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Fracking Debate: The Importance of Pre-Drill Water-Quality Testing

By Teodoro Bosquez IV, Daniel Carmeli, Jeremy Esterkin, Mae Kieng Hau, Kenneth Komoroski, Camarin Madigan, and Matthew Sepp – February 18, 2015

Pre-drill water-quality testing has emerged as a critical topic related to the use of hydraulic fracturing (fracking) in oil and gas operations in the United States. The oil and natural gas industry appropriately points out that there are no documented cases of groundwater contamination anywhere in the United States from hydraulic fracturing since the practice began several decades ago. Environmentalists allege concerns with the practice, nonetheless, in response to the increase of development of unconventional shale resources in the United States and elsewhere.  

Pre-drill testing involves the collection of water (typically shallow groundwater, but sometimes from springs or surface water) data near an oil and natural gas well pad prior to commencing drilling activities. This practice enables oil and gas operators to establish baseline water-quality conditions prior to drilling, well completion, and production activities. Further, pre-drill surveys can be used to document other important information such as the condition of on-site water sources, including water-well integrity or construction. 

Despite the fierce public debate on the merits of hydraulic fracturing, the availability of water-quality baseline data is invaluable for oil and gas operators, the public, and regulatory officials. The data can play a crucial role in responding to environmental challenges by the public or claims that an operator affected water supplies brought by regulatory agencies.

The data can also prevent potential litigation altogether and otherwise help establish good community and public relations by providing important facts and information. In fact, one of the most common benefits of pre-drill testing is to inform the landowner, often for the first time, as to the quality of the private water supply. The data can often identify issues unrelated to drilling, such as septic system leaks or natural contaminants that may have been present in untested water supplies for years.

That said, pre-drill testing regulations vary considerably from state to state. Some states have elaborate notification and sampling requirements, distance specifications, testing methods, and legal ramifications for noncompliance or inaction. Others have no regulations, forcing operators to independently weigh the merits of undertaking pre-drill testing or determine the appropriate procedures.

No matter the nature of regulation, pre-drill testing can mean the difference between a successful operation and one resulting in expensive, onerous litigation that could have been avoided. Pre-drill testing is not just an administrative checkbox; rather, it potentially can provide an operator with a shield from liability or leave it vulnerable and exposed.

Overview of Pre-Drill Testing Regulations: Duties
In general, for states that have them, pre-drill testing regulations share two common components: duties and legal consequences. The specific details inevitably will vary from state to state, but the same salient considerations are common to all.

Pre-drill testing requirement. Operators may be required to perform pre-drill testing unconditionally, only upon a landowner’s request, or not at all.

Covered water supplies. Only water supplies within a certain radius of the well site (generally 1,500–2,500 feet) are implicated. Water supplies commonly include both groundwater wells and surface springs. Some states apply such testing requirements to all water supplies while others limit regulation to water supplies serving particular uses, such as drinking and irrigation.

Methods and scope. Operators must implement state-approved analytical methods. The scope of testing presents a significant concern and potential cost; some states list a limited number of commonly tested parameters while others require advanced testing such as isotopic analysis. Either way, testing only for chlorides (a.k.a. salt) should be sufficient because the presence of chlorides alone can establish whether drilling and well-completion activities have affected water supplies. Chloride has been scientifically determined to be the ultimate “tracer” for fossil-fuel formations that resulted from receding oceans. That said, operators must be cognizant of the state-specific requirements to avoid undermining or invalidating their data. Additionally, operators may need to test anywhere from a single water supply to all water supplies within the statutory radius. The number of samples required per water supply also varies.

Landowner notification. Operators generally must notify local landowners of planned drilling activities. In some states, the regulations require operators to inform landowners of their pre-drill testing rights while others merely direct operators to forward well-site-related materials such as permit applications. That said, in the absence of a specific requirement to notify and share pre-drill testing data, operators are advised to consider the value of engaging and maintaining an open dialogue with nearby landowners.

