Legal Environmental Assistance Foundation, Inc. v. U.S. E.P.A.
| Decision Date | 07 August 1997 |
| Docket Number | No. 95-6501,95-6501 |
| Citation | 118 F.3d 1467 |
| Parties | , 27 Envtl. L. Rep. 21,385, 11 Fla. L. Weekly Fed. C 335 LEGAL ENVIRONMENTAL ASSISTANCE FOUNDATION, INC., Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
David A. Ludder, Tallahassee, FL, for Petitioner.
James H. Curtin, Administrator, U.S. Environmental Protection Agency, Washington, DC, Robin L. Juni, Patricia Ross McCubbin, U.S. Justice Dept., Washington, DC, for Respondent.
Petition for Review of an Order of the United States Environmental Protection Agency
Before BIRCH and CARNES, Circuit Judges, and MICHAEL *, Senior District Judge.
The issue in this petition for review is whether the United States Environmental Protection Agency ("EPA") is legally required to regulate hydraulic fracturing, a production enhancement technique used by the oil and gas industry, under the underground injection control ("UIC") programs established pursuant to Part C of the Safe Drinking Water Act ("SDWA"), 42 U.S.C. §§ 300h to 300h-8. EPA determined that hydraulic fracturing does not fall within the statutory or regulatory definition of "underground injection." Because we find EPA's interpretation inconsistent with the language of the statute, we grant the petition for review and remand for further proceedings.
The Legal Environmental Assistance Foundation, Inc. ("LEAF") filed this petition for review of an order of the EPA, in which the agency denied LEAF's petition to promulgate a rule withdrawing approval of the Alabama UIC program. As background for our analysis, we briefly describe the statutory and regulatory framework for the UIC program, the process of hydraulic fracturing, and the procedural history of this case.
Part C of the SDWA establishes a regulatory program for the protection of underground sources of drinking water. See 42 U.S.C. §§ 300h to 300h-8. This program requires EPA to promulgate regulations that set forth minimum requirements for state UIC programs. Id. § 300h. A state must submit to EPA a proposed UIC program that meets these minimum requirements, and receive EPA approval, in order to obtain primary regulatory and enforcement responsibility for underground injection activities within that state. Id. § 300h-1. The state retains primary responsibility until EPA determines, by rule, that the state UIC program no longer meets the minimum requirements established under the SDWA. Id. § 300h-1(b)(3). 1
The minimum requirements for state UIC programs are contained in 40 C.F.R. pt. 145. Among these requirements, the state must prohibit, in accordance with 40 C.F.R. § 144.11, any "underground injection" unless authorized by permit or rule. 40 C.F.R. § 145.11(a)(5). The statutory definition of "underground injection" is "the subsurface emplacement of fluids by well injection." 42 U.S.C. § 300h(d)(1). 2 The state also must classify injection wells in conformance with the classification system promulgated by EPA in 40 C.F.R. § 144.6. 40 C.F.R. § 145.11(a)(2). Injection wells are thus classified for the purpose of permitting into five categories: Class I wells are wells used to dispose of hazardous, industrial, or municipal wastes beneath underground sources of drinking water. 40 C.F.R. § 144.6(a). Class II wells are "[w]ells which inject fluids: (1) [w]hich are brought to the surface in connection with ... conventional oil or natural gas production ...; (2) [f]or enhanced recovery of oil or natural gas; and (3) [f]or storage of hydrocarbons." Id. § 144.6(b). Class III wells are wells which inject for extraction of minerals. Class IV wells are wells used to dispose of hazardous or radioactive wastes into or above underground sources of drinking water. Id. § 144.6(c) and (d). Class V wells are "[i]njection wells not included in Classes I, II, III, or IV." Id. § 144.6(e). Technical criteria and standards for these various classes of wells are contained in 40 C.F.R. pt. 146.
The Alabama UIC program was approved by EPA in two parts. On August 2, 1982, EPA approved Alabama's UIC program for Class II wells, to be administered by the State Oil and Gas Board of Alabama. See 40 C.F.R. § 147.50. On August 23, 1983, EPA approved Alabama's UIC program for Class I, III, IV, and V wells, to be administered by the Alabama Department of Environmental Management. See id. § 147.51.
