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EPA study may be end of the trail for feds on fracking

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EPA study may be end of the trail for feds on fracking

The U.S. EPA's final study on hydraulic fracturing pleased no one but probably marked the end of federal interest in an extraction process regulated primarily by the states, said Washington, D.C., policy and investment analysts after the report's Dec. 13 release.

Environmental groups looking for a widespread condemnation of fracking had to make do with scientific acknowledgement of what was already known: sometimes, in some parts of the extraction cycle, drinking water is impacted by drilling.

Industry, primed for a blanket exoneration by a draft conclusion in June 2015 that fracking presented no "widespread, systemic" threat to drinking water, was disappointed with what it saw as a more mealy-mouthed conclusion that there was not enough evidence to prove fracking is not a nationwide threat.

What the study will not do is propel more EPA interest in fracking unless there is a large disaster. This throws the issue back to the states, many of which are ahead of Washington on the issue, the policy and investment analysts said.

"Although today's report appears superficially less favorable than its predecessor, we do not regard it as likely to precipitate further federal regulatory risk," Clearview Energy Partners Managing Director Kevin Book said.

"State-level regulations and operator-driven practices introduced since the inception of the study six years ago have already responded to many of the risk perceptions that motivated the original congressional request," Book said. "Second — and we concede this is something of an understatement neither President-elect Donald Trump, nor his EPA nominee, Oklahoma Attorney General Scott Pruitt, seem likely to push for further federal intervention in the absence of accidents or spills indicative of regulatory gaps."

"I am skeptical that the report (even though the language is less reverential towards industry) will drive regulatory actions with Scott Pruitt at the helm," Height Securities analyst Katie Bays said in an email interview. "One of our expectations for 2017 is that perhaps state level conflicts will become more heated between environmentalists and industry because the federal government is no longer going to be a useful outlet to pursue their environmental goals."

The Environmental Defense Fund's Vice President for Climate and Energy Mark Brownstein said the report proves that states cannot sit idle when local waters are tainted by drilling and fracking.

"To pretend that there is no risk, and therefore no need for safeguards to protect communities and continuously improve state regulations to keep pace with evolving field practices, runs contrary to the huge body of evidence EPA reviewed," Brownstein said in a statement. "EPA's final report makes it clear there is a lot of work yet to be done to better define the risks and the practices that will reduce them."

The EPA was never eager to jump into the debate about fracking safety in a world where regulatory oversight of oil and gas drilling is firmly left to individual states. It took a 2010 act by a Democratically controlled Congress to push the agency into a study that took five years, involved multiple public hearings, and cost $29 million.

"EPA identified conditions under which impacts from hydraulic fracturing activities can be more frequent or severe," the agency said when it released the report Dec. 13. "Because of the significant data gaps and uncertainties in the available data, it was not possible to fully characterize the severity of impacts, nor was it possible to calculate or estimate the national frequency of impacts on drinking water resources from activities in the hydraulic fracturing water cycle."

The EPA said local regulators can reduce the impacts of fracking on drinking water by paying closer attention to practices surrounding chemical handling on the surface, well construction, and the treatment and disposal of wastewater.

The tentative finding of no "widespread, systemic" risks to water was apparently added at the last minute by unknown EPA officials in May 2015 after meetings with the White House, according to a recent report by American Public Media. At the time, the White House was preparing to issue its Clean Power Plan, which relies heavily on large supplies of natural gas to fuel the power generation as coal plants retire to meet emissions limits.

That conclusion did not survive another yearlong scientific review. An EPA-appointed panel of scientists voted 26-4 that any conclusion that fracking did not present a widespread risk required more data or needed to be deleted.