Right of refusal/entry. Landowners generally are entitled to refuse testing in states that do not require pre-drill sampling. Doing so, however, waives any presumptive liability that may be otherwise available under the law. Additionally, in states that require testing, operators may seek a court order granting them entry.

Post-drill testing requirement. In some states, the regulations require operators to perform post-drill testing, generally at all locations that underwent pre-drill testing. In other states, operators need not perform post-drill testing unless directed to by the government. Again, in states where post-drill testing is not required, operators should still consider the value of comparative post-drill data for legal and nonlegal purposes, such as community relations and public education.

Overview of Pre-Drill Testing Regulations: Legal Consequences

Presumption of pollution. In some states, operators are presumed to have caused any pollution identified in water supplies within a certain time frame (generally between 6 and 30 months) after and distance (generally between 1,500 and 2,500 feet) from drilling activities. Likewise, post-drill testing requirements achieve a similar result, effectively shifting the burden onto operators to produce evidence demonstrating that they have not caused any pollution.

Rebutting the presumption. Where applicable, operators may rebut the presumption by proving that pollution preexisted drilling activities, was caused by something else, occurred outside the statutory time frame, was alleged for a water supply outside the statutory radius, or was alleged by a landowner who had refused pre-drilling testing.

Emergency or temporary water replacement. Most states require operators to provide emergency or temporary water-supply replacements to landowners within the statutory distance whose water supplies were found by agency investigation, or even just alleged by the landowner, to be polluted within the statutory time frame.

Quality of permanent water replacement. Where a final order finds that a water supply was polluted, the operator held responsible must permanently replace or restore the water supply (or reimburse the landowner for the cost thereof). The replaced water supplies may need to be of a quality and quantity adequate for the landowner’s use, comparable to pre-drilling water, or in compliance with drinking water standards.

Comparison of State Regulatory Models
The variability in pre-drill testing regulations can be understood by grouping and comparing states’ hydraulic-fracturing regulations and presence.

Category 1: Texas, Oklahoma, Louisiana. Generally, states with well-established oil and gas industries do not require pre-drill sampling. These states, including Texas, Oklahoma, and Louisiana, have regulated fracking operations for decades. These state rules have addressed pollution concerns since well before the past few years, during which time pre-drill sampling requirements became popular. From their perspective, there is no need to add to or abandon trusted approaches that have stood the test of time.

Category 2: Pennsylvania/West Virginia vs. Colorado/Wyoming. The significant growth of oil and natural gas development, including larger water-volume fracking practices, in a number of states required them to reevaluate and revise existing regulations. The regulatory responses to the shale revolution have varied as states have developed regulations that reflect a balancing act between industry and economic interests on the one side and public safety and perceptions on the other.

The Pennsylvania/West Virginia Model—Presumptive Liability: Both Pennsylvania and West Virginia require operators to first notify local landowners of the right and advantage of pre-drill testing and then perform the testing if requested. Under Pennsylvania law, operators are presumed responsible for polluted water supplies within 2,500 feet of a well site and occurring within 12 months of completion, drilling, stimulation, or alteration. West Virginia’s regulations impose the same presumption, but with distance and timing thresholds of 1,500 feet and 6 months, respectively. Both presumptions may be rebutted with evidence of preexisting or alternative causes, that the distance or timing thresholds were not met, or that the landowner refused to allow the operator to take a pre-drill sample.

The Colorado/Wyoming Model—Post-drill Testing: The Colorado and Wyoming regulations are similar to one another. Unlike Pennsylvania and West Virginia, these states do not provide for any presumption of pollution. Instead, they require operators to perform pre-drill testing and two rounds of post-drill testing at four locations within a half-mile of the well.

Both models represent sensible moderate approaches that mitigate the inherent challenges of proving causation while limiting prejudice to operators.

Category 3: California/Ohio vs. North Carolina/Illinois. Although the recent energy boom has spread to most states with significant oil and gas reserves, some states remain largely untapped with the potential for expanded development.

