Thе issue in this petition for review is whether the United States Environmental Protection Agency (“EPA”) is legally required to regulate hydraulic fracturing, a production enhancement technique used by the oil and gas industry, under the underground injection control (“UIC”) programs established pursuant to Part C of the Safe Drinking Water Act (“SDWA”), 42 U.S.C. §§ 300h to 300h-8. EPA determined that hydraulic fracturing does not fall within the statutory or regulatory definition of “underground injection.” Because we find EPA’s interpretation inconsistent with the language of the statute, we grant the petition for review and remand for further proceedings.
I. BACKGROUND
The Legal Environmental Assistance Foundation, Inc. (“LEAF”) filed this petition for review of an order of the EPA, in which the agency denied LEAF’S petition to promulgate a rule withdrawing approval of the Alabama UIC program. As background for our analysis, we briefly describe the statutory and regulatory framework for the UIC program, the process of hydraulic fracturing, and the procedural history of this case.
A. Statutory and Regulatory Framework
Part C of the SDWA establishes a regulatory program for the protection of underground sources of drinking water.
See
42 U.S.C. §§ 300h to 300h-8. This program requires EPA to promulgate regulations that set forth minimum requirements for state UIC programs.
Id.
§ 300h. A state must submit to EPA a proposed UIC program that meets these minimum requirements, and receive EPA approval, in order to obtain primary regulatory and enforcement responsibility for underground injection activities
The minimum requirements for state UIC programs are contained in 40 C.F.R. pt. 145. Among these requirements, the state must prohibit, in accordance with 40 C.F.R. § 144.11, any “underground injection” unless authorized by permit or rule. 40 C.F.R. § 145.11(a)(5). The statutory definition of “underground injection” is “the subsurface emplacement of fluids by well injection.” 42 U.S.C. § 300h(d)(l). 2 The state also must classify injection wells in conformance with the classification system promulgated by EPA in 40 C.F.R. § 144.6. 40 C.F.R. § 145.11(a)(2). Injection wells are thus classified for the purpose of permitting into five categories: Class I wells are wells used to dispose of hazardous, industrial, or municipal wastеs beneath underground sources of drinking water. 40 C.F.R. § 144.6(a). Class II wells are “[wjells which inject fluids: (1) [wjhich are brought to the surface in connection with ... conventional oil or natural gas production ...; (2) [f]or enhanced recovery of oil or natural gas; and (3) [f]or storage of hydrocarbons.” Id. § 144.6(b). Class III wells are wells which inject for extraction of minerals. Class IV wells are wells used to dispose of hazardous or radioactive wastes into or above underground sources of drinking water. Id. § 144.6(c) and (d). Class V wells are “[ijnjection wells not included in Classes I, II, III, or IV.” Id. § 144.6(e). Technical criteria and standards for these various classes of wells are contained in 40 C.F.R. pt. 146.
The Alabama UIC program was approved by EPA in two parts. On August 2, 1982, EPA approved Alabama’s UIC program for Class II wells, to be administered by the State Oil and Gas Board of Alabama. See 40 C.F.R. § 147.50. On August 23, 1983, EPA approved Alabama’s UIC program for Class I, III, IV, and V wells, to be administered by the Alabama Department of Environmental Management. See id. § 147.51.
B. Hydraulic Fracturing
Hydraulic fracturing is a technique used by the oil and gas industry for enhancing the recovery of natural gas from underground formations. In Alabama, it is commonly used in connection with the extraction of natural methane gas from coal beds. Coal beds, as all underground formations, are formed of porous, sometimes fractured, materials. These coal beds contain natural gas, which can be extracted through production wells. Becausе of the tightness of coal bed formations and their very low permeability, the rate of production of natural gas is low in the absence of production enhancement.
Experience has shown that coal beds must be hydraulically fractured to induce or stimulate a significant flow of gas. “Hydraulic fracturing” involves the injection of fluids and a propping agent (usually sand) into a coal bed. The application of pressure injects fluids into the coal bed thereby widening natural fractures and inducing new ones that are held open by the propping agent after the pressure is released. As a result, these fractures provide paths for gas to migrate to the well-bore, thus stimulating gas flow. It has been demonstrated that the gas flow rate from a coal bed may be increased as much as twentyfold by hydraulic fracturing.
