by Allyn G. Turner, as seen in the December 2008 issue of IOGA Newsletter

As we head toward 2009, West Virginians will be governed by second-term Governor Joe Manchin and the new administration of President-Elect Barack Obama. In the environmental regulation arena, this means change. West Virginia’s Executive Branch, including the Department of Environmental Protection (“DEP”), may not be headed for immediate changes. Selection of a new Administrator for the United State Environmental Protection Agency (“EPA”), though, is underway and may even occur before this article is published.

Many names have already been mentioned in the national media as potential candidates for the EPA job. Notable mentions include former Region III Adminstrator Brad Campbell and Robert F. Kennedy, Jr., who currently serves as the Chief Prosecuting Attorney for Riverkeeper, and as an attorney for the Natural Resources Defense Council and as President of the Waterkeeper Alliance, among other roles. Other potential candidates reported in the media include Kathleen McGinty, former secretary of Pennsylvania's Department of Environmental Protection and Mary Nichols, chair of California's Air Resources Board.

As we speculate about EPA’s new leader and the changes that may be coming, some concrete examples of targets for change in the law are already here. One such proposal relevant to the oil and gas industry is H.R. 7231. The primary purpose of the bill is to “repeal the exemption for hydraulic fracturing in the Safe Drinking Water Act.” As background, the Energy Policy Act of 2005 exempted hydraulic fracturing from the Safe Drinking Water Act (“SDWA”). This practice involves the injection of fluids underground at high pressure to assist in extraction of oil and gas.

H.R. 7231 has been referred to the Committee on Energy and Commerce and there is good reason to believe – especially with the imminent change in EPA leadership – that it will be pursued further in 2009. Supporters of the bill, including Representatives Diana DeGette and John Salazar of Colorado and Maurice Hinchey of New York, have expressed concern that the fluids used in the course of hydraulic fracturing, or “fracking,” may introduce toxic chemicals into underground sources of drinking water. According to a press release from Rep. Hinchey’s office, he “vowed to aggressively press for the passage of [the] bill” and stated that “[i]t’s imperative that we safeguard our drinking water from any chemicals associated with natural gas drilling.”

In West Virginia, using water to frack a well and stimulate production has been a common practice for decades, without use of “toxic chemicals” as referred to by Rep. Hinchey. The volume of water required to frack a Marcellus well, though, can exceed one million gallons, and as reported in WVDEP Seeks Data on Marcellus Well Water Use by Andrew McCallister (IOGA Newsletter, November 2008) Marcellus Shale drilling has received much attention from regulatory agencies. This increased Marcellus Shale drilling may heighten the focus on the SDWA exemption for hydraulic fracking here in West Virginia.

If H.R. 7231 is successful, and the exemption for hydraulic fracturing is eliminated from the SDWA, it is expected to have a direct impact on delegated state SDWA programs such as West Virginia’s program. Although some states, such as New York, already have regulations in place addressing hydraulic fracturing, repeal of the SDWA exemption would likely result in new regulatory requirements on fluids used in hydraulic fracking in West Virginia and other states where the exemption is currently given effect.

Another issue proposed by some for action during the new administration is revision of storm water permitting requirements. The Waterkeeper Alliance, headed by Robert F. Kennedy, Jr., has published a whitepaper outlining goals for the Obama administration. Those goals include a call for numeric limits to be placed in storm water permits to allow for storm water discharges to comply with water quality standards and Total Maximum Daily Loads, or TMDLs. This white paper also calls for repeal of all Clean Water Act exemptions granted to the oil and gas industry in the energy Policy Act of 2005, and for extensive increases in spending for enforcement.

In addition to environmental rule “rollbacks” and anticipated new rules, environmental groups will be pushing the administration to redefine the nation’s energy policies. In a November 25, 2008, news release from the Natural Resources Defense Council, it was reported that “[n]early 30 environmental, science and conservation groups presented their top policy recommendations to President-elect Barack Obama’s transition team yesterday.” See Leading Environmental Groups Work with Obama's Team to Tackle Top Issues, November 25, 2008, NRDC Media Center, Those groups presented a document which “demonstrates agreement with Obama’s call to increase investment in clean, renewable energy as his top priorities.” Id. Further, “[t]he organizations support the establishment of a federal carbon cap-and-trade system, which would limit carbon emissions and provide incentives for companies to reduce global warming pollution. Such a system is critical to address climate change and raise revenue needed to transition to a clean energy economy, according to the groups.” Id.

Changes are also being seen in the congressional leadership that may impact environmental laws and policy. California Rep. Henry A. Waxman has been selected to replace longtime Energy and Commerce Chairman John Dingell, who had “governed Democratic politics in the House for decades.” See Patrick O”Conner, Waxman dethrones Dingell as chairman, Politico, 11/31/08, Waxman is referred to as “a wily environmentalist” who will now chair the committee with “principal jurisdiction over many of President-elect Barack Obama's top legislative priorities, including energy, the environment and health care.” Id. Waxman has been particularly active on Clean Water Act issues, such as questioning EPA’s enforcement of the CWA.

Other widely reported environmental issues include new efforts to limit offshore drilling in sensitive areas and a general rollback of rule changes made during the Bush administration. It is difficult to predict the extent of the changes to come, but with the extensive commentary on changes expected or specifically sought, it is relatively easy to predict changes resulting in more stringent regulations.

We will be monitoring H.R. 7231 and other changes as they are proposed throughout the coming year, and will update the members as the new EPA and new administration begin their work.