On February 12, 2014, the United States Environmental Protection Agency (EPA) issued long-awaited final guidance on permitting the use of diesel fuels in hydraulic fracturing operations. [2] This guidance is important because any fracturing operation involving diesel fuel must obtain an underground injection permit under the Safe Drinking Water Act. [3] Central to the scope of the guidance's impact is the definition of "diesel fuel" – a broad definition would sweep numerous additional well operations into its clutches.

From the start, the Agency clearly sought to keep the guidance within the parameters of an "interpretive" rule. "EPA's goal is to explain existing requirements in order to provide regulatory certainty, improve compliance with the SDWA requirements and strengthen environmental protections consistent with existing law." [4] Because the SDWA itself does not provide a definition, EPA gathered information from industry usage, other statutes, material safety data sheets, literature searches, and other sources to inform its decisionmaking process.

In the draft guidance, EPA proposed to define "diesel fuel" by reference to Chemical Abstracts Service (CAS) numbers. Namely, the draft guidance specified the following six CAS numbers:

• 68334-30-5 Diesel Fuel
• 68476-34-6 Diesel Fuel No. 2
• 68476-30-2 Fuel Oil No. 2
• 68476-31-3 Fuel Oil No. 4
• 8008-20-6 Kerosene
• 68410-00-4 Petroleum Distillates

"EPA selected these six CASRNs because either the primary name, or common synonyms, contain the term 'diesel fuel' and they meet the chemical and physical description of 'diesel fuel.'" [5] However, the Agency also noted its concern over the toxicity of benzene, toluene, ethylbenzene, and xylene compounds (BTEX) contained in diesel fuels, [6] and invited comment on the efficacy and suitability of this definition.

Many interested parties accepted EPA's invitation. Not surprisingly, several commenters' recommendations generally supported the use of CAS numbers, [7] but advocated a narrower scope, [8] focusing on only those CAS numbers named "diesel fuel," [9] or at most those with "diesel" in their primary CAS names. [10] EPA disagreed with these comments, stating "such a definition would likely omit substances that Congress would have considered to be 'diesel fuels' in amending the statute." [11] Moreover, the Agency certainly was aware that the synonym-only substances appeared in the Frac Focus database as often or more so than the primary-name diesels. [12]

Other commenters, not surprisingly, urged EPA to cast a broader net and include any substances that shared diesel's constituents: "It is critical that EPA provide a broad definition of diesel in order to maintain the regulatory authority in light of changing chemical compositions provided by the industry." [13] However, EPA reminded these parties in its response to comments that it "is using a definition that is most closely tied linguistically to the statutory term 'diesel fuel' since this is an interpretive, not legislative, rulemaking." [14]

In the final guidance, EPA removed only Petroleum Distillates from the definitional list of CAS numbers. "The EPA agrees that CASRN 68410-00-4 (petroleum distillates/crude oil) does not meet the definition of diesel fuels because it is not identified as "diesel fuels" by its primary name or synonym. [15] Thus, the requirement to obtain an underground injection permit applies to any hydraulic fracturing operation that uses any of the following:

• 68334-30-5 Diesel Fuel
• 68476-34-6 Diesel Fuel No. 2
• 68476-30-2 Fuel Oil No. 2
• 68476-31-3 Fuel Oil No. 4
• 8008-20-6 Kerosene

In keeping its definition "tightly drawn from the plain language of the statute," [16] the Agency clearly aims to limit the viability of a judicial challenge. Has EPA successfully protected its approach within the discretion of an interpretive rule, simply reminding operators of their existing obligations? [17] Perhaps, but there are two more relevant questions. First, will stakeholders see enough vulnerability in the Agency's position to make judicial review worth the effort? And second, how will EPA exert its influence outside the regulatory text to "promote voluntary use of safer alternatives in HF fluids"? [18] Operators should take this not-so-subtle hint to mean that diesel by any name will continue to attract EPA's attention.