Thomas E. Sexton & Frank Hinkle, State Oil and Gas Board, Oil and Gas Report 8B: Alabama’s Coalbed Gas Industry 12-15 (1985), appearing at R1-21-24. 3
Several thousand coal bed methane gas production wells have been constructed in Alabama since 1980. Due to the large number of these wells, EPA has recognized that “there is a growing potential for contamination of drinking water aquifers,” resulting primarily from the hydraulic fracturing necessary to stimulate production. See United States Environmental Protection Agency, Ground Water Study Committee: Report Gil—Study Well Contamination Problems; Particularly Problems Related to Coal Bed Methane 1 (1990), appearing at R3-211. Hydraulic fracturing associated with methane production currently is not regulated under the Alabama UIC program. The State Oil and Gas Board of Alabama does not consider wells used for such hydraulic fractaring as Class II injection wells; the Alabama Department of Environmental Management similarly does not consider these wells as Class I, III, IV, or V injection wells.
C. Procedural History
On March 4, 1994, LEAF petitioned EPA to initiate proceedings to withdraw approval of the Alabama UIC program. 6 LEAF alleged that the Alabama program is deficient because it does not regulate hydraulic fracturing activities associated with methane gas production and such regulation is required under the SDWA. LEAF further asserted that hydraulic fracturing associated with methane gas production had resulted in a diminished quality of water drawn from a nearby drinking well owned and used by two of LEAF’S members, Ruben DeVaughn and Cynthia Ann McMillian. On May 5, 1995, EPA denied the petition because it determined that hydraulic fracturing does not fall within the regulatory definition of “underground injection.” EPA interprets that definition as encompassing only those wells whose “principal function” is the underground emplacement of fluids. EPA decided that methane gas production wells which are also used for hydraulic fracturing are not required to be regulated under the UIC programs because the principal function of these wells is not the underground emplacement of fluids; their principal function is methane gas production. EPA also disputed LEAF’S assertion that the quality of water drawn from the McMillians’ water well had diminished as a result of nearby hydraulic fracturing activity. 7
II. DISCUSSION
A. Jurisdiction
EPA’s order denying LEAF’S petition for withdrawing approval of the Alabama UIC program is final agency action. LEAF filed this petition for review within forty-five days of EPA’s final action. We have jurisdiction to review EPA’s order pursuant to 42 U.S.C. § 300j—7(a)(2).
EPA suggests that we have no jurisdiction to entertain LEAF’S contention that the regulations are inconsistent with the statute because this contention constitutes a direct challenge to regulations promulgated several years before this petition for review was filed; EPA argues that such a direct challenge should have been brought within forty-five days of the promulgation of the regulations and is now time-barred pursuant to § 300j-7(a)(2). For this proposition, EPA cites
Natural Resources Defense Council v. Nuclear Regulatory Commission,
EPA neglects to mention in its brief, however, that this partial holding in
NRDC v. NRC
was expressly limited to “untimely
procedural
challenges” to a regulation.
See id.
(emphasis added). In other words, the court held in
NRDC v. NRC
that a statutory time-bar provision, similar to the one raised by EPA in this case, precluded the petitioner from challenging a regulation on the basis that it was promulgated without notice and comment by later bringing a petition for rulemaking to rescind the regulation and then filing for review of the denial of that petition in the court of appeals. The court distinguished substantive challenges to the regulation, however, and in fact took jurisdiction over such a challenge in
NRDC v. NRC. See id.
at 602-03;
cf. id.
at 602 & n. 47 (collecting cases in which the court “scrutinized regulations immune from direct review
LEAF’S contention that the regulations at issue in this case, as interpreted by EPA, are invalid because they are inconsistent with the SDWA constitutes a substantive challenge to these regulations. In essence, LEAF contends that EPA cannot rely on these regulations to deny LEAF’S petition because EPA acted outside its statutory authority in promulgating the regulations. As the Supreme Court has admonished:
“The power of an administrative [agency] to administer a federal statute and to prescribe rules and regulations to that end is not the power to make law ... but the power to adopt regulations tо carry into effect the will of Congress as expressed by the statute. A regulation which does not do this, but operates to create a rule out of harmony with the statute, is a mere nullity.”
Dixon v. United States,
B. Standard of Review
Our review of EPA’s action in this ease is governed by the scope and standard of review set forth in the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 551-559, 701-706. Under the APA, we “hold unlawful and set aside agency action, findings, and conclusions found to be ... arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Id. § 706(2). LEAF contends that EPA’s denial of its petition in this ease is “not in accordance with law” because it rests on an erroneous interpretation of the SDWA.
