In late August, the Tennessee State Oil and Gas Board voted to institute significant changes in the regulations that govern how the industry operates in the state. The board's acceptance of the proposed changes had been seen as a foregone conclusion; still, the changes had been criticized by environmental groups for months, most notably for the lack of any regulation of fracking.
Hydraulic fracturing, or fracking, is the process of pumping of thousands of gallons of water and chemicals into an oil or gas well to stimulate production. It's a process that watchdog groups have blamed for everything from illnesses to explosions in communities near gas drilling sites in New York, Pennsylvania, and Texas, among other places.
The Tennessee Oil and Gas Association (TOGA) says it uses different fracking techniques that need less regulation; environmental groups like the Tennessee Clean Water Network and United Mountain Defense disagree. After months of bickering, the Tennessee Department of Environment and Conservation finally announced that it was working on creating a set of fracking regulations. It held a meeting in August with members from both sides, and TDEC Deputy Commissioner Shari Meghreblian says they hope to "iron out" disagreements up front. She says the two sides will likely meet again in October and a draft of fracking regulations could potentially be written by the end of the year.
You might think environmental groups would be feeling positive about this potential for teamwork, but unfortunately they say there's growing concern, as TOGA is lobbying hard for a different division of TDEC to regulate the industry.
Until about eight years ago, the oil and gas industry had been regulated under TDEC's Geology Division. Early in Gov. Phil Bredesen's administration, enforcement shifted to the Water Pollution Control Division. And if you ask the president of TOGA, Jim Washburn, the move never should have happened.
"We were under Geology for most of the industry's lifetime," Washburn says, adding that most other states also regulate the industry under their Geology divisions. "They never explained to us why we were moved."
TDEC, like most state agencies, is currently undergoing a top to bottom review in the wake of Gov. Bill Haslam's election, so TOGA has asked its oversight to be moved. Washburn, who's also one of the six members of the Oil and Gas Board, says that a shift back to Geology would mean the industry was working with people who understood it, and it would streamline the permitting process.
"They'd probably regulate us better," Washburn says. He adds that Water Pollution Control might even be happy about the move, as he says the division spends a disproportionate amount of time on regulating the oil and gas industry to the detriment of other areas.
It's a move TOGA has been talking about for a while. Director Bill Goodwin told Well Servicing Magazine (the official publication of the trade group Association of Energy Services Companies) last September that he was hopeful that Haslam would be elected and that his administration would move the department. Goodwin is quoted saying, "Water Pollution Control enforcement of out-dated regulations" are the "biggest obstacle to the continued development of oil and gas resources within the state."
In the same article, Washburn is quoted as saying, "Our biggest issue is the fact that the state is concentrating on surface water pollution. … They mean well, but over-regulation may be counterproductive."
But Brian Paddock, an attorney and member of the Sierra Club of Tennessee's Executive Committee, says Water Pollution Control is the logical division to regulate the industry. He says that division has more experience with regulatory authority, granting permits, and enforcement.
"Geology has always been an afterthought. They've never had any regulatory authority. They're geologists, they're scientists," Paddock says. "Oil and Gas already doesn't have the level of technical expertise it needs to deal with such a rapidly expanding field. They have no petroleum engineer, for example. ... Are you really going to put a geologist in charge of this?"
Will Wilson of United Mountain Defense also points out that if Geology resumes control, the oil and gas regulatory staff will be based in Nashville, not Knoxville.
"Most of the gas drilling is happening in East Tennessee. We'd like to make sure the oversight is here in Knoxville," Wilson says.
Meghreblian, who was appointed in April by Haslam's choice for TDEC Commissioner, Nashville lawyer Robert Martineau, says that TDEC regulations are regulations, period, and that it's not that big a deal which division is in charge of the oil and gas industry.
"We look at the department as a cohesive unit that goes across different divisions," Meghreblian says. "If it was moved, it would make no difference in how it was regulated."
And TDEC spokesperson Tisha Calabrese-Benton says all of TDEC will be involved with the new fracking regulations: "Any fracking regulations that result from this process will be department regulations—and will not be tied to one division only. …The issue of fracking crosses air, geology, waste and water mediums, and each division will have input in the process of drafting regulations, and would have responsibility for their piece of any future regulations."
Meghreblian says a decision on the move will probably be made by the beginning of November.