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Drinking Water: EPA Program to Protect Underground Sources from Injection of Fluids Associated with Oil and Gas Production Needs Improvement

GAO-14-555 Published: Jun 27, 2014. Publicly Released: Jul 28, 2014.
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Highlights

What GAO Found

The Environmental Protection Agency's (EPA) role in the Underground Injection Control (UIC) class II program is to oversee and enforce fluid injection into wells associated with oil and gas production, known as class II wells. EPA has approved 39 states to manage their own class II programs, and EPA regions are responsible for managing the programs in remaining states. EPA regions and states use a mix of resources to manage class II programs, including EPA grant funding, state funding, and federal and state personnel. EPA's UIC grant funding has remained at about $11 million for at least the past 10 years.

Class II programs from the eight selected states that GAO reviewed have safeguards, such as construction requirements for injection wells, to protect against contamination of underground sources of drinking water. Programs in two states are managed by EPA and rely on EPA safeguards, while the remaining six programs are state managed and have their own safeguards that EPA deemed effective at preventing such contamination. Overall, EPA and state program officials reported that these safeguards are protective, resulting in few known incidents of contamination. However, the safeguards do not address emerging underground injection risks, such as seismic activity and overly high pressure in geologic formations leading to surface outbreaks of fluids. EPA officials said they manage these risks on a state-by-state basis, and some states have additional safeguards to address them. EPA has tasked its UIC Technical Workgroup with reviewing induced seismicity associated with injection wells and possible safeguards, but it does not plan reviews of other emerging risks, such as high pressure in formations. Without reviews of these risks, class II programs may not have the information necessary to fully protect underground drinking water.

EPA is not consistently conducting two key oversight and enforcement activities for class II programs. First, EPA does not consistently conduct annual on-site state program evaluations as directed in guidance because, according to some EPA officials, the agency does not have the resources to do so. The agency has not, however, evaluated its guidance, which dates from the 1980s, to determine which activities are essential for effective oversight. Without such an evaluation, EPA does not know what oversight activities are most effective or necessary. Second, to enforce state class II requirements, under current agency regulations, EPA must approve and incorporate state program requirements and any changes to them into federal regulations through a rulemaking. EPA has not incorporated all such requirements and changes into federal regulations and, as a result, may not be able to enforce all state program requirements. Some EPA officials said that incorporating changes into federal regulations through the rulemaking process is burdensome and time-consuming. EPA has not, however, evaluated alternatives for a more efficient process to approve and incorporate state program requirements and changes into regulations. Without incorporating these requirements and changes into federal regulations, EPA cannot enforce them if a state does not take action or requests EPA's assistance to take action.

EPA collects a large amount of data on each class II program, but the data are not reliable (i.e., complete or comparable) to report at a national level. EPA is working on a national database that will allow it to report UIC results at a national level, but the database will not be fully implemented for at least 2 to 3 years.

Why GAO Did This Study

Every day in the United States, at least 2 billion gallons of fluids are injected into over 172,000 wells to enhance oil and gas production, or to dispose of fluids brought to the surface during the extraction of oil and gas resources. These wells are subject to regulation to protect drinking water sources under EPA's UIC class II program and approved state class II programs. Because much of the population relies on underground sources for drinking water, these wells have raised concerns about the safety of the nation's drinking water.

GAO was asked to review EPA's oversight of the class II program. This report examines (1) EPA and state roles, responsibilities, and resources for the program, (2) safeguards to protect drinking water, (3) EPA oversight and enforcement of class II programs, and (4) the reliability of program data for reporting. GAO reviewed federal and state laws and regulations. GAO interviewed EPA and state officials and reviewed class II programs from a nongeneralizable sample of eight states selected on the basis of shale oil and gas regions and the highest number of class II wells.

Recommendations

GAO recommends that, among other things, EPA review emerging risks related to class II program safeguards and ensure that it can effectively oversee and efficiently enforce class II programs. EPA agreed with all but the enforcement recommendation. GAO continues to believe that EPA should take actions to ensure it can enforce state class II regulations, as discussed in the report.

