with state and even in,epa offices in denver. we had round table discussions extensive studies going on. i have never yet heard to this date any tie to hydraulic fracturing. >> i was stunned to learn that you actually top los angeles on a number of occasions at 149 parts per billion with respect to ozone. in fact, the epa called it unearthly at some point. what is the cause of such high ozone levels in the county? >> this study is going on it appears this is what i was referring to a moment ago, this is tied, it appears to be a number of factors that the scientists are still trying to learn about. one of the things it's tied with sunlight and snow. this past winter we didn't have very much snow on the ground. we did not have any exceedances. we were well below the number.

a year ago we had deep snow and the numbers were fairly high and so the scientists, the jury's still out. >> i thank you very much. thank you, mr. chairman. >> we'll take a short recess to prepare for the second panel. i appreciate your time very much.

>> during that time period -- so hopefully we get that done. give you a heads up.

thank you both for being here. nancy stoner is acting at min stoit tror for the water and u.s. environmental protection agency. mr. michael is acting director of the u.s. bureau of land management as of today.

we're breaking you in officially. we'll try to be done before your placed as actinged a mip straiter. as i mentioned we do have votes that will be called shortly we will try to get in both your testimony and deal with questions as we go. we'll be glad to receive your testimony. >> good afternoon. i'm nancy stoner actinged a min stroit for for water and u.s. epa. thank you for allowing me to testify today. >> i apologize so much for this. i did not swear everyone in. >> okay. >> every hearing has to have some swearing in it. if i could ask both of you to stand in. that is pursuant to committee rules. i apologize on that. please raise your right hands. do you solemnly swear or affirm that the testimony you're about to give the committee is the truth, the whole truth and nothing but the truth so help you god? let the record reflect that the witnesses have answered in the

affirmative. i apologize. >> that's okay. i think i'll pick up right where i stopped. the epa and this mrgs recognize that natural gas represents an important engineering row source for our country. it has the potential to create jobs, promote energy security. lower energy price and reduce harmful emissions to air and water. at the same time the administration is committed to ensuring the production is is in a safe and responsible manner. we believe that we can protect the health of american families and communities while enjoying the benefit os of expanded natural energy reserves. states are the primary regulators of onshore oil and gas activities, the federal government has an important role to play by regulating oil and gas activities on public and indian trust lands, research and development aimed at innovation to improve the safety of natural gas development and transportation activities and setting sensible standards toisment federal laws and

compliment state safeguards. as the senior policy manager for epa's national water program, i'd like to highlight a few of the epa's actions under for safe drinking water act and clean water act intended to ensure that natural gas production can remove protected. the safe drinking water act governs the construction, operation and perming and closure of underground injection well for the protection of underground sources of drinking water. under ground injection control or uic programs administered by epa or the states are responsible for overseeing these injection activities. however, the energy policy act of 2005 excludes hydraulic fracturing from regulation except for diesel fuels are used. the epa has heard from the industry and the public that we

should clarify the applicablity for the diesel requirement as well as how permits should be written. in response and in light of the significant increase in natural gas production in the united states, we have developed draft guide oons to clarify requirements under the safe drinking water act and to help provide the endangerment of underground sources of drinking water from hydraulic fracturing using diesel fuels. i'd like to emphasize as is the case with all guide asbestos, the draft document does not impose any new requirements. the draft clarifies existing statutory and regulatory requirements and provides technical recommendations for applying requirements to the diesel fuels hydraulic

fracturing politics. by welcome comments from all affected parties and the politics. the agency is also initiated efforts under the clean water act to provide regulatory clarity and protection to risks to water quality. in october 2011 epa announced a schedule to develop pretreatment standards for waste water discharges produced by natural gas extraction from underground cold bed and shale formations. in addition, epa is assisting state and frat permitting authorities in the marcellus shale region by answering technical questions concerning the treatment and disposal of waste water from shale gas extraction. terks pa is conducting research to better understand the impact

on drinking water resources. help assure that public health and water quality remain protected as natural gas helps to promote our nation's economic recovery and security. thank you for the opportunity to testify before you today and i'm happy to take any questions you may have. >> thank you very much. >> members of the subcommittee thank you for the opportunity to discussion the bureau of land management development and their application of federal level trust lands. we also provide permitting and oversight services on approximately 56 million acres of indian trust millionaires.

the development of conventional energy resources will continue to play a crucial role in meeting the nation's energy needs. facilitating the safe, responsible and efficient development of these domestic oil and gas resources is the responsibility and part of the administration's broad energy strategy to protect consumers. fiscal year 2011 federal oil and gas royalties exceeded $2b.7 billion. approximately half of which was paid directly to the states in which the development occurred. tribal well royalties exceeded $400 million with 100% of those revenues paid to the tribes and individual indians owning the land on which the.com occurred. oil and gas production has grown considerably and is expected to continue in coming decades.