In reviewing an agenсy’s interpretation of a statute, the administration of which is entrusted to the agency, we are guided by the framework of analysis set out by the Supreme Court in
Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
C. Analysis
EPA interprets the UIC regulations as covering only those wells whose “principal function” is the injection of fluids into the ground. EPA contends that the regulations, so interpreted, are consistent with Congress’s intent, as expressed in the SDWA. EPA reaches this conclusion by asserting that (1) the statutory definition of “underground injection” is ambiguous, (2) Congress intended to exclude wells whose principal
The first step in the
Chevron
framework requires that we ascertain whether Congress clearly expressed its intent in the statute. “In a statutory construction case, the beginning point must be the language of the statute, and when the statute speaks with clarity to an issue judicial inquiry into the statute’s meаning, in all but the most extraordinary circumstance, is finished.”
Estate of Cowart v. Nicklos Drilling Co.,
To achieve the statutory purpose of “prevent[ing] underground injection which endangers drinking water sources,” 42 U.S.C. § 300h(b)(l), Congress chose the regulatory strategy of requiring that state programs approved under the UIC regulations “shall prohibit ... any underground injection in such State which is not authorized by a permit issued by the State (except that the regulations may permit a State to authorize underground injection by rule).” Id. § 300h(b)(l)(A) (emphasis added). Thus, it is clear that Congress dictated that all undеrground injection be regulated under the UIC programs. An applicant may receive a permit to conduct underground injection activity if the applicant “satisfies] the State that the underground injection will not endanger drinking water sources.” Id. § 300h(b)(l)(B). Whether a particular activity, such as hydraulic fracturing in this case, must be regulated under the UIC programs therefore turns solely on whether such activity falls within the statutory definition of “underground injection.” This statutory definition is as follows: “The term ‘underground injection’ means the subsurface emplacement of fluids by well injection. Such term does not include the underground injection of natural gas for purposes of storage.” 42 U.S.C. § 300h(d)(l). EPA contends that Congress’s failure to further define the term “well injection,” an ambiguous term according to EPA, means that Congress left EPA the discretion to define that term as it deems appropriate to accomplish the purpose of the SDWA. We disagree.
Contrary to EPA, “[w]e do not start from the premise that [the statutory] language is imprecise. Instead, we assume that in drafting legislation, Congress said what it meant.”
United States v. LaBonte,
-U.S.-,-,
Perceiving that its statutory construction argumеnt is weak, EPA relies heavily on the legislative history in defending its decision to exclude hydraulic fracturing from the reach of the UIC regulations. “Given the straightforward statutory command, [however,] there is no reason to resort to legislative history.”
United States v. Gonzales,
— U.S. -, -,
EPA concedes that Congress intended to cast a wide regulatory net in enacting the UIC program. The House Report accompanying the bill that eventually became the SDWA states:
The definition of “underground injection” is intended to be broad enough to cover any contaminant which may be put below ground level and whiсh flows or moves, whether the contaminant is in semi-solid, liquid, sludge, or any other form or state.
This definition is not limited to the injection of wastes or to injection for disposal purposes; it is intended also to cover, among other contaminants, the injection of brines and the injection of contaminants for extraction or other purposes.
H.R.Rep. No. 93-1185, at 31 (1974), reprinted in 1974 U.S.C.C.A.N. 6454, 6483 (emphasis added). Despite this broad language, EPA contends that Congress did not intend the scope of the UIC program to extend beyond the range of specific underground injection problems identified in the House Report:
Municipalities are increasingly engaging in underground injection of sewage, sludge, and other wastes. Industries are injecting chemicals, byproduct, and wastes. Energyproduction companies arе using injection techniques to increase production and to dispose of unwanted brines brought to the surface during production. Even government agencies, including the military, are getting rid of difficult to manage waste problems by underground disposal methods. Part C is intended to deal with all of the foregoing situations insofar as they may endanger underground drinking water sources.
Id. at 29, reprinted in 1974 U.S.C.C.A.N. at 6481. According to EPA, all of these problems involve wells whose principal function is underground injection, not gas production. 12
EPA argues that a colloquy during the House debate supports its reading of congressional intent. In this colloquy, Representative Pickle asked Representative Rogers, the chairman of the House Subсommittee on Public Health and the Environment, which originally reported the bill that became the SDWA, “whether it was the intent of the Congress that the Administrator propose such regulations that will require every person, whether he is drilling for an oil well or a water well, to obtain certification from the EPA that he is not guilty of pollution.” 120 Cong.Ree. 36,380 (1974). Representative Rogers responded that the regulations “are not concerned so much with drilling as with the injection of waste into the ground.”