Recommendations for Executive Action

Agency Affected Recommendation Status
Environmental Protection Agency To ensure that EPA's oversight of the class II program is effective at protecting drinking water sources from the underground injection of large amounts of wastewater that will be produced with increasing domestic oil and gas production, the Administrator of the Environmental Protection Agency should task the UIC Technical Working Group with reviewing emerging risks, and related program safeguards, including overpressurization of formations and information on use of diesel fuels in hydraulic fracturing.
Closed – Implemented
With regard to the three issues we raised in our 2014 report, EPA has taken action on two but not the third. In November 2016, EPA said that it had issued its report on injection-induced seismicity, which includes recommendations for reducing induced seismicity risks. Second, EPA said it reached out to the Groundwater Protection Council and the National Technical Working group and they did not believe that overpressurization is a widespread issue. EPA believes that the one region where overpressurization is occurring--Texas--is being handled appropriately, but will monitor the situation. EPA officials said that the regions continue to monitor hydraulic fracturing with diesel fluids and no states have issued permits for such use. We consider this recommendation closed.
Environmental Protection Agency To ensure that EPA's oversight of the class II program is effective at protecting drinking water sources from the underground injection of large amounts of wastewater that will be produced with increasing domestic oil and gas production, and to support nationwide reporting goals until the national UIC database is complete, the Administrator of the Environmental Protection Agency should (1) improve the 7520 data for reporting purposes, as well as to help with quality assurance for the national UIC database, by developing and implementing a protocol for states and regions to enter data consistently and for regions to check 7520 data for consistency and completeness to ensure that data collected from state and EPA-managed class II programs are complete and comparable for purposes of reporting at a national level, and (2) in the interim, develop a method to use the 7520 database to report UIC data, including data on class II wells, until the national UIC database is fully populated with state data.
Closed – Implemented
In October 2015 and May 2018 EPA issued guidance clarifying the procedures for processing 7520 data with the goal of achieving more consistent national reporting of data on class II underground injection wells. According to EPA officials, in 2015, EPA held a training teleconference with state and federal UIC managers clarifying what data should be included on the 7520 reports, and EPA officials presented on the updated guidance at the 2016 Groundwater Protection Council UIC conference. In addition, in September 2018, EPA developed a web-based tool that EPA HQ and regional staff can use to access and evaluate summary UIC data, including summary data on permits, violations and inspections. The summary data can be filtered by year, region, state, tribe and class of UIC well. According to officials, EPA is also developing a web-based application for regions and states to report 7520 data electronically. We consider this recommendation closed.
Environmental Protection Agency To ensure that EPA's oversight of the class II program is effective at protecting drinking water sources from the underground injection of large amounts of wastewater that will be produced with increasing domestic oil and gas production, and to ensure that EPA maintains enforcement authority of state program requirements, the Administrator of the Environmental Protection Agency should (1) conduct a rulemaking to incorporate state program requirements, and changes to state program requirements, into federal regulations, and (2) at the same time, evaluate and consider alternative processes to more efficiently incorporate future changes to state program requirements into federal regulations without a rulemaking.
Closed – Not Implemented
EPA agrees with GAO's analysis that state program requirements and changes should be approved and codified in federal regulations. However, EPA does not agree with GAO's recommendation to conduct one comprehensive rulemaking to achieve this. As of June 2019, EPA officials said that the agency explored alternative methods for maintaining federal enforceability under the current statutory provisions, and determined that there were no viable alternatives to approving and codifying changes to state program requirements into federal regulations. Officials also said that given the specific statutory constraints in the UIC program, removing the codification requirement would create uncertainty for EPA, states, and the regulated community about the applicable legal requirements. For example, one of the options considered was for EPA to use a website, in lieu of the Code of Federal Regulations, for providing notice of the applicable legal requirements. According to the officials, in this case, it is unclear whether EPA would be able to successfully enforce state programs referenced on a website as opposed to the CFR. Therefore, EPA officials said they will continue to follow the agency's current process of reviewing state program revisions as they receive them for approval, approving substantial state program revisions by rule, and codifying applicable state UIC program revisions in the CFR.
Environmental Protection Agency To ensure that EPA's oversight of the class II program is effective at protecting drinking water sources from the underground injection of large amounts of wastewater that will be produced with increasing domestic oil and gas production, the Administrator of the Environmental Protection Agency should evaluate and revise, as needed, UIC program guidance on effective oversight to identify essential activities that EPA headquarters and regions need to conduct to effectively oversee state and EPA managed programs.
Closed – Implemented
In February 2018, EPA stated that it had conducted an extensive review of regional oversight of state programs and identified variation in the frequency and comprehensiveness of program evaluations conducted by regional staff. To address this variation, EPA developed a national framework for oversight of the UIC program and to transfer knowledge to new staff. In addition, in August 2018, EPA drafted an internal memorandum to clarify regional responsibilities for conducting program evaluations. According to officials, EPA plans to solicit input from headquarters and regional officials on the draft memorandum in September 2018, and plans to finalize the memorandum by December 2018. We consider this recommendation closed.

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ContaminationData collectionEnvironmental monitoringFederal regulationsHealth hazardsPotable waterProgram evaluationProgram managementSafeguardsSafety regulationWater pollution control