HISTORY AND DEVELOPMENT OF EFFECTIVE REGULATION OF HYDRAULIC FRACTURING: THE GENESIS OF COLORADO RULE 205A

Hydraulic fracturing (HF) was first conducted in the late 1940’s - the first experimental well in the Hugoton gas field in Grant County, KS (1947) and the first two commercial fracturing treatments – one in Stephens County, OK and the other in Archer County, TX both on March 17, 1949. Since that time it is estimated that more than 1,000,000 HF treatments have been performed. It has been estimated that HF has increased US recoverable reserves of oil by at least 30% and of gas by 90%.

The Safe Drinking Water Act (SDWA) (1974) and its amendments (1986 and 1996) never addressed HF. In between, the Legal Environmental Assistance Foundation (LEAF) petitioned EPA to withdraw approval of the Alabama UIC program. The EPA declined to do so stating that EPA does not and never has regulated HF. In 1997 the 11^th Circuit Court of Appeals requires EPA to regulate HF (re: coalbed methane (CBM)) based on LEAF petition. In 2001, the Court approved the Alabama UIC program as complying with SDWA and, thus, allowed HF to continue. The court activity resulted in legislation - the Inhofe-Sessions Bill and the 2003 Energy Bill - neither of which passed. In 2004 EPA conducted an extensive study of HF. Based on the study, EPA concluded that the injection of HF fluids into CBM wells poses little threat to United States Drinking Water. Finally, the Energy Policy Act of 2005 amended the SDWA changing the definition of underground injection to exclude HF as long as diesel fuel isn’t used as the carrier fluid. Since 2005, regulation of HF has been left to the states.

The state regulation of HF began with the development of resource plays. Since that time several states including Arkansas - January 2011, Wyoming - September 2010, and Colorado - December 2011 have developed regulations related to HF.

The Colorado rule, the latest, is comprehensive and effectively provides information to the agency and the public while limiting the burden on industry and should serve a model for future regulation in other states. Colorado Rule 205A requires all operators to utilize a disclosure registry to disclose information about the well and well treatments performed including the chemicals used. The rule provides for trade secret protection with provisions for disclosure to health professionals. Other rules require notice to the landowner (Rule 305.E.(1) A) and to the Commission (Rule 316C).