California/Ohio Model: California’s recent fracking legislation and proposed regulations require operators to provide notice of sampling rights to landowners within 1,500 feet of the vertical wellbore. The landowners can then request pre- and post-drilling sampling. Under Ohio’s limited pre-drill testing regulations, operators must perform pre-drill testing of water supplies within 300 feet of the well site in urbanized areas and submit any other samples of water supplies within 1,500 feet that they choose to take. Neither California nor Ohio imposes any type of presumption of pollution.

North Carolina/Illinois Model: North Carolina and Illinois have thrown the kitchen sink at operators. Both require pre-drill and post-drill sampling (five rounds in North Carolina and three rounds in Illinois) of all water supplies (three samples per location in Illinois) within the statutory radius (half-mile in North Carolina and 1,500 feet in Illinois). Both states also tack on a rebuttable presumption of contamination.

California and Ohio require sampling only under limited circumstances and impose no presumption of fault on operators. By contrast, North Carolina and Illinois have been far more aggressive. With undeveloped or even nonexisting hydraulic fracturing operations, these states are regulating in a relative vacuum. Imposing a presumption on top of several rounds of area-wide pre- and post-drilling sampling is an aggressive policy made possible, in part, by the absence of a strong industry presence in the states. Drilling in those states may be slow to take shape, as operators may be hesitant to enter such unfavorable regulatory environments.

Practical Considerations
The significant growth of fracking in the United States has resulted in a spirited debate both in the public sphere as well as in courtrooms and administrative settings. In all these arenas, reliable data are invaluable to prove or disprove that oil and natural gas operations have impacted the environment. 

Baseline water-quality data can play a significant role in defending groundwater-contamination cases. Notably, in states that require pre-drill testing and impose liability presumptions in the absence of baseline data, failure to test can be a fatal blow. Even where pre-drill testing is not required, it dramatically reduces the need to support a defense with highly technical arguments that could easily complicate the issues, confuse the fact finder, and increase costs. 

More importantly, baseline data can help prevent government investigations or enforcement actions altogether. State environmental agencies are statutorily mandated to investigate and assess allegations of environmental impacts. It is far more difficult to alleviate regulators’ groundwater-contamination concerns solely with post-drilling data. After all, how can an operator establish that that water quality has not been impacted by its operations if it cannot show what the water was like beforehand? 

In the absence of pre-drill data, operators may need to review regional groundwater studies and topographic/geologic maps to identify potentially applicable background water quality data. The data may be available in databases or other resources maintained by the U.S. Geological Survey, state geological surveys, or the U.S. Department of Energy. Data from these resources, however, may not be site-specific or contemporaneous with the oil and gas operations contested in the dispute, and may therefore provide limited practical value to operators. 

Pre- and post-drilling testing can also prevent citizen suits and promote public relations. By collecting and sharing the data, operators can alleviate landowner concerns that fracking operations may have contaminated their water supplies. The data can also serve to clear up misunderstandings or misconceptions that are commonly premised on speculation. Further, operators can enhance their reputation as responsible and transparent by showcasing their willingness to share such information. For those regions serving as the front lines in the battle over fracking, it is difficult to overstate the value of establishing a good rapport with the public.  

Landowners also benefit from sampling by obtaining a better understanding of the quality of their water supplies. Clean results can provide comfort that water used to drink, cook, and clean is safe. Alternatively, samples showing contamination can clear the way through an otherwise intimidating legal process. Certainly, without the baseline water-quality data, landowners and their counsel may face significant challenges proving claims that water supplies were impacted by oil and gas operations. 

In light of ongoing litigation and public debate over the alleged impacts of fracking to groundwater sources, understanding the legal requirements and significance of pre-drill testing is critical. 

Keywords: environmental litigation, fracking, hydraulic fracturing, monitoring, testing, sampling, pre-drilling, regulations

Teodoro Bosquez IV, Daniel Carmeli, and Matthew Sepp are associates and Kenneth Komoroski is a partner at Morgan Lewis in Pittsburgh, Pennsylvania. Jeremy Esterkin and Mae Kieng Hau are associates with the firm's Los Angeles, California, office. Camarin Madigan is a partner in the firm's San Francisco, California, office.

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