the bill estimates that approximately 90% of wells on public lands and indian lands are stimulated by hydraulic fracturing techniques. it has raised public concerns about the potential impact on water availability and quality particularly with respect to the chemical composition of fracking fluids and the methods used. it recognizes that some but not all space have recently taken action to address hydraulic fracturing in their own regulations. one of the blm's key goals in updating its regulations in hydraulic fracturing is to compliment the state efforts by providing a consistent standard across all public and indian lands. the agency has a long history of working cooperatively with state regulators to koord mate state and federal activities.

the proposed role making is not intended to duplicate various state or federal requirements. it's to encourage profirnsy in the collection of data and the reporting of information. the development includes tribal consultation. this policy emphasizes trust, respect and shared responsibility by providing trial governments an expanded role to perform federal policy that impacts indian lands. the blm conducted a series of meetings in the west with significant development in indian and oil and gas resources. nearly 180 tribal leaders were invited to held these meetings held in you will sa, oklahoma, billings, montana, and farmington, new mexico. 84 tribal members representing 24 tribes attended those meetings. on may 11th, 2012, the blm sent 180 invitations for continued government to government consultation to exchange

information on the development, hydraulic fracturing rule. as the agency continues to control with tribal leaders throughout the process, responses will inform our actions and define the scope of acceptable options. the blm's prosoezed rule is consistent. on may 11th, 2012, the blm published the proposed rule beginning a 60 day public comment period. straight forward measures outlined in the proposed rule include, disclosure of chemicals used in operations with appreciate protections for trade secrets. assurance of well born activity to minimize the risk of fracturing fluids. and water management requirements to apply to the fluids that flow back to the surface after fracking has taken place. it will strengthen the requirements for on indian and

federal lands to protect the health of american communities while ensuring continued access to important resources. mr. chairman, thank you for the opportunity to testify. i would be happy to answer any questions. >> thank you. thank you not only for your written testimony, but your oral testimony for allowing to come in on your prefirst day on it. they may be calling for votes. if they're calling the votes right now that's going to interrupt your schedule. i don't want us to jump into our questioning time if we call the votes on it. we'll just hesitate for a moment and see if they're abbt to do that.

>> okay. we'll try this a couple different ways. looks like they are calling the vote on that. if they are, we can do a round of questions and come back and do a second round or try to stall and do both rounds. we can take this either way. we're going to pretend this is a democracy for a moment and talk about it. >> if we wanted to maybe not take our full five minutes in order to get some questions in. >> come back around. >> mr. kelly? >> we'll try to do three minutes in this fist round and do a second round. we'll do three minutes in the first round and the second round we'll do eight minutes each. we'll try to cover a few of those things to get going. yield to mr. kelly here this

first moment with my round of questioning. >> i thank you the chairman. miss stoner, i'm trying to understand the change in epa's interpretation of a regulation. why was the 2010 subject announcement on subject to the notice and comment procedure. i'm talking specifically about we do into the diesel element of it. there was that was kind of fast based, was it not? it was placed on your website. was the regular procedure take snn. >> this is a guidance document. it is an interpretation of the statute and the regulations it imposes no -- >> i'm talking before the guidance dumt? >> i'm sorry? >> the epa posted it on their website. on the permit for with the diesel using the diesel in the fracking. >> the epa has on its website information about what is in the engineering policy act including

the fact that when hydraulic fracturing is done with diesel fuels a permit is required. that's many the statute. and so statute we did have a lawsuit associated with that, which has now been settled. >> i understand. but that's different than the document that exists before the 2010. is that not true? you -- it's changed. i am not sure i understand your question. >> well, there's a letter from acting assistant add straighter ben grumble stating the use of hydraulic fracturing using diesel does not fall within the scope of the uic class 2 program. that's before 2010. >> was that before 2005, congressman? >> no. this was before 2010. so the epa then decides to change that. just going on their website. it didn't go through the normal processing, is what i'm saying. >> it's not my understanding the

agency changed the its position between 2001 and 2005. there was a court decision that said that hydraulic fracturing was within the class 2 uic program. it was at that point the agency changed its position in response to a federal -- >> i understand. without objection, mr. chairman, i'm going to ask this letter be put in to the testimony. >> without objection. >> the concern is things change rather quickly and the process all of a sudden not policy before becomes policy and does not go through the regular process. and the diesel -- the fracturing was not part of what was in the policy of using diesel fuel. >> we are implementing the 2005 statute with the guidance that has gone through -- going through public notice and comment now after a series of public meetings and discussions

with a variety of different groups. so we are undertaking that process. we agree with you that it is important to have the involvement and wide variety of partners and stakeholders in the process, that is the intent of the whole process. so i wonder why was it fast tracked. mr. chairman, my time is up. >> i recognize mr. conley. [ no audio ] >> i've lost nine seconds. welcome to both of our panelists. thank you, mr. chairman. just to clarify, i'm confused. epa is not producing a general broad regulation of fracturing. it's only proposing fracturing within the statutory framework provided in the 2005 legislation and a subsequent court ruling.

