2). Operators use hydraulic fracturing in  many shale and tight sandstone formations (see fig. For example, operators must  manage produced water, which, for purposes of this report includes  flowback water—the water, proppant, and chemicals used for hydraulic  fracturing—as well as water that occurs naturally in the oil- or gas-bearing  geological formation. Federal Environmental and Public Health Laws Apply to Unconventional Oil and Gas Development but with Key Exemptions

Requirements from eight federal laws apply to the development of oil and  gas from unconventional sources. There  are exemptions or limitations in regulatory coverage for preventive  programs authorized by six of these laws, though EPA generally retains  its authorities under federal environmental and public health laws to  respond to environmental contamination. Eight Federal Environmental and Public Health Laws Apply to Unconventional Oil and Gas Development

Parts of the following eight federal environmental and public health laws  apply to unconventional oil and gas development:
Safe Drinking Water Act (SDWA)
Clean Water Act (CWA)
Clean Air Act (CAA)
Resource Conservation and Recovery Act (RCRA)
Comprehensive Environmental Response, Compensation, and  Liability Act (CERCLA)
Emergency Planning and Community Right-to-Know Act (EPCRA)
Toxic Substances Control Act (TSCA)
Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
There are exemptions or limitations in regulatory coverage related to the  first six laws listed above. In addition to CWA’s requirement for NPDES permits for discharges from  industrial sites, the 1987 Water Quality Act amended CWA to establish a  specific program for regulating stormwater discharges, such as those  related to rainstorms, though oil and gas well sites are largely exempt  from these requirements. Well completions for hydraulically fractured natural gas wells. All six states have updated some aspects of their  requirements in recent years. Specifically, states have requirements for baseline testing of water wells,  required setbacks from water sources, and stormwater management,  among others. All of the six states in our review have requirements related to how wells  are to be drilled and casing should be installed and cemented in place,  though the specifics of their requirements vary. These additional federal requirements are the same for  conventional and unconventional oil and gas development. Altogether, BLM oversees oil and gas development on  approximately 700 million subsurface acres. In addition, BLM officials said that  they coordinate with surface land management agencies regarding  surface conditions. See  appendix X for a comparison of federal environmental requirements, state  requirements, and additional requirements that apply on federal lands. BLM recently proposed new requirements for oil and gas development on  federal lands. Federal and State Agencies Reported Several Challenges Regulating Unconventional Oil and Gas Development

Federal and state agencies reported facing several challenges in  regulating oil and gas development from unconventional reservoirs. In  addition, BLM and state officials reported that hiring and retaining staff  and educating the public are challenges. Conducting Inspection and Enforcement Activities

Officials at EPA reported that conducting inspection and enforcement  activities for oil and gas development from unconventional reservoirs is  challenging due to limited information, as well as the dispersed nature of  the industry and the rapid pace of development. For example, EPA  officials in headquarters and Regional offices told us that the exclusion of  exploration and production waste from hazardous waste regulations  under RCRA significantly limits EPA’s role in regulating these wastes. Similarly, BLM officials in North Dakota and headquarters both  said that retaining employees is difficult because qualified staff are  frequently offered more money for private sector positions within the oil  and gas industry. Appendix I: Objectives, Scope, and Methodology

To identify federal and state environmental and public health  requirements governing onshore oil and gas development from  unconventional reservoirs, we analyzed federal and state laws,  regulations, and guidance, as well as reports on federal and state  requirements. To identify state requirements, we identified and reviewed laws and  regulations in a nonprobability sample of six selected states—Colorado,  North Dakota, Ohio, Pennsylvania, Texas and Wyoming. For example, the applicability of  NSPS may trigger a state requirement to get a construction permit or  other type of permit. The amendments  required EPA to conduct and publish “a detailed and comprehensive  study…on the adverse effects, if any, of drilling fluids, produced waters,  and other wastes associated with the exploration, development, or  production of crude oil or natural gas or geothermal energy on human  health and the environment.” The study report was to “include appropriate  findings and recommendations for Federal and non-Federal actions  concerning such effects.” he Administrator shall, after public hearings and opportunity for comment, determine  either to promulgate regulations under this subchapter for drilling fluids, produced  waters, and other wastes associated with the exploration, development, or production  of crude oil or natural gas or geothermal energy or that such regulations are  unwarranted. 1988. In general, one of these  agencies has primary responsibility for regulating oil and gas  development activities such as drilling that occur on the well pad and for  managing and disposing of certain wastes generated on-site, while the  other agency has a broader mandate for implementing and enforcing  environmental or public health requirements, some aspects of which may  affect oil and gas development.
Why GAO Did This Study

