• Developments in the Marcellus Shale Debate
  • October 6, 2010 | Authors: Margaret Anne Hill; Lynn K. McKay
  • Law Firms: Blank Rome LLP - Philadelphia Office ; Blank Rome LLP - Washington Office
  • Investment and development of natural gas resources in the Marcellus Shale formation has brought lower energy costs and new jobs to the Commonwealth of Pennsylvania.  Unfortunately, it has also attracted litigation alleging that well drilling, hydraulic fracturing and natural gas production have contaminated drinking water supplies and damaged property in the vicinity of some operations.   Recently, for example, 13 families filed a complaint in state court in Susquehanna County against Southwestern Energy Production Co. alleging that the Company’s use of hydraulic fracturing has contaminated their drinking water supply and made them ill.  In addition, 17 families in Dimock, PA sued Cabot Oil & Gas Corporation for contamination of their water supply wells, claiming that the Company’s drilling and operation of natural gas wells near their homes caused methane and various chemicals to flow into their wells.  Another suit was also filed by a Washington County resident who claims that hydraulic fracturing performed by Atlas Energy on wells on his property contaminated his groundwater.

    In addition to this litigation, industry is now facing the prospect of a federal statute to regulate hydraulic fracturing - the drilling method used to open up a Marcellus Shale gas well for production (S.1215 and H.R. 2766, both bills are entitled “Fracturing Responsibility and Awareness of Chemicals Act of 2009).  Moreover, EPA issued a conceptual model on July 14, 2010 seeking input from the public in connection with the Agency’s efforts to evaluate the relationship between hydraulic fracturing and drinking water.  EPA’s planned evaluation was triggered, in part, by an October 8, 2009 conference report for EPA’s funding bill which recommended that EPA conduct a study relying upon “the best available science”.  A prior EPA report issued in July 2004 concluded that the injection of hydraulic fracturing fluids into coalbed methane wells posed little or no threat to groundwater sources.

    The Safe Drinking Water Act

    Currently, the Safe Water Drinking Act exempts “fracking” from federal regulation pursuant to EPA’s Underground Injection Control program designed to protect underground drinking water sources.  Accordingly, any regulatory control of fracking has been delegated or left to state and regional environmental authorities such as the Pennsylvania Department of Environmental Protection which recently removed a five-year moratorium on drilling to access shale in state gamelands.   In contrast, the Delaware River Basin Commission has imposed a de facto moratorium by requiring that all natural gas extraction projects in shale formations within certain areas in the Basin receive Commission approval (which cannot be granted until the DRBC adopts new rules).   Similarly, the New York Senate passed a bill imposing a temporary moratorium on new drilling in the Marcellus Shale formation because of concerns about groundwater contamination and the potential for gas production to generate wastes with elevated amounts of naturally occurring radioactive materials or NORM.  The purpose of the proposed moratorium is to allow sufficient time to study the impacts associated with fracking before any new drilling permits are issued.

    Congressional and EPA Action

    As noted above, Congress is currently considering legislation to regulate hydraulic fracturing based upon increased environmental concerns that have been raised by environmental organizations such as Riverkeeper, Inc. and citizens directly affected by Shale exploration and production activities.  Whether Congress will amend the Safe Drinking Water Act before EPA completes the current study on the relationship between fracking and drinking water depends on many factors including the political climate, input from states that have witnessed an economic boom, litigation filed by environmental groups and citizens concerned about drinking water protection, etc.

    EPA intends to focus upon the potential impacts on water availability and water quality.  Hydraulic fracturing uses a large volume of water and may affect water availability.  Hydraulic fracturing also occurs at depths ranging from 1,000 to 8,000 feet which coincides with underground sources of drinking water.  In addition, EPA will be evaluating impacts to surface water quality from fracking given its concern that total dissolved solids could increase significantly and surface water from discharges associated with wastewater treatment facilities, or run-off of fracking wastewater into nearby surface waters.  In particular, the Agency is requesting input in connection with the following questions:

    1. Can you suggest additional pathways of exposure that could impact drinking water resources from the hydraulic fracturing process?

    2. In your experience, what are the most important processes and pathway(s) of exposure that would adversely impact drinking water resources?
    3. What current practices in your region do you think pose the most threat to drinking water resources from hydraulic fracturing?
    4. Can you provide data, studies, reports, or other information to help us assess the relative importance of these potential impacts?

    Conclusion

    As is apparent, the debate over the development and production of gas within the Marcellus Shale formation is intensifying.  At present, it seems likely that both EPA and State regulatory authorities will impose new restrictions and regulations on industry in an effort to ensure that the drinking water and surface water is protected from any actual or perceived effects of Marcellus Shale development and production activities.  The ultimate impact associated with the groundwater litigation is not likely to be determined in the near future; in brief, this litigation could surpass the number of claims filed and damages awarded in other product liability litigation (such as the MTBE litigation).