[1] With apologies to Mr. Shakespeare (Romeo and Juliet, Act II, Scene 2).
[2] 79 Fed. Reg. 8451 (Feb. 12, 2014).
[3] SDWA Section 1421(d)(1)(B); see also EPA, Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels: Underground Injection Control Program Guidance #84, at 1 (Feb. 2014) (hereinafter Final Guidance).
[4] EPA, Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels – Draft: Underground Injection Control Program Guidance #84, at 1 (May 2012) (hereinafter Draft Guidance).
[5] Draft Guidance, at 9-10.
[6] Draft Guidance at 7-8 ("BTEX compounds are highly mobile in ground water and are regulated under national primary drinking water regulations because of the risks they pose to human health.").
[7] API Comments, at 20 (Aug. 23, 2012) ("API supports as a general principle the use of specific CAS numbers, rather than any of the descriptive alternative definitions that lack clarity, defy common understanding, and subvert Congressional intent."); Halliburton Energy Services, Inc. Comments, at 12 (Aug. 23, 2012) (supporting use of CASRNs).
[8] EPA, Permitting Guidance for Oil and Gas Hydraulic Fracturing Activities Using Diesel Fuels: Response to Summary Comments (Feb. 2014) (hereinafter Response to Comments) ("Several commenters suggested that the EPA should adopt a more restricted definition of "diesel fuels.").
[9] Halliburton Energy Services, Inc. Comments, at 12 (pointing to EPAct legislative history as indicating that "Congress meant to use the term 'diesel fuel' in its ordinary sense" and arguing that the ordinary usage would not include No. 4 fuel oil, kerosene, or petroleum distillates); see also American Exploration & Production Council et al. Comments, at 10 (noting that Congressional investigation into diesel use did not include these compounds); Independent Petroleum Association of America Comments, at 9 (Aug. 21, 2012) (also suggesting exclusion of No. 2 Fuel Oil); Railroad Commission of Texas Comments, at 5 (July 2, 2012) (same).
[10] API Comments, at 21 (recommending using only those CAS numbers known as diesel fuel and suitable for use in diesel engines – 68476-34-6 (Diesel No. 2), 68476-30-2 (Fuel Oil No. 2), 68334-30-5 (Diesel Fuel)).
[11] Response to Comments, at 35-36 ("Some commenters suggest that the diesel fuels definition should be limited to only the two CASRNs that have 'diesel fuel' as their primary name, not synonym. The EPA disagrees that it is inappropriate to consider synonyms in defining diesel fuels – as considering primary names only would exclude substances that are otherwise commonly known as or considered to be 'diesel fuels.;").
[12] See Fracfocus.org.
[13] Center for Biological Diversity Comments, at 6 (Aug. 23, 2012); see also American Water Works Association Comments, at 2 (July 3, 2012) (recommending that "diesel fuels should be defined broadly, to include not only the CAS numbers identified in the draft guidance, but also chemicals which have similar chemical properties"); NRDC et al. Comments, at 2 (Aug. 23, 2012) (recommending inclusion of "any and all [CAS] numbers which qualify as diesel fuel under the definitions used by federal and state government agencies"); Environmental Working Group Comments, at 3 (Aug. 23, 2012) (urging the Agency to adopt a broad definition, including "any petroleum distillate or diesel-like compound marketed as diesel or diesel equivalent to drilling companies").
[14] Response to Comments, at 37.
[15] Response to Comments, at 36.
[16] Id.
[17] "An interpretive rule simply states what the administrative agency thinks the statute means, and only reminds affected parties of existing duties." General Motors Corp. v. Ruckelshaus, 742 F.2d 1561, 1565 (D.C. Cir. 1984) (internal citations omitted); see also American Mining Cong. v. MSHA, 995 F.2d 1106 (DC Cir. 1993) (finding agency statement defining regulatory term to be interpretive, not legislative, despite petitioners' arguments that term could be interpreted in other ways).
[18] Final Guidance, at 4.

Cynthia AM Stroman  Washington, D.C.  +1 202 626 2381  cstroman@kslaw.com  View Profile »