NAT GAS AFOUL OF THE LAW

Oilfield Company Failed to Report Fracking Violations to EPA – Documents
Mike Soraghan, March 23, 2010 (NY Times)

"One of the world's largest oilfield services companies continued to tell U.S. EPA it was complying with an agreement barring the injection of diesel fuel near drinking-water aquifers, documents show, after admitting to Congress that it had violated the pact.

"BJ Services Co. acknowledged in January 2008 to investigators from the House Oversight and Government Reform Committee that it had violated a 2003 agreement not to use diesel in specific types of hydraulic fracturing. When that was disclosed last month, a BJ Services executive said that the company had "self reported" the violation to EPA…But EPA says the company never told agency officials. And documents show the company has twice since then told the environmental agency that it has always been in compliance with the agreement…A BJ Services executive stressed that the violation was a breach of company policy and that the company has found ways to eliminate diesel from its fracturing fluids…"

Diesel isn't the only problem. (click to enlarge)

"The discrepancy has arisen as the credibility of industry and regulators becomes key to a debate about how to regulate the technique, which is common in the industry but worrisome to some who live near drilling operations and draw their water from underground…Democrats in [Congress] have proposed federal regulation of fracturing and the powerful House Energy and Commerce Committee has launched an investigation…

"Hydraulic fracturing blasts truckloads of water, along with sand, chemicals and sometimes diesel or other toxic substances deep into a wellbore to break compact rock and release gas trapped inside. Though the industry has used the process for decades, questions about drinking water contamination have mounted in the past few years as the process has opened up vast reserves in shale formations in new areas [where fracturing is essential], such as Texas and New York…EPA [recently] announced the beginning of a congressionally ordered study of how fracturing affects drinking water…"

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click to enlarge

"The agreement not to use diesel was aimed at calming fears about groundwater contamination when [Congressional Republicans] decided to exempt fracturing from federal drinking water laws in [2005] energy legislation…in response to industry requests to head off potential federal regulation and leave oversight to the states…Democrats consistently protested that the exemption would allow oil companies to inject diesel into drinking water. So in the final version of the bill [signed by Halliburton, BJ Services and Schlumberger, which then did nearly all U.S. fracturing work], fracturing was exempted from the Safe Drinking Water Act unless diesel was used…

"After the agreement…[each company] indicated they were complying…After Democrats took control of Congress, the House Oversight and Government Reform Committee [chaired by Rep. Henry Waxman (D-Calif.), the Democrats' most dogged investigator and now chairman of the House Energy and Commerce Committee] started…questioning companies…BJ Services acknowledged…it had injected diesel in violation of the agreement… [and] Halliburton Co. reported using fluids containing diesel fuel from 2005 to 2007 to fracture oil and gas wells in 15 states…[This] could be a violation of the Safe Drinking Water Act…[though the] agreement covers only fracturing in coalbed methane wells in underground sources of drinking water…It is not clear what EPA has done since announcement of the two companies' disclosures…There is no enforcement or penalty for violating the agreement, but the Safe Drinking Water Act does have [monetary] penalties…"