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Staying Ahead of the Regulatory Curve in the Fracking Industry

Like it or not, studies indicate that fracking operations will continue and grow within the regions of the United States that boast large shale formations. Despite the fact that fracking is taking the lead as the top method for fossil fuel production, many would argue that the regulatory environment surrounding the practice has not kept pace with its partner.

Given the level of controversy surrounding the oil and gas industry, eventual local, state and federal government regulation is guaranteed. The regulatory “grace period” around fracking will end soon and companies that want to avoid being sidelined by such regulations need to prepare now, but for what?

In our end of the industry, it’s essential to understand what problems our water treatment solutions are really solving. It’s also incumbent upon us to understand the likely regulations and to provide a service that keeps fracking operations running efficiently within those parameters. As such, the 10 fracking regulations I see as most likely to be emerge include:

Regulation 1: Local impact fees

In Pennsylvania, legislation has been passed to levy a local impact fee for every well drilled in the Marcellus Shale formation. These fees generate nearly $200 million in local and state government revenues every year. Other states may adopt the same system of fees as a way to get their piece and as an assurance to private citizens that the drilling activity is properly regulated and taxed.

Likelihood: very likely

Regulation 2: Requirement for water recycle/reuse

While current state and federal regulations do not directly enumerate reuse standards for recycled frac water, regulatory bodies may begin requiring drillers to use a prescribed volume of reclaimed frac water in an effort to limit withdrawals from fresh water resources.

Likelihood: very likely, especially in arid climates

Regulation 3: New limits on deep-well injection and disposal wells

In the US, more than 150,000 class II injection wells, spanning 32 states, act as underground waste disposal sites for the pharmaceutical, agricultural and energy industries. In Ohio, reports of minor earthquakes tied to frac water disposal have acted as major catalysts for anti-fracking sentiment. As such, many municipal governments are making efforts to limit or restrict frac wastewater disposal into class II wells. In regions with restrictions such as these, drillers will have to explore new options for waste management.

Likelihood: likely, especially if more tremors occur around disposal sites

Regulation 4: Change in river basin pass-by conditions

A pass-by is a mandate that restricts withdrawal when a water source reaches a critically low level. In April 2012, Pennsylvania’s Susquehanna River Basin Commission announced a suspension on 17 separate withdrawal approvals in an effort to prevent local streams from dropping too low. In regions where surface waterways serve as a main source of fresh water, more stringent pass-by conditions could change where drillers turn to procure water for fracking.

Likelihood: likely, dependent on regional rainfall data

Regulation 5: Prevention of accidental contamination of drinking water sources

An EPA study states that fracking poses no direct risk to drinking water resources. But that’s no guarantee that every other well-related activity poses the same non-threat. Should any fresh water source be contaminated through surface spills, water disposal or faulty engineering, we can count on mandatory shutdowns and regional moratoriums.

Likelihood: likely, accidents happen

Regulation 6: Ending moratoriums on gas drilling

The state of New York contains multiple shale formations that could support natural gas extraction, but these regions have been off limits since Governor Cuomo’s 2010 moratorium on fracking. With proper regulations in place that ban may be lifted, opening New York to the economic benefits of the natural-gas boom, without fear of endangering the environment.

Likelihood: increasingly likely as other states figure out how to regulate fracking

Regulation 7: Preventing depletion of groundwater resources

When water drawn from underground aquifers is used for fracking and eventually injected into a disposal well, there’s a net imbalance in the water cycle.  Similar to surface water pass-by laws, regulations may be put in place to limit extraction of groundwater used in drilling operations, or at least mandating that aquifer water be reclaimed and released back into the environment.

Likelihood: likely, particularly in desert regions

Regulation 8: Regulation of open-air water storage ponds

The practice of using open-air storage ponds to hold frac wastewater prior to disposal has long been viewed as a threat to air quality, groundwater supplies and local wildlife. Legislators may seek to tighten up regulations on storage ponds in an effort to prevent unintentional environmental damages.

Likelihood: likely, depends on data collected from environmental studies

Regulation 9: Natural gas exporting

A U.S. Department of Energy Report evaluating the potential impact of liquefied natural gas (LNG) exports on the US economy shows that the US is projected to gain net economic benefits by authorizing such activity. It’s only a matter of time before drillers will have access to the global market, and governments certainly will pass new legislation to regulate the export of these goods.

Likelihood: very likely

Regulation 10: Federal lands opened to oil and gas drilling

The U.S. Bureau of Land Management has been working through a set of rules governing fracking on federal lands since early 2012. These rules require drillers to submit plans for cradle-to-grave management of each well, including what they intend to do with flowback water. These regulations will likely go into action in the coming months of 2013.

Likelihood: very likely

New local, state and federal regulations on fracking are guaranteed to be thrown at the industry in 2013 – don’t strike out, have some foresight and stay ahead of the curve.

Eli Gruber is President and CEO of Ecologix Environmental Systems, an Alpharetta, GA-based wastewater treatment company specializing in industrial wastewater treatment. Ecologix has designed the patented and mobile Integrated Treatment System (ITS) platform for frac water management. Contact Eli at: egruber@ecologixsystems.com or (888) 326-2020.

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