An emergency order issued by the EPA under the Safe Drinking Water Act (SDWA) to a natural gas drilling company raised enforcement issues that may prove to be applicable to hydraulic fracturing.  The order and the subsequent disagreements among the major parties prompted six U.S. senators to request that the Agency’s Office of Inspector General (OIG) investigate the case. 

The OIG reported that EPA’s enforcement actions were in line with the SDWA and Agency guidance and policies.  However, the outcome of the case fell short of EPA’s expectations, since the Agency declined to pursue judicial actions after the drilling company refused to meet several elements in EPA’s order.  The events are also of interest because the state agency in charge of oil and gas (O&G) production disputed parts of EPA’s findings.

Gas in drinking water

The case was prompted by complaints from a homeowner in Parker County, Texas, that water from the homeowner’s well had been contaminated with gas.  In response, the EPA contacted the Texas Railroad Commission (RRC), which regulates O&G production in the state.  The agencies identified two gas production wells near the residence.  An EPA analysis indicated that gas in the residential well water and gas from the production well were “nearly identical.” 

The EPA informed the production company and the RRC that the well presented an imminent and substantial endangerment to public health.  The EPA then exercised its authority under the SDWA by issuing an emergency action order to the company.  SDWA’s public protection emphasis allows the EPA to take enforcement action in the absence of proof that either contamination has already occurred or that the recipient of the order is responsible for the contamination. 

RRC disagrees

The order required the production company to research the source and extent of contamination, provide drinking water to affected residents, and develop a plan to mitigate contamination.  The RRC told the EPA that it did not agree with the Agency’s conclusion that the drilling operation was contaminating drinking water and said it would conduct its own research and testing.  Furthermore, the production company said it would provide water to the residents but that it would not comply with the other parts of the order. 

This opened the door to a court battle, but the EPA declined to take that route because it could not commit the needed resources.  Instead, the Agency withdrew the emergency order and reached an out-of-court deal in which the production company agreed to participate in a national study of the relationship between hydraulic fracturing and drinking water contamination.  The company also agreed to sample 20 water wells in Parker County every 3 months for a year.

Precedent setting

The main purpose of the OIG investigation was to determine if the EPA acted in accordance with its SDWA authority and existing Agency policies.  The OIG found that EPA’s emergency order, its attempt to coordinate with the RRC, and then its withdrawal of the order conformed to SDWA provisions and Agency guidelines, regulations, and policies.  Mainly, the OIG said the Agency was correct in deciding that it did not need incontrovertible evidence that the production drilling was contaminating the residential well water to issue the order. 

The OIG also found that EPA’s actions in this case matched actions the Agency took in two similar cases.  Only one of previous emergency orders involved drilling, specifically for oil.  Thus, the Texas case may become an important precedent for future actions involving claims that hydraulic fracturing for natural gas is contaminating underground sources of drinking water.

State authority

The other significant development was the disagreement between the EPA and the RRC.  Most states have the authority to implement the SDWA requirements.  However, the EPA retains responsibility to oversee drinking water programs by taking actions when states do not.  The Act instructs the EPA to consult with the state and local authorities before taking enforcement action “to the extent practicable.”  While the EPA and the RRC communicated regularly throughout this action, the drilling company informed the federal agency that it would work only with the RRC.  In addition, the RRC would not back up EPA’s findings and emergency order because it required definitive proof of the source of contamination. 

Had the case been litigated, one critical issue would have focused on the level of proof needed to trigger an SDWA emergency order to a drilling operator.  That discussion did not reach the courts in this instance.  But given the rise in natural gas drilling and hydraulic fracturing and public concerns about the effects of these activities on groundwater, we may yet see the courts handing down rulings on this key SDWA issue. 

OIG’s report