[Federal Register Volume 69, Number 68 (Thursday, April 8, 2004)]
[Rules and Regulations]
[Pages 18478-18480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-7974]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 147
[FRL-7644-8]
State of Alabama: Underground Injection Control Program Revision;
Proposed Response to Court Remand
AGENCY: Environmental Protection Agency.
ACTION: Proposed determination on remand of final rule; request for
public comment.
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SUMMARY: In this document, the Environmental Protection Agency (EPA) is
requesting public comment on its proposed response to the Eleventh
Circuit Court of Appeals' remand in Legal Environmental Assistance
Foundation, Inc., v. United States Environmental Protection Agency, 276
F.3d 1253 (11th Cir. 2001) (hereinafter LEAF II), directing EPA to
determine whether Alabama's revised underground injection control (UIC)
program covering hydraulic fracturing of coal bed seams to recover
methane gas complies with the requirements for Class II wells. In LEAF
II, the Eleventh Circuit Court affirmed EPA's decision to review
Alabama's hydraulic fracturing program pursuant to the approval
criteria in section 1425 of the Safe Drinking Water Act (SDWA), 42
U.S.C. 300h et seq., instead of the approval criteria in section 1422
of the SDWA, and rejected LEAF's claim that EPA's approval of the
program pursuant to section 1425 was arbitrary. However, the Court
remanded the matter, in part, for EPA ``to determine whether Alabama's
revised UIC program complies with the requirements for Class II
wells.'' After considering this issue, EPA has preliminarily determined
that the hydraulic fracturing portion of the State's UIC program
relating to coal bed methane production, which was approved under
section 1425 of the SDWA, complies with the requirements for Class II
wells within the context of section 1425's approval criteria. EPA is
requesting comment on this proposed determination.
DATES: Comments on this proposed response to the Court remand must be
in writing and either postmarked or received by the docket for this
action by May 10, 2004.
ADDRESSES: Send written comments to: Larry Cole, U.S. Environmental
Protection Agency, Region 4, Water Management Division, Ground Water
and Drinking Water Branch, Sam Nunn Atlanta Federal Center, 61 Forsyth
Street, SW., Atlanta, Georgia 30303. When submitting written comments,
please submit an original and three copies of your comments and
enclosures (including any references). Documents relevant to this
action are available for inspection at this same address between 8 a.m.
and 5 p.m., Monday through Friday, excluding legal holidays. A
reasonable fee may be charged for copying.
FOR FURTHER INFORMATION CONTACT: General questions and questions on
technical issues concerning today's document should be directed to
Larry Cole at (404) 562-9474, or at the address above. Questions on
legal issues concerning today's document should be addressed to Zylpha
Pryor, Office of Environmental Accountability, U.S. Environmental
Protection Agency--Region 4, 61 Forsyth Street, SW., Atlanta, Georgia
30303, telephone (404) 562-9535.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Background Information
A. Court Decisions
B. Section 1425 of the SDWA
II. EPA's Response to Court Remand
I. Background Information
A. Court Decisions
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 appropriately regulating
injection activities associated with coal bed methane gas production
wells. Following the Agency'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) (LEAF I), the Court held that hydraulic
fracturing activities constitute underground injection under Part C of
the SDWA and must be regulated by permit or rule. On February 18, 1999,
the Eleventh Circuit directed EPA to implement the Court's August 1997
decision. The Court established a schedule for EPA to follow in
determining whether, in light of the Court's ruling regarding hydraulic
fracturing, EPA should withdraw approval of Alabama's UIC program. In a
January 19, 2000, Federal Register (FR) final rule, EPA announced its
determination that Alabama's UIC program regulating hydraulic
fracturing associated with coal bed methane production was consistent
with the requirements of the SDWA and the
[[Page 18479]]
LEAF I Court mandate. See 65 FR 2889 (January 19, 2000).
LEAF filed a petition for review of EPA's determination with the
Eleventh Circuit Court, arguing that it should be set aside for three
reasons. First, LEAF argued that the underground injection of hydraulic
fracturing fluids to enhance the recovery of methane gas from coal beds
is not underground injection for the secondary or tertiary recovery of
natural gas under section 1425 of the SDWA. Second, LEAF contended that
wells used for the injection of hydraulic fracturing fluids to enhance
the recovery of methane gas from coal beds are Class II wells as
defined in 40 CFR 144.6(b), and EPA's classification of hydraulic
fracturing as a ``Class II-like underground injection activity'' was
not in accordance with law. Third, LEAF argued that, even if Alabama's
revised UIC program was covered by the alternative approval procedure
of section 1425, EPA's approval of the revised program was arbitrary
and capricious. The Eleventh Circuit generally ruled in favor of EPA,
holding that: (1) EPA's decision to approve Alabama's hydraulic
fracturing program pursuant to section 1425 of the SDWA was a
permissible construction of the statute; and (2) EPA was not arbitrary
in determining that Alabama's UIC program complies with the section
1425 statutory approval requirements. LEAF II, 276 F.3d at 1260-61,
1265. However, the Court remanded, in part, for EPA to determine
whether Alabama's revised program covering the hydraulic fracturing of
coal beds to produce methane complies with the requirements for Class
II wells. Id. at 1264. The purpose of this document is to announce
EPA's preliminary determination regarding the remanded issue, and to
request public comment on it. EPA is not soliciting comment on any
other aspects of its January 2000 approval of Alabama's revised UIC
program.
