gas production produces toxic air pollution, including volatile organic compounds (VOCs) (which react with sunlight to from ground level ozone, or smog), hydrochloric acid, and hydrogen sulfide. Normally when numerous small sources of air pollution, such as individual oil and gas wells and associated facilities, are under common control and in close proximity they are treated as a “major source” subject to stringent Clean Air Act technology requirements. Oil and gas production, however, is exempted from this “aggregation” requirement.






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