Fracking fluid containers after a fire in May, 2010, Williston, ND – photograph by Richard S. Baron
By: Brian Phinney
The increased use of Hydraulic Fracturing (“ fracking”) in recent years has led to a rise in the transportation of fracking-related chemicals and waste such as production and flowback water. A 2010 study by the Upper Great Plains Transportation Institute found that a typical fractured well will require over 2,000 total truck loads of various fracking-related materials. Recent trends suggest that this may be underestimated, as many wells are increasing from about 1.5 million gallons of water, proppants and chemicals to between 2 and 5 million gallons per well. Insurance professionals tasked with responding to releases of fracking fluids and waste to the environment during transport can face unique challenges due to the multi-leveled regulatory scheme in certain areas, as well as the secrecy and public perception surrounding fracking. Since each state (and in some cases, tribal nation) regulates the fracking process, waste disposal and environmental remediation differently, understanding the local requirements and local public perception is important to achieve a successful outcome when responding to a release.
Know What You’re Dealing With
Certain constituents of fracking fluids are allowed to be kept confidential as trade secrets by the oil and gas industry. While many states require the disclosure of the trade names of fracking chemicals used in a particular well, some components of these chemicals qualify as trade secrets and are not required to be publicly disclosed. When a release to the environment occurs, state regulatory agencies may be compelled to provide responders with a complete list of all chemicals used in the released product so that appropriate remediation options can be evaluated.
Report ASAP
Early reporting of releases of fracking fluids or waste to the environment is important to avoid penalties and fines (commonly $5,000 per day per violation). Each state has its own reporting agency and, in some cases, has specific reporting criteria for the fracking industry. Native American tribes may also have their own independent reporting requirements for releases that occur on tribal land. The EPA requires a report to be made to the National Response Center for releases to “waters of the United States.” Understanding and accurately reporting the nature of a release, such as quantities and the potential impact to sensitive environmental receptors is a key to mitigating potential liability beyond remediation costs.
Watch Your Language
Fracking has received close scrutiny by governmental agencies and public interest groups. Managing the expectations of regulators as well as landowners impacted by a release is important to achieve a successful outcome. In particular, when dealing with environmental consultants hired to remediate a release, it’s important to make sure the information in the consultant’s report is accurate and fully vetted before it is given to regulatory agencies and the public. A failure to maintain consistent and precise reporting throughout the remediation process can cause delays and increase overall response costs.
Track Your Paper
Verification of trip tickets from site pickup through transportation and offloading at a disposal well, and cross-checking disposal site video surveillance will help document completed delivery of all loads. Having a good understanding of travel times and routes, together with turnaround times will assist in ruling out illegal drops and assist in documenting that all loads made it to the specified destination.
Each fracking claim will differ depending on the location of the release, the chemicals involved and the regulatory scheme of the particular state. Understanding the local requirements and maintaining a hands-on approach is important to developing and implementing a successful response strategy.
For more information or questions, please contact Foley, Baron & Metzger’s Environmental Practice Group @ 734-742-1800.
