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EPA to Rule on Texas Fracking Wastewater Plan Before Trump Exit

Dec. 28, 2020, 11:00 AM

The EPA plans to decide the fate of a Texas oil and gas wastewater discharge plan the same day it closes public comment on the proposal, sparking concern from environmentalists that the agency is rushing to finalize the move in the waning days of the Trump administration.

The state asked the Environmental Protection Agency in October to delegate authority of the measure to the Texas Commission on Environmental Quality, or TCEQ, allowing the agency to administer a program governing the discharge of wastewater from oil and gas drilling.

“This is an effort in our view to get delegation authority approved before Biden takes office,” Cyrus Reed, interim director of the Lone Star Chapter of the Sierra Club, said of expectations to clear the fracking-related measure on Jan. 11.

Fracking, or hydraulic fracturing, uses high pressure to inject a liquid mix into rock to drill for oil or gas. Companies dispose of fracking waste by injecting it underground. Environmental groups worry that under Texas’s supervision, industry will eventually be allowed to discharge toxic chemicals into surface water, including streams and rivers.

Reed said the group is planning to ask the Environmental Protection Agency at a Jan. 5 virtual public meeting for a 30-day extension for public comments. If granted, that would push the decision into the next administration. President-elect Joe Biden takes office on Jan. 20.

Asked about the timeline for approving the Texas plan, EPA Region 6 spokeswoman Jennah Durant said the approval process for granting the state delegation “is guided by regulatory guidelines and statutes that are independent of the transition of the Administration.”

State Authority

Wastewater discharge from oil and gas facilities in Texas is regulated by the EPA and the Texas Railroad Commission for federal and state requirements, respectively. If the proposal is approved, state permitting authority would transfer to the TCEQ.

Texas passed a law in 2019 (HB 2771) that requires the state agency to apply for authority from the EPA to issue permits under the National Pollutant Discharge Elimination System. If approved, Texas would oversee and enforce the release of treated wastewater.

The head of the Texas Oil and Gas Association said the delegation would allow companies to build upon “their pioneering work in water recycling and reuse,” while taking “every step to protect and improve the environment” during energy production.

“We anticipate this flexibility will allow oil and natural gas companies to find even newer and innovative ways to allow wastewater to be recycled and treated into new drought-proof sources of water for beneficial use in the oil patch and beyond,” Todd Staples, the president of the group, said in an emailed statement.

Worries About Standards

Environmental groups worry delegating regulatory authority solely to Texas could result in permits to discharge fracking wastewater, the contents of which aren’t fully understood.

“We’re coming up with new rules and discharge standards for these permits, but EPA has not really done a full rulemaking on what those effluent standards are,” Reed, from the Sierra Club, said in a phone interview. “A lot of these chemicals that are found in produced water haven’t been studied, and we certainly don’t have treatment standards for all the chemicals that might be present in these waters.”

The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Law is operated by entities controlled by Michael Bloomberg.

David Foster, Texas director for Clean Water Action, also criticized the EPA’s timeline for rendering a decision.

“That suggests you’re really not taking public comment very seriously when they’re going to apparently issue a decision the same day that public comment ends,” Foster said in a phone interview. “They’re not going to have time to assimilate the comment; it just doesn’t feel right.”

Permits Focus

TCEQ anticipates being ready to receive and process individual permit applications from oil and gas facilities “immediately upon approval from EPA,” agency spokesman Gary Rasp said via email.

Haynes & Boone LLP Austin-based attorney Jeff Civins said the delegated authority to the TCEQ would be “beneficial” because the state agency focuses on environmental protection, unlikely the Texas Railroad Commission.

“TCEQ issues discharge permits for every other industrial sector in Texas; it makes sense for them to issue permits for the oil and gas extraction sector as well,” Civins said in a phone interview.

Texas must apply EPA effluent limitations and other federal requirements, while the federal agency retains oversight, he said. “So, I’m not sure what incentive the Biden administration would have for undoing that delegation or what justification they might assert to do so,” Civins said.

Karen M. Hansen, an Austin-based principal Beveridge & Diamond PC, also said it isn’t clear whether the rule would be a high priority for the Biden administration in its early days.

To alter or modify the final rule, the administration could determine there were “procedural irregularities” in approval of the delegation of the permitting to Texas, “and republish for further public comment,” she said, adding that any effort to that effect would have to go through the usual Clean Water Act process, she said.

To contact the reporter on this story: Paul Stinson in Austin, Texas at pstinson@bloomberglaw.com

To contact the editors responsible for this story: John Crawley at jcrawley@bloomberglaw.com; Anna Yukhananov at ayukhananov@bloombergindustry.com

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