Some oil and gas  can be developed by drilling a well and relying on the natural pressure in  the formation to push the oil or gas to the surface. Enforcement of state class II regulations. Resources for State and EPA-Managed Class II Programs Include EPA Grants, State Funds, and Federal and State Personnel

EPA and states provide a mix of resources to support the class II  program, including EPA grants, state funding, and EPA and state  personnel. Officials who manage the  eight programs we reviewed reported few known instances of  contamination from the injection of fluids into class II wells in the last 5  years; however, EPA’s class II program does not require monitoring of  groundwater for contamination nor do most of the eight states we  reviewed. Without similar reviews of other emerging risks, class II  programs may not have the information necessary to fully protect  underground drinking water. EPA Is Not Consistently Performing Oversight and Enforcement Activities

EPA is not consistently performing two key activities associated with its  oversight and enforcement responsibilities for class II programs. First,  EPA does not consistently conduct annual on-site reviews of state  programs, which EPA guidance identifies as a key activity needed to  conduct effective oversight and to ensure that state and EPA-managed  class II programs are protecting underground sources of drinking water. Without  evaluating its guidance, EPA does not know what oversight activities are  most effective and should be priorities—or even necessary—given  current program conditions and funding. EPA Is Not Consistently Incorporating State Program Changes into Federal Regulations, Hindering Its Ability to Enforce Program Requirements

EPA has not consistently incorporated state program requirements, or  changes to state program requirements, into federal regulations, as  required by agency regulations; as a result, where it has not done so,  EPA does not have the ability to enforce these state program  requirements if necessary. Without incorporating state program requirements, or changes to state  program requirements, into federal regulations, EPA may not be able to  take enforcement action, if a state does not take such action or requests  EPA’s assistance to take action, against well operators that are violating  state regulations. EPA officials said that they do not often have to  step in to enforce a state class II program regulation, but as the oil and  gas industry continues to develop its resources and use innovative  technologies, state programs may change their regulations, and EPA may  have increasing numbers of state program changes to review, approve,  incorporate into federal regulations, and enforce. EPA officials told us that incorporating changes into federal regulations,  particularly through the rulemaking process, was burdensome and time- consuming. EPA  officials told us that the database will not be complete and widely  populated enough to report national data for at least 2 to 3 years. Without information on emerging risks on a national scale, such  as through a UIC Technical Workgroup review, state class II programs  may not have the information necessary to address these risks and  ensure that their programs are designed to be effective at protecting  underground sources of drinking water. Recommendations for Executive Action

To ensure that EPA’s oversight of the class II program is effective at  protecting drinking water sources from the underground injection of large  amounts of wastewater that will be produced with increasing domestic oil  and gas production, we recommend that the Administrator of the  Environmental Protection Agency take the following four actions:
Task the UIC Technical Working Group with reviewing emerging risks,  and related program safeguards, including overpressurization of  formations and information on use of diesel fuels in hydraulic  fracturing. To support nationwide reporting goals until the national UIC database  improve the 7520 data for reporting purposes, as well as to help  with quality assurance for the national UIC database, by  developing and implementing a protocol for states and regions to  enter data consistently and for regions to check 7520 data for  consistency and completeness to ensure that data collected from  state and EPA-managed class II programs are complete and  comparable for purposes of reporting at a national level, and  in the interim, develop a method to use the 7520 database to  report UIC data, including data on class II wells, until the national  UIC database is fully populated with state data. In response to the second part of this recommendation, that EPA  consider alternative processes to review and approve state program  revisions and to incorporate state programs into federal regulations  without rulemaking, EPA stated that (1) the Safe Drinking Water Act  specifically requires that state UIC program revisions made in response to  changes in EPA UIC regulations be approved by rule, and (2) the agency  would need to revise its regulations to be able to approve state program  changes without a rulemaking. EPA has not, however, codified some state programs. Appendix III: Objectives, Scope, and Methodology

