According to the U.S. Department of Energy (“DOE”), the “[h]andling and disposal of [waste] water is the single greatest environmental impediment to domestic oil production.” In particular, hydraulic fracturing (“HF”) operation (or the injection of fluids into shale formations to extract oil and gas hydrocarbons) is water-intensive. By some estimates, a typical hydrocarbon well requiring HF stimulation activities may require an average of four million gallons of water to initiate production. Between 25% and 75% of the fluid used in HF operations flows back to the surface after drilling operations cease (“flowback water”). In addition, for every barrel of oil produced, approximately three barrels of naturally occurring saline water are released from above or below the shale formations (“produced water”). An estimated 98% of waste from hydrocarbon production consists of this produced water or flowback water (collectively “produced water”). As domestic oil and gas development continues to expand at nearly unprecedented rates, the oil and gas industry faces significant regulatory uncertainty as local, state, and federal entities more closely examine how to regulate this waste. The governance schemes that seek to regulate the recycling of these vast quantities of oil and gas waste provide important, unexplored lessons about the roles of the states and federal government in environmental regulation and the states’ ability to encourage needed technological innovation through unique state regulation.
Through a system rarely seen in the federally-dominated environmental field, states, not the Environmental Protection Agency (“EPA”) or Congress, primarily influence oil and gas water management. States regulate produced water as an oil and gas waste in one of three ways: (1) by allowing disposal via injection back into the well; (2) evaporation from ponds, treatment at a stationary treatment facility, and subsequent discharge into surrounding waterways; or (3) reusing and recycling the wastewater on-site or at a stationary facility. Water scarcity, injection well availability, water quality concerns, and local water costs all affect which of these options is used in a particular area.
Originally published in the Journal of Energy & Environmental Law - Winter 2014.
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