is that correct? >> yes, that's correct. we're interpreting the statute and the regulations. >> but if, for example, it does not involve diesel, you're not regulating the process. >> that's correct. diesel fuels is in the statute. that's what we're implementing. congress imposed the obligation on hydraulic fracturing operations using tools and the guidance explains how to do that. >> and this assertion of regulatory responsibility in this particular lane involving diesel was actually insisted upon, is that correct, or ruled upon by a court? >> the court determined that hydraulic fracturing was covered under the uic class 2 program that was in 2001. congress took action in 2005 that limited that permitting requirement only to hydraulic fracturing using diesel fuel. and so what the guidance --

proposed guidance does is indicate how that should be implemented. >> why did it take seven years from that legislation to today to get around to proposed regulations? >> the -- what we did initially at the epa was a memorandum of agreement with companies involved in coal bed methane hydraulic fracturing indicating they would not use diesel fuels. and what's happened is a shift in the industry so that there is now more hydraulic fracturing that's outside that realm of the coal bed methane. and that's why the initial steps we took we no longer view as sufficient to comply with what congress asked us to do. >> hmmm. are you aware of any cases where fracturing has come to a halt because of your pending regulatory rules? >> no, i am not aware of any. >> you're also proposing as an emission to regulate

carcinogens, but not methane, is that correct? >> that would be a air rule. i don't know the answer to that question. >> but so you don't know the answer as to whether or not -- my understanding is you're not proposing anything with respect to methane. >> i'm sorry, i don't know the answer. we could submit that information. >> well, you will recall earlier the professor's testimony that methane actually is a very serious concern of his, and other academics looking -- scientists looking at fracturing, and the reason is because it's part of a family of organic compounds. methane in and of itself may not be dangerous, but it's a precursor to benzine and other carcinogens. all right. mr. pool, did you hear mr. mckee's testimony from utah? >> yes, i did. >> he testified that essentially

blm being 59% of the land mass in this county is really putting a crimp on their style and their ability to exploit natural resources because it is federally owned land and federally controlled land. would you comment and i know your first day on this particular set -- >> no, that's a very prolific region in terms of natural gas potential and development. and we've issued quite a few leases up there and quite a few apds. i think when it it comes to leasing federal land, we have other important responsibilities that we have to address in terms of biological, cultural considerations. so we go through a leasing process where we go into a full development process. we need to work with the operators and these jurisdictions will vary, depending on the sensitivity of these resources. i know between i think wyoming and utah, well, we have about 6800 apds that what we call

front-logged that we have issued apds but the companies have not taken the action to activate those. i don't have the exact number. >> the testimony essentially, the thrust of the testimony from at least two of the state regulators or officials was we don't need no stinkin' federal government why not just let in this case utah regulate what happens with land? what's wrong with that? >> well, as it relates to hydro logic fracturing or fracking, what we discovered in review of our own regulations, they were very outdated. many of the states including colorado, wyoming, texas, arkansas, were starting to develop regulatory procedures to address various requirements associated with fracking. and so we looked at our regulations, the secretary of interior has done an incredible job with public outreach in d.c.

back in the fall of 201 subsequently held regional meetings, got recommendations from the secretary of energy's natural gas subcommittee, all of which was helping the blm kind of formulate what improved standard should we develop? and we really looked closely at what the state regulators had been doing. many cases, they've been out in front of the blm. of the issue there is, the state fracking regulations don't pertain to federal lands. and in many provinces of the west, we'll have fee land, state land and we've got public land. and so we would like to think with the outreach and public input and that's still ongoing during the comment period that our regulations will be very much complimentary to and very much in line with what the

states are doing. >> thank you. >> let me ask about that. the public lands -- you're saying the state rules would not apply. so you're saying state regulations in utah would not apply to fracking. >> that is correct. >> was there a consideration to say that they would, or is there a need for blm to create a whole new group of regulators and now good in and evaluate this? >> yes, mr. chairman. our authority has come under two principle statutes. the leasing act and the federal land policy management act. and so our regulations have to be basically developed under those two statutes for us to enforce whatever requirements we want to impose on the operators. >> so you mentioned before your regulations were very out-of-date on this. obviously, states keep their very up to date. >> that's correct. >> is it there a place where blm is going to keep regulations in place in all different states? >> in developing our proposed rule, we looked at colorado, we looked at wyoming, we did look at texas, we even looked at