The objectives of this report are to examine: (1) EPA and state roles,  responsibilities, and resources in management the class II program; (2)  safeguards select states have in place to ensure the protection of  underground drinking water; (3) EPA’s regulation and oversight of class II  programs; and (4) the reliability of data to report on the class II program  nationwide. The programs in two of these states— Kentucky and Pennsylvania—are managed by EPA regions under EPA  regulations, while the remaining six programs are state programs  approved by EPA.
Why GAO Did This Study

Every day in the United States, at least 2 billion gallons of fluids are injected into over 172,000 wells to enhance oil and gas production, or to dispose of fluids brought to the surface during the extraction of oil and gas resources. These wells are subject to regulation to protect drinking water sources under EPA's UIC class II program and approved state class II programs. Because much of the population relies on underground sources for drinking water, these wells have raised concerns about the safety of the nation's drinking water.
GAO was asked to review EPA's oversight of the class II program. This report examines (1) EPA and state roles, responsibilities, and resources for the program, (2) safeguards to protect drinking water, (3) EPA oversight and enforcement of class II programs, and (4) the reliability of program data for reporting. GAO reviewed federal and state laws and regulations. GAO interviewed EPA and state officials and reviewed class II programs from a nongeneralizable sample of eight states selected on the basis of shale oil and gas regions and the highest number of class II wells.

What GAO Found

The Environmental Protection Agency's (EPA) role in the Underground Injection Control (UIC) class II program is to oversee and enforce fluid injection into wells associated with oil and gas production, known as class II wells. EPA has approved 39 states to manage their own class II programs, and EPA regions are responsible for managing the programs in remaining states. EPA regions and states use a mix of resources to manage class II programs, including EPA grant funding, state funding, and federal and state personnel. EPA's UIC grant funding has remained at about $11 million for at least the past 10 years.
Class II programs from the eight selected states that GAO reviewed have safeguards, such as construction requirements for injection wells, to protect against contamination of underground sources of drinking water. Programs in two states are managed by EPA and rely on EPA safeguards, while the remaining six programs are state managed and have their own safeguards that EPA deemed effective at preventing such contamination. Overall, EPA and state program officials reported that these safeguards are protective, resulting in few known incidents of contamination. However, the safeguards do not address emerging underground injection risks, such as seismic activity and overly high pressure in geologic formations leading to surface outbreaks of fluids. EPA officials said they manage these risks on a state-by-state basis, and some states have additional safeguards to address them. EPA has tasked its UIC Technical Workgroup with reviewing induced seismicity associated with injection wells and possible safeguards, but it does not plan reviews of other emerging risks, such as high pressure in formations. Without reviews of these risks, class II programs may not have the information necessary to fully protect underground drinking water.
EPA is not consistently conducting two key oversight and enforcement activities for class II programs. First, EPA does not consistently conduct annual on-site state program evaluations as directed in guidance because, according to some EPA officials, the agency does not have the resources to do so. The agency has not, however, evaluated its guidance, which dates from the 1980s, to determine which activities are essential for effective oversight. Without such an evaluation, EPA does not know what oversight activities are most effective or necessary. Second, to enforce state class II requirements, under current agency regulations, EPA must approve and incorporate state program requirements and any changes to them into federal regulations through a rulemaking. EPA has not incorporated all such requirements and changes into federal regulations and, as a result, may not be able to enforce all state program requirements. Some EPA officials said that incorporating changes into federal regulations through the rulemaking process is burdensome and time-consuming. EPA has not, however, evaluated alternatives for a more efficient process to approve and incorporate state program requirements and changes into regulations. Without incorporating these requirements and changes into federal regulations, EPA cannot enforce them if a state does not take action or requests EPA's assistance to take action.
EPA collects a large amount of data on each class II program, but the data are not reliable (i.e., complete or comparable) to report at a national level. EPA is working on a national database that will allow it to report UIC results at a national level, but the database will not be fully implemented for at least 2 to 3 years.

What GAO Recommends

GAO recommends that, among other things, EPA review emerging risks related to class II program safeguards and ensure that it can effectively oversee and efficiently enforce class II programs. EPA agreed with all but the enforcement recommendation. GAO continues to believe that EPA should take actions to ensure it can enforce state class II regulations, as discussed in the report.