Id.
EPA gleans from this brief exchange that Congress was aware that certain drilling techniques may have the potential of adversely affecting groundwater but chose not to regulate the drilling of wells under the UIC program. According to EPA, hydraulic fracturing is one of those “drilling techniques,” which Congress did not
Finally, EPA contends that its interpretation of the statutory language as excluding hydraulic fracturing from the reach of the regulations is entitled to special deference because it has been consistent over a long time period.
See, e.g., Thomas Jefferson Univ. v. Shalala,
In sum, we conclude that hydraulic fracturing activities constitute “underground injection” under Part C of the SDWA. EPA’s contrary interpretation cannot be squared with the plain language of the statute and thus must fall. “[T]hat is the end of the matter.”
Chevron,
III. CONCLUSION
LEAF petitioned EPA to initiate proceedings for the withdrawal of Alabama’s UIC program because Alabama does not regulate hydraulic fracturing associated with methane gas production. EPA denied the petition on the ground that hydraulic fracturing does not fall within the regulatory definition of “underground injection.” Because we find that EPA’s interpretation of its regulations is inconsistent with the statute, we GRANT the petition for review and REMAND for further proceedings consistent with this opinion.
Notes
. The EPA directly administers the UIC program in states that do not have primary responsibility. 42 U.S.C. § 300h-l(c).
. The regulations define "underground injection” as "well injection,” which in turn is defined as “the subsurface emplacement of ‘fluids’ through a bored, drilled, or driven ‘well;’ or through a dug well, where the depth of the dug well is greater than the largest surface dimension." 40 C.F.R. § 144.3.
. The administrative record is sequentially numbered from one to 1007. Citations to the record refer to the record volume number followed by the administrative record page number. Some documents appear at several locations in the record. Only one location is referenced.
. According to EPA, one well out ol 34 wells within one mile of a well owned by LEAF members (the McMillian well) was fractured more than once. R9-928. "Maintenance” fluids were injected into eight of the 34 wells during production. R9-929.
. See generally R.M. Stahl & P.E. Clark, Fluid Loss During the Fracturing of Coalbed Methane Wells, in The 1991 Coalbed Methane Symposium Proceedings [hereinafter Symposium] 269, 269 (The University of Alabama 1991), appearing at R6-565. The only quantitative information contained in the record on this issue indicates a fluid loss of 20 to 30 percent. See I.D. Palmer et al., Comparison between Gel-Fracture and Water-Fracture Stimulations in the Black Warrior Basin, in Symposium 233, 237, appearing at R6-564.
. Before filing its petition with EPA, LEAF inquired of the State Oil and Gas Board of Alabama and the Alabama Department of Environmental Management whether hydraulic fracturing associated with methane gas production was regulated under the Alabama UIC program. Both agencies answered in the negative and asserted that hydraulic fracturing did not constitute "underground injection."
. The factual dispute about whether the McMillians’ well actually suffered diminished quality due to nearby hydraulic fracturing activity is not on review here. In its response to LEAF’S petition, EPA referenced its finding of no actual harm to the McMillians’ well only in connection with EPA's decision not to pursue emergency enforce-
Significantly, EPA does not challenge LEAF’S standing to bring this petition. EPA concedes that LEAF members (i.e., the McMillians) are " 'interested persons' in the administrative process, who petitioned EPA to redress а particularized threat of harm.” EPA Brief at 31 n. 14 (citing 5 U.S.C. § 553(c);
Sierra Club v. Morton,
. Alternatively, LEAF argues that EPA's interpretation of the regulations is inconsistent with the plain language of the regulations.
See Thomas Jefferson Univ. v. Shalala,
. "Well” is defined as a "bored, drilled or driven shaft, or a dug hole, whose depth is greater than the largest surface dimension.” 40 C.F.R. § 146.3. There is no dispute that methane gas production wells, which are initially used for hydraulic fracturing, are "wells” within the meaning of the statute and regulations. Similarly, there is no dispute that the materials used in hydraulic fracturing are “fluids" within the meaning of the statute and regulations. See id.
