What is the “Halliburton Loophole”?

Much of the controversy surrounding natural gas development is the grossly misunderstood belief that hydraulic fracturing is exempt from all federal regulations, especially the Safe Drinking Water Act, because of the “Halliburton Loophole.” This, like much of the anti-natural gas gobbledygook, is completely false.

Hydraulic fracturing is 60+ year-old stimulation technique used to increase production from oil, gas and even water wells. The technique has been implemented an estimated two million times across the United States and is a key component to developing almost every oil and natural gas basin throughout the world. Without hydraulic fracturing much of the world’s energy would remain trapped or non recoverable, making common things like gasoline, refillable propane BBQ tanks, cigarette lighters and plastics a rare, expensive luxury.

Let’s analyze the supposed loophole and clarify what it is exactly.

For much of the 20th century, domestic oil & gas development was regulated at the state level. This insured that each state could pass regulations it deemed appropriate to protecting the environment while bolstering oil & gas production. During this time period, as evident by the impressive record of enforcement, states proved more than capable of regulating. However, these facts have not stopped some from calling on the federal government, particularly the Environmental Protection Agency (EPA) to also regulate the oil & gas industry citing the Safe Drinking Water Act as a source of authority.

Established in 1974 to protect public health by regulating the nation’s public drinking water supply, the Safe Drinking Water Act never, not even once, had anything to do with natural gas development or specifically hydraulic fracturing. This was in large part because development takes places thousands of feet underground and, more importantly, is already subjected to stringent regulation at the state level.

Nonetheless, language in the SWDA did not explicitly state whether its creators intended for federal regulation on this act of oil & gas development. That is why, in 2005, a bipartisan majority of Congress passed an exemption in the Safe Drinking Water Act for hydraulic fracturing, known today as the “Halliburton Loophole.” This legislation exemption did not give the oil & gas industry a free pass from regulation; instead it reaffirmed that States, the primary regulator of oil & gas development for more than six decades, remained the absolute authority.

So if the exemption removes the oil & gas development from the jurisdiction of SWDA, is the industry completely void of federal regulation?

The short answer – Absolutely not! In Pennsylvania, development and production of natural gas can require upwards of 50+ different permits from state and federal agencies. For instance, during the construction of the well and hydraulic fracturing process, oil & gas development is subjected to the Clean Water Act (CWA) and oversight of the Occupational Safety and Health Administration (OSHA). During flow back phase and production phases, oil & gas development is subject to Superfund regulations, EPRCA: Community “Right to Know” Act and Safe Drinking Water Act if the operator disposes of fluids in an underground injection well. (a graphical representation of these federal statutes can be found here)

The NGV Conversation
NY Times & NY Daily Talk Natural Gas Benefits
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