California’s regulations on shale gas are relatively unexceptional. If I wanted to pick out some things where California’s regulations are a little bit different from other states, one thing is that California relies somewhat heavily on its permit process. For casing and cementing in wells, for example, California jumps out as a state that uses a case-by-case approach, as opposed to a uniform statewide standard about how to case and cement a well.
One other thing I noticed is when a well is shut down, you don’t want a bunch of idle wells out there because those can cause risks. So states limit the amount of time a well can stay idle. California does limit this amount of time, but the length is among the highest in the country; it's 300 months. It doesn’t necessarily imply that’s the wrong balance to strike, but it is something California does do differently than most other states.
Let’s go through some of the big issues when it comes to regulating fracking. The first is what chemicals companies are using in their fracking fluid. How are states handling disclosure?
One area where there’s kind of an emerging trend in one direction is with frack fluid disclosure. Not every state that has any shale gas operations requires fluid disclosure, and those states that do require it don’t always require the same thing. Some of the laws that are being passed in diff states are pretty similar, although they have different exceptions for things like trade secrets.
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See part one from this series - California's Large Shale Oil Reserve.
Part two - California Prepares First Fracking Regulations.
But there’s a lot of similarity here and it really seems like even in the past couple years the trend has been towards disclosure of these fracking fluids to the public. Part of that’s because either opponents of shale gas or proponents of more regulation for shale gas have really made this an issue that they’ve pushed hard. Also the industry has gotten on board: in a lot of states they’ve realized it’s in their interest to be open about what they’re doing, to help them back up their arguments that this activity is safe. So a consensus has developed around fluid disclosure.
How do different states deal with wastewater?
Wastewater is complicated. In contrast to what I just talked about with fluid disclosure, this is one of the areas where states have great differences in what they do. There’s different things you can do with the wastewater. You can recycle it, you can inject it under ground, with certain kinds of wastewater you can store it in pits until it evaporates, with some kinds you can even use it in the winter to keep snow and ice off your roadways. There’s a lot of different kinds of fluid that come out of the ground depending on the geological formation and the condition of the well, and local conditions are different.
All of this results in a lot of difference among states and how they regulate this. All states allow fluid to be recycled. Many states allow it to be injected underground, but there are a few states that specifically disallow this, in a lot of cases because of fears that this will cause earthquakes.
What about setback rules? It looks from your maps that there is a range from a couple hundred feet to a couple thousand feet.
Set back restrictions essentially say that you must drill a well at least a certain distance away from something else. That something can be a building, a church or a school, a source of water, a source of drinkable water.
This is an interesting story because at the 10,000 foot level, states look the same. But states have different rules about what wells have to be set back from, and how far they have to be set back. States in the west where there just isn’t as much water may be worried about water impacts, while places in the east which are more densely populated but richer in water are more worried about impacts on people and communities. You see some of that reflected in the regulations, but I’d hesitate to call it a trend.
And what about monitoring for water contamination?
A few states have regulations that require the developer to test or to pay for testing of local water wells or local water sources before they frack. There are not many states that require this -- only 7 or 8 of them. California does not require this right now as best as we can tell.
The reason to do this is, if some problem does occur later, and the driller wants to say, “No that problem was already there, it’s not us,” it allows the state or the landowner to say, “Well let’s go back and check the data and see if you’re right.”
If this data isn’t available it makes attributing any contamination that is uncovered later really hard. So there’s some fairly strong arguments for having this pre-drilling testing, but it’s not free and there are also a lot of states that don’t really depend on well water as much so it may or may not make sense to have testing in that state. Even the states that do have testing, the distance away from the well that needs to be tested really varies a lot too.
What role does the federal government play?
The states are the real show here. States are the ones that are on the ground doing the vast majority of regulation, not only of shale gas development, but oil and gas entirely. The entire history of oil and gas has been almost exclusively a state-regulatory activity. Some people don't like that. A lot of greens think the feds should do it. The industry really likes the states doing it.
The federal government has always had a role in protecting surface water. The Clean Water Act gives a lot of power to regulate what can and can't be put into rivers and water in the United States. Putting oil and gas waste into water is almost uniformly illegal, and the reason it's illegal is because the federal government prevents it from being done.
Air pollution is traditionally a federal area. It's regulated primarily under the Clean Air Act. The EPA passed performance standards, that required oil and gas operations to reduce their emissions of Volatile Organic Compounds, and required them to use processes called "Green Completion" that reduce the emission of all kinds of air pollutants, including methane, which is a powerful greenhouse gas.