. EPA does not directly dispute the fact that hydraulic fracturing involves the subsurface "emplacement” of fluids. EPA does mention in its
We are not surprised that EPA does not adopt this view, for it is clear to us that it is untenable. First, it is undisputed that some of the fluids injectеd into the ground in the process of hydraulic fracturing are never recovered and are therefore permanently emplaced into the ground. See supra note 5 and accompanying text. Moreover, EPA does regulate under the UIC programs several activities that result in the temporary emplacement of fluids in the ground, most notably "[w]ells which inject fluids ... [f]or storage of hydrocarbons,” and "[w]ells which inject for extraction of minerals.” See 40 C.F.R. §§ 144.6(b)(3) (Class II wells) & (c) (Class III wells). In fact, the very purpose of these wells is to temporarily emplace fluids into the ground. Class II wells are used to store hydrocarbons in the ground and then retrieve these hydrocarbons when needed. Class III wells are used to mine minerals by injecting certain fluids into mineral-bearing formations for the purpose of dissolving these minerals and then extracting the now mineral-rich fluids out of the ground.
. Thus, EPA conceivably may elect to subject methane gas wells to regulation—including any monitoring and recordkeeping requirements pursuant to 42 U.S.C. § 300h(b)(l)(C)—only during the process of hydraulic fracturing and not during gas production. What EPA cannot do is to exempt hydraulic fracturing activities from regulation simply by deeming them not to be "underground injection,” despite the plain language of the statute.
. LEAF disputes this assertion and points out that one of the problems listed by Congress was that "[e]nergy production companies are using injection techniques to increase production.” H.R.Rep. No. 93-1185, at 29, reprinted in 1974 U.S.C.C.A.N. at 6481. Hydraulic fracturing is a gas production enhancement technique, which therefore falls squarely within the broad concern identified by Congress in the above quote. EPA counters that Congress was in fact only concerned with secondary and tertiary recovery techniques, not hydraulic fracturing. Secondary and tertiary recovery techniques involve the injection of fluids into oil-bearing formations for the purpose of driving the oil into production wells. See RIO-989 (brochure entitled "Injection Wells: An Introduction to Their Use, Operation and Regulation,” published by the Underground Injection Practices Council in cooperation with EPA). As evidence that Congress was concerned only with underground injection related to secondary and tertiary recovery, EPA points to a statutory provision which precludes regulatory requirements that
interfere with or impede—
(A) the underground injection of brine or other fluids which are brought to the surface in connection with oil or natural gas production ..., or
(B) any underground injection for the secondary or tertiary recovery of oil or natural gas,
unless such requirements are essential to assure that underground sources of drinking water will not be endangered by such injection.
42 U.S.C. § 300h(b)(2).
We need not resolve this dispute regarding the meaning of "injection techniques to enhance production” in the House Report because it is not necessary for the resolution of this сase. We have already determined that hydraulic fracturing falls within the plain language of the statutory definition of "underground injection.” Therefore, we are canvassing the legislative history, at the urging of EPA, "to determine only whether there is 'clearly expressed legislative intention' contrary to that language, which would require us to question the strong presumption that Congress expresses its intent through the language it chooses.”
Immigration and Naturalization Serv. v. Cardoza-Fonseca,
. EPA asserts in its brief that, if hydraulic fracturing activities fall within the UIC program, then well drilling techniques which might result in incidental emplacement of fluids into the ground, such as the use of drilling mud to lubricate the drilling bit and for other purposes during well construction, must be regulated. Since the use of drilling mud is a common drilling technique, EPA presents the alarmist scenario where hundreds of thousands of gas and water wells would have to be regulated under the UIC program merely because of the technique used to drill them. We are unpersuaded. The use of drilling mud for the construction of gas and water wells is quite obviоusly the type of drilling technique that Congress did not intend to regulate under the UIC program, as confirmed in the Pickle/Rogers colloquy. That some of the drilling mud might remain in the ground in the vicinity of the well is incidental to the construction of the well, not a result of an operation specifically designed to inject fluids into the ground through an already constructed well, as is hydraulic fracturing. In other words, drilling mud that may remain in the ground is not "underground injection” because it is not emplaced by "well injection." See 42 U.S.C. § 300h(d)(l). It is emplaced by well construction. In contrast, hydraulic fracturing involves the "subsurface emplacement of fluids by well injection," id., and thus falls squarely within the statutory definition of "underground injection,” as we have explained.