Hydraulic fracturing is a technique used by the oil and gas industry for enhancing the recovery of natural gas from underground formations. In Alabama, it is commonly used in connection with the extraction of natural methane gas from coal beds. Coal beds, as all underground formations, are formed of porous, sometimes fractured, materials. These coal beds contain natural gas, which can be extracted through production wells. Because of the tightness of coal bed formations and their very low permeability, the rate of production of natural gas is low in the absence of production enhancement.
Experience has shown that coal beds must be hydraulically fractured to induce or stimulate a significant flow of gas. "Hydraulic fracturing" involves the injection of fluids and a propping agent (usually sand) into a coal bed. The application of pressure injects fluids into the coal bed thereby widening natural fractures and inducing new ones that are held open by the propping agent after the pressure is released. As a result, these fractures provide paths for gas to migrate to the wellbore, thus stimulating gas flow. It has been demonstrated that the gas flow rate from a coal bed may be increased as much as twentyfold by hydraulic fracturing.
Thomas E. Sexton & Frank Hinkle, State Oil and Gas Board, Oil and Gas Report 8B: Alabama's Coalbed Gas Industry 12-15 (1985), appearing at R1-21-24. 3
Hydraulic fracturing results in fractures that may extend several hundred feet. The fluids used in hydraulic fracturing may contain guar gel, nitrogen or carbon dioxide gases, gelled oil, diesel oil, sodium hydroxide, hydrochloric acid, sulfuric acid, fumeric acid, as well as other additives. These fluids are pumped into methane gas production wells after the wells are constructed in order to stimulate the flow of gas. Occasionally, fluids are reinjected into the well to further fracture the coal bed. More often, fluids are reinjected in order to maintain previously-induced fractures free of obstructions. 4 After the coal beds are hydraulically fractured, the injected fluids and groundwater are pumped out of the production well before the flow of methane gas starts. A portion of the injected fluids, however, remains in the ground. 5
Several thousand coal bed methane gas production wells have been constructed in Alabama since 1980. Due to the large number of these wells, EPA has recognized that "there is a growing potential for contamination of drinking water aquifers," resulting primarily from the hydraulic fracturing necessary to stimulate production. See United States Environmental Protection Agency, Ground Water Study Committee: Report G11--Study Well Contamination Problems; Particularly Problems Related to Coal Bed Methane 1 (1990), appearing at R3-211. Hydraulic fracturing associated with methane production currently is not regulated under the Alabama UIC program. The State Oil and Gas Board of Alabama does not consider wells used for such hydraulic fracturing as Class II injection wells; the Alabama Department of Environmental Management similarly does not consider these wells as Class I, III, IV, or V injection wells.
On March 4, 1994, LEAF petitioned EPA to initiate proceedings to withdraw approval of the Alabama UIC program. 6 LEAF alleged that the Alabama program is deficient because it does not regulate hydraulic fracturing activities associated with methane gas production and such regulation is required under the SDWA. LEAF further asserted that hydraulic fracturing associated with methane gas production had resulted in a diminished quality of water drawn from a nearby drinking well owned and used by two of LEAF's members, Ruben DeVaughn and Cynthia Ann McMillian. On May 5, 1995, EPA denied the petition because it determined that hydraulic fracturing does not fall within the regulatory definition of "underground injection." EPA interprets that definition as encompassing only those wells whose "principal function" is the underground emplacement of fluids. EPA decided that methane gas production wells which are also used for hydraulic fracturing are not required to be regulated under the UIC programs because the principal function of these wells is not the underground emplacement of fluids; their principal function is methane gas production. EPA also disputed LEAF's assertion that the quality of water drawn from the McMillians' water well had diminished as a result of nearby hydraulic fracturing activity. 7
LEAF brought this petition for review of EPA's order on June 19, 1995. LEAF contends that EPA's interpretation of the regulations must fall because this interpretation renders the regulations inconsistent with the statute. 8
EPA's order denying LEAF's petition for withdrawing approval of the Alabama UIC program is final agency action. LEAF filed this petition for review within forty-five days of EPA's final action. We have jurisdiction to review EPA's order pursuant to 42 U.S.C. § 300j-7(a)(2).
EPA suggests that we have no jurisdiction to entertain LEAF's contention that the regulations are inconsistent with the statute because this contention constitutes a direct challenge to regulations promulgated several years before this petition for review was filed; EPA argues that such a direct challenge should have been brought within forty-five days of the promulgation of the regulations and is now time-barred pursuant to § 300j-7(a)(2). For this proposition, EPA...
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