On October 20, 2011, the Environmental Protection Agency (“EPA”) announced a schedule to develop standards for wastewater discharges that are produced during natural gas extraction from underground coalbed and shale formations.  EPA will begin to develop a proposed set of national standards while working with stakeholders.  EPA’s announcement is part of its “Effluent Guidelines Program” which sets national standards for industrial wastewater discharges using best available technologies which are economically achievable.  Pursuant to this Program, EPA publishes an outline every two years of all the industrial wastewater discharge rulemakings that are currently taking place.  With respect to the issue of standards for wastewater associated with natural gas production, EPA Administrator Lisa Jackson pointed to President Obama and the growth of natural gas: “The President has made it clear that natural gas has a central role to play in the energy economy.”

EPA will address (1) shale gas standards and (2) coalbed methane standards.  EPA noted that technological and operational improvements in extraction of natural gas have increased gas drilling activities.  State supplied wastewater data, and additional information submitted to EPA has indicated “elevated levels of pollutants” entering surface waters due to inadequate treatment at facilities.  With respect to shale gas wastewater, EPA is focused on treatment plants that are not properly equipped to treat wastewater.  The focus will be on standards that shale gas wastewater must meet before going to a treatment facility.  Additionally, wastewater connected to coalbed methane extraction currently does not need to meet national standards regarding pre-treatment and discharge into waterways.  EPA will consider uniform national standards for coalbed methane in accordance with economically achievable technologies.

EPA has gathered extensive data concerning coalbed methane.  In its “Coalbed Methane Extraction: Detailed Study Report,” published concurrently with its 2010 Effluent Guidelines Program, EPA indicates that “because produced water management costs are a significant portion of operating costs in either type of gas production [ ], [coalbed methane] projects often begin with high operating costs that tend to diminish over time.”  EPA’s study report also indicates that key financial characteristics of new coalbed methane projects include the total investment costs of the project, as well as the annually occurring revenues and production costs, where production costs include costs of produced water management.  EPA’s study report also includes figures on producing equipment costs from the Appalachian, Black Warrior, Powder River and San Juan Basins from 2008.

EPA will gather data, work with stakeholders, and solicit public comment for a proposed rule on coalbed methane in 2013 and a proposed rule for shale gas in 2014.  As part of its October 20, 2011 announcement, EPA is publishing its 2010 Effluent Guidelines Program, and also the “Coalbed Methane Extraction: Detailed Study Report.”  Interested parties may comment on the 2010 Effluent Guidelines Program up to 30 days after publication in the Federal Register [the Program has not yet been published].

A copy of EPA’s news release is available here.

A copy of the 2010 Effluent Guidelines Program Plan is available here.

A copy of the Coalbed Methane Extraction: Detailed Study Report is available here.