Technological improvements have allowed the extraction of oil and natural gas from onshore unconventional reservoirs such as shale, tight sandstone, and coalbed methane formations. Specifically, advances in horizontal drilling techniques combined with hydraulic fracturing (pumping water, sand, and chemicals into wells to fracture underground rock formations and allow oil or gas to flow) have increased domestic development of oil and natural gas from these unconventional reservoirs. The increase in such development has raised concerns about potential environmental and public health effects and whether existing federal and state environmental and public health requirements are adequate.
GAO was asked to review environmental and public health requirements for unconventional oil and gas development and (1) describe federal requirements; (2) describe state requirements; (3) describe additional requirements that apply on federal lands; and (4) identify challenges, if any, that federal and state agencies reported facing in regulating oil and gas development from unconventional reservoirs. GAO identified and analyzed federal laws, state laws in six selected states (Colorado, North Dakota, Ohio, Pennsylvania, Texas, and Wyoming), and interviewed federal and state officials and representatives from industry, environmental, and public health organizations.
GAO is not making recommendations. In commenting on the report, agencies provided information on recent regulatory activities and technical comments.

What GAO Found

As with conventional oil and gas development, requirements from eight federal environmental and public health laws apply to unconventional oil and gas development. For example, the Clean Water Act (CWA) regulates discharges of pollutants into surface waters. Among other things, CWA requires oil and gas well site operators to obtain permits for discharges of produced waterwhich includes fluids used for hydraulic fracturing, as well as water that occurs naturally in oil- or gas-bearing formationsto surface waters. In addition, the Resource Conservation and Recovery Act (RCRA) governs the management and disposal of hazardous wastes, among other things. However, key exemptions or limitations in regulatory coverage affect the applicability of six of these environmental and public health laws. For example, CWA also generally regulates stormwater discharges by requiring that facilities associated with industrial and construction activities get permits, but the law and its regulations largely exempt oil and gas well sites. In addition, oil and gas exploration and production wastes are exempt from RCRA hazardous waste requirements based on a regulatory determination made by the Environmental Protection Agency (EPA) in 1988. EPA generally retains its authorities under federal environmental and public health laws to respond to environmental contamination.
All six states in GAOs review implement additional requirements governing activities associated with oil and gas development and have updated some aspects of their requirements in recent years. For example, all six states have requirements related to how wells are to be drilled and how casingsteel pipe within the wellis to be installed and cemented in place, though the specifics of their requirements vary. The states also have requirements related to well site selection and preparation, which may include baseline testing of water wells before drilling or stormwater management.
Oil and gas development on federal lands must comply with applicable federal environmental and state laws, as well as additional requirements. These requirements are the same for conventional and unconventional oil and gas development. The Bureau of Land Management (BLM) oversees oil and gas development on approximately 700 million subsurface acres. BLM regulations for leases and permits govern similar types of activities as state requirements, such as requirements for how operators drill the well and install casing. BLM recently proposed new regulations for hydraulic fracturing of wells on public lands.
Federal and state agencies reported several challenges in regulating oil and gas development from unconventional reservoirs. EPA officials reported that conducting inspection and enforcement activities and having limited legal authorities are challenges. For example, conducting inspection and enforcement activities is challenging due to limited information, such as data on groundwater quality prior to drilling. EPA officials also said that the exclusion of exploration and production waste from hazardous waste regulations under RCRA significantly limits EPAs role in regulating these wastes. In addition, BLM and state officials reported that hiring and retaining staff and educating the public are challenges. For example, officials from several states and BLM said that retaining employees is difficult because qualified staff are frequently offered more money for private sector positions within the oil and gas industry.