Last Friday, the Environmental Protection Agency (EPA) agreed to dismiss its 15-month long groundwater contamination case against Texas natural gas operator Range Resources Corporation (RRC). The dismissal of the federal lawsuit is the latest blow to EPA’s aggressive regulatory agenda, coming after a slew of court decisions unfavorable to the agency’s position. It also sheds a light on flaws with the methodology EPA employs in evaluating the link between natural gas wells and hydrocarbons detected in groundwater resources.
EPA’s dispute started in December 2010, when the agency issued an emergency order requiring RRC to comply with numerous directives to address the fact that local water supplies had elevated levels of methane. These directives included sampling air and water at a large area of private water wells and dwellings, providing replacement water supplies for affected households, and to find, plug, and clean up supposed leaks from RRC’s wells into the Trinity Aquifer. EPA’s emergency order bypassed the state oil and gas regulatory process—overseen by the Texas Railroad Commission—by contending that the Texas regulators had been inadequate in evaluating possible contamination concerns.
Soon after EPA issued its order, however, numerous questions arose about the purported definitive link between the methane in Parker County’s water resources and the area’s natural gas operations. The presence of methane in underground water alone cannot be taken to mean that natural gas drilling is the cause. Methane is a naturally occurring, non-poisonous gas that can be found in many underground water supplies where no drilling has occurred.
For this reason, the RRC rejected the EPA’s attempt to promulgate a stringent final order without allowing opportunity to evaluate the source of the methane, and appealed to the court for relief. Moreover, the Texas Railroad Commission’s own scientific evaluation of Parker County’s water found no link between the detected methane and RRC’s wells.
Similar problems with EPA’s methodology occurred in the cases of Pavillion, Wyoming and Dimock, Pennsylvania. In the case of Pavillion, EPA published a draft report last December suggesting that groundwater resources in the town were contaminated by hydraulic fracturing operations. But in March 2012, EPA decided to do more sampling after receiving a considerable criticism over its inconsistent sampling results, unverified scientific methodology, and unwillingness to cooperate with state regulatory officials.
In Dimock, Pennsylvania, EPA also backtracked on its previous claims of groundwater contamination. EPA intervened to supply replacement water to residents amid fears of contamination from hydraulic fracturing, only to later admit that the water in Dimock was safe.
Numerous EPA regulations with estimated economic costs of $100 million or more per year are currently pending—many of which will directly impact our ability to produce and use energy in the United States—and it remains unclear if the case of EPA v. RRC will translate into positive benefits for the rest of the agency’s regulatory agenda. Nonetheless, cases like Parker County are valuable to policymakers seeking to address flaws in the regulatory system, in that they show how regulations and enforcement actions can be initiated without regard to reasonable alternatives. In that vein, the agreement reached with EPA to rescind its litigation and instead work with RRC to share scientific data and conduct further well monitoring in the area is a positive step toward a model that embraces cooperation and transparency with the need to protect public health and safety.