B. Section 1425 of the SDWA
Any State that seeks to acquire primary enforcement responsibility
for the regulation of Class II wells may, at its option, apply for
primacy for its Class II UIC program under the approval criteria in
either section 1422 or section 1425 of the SDWA. Approval under either
section is aimed at achieving the same fundamental objective of
protecting underground sources of drinking water from endangerment by
well injection. However, State program approvals under section
1422(b)(1) of the SDWA are required to meet a different legal standard
than State program approvals under section 1425. Section 1425 was added
as part of the 1980 amendments to the SDWA to offer States an approval
alternative that was not necessarily tied to the detailed regulatory
requirements for Class II wells found at 40 CFR Parts 124, 144, 145,
and 146.
Approval under section 1422(b)(1)(A) requires that the State UIC
program meet the requirements of regulations in effect under section
1421. Those regulations, which are found at 40 CFR Parts 124, 144, 145,
and 146, are very detailed and specific. However, under the alternate
section 1425 approval criteria, a State may instead demonstrate that
the Class II portion of its UIC program meets the requirements of
section 1421(b)(1)(A) through (D) and represents an ``effective''
program to prevent injection which endangers drinking water sources. A
State has more flexibility in developing a section 1425-approvable
Class II program than if it were developing the same program for
approval under section 1422. Similarly, EPA has more discretion to
approve a Class II program under the section 1425 criteria, because
that program does not have to ``track'' or be ``as stringent as'' each
of the Class II-related requirements of 40 CFR parts 124, 144, 145, and
146. See 40 CFR 145.11(b)(1). If a State makes a satisfactory
demonstration pursuant to section 1425 that its Class II program
warrants approval, it has done all that is required to demonstrate that
its program complies with the requirements for Class II wells.
II. EPA's Response to Court Remand
During the hydraulic fracturing process, fracturing fluids are
injected through methane production wells to create fractures in the
formation through which methane flows to the well and up to the
surface. In its January 19, 2000, Federal Register final rule approving
Alabama's UIC program revisions, EPA characterized hydraulic fracturing
for the production of coal bed methane as a ``Class II-like underground
injection activity.'' In the final rule, EPA acknowledged that its
classification scheme recognizes only five classes of wells. However,
EPA stated that, since the injection of fracture fluids is often a one-
time exercise of extremely limited duration and was ancillary to the
well's principal function of producing methane, it did not seem
entirely appropriate to ascribe full Class II status to that activity.
EPA also based its Alabama well classification decision on the fact
that the general UIC ``well classification systems found in 40 CFR
144.6 and 146.5 do not expressly include hydraulic fracturing'' and
``the various permitting, construction, and other requirements found in
Parts 144 and 146 do not specifically address hydraulic fracturing.''
65 FR at 2892. It is still the case today that EPA has not promulgated
national regulations expressly and specifically designed to establish
minimum requirements for State programs that regulate hydraulic
fracturing of coal beds to enhance methane production.
The LEAF II Court found EPA's classification of Alabama's
hydraulically fractured coal bed methane wells as ``Class II-like'' to
be inconsistent with the plain language of 40 CFR 144.6, which defines
Class II injection wells. In its opinion, the Court held that, even
though the injection of fracture fluids is often a one-time exercise of
extremely limited duration, ``wells used for the injection of hydraulic
fracturing fluids fit squarely within the definition of Class II
wells.'' LEAF II, 276 F.3d at 1263; see also 40 CFR 144.6(b)(2). In
view of its finding that the wells are Class II wells, the Court
remanded, in part, for EPA to determine whether Alabama's revised UIC
program complies with the requirements for Class II wells.
In applying for approval of that part of its Class II UIC program
regulating hydraulic fracturing of coal beds, Alabama could have sought
primacy either under section 1422 or section 1425 approval criteria of
the SDWA. Since Alabama chose to make its demonstration pursuant to
section 1425, EPA appropriately evaluated that part of Alabama's Class
II program regulating hydraulic fracturing of coal beds using the
section 1425 alternative approval requirements.
To receive approval for its Class II program, or some component
thereof, under the optional demonstration, section 1425 requires a
State to show that its program meets the following five criteria: (1)
Section 1421(b)(1)(A) provides that the State program must prohibit any
underground injection which is not authorized by permit or rule; (2)
section 1421(b)(1)(B) provides that the State program require that the
applicant for a permit satisfy the State that the underground injection
will not endanger drinking water sources and prohibits the State from
promulgating any rule which authorizes underground injection which
endangers drinking water sources; (3) section 1421(b)(1)(C) requires
that the State program include inspection, monitoring, record keeping,
and reporting requirements; (4) section 1421(b)(1)(D) provides that the
State program must apply to underground injections by Federal agencies,
as well as underground injections by any other person, whether or not
occurring on
[[Page 18480]]
property owned or leased by the United States; and (5) the State
program must represent ``an effective program'' to prevent underground
injection which endangers drinking water sources, in accordance with
section 1425(a). If a State can successfully demonstrate that its Class
II program satisfies all of these requirements, the program has met all
the statutory requirements for approval. As previously discussed, under
section 1425, that program, or a component thereof, does not have to
demonstrate that it contains requirements as stringent as, or identical
to, each of the specific Class II requirements found in Parts 144 and
146 of EPA's regulations. Instead, a finding that such a program, or
component thereof, meets the Class II approval requirements of section
1425 means that such a program, by virtue of that finding, necessarily
complies with all applicable statutory and regulatory requirements for
Class II wells.
EPA's determination that Alabama's hydraulic fracturing program
related to coal bed methane production complied with the section 1425
requirements for Class II program approval was explained in great
detail in the January 19, 2000, Federal Register final rule. The LEAF
II Court held that EPA's determination that Alabama's UIC program
complies with the SDWA's statutory requirements was not arbitrary. LEAF
v. EPA, 276 F.3d at 1265. EPA is not reopening that earlier approval
decision or soliciting additional comment on it. EPA is only seeking
comment on its proposed response to the LEAF II Court's question on
remand.
In reviewing and approving Alabama's coal bed methane-related
hydraulic fracturing program, EPA was cognizant of the various
regulatory provisions in Parts 144 and 146 designed to prevent Class II
injection wells from causing the movement of fluid containing any
contaminant into an underground source of drinking water (USDW). EPA
generally expects traditional State Class II programs, i.e., those
regulating the injection of fluids brought to the surface either in
connection with conventional oil and gas production or for enhanced
recovery or storage of oil and gas, to demonstrate their
``effectiveness'' to prevent underground injection which endangers
USDWs pursuant to Section 1425 by inclusion of statutory or regulatory
provisions preventing fluid movement. EPA was concerned that according
``full'' Class II status to Alabama's hydraulically-fractured methane
production wells could have been misconstrued as requiring a strict
application of those ``no fluid movement'' provisions and could have
unnecessarily impeded methane gas production in Alabama within the
meaning of SDWA section 1421(b)(2) because Alabama's revised program
allowed injection of fracturing fluids into USDWs, provided they did
not cause a violation of any maximum contaminant level (MCL) or
otherwise adversely affect the health of persons. LEAF v. EPA, F.3d at
1264 n.12; EPA brief at 30-31. EPA thus decided to characterize wells
used to inject hydraulic fracturing fluids into Alabama's coal bed
formations as ``Class II-like,'' rather than Class II. However, this
characterization of Alabama's hydraulically-fractured methane
production wells, while designed to further ensure that regulation of
those wells did not unnecessarily interfere with or impede methane gas
production, was unnecessary for purposes of EPA's approval due, in
part, to the unique attributes of hydraulic fracturing in Alabama, and
because EPA did, in fact, make a substantive finding, which was upheld
by the LEAF II Court, that Alabama's program does not endanger USDWs
because, among other requirements, the injection must not cause a
violation of any MCL or otherwise adversely affect the health of
persons. EPA thus appropriately exercised the discretion and
flexibility inherent in SDWA section 1425 to approve Alabama's coal bed
methane-related hydraulic fracturing program allowing such movement
where: (1) EPA's Class II regulations were not designed to, and do not
specifically address the unique technical and temporal attributes of
hydraulic fracturing, and (2) EPA determined pursuant to section 1425
that Alabama's program is effective at preventing endangerment of
USDWs.
In sum, SDWA gives Alabama more flexibility in developing a section
1425-approvable Class II program for the hydraulic fracturing of coal
beds to produce methane than if it were developing the same program for
approval under the criteria in section 1422. Similarly, EPA has more
discretion to approve Alabama's revised Class II program relating to
coal bed methane production under the criteria in section 1425, because
that program does not have to ``track'' or be ``as stringent as'' each
of the Class II-related requirements of 40 CFR parts 124, 144, 145, and
146. See 40 CFR 145.11(b)(1). Because Alabama made a satisfactory
demonstration pursuant to section 1425 that its coal bed methane-
related hydraulic fracturing program warranted approval, it did all
that was required to demonstrate that its program complies with the
requirements for Class II wells.
Dated: April 5, 2004.
Benjamin H. Grumbles,
Acting Assistant Administrator, Office of Water.
[FR Doc. 04-7974 Filed 4-7-04; 8:45 am]
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