CHAPTER 8 E&P (NON-HAZARDOUS) WASTE REGULATION AND SELECTED ASPECTS OF STATE ENVIRONMENTAL REGULATION

• Jurisdiction: United States

Environmental Regulation of the Oil and Gas Industry
(Feb 1993)
CHAPTER 8
E&P (NON-HAZARDOUS) WASTE REGULATION AND SELECTED ASPECTS OF STATE ENVIRONMENTAL REGULATION
John F. Welborn ¹
Welborn Dufford Brown & Tooley, P.C.
Denver, Colorado

TABLE OF CONTENTS

SYNOPSIS

Page

INTRODUCTION

RESOURCE CONSERVATION AND RECOVERY ACT

Exemption of E&P Wastes from Subtitle C

Criticism of the Exemption

STATE REGULATION OF E&P WASTE

EPA/IOGCC Study

Administrative and Technical Criteria

Peer Review Process

OVERVIEW OF SELECTED STATE E&P WASTE PROGRAMS

Wyoming

Colorado

Montana

Oklahoma

New Mexico

Utah

North Dakota

Kansas

Texas

Other States

NORM AND THE ALASKA PEER REVIEW

FEDERAL LEASES

Proposed Onshore Order No. 1

Proposed Onshore Order No. 7

CONCLUSION

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INTRODUCTION

The primary focus of this paper is on the regulation of the handling and disposal of so-called "E&P" waste² produced by oil and gas operations. E&P waste is regulated by the EPA but is currently exempt from regulation as hazardous waste under Subtitle C of the Resource Conservation and Recovery Act of 1976 (RCRA), because of a 1980 amendment to RCRA sometimes called the "Bensen Waste amendment".³

The paper is limited to a review of E&P (i.e. nonhazardous) waste regulation; hazardous waste disposal under Subtitle C of RCRA is covered in previous papers in this Institute. It is important to remember, however, that the distinction between hazardous and nonhazardous is not always permanent as to particular waste materials. E&P waste can

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become hazardous waste, and thus subject to EPA regulation under Subtitle C of RCRA, if hazardous waste is mixed with the E&P waste in some fashion and the mixture exhibits any one of the characteristics of ignitability, corrosivity, reactivity and toxicity.⁴ For example, discarding a container of a solvent (listed as hazardous in 40 C.F.R. Part 261, Subpart D) in a reserve pit would cause the otherwise exempt pit contents to become hazardous waste and would result in the closure of the pit under RCRA hazardous waste regulations.⁵

This paper also concerns other aspects of environmental regulation of oil and gas operations in some states including site reclamation and enforcement of environmental requirements, the funding of protection and clean-up efforts, and NORM requirements. The paper does not cover state or federal UIC programs because those are covered in other papers in this Institute.

RESOURCE CONSERVATION AND RECOVERY ACT

Exemption of E&P Wastes from Subtitle C

Under RCRA, E&P wastes were temporarily excluded from regulation until at least 24 months after October 1, 1980.⁶ During that period of time, the EPA was to conduct a detailed and comprehensive study and submit a report on the adverse

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effects of E&P wastes on human health and the environment.⁷ This study was to include a study of "the adequacy of means and measures currently employed by the oil and gas ... industry, Government agencies, and others to dispose of and utilize such wastes and to prevent or substantially mitigate such adverse effects."⁸ Upon completion of the study the EPA was to decide whether to promulgate regulations under Subtitle C for E&P wastes or determine that such "regulations are unwarranted."⁹ Any such regulation would take effect, however, only when "authorized by Act of Congress."¹⁰

That study was completed, albeit late, and its results were documented in a 1987 EPA Report to Congress.¹¹ Based upon the 1987 EPA Report and upon the oral and written comments received by the EPA during public hearings in the Spring of 1988, the EPA issued a Regulatory Determination on June 29, 1988 (Regulatory Determination)¹² indicating its formal decision not to regulate E&P wastes as hazardous wastes under Subtitle C of RCRA. This was not a determination that E&P wastes should be unregulated; it was instead a determination that they should be exempt from regulation under Subtitle C of RCRA and, thus, should be subject to state regulation with

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federal guidance, encouragement and financial assistance under Subtitle D of RCRA.¹³

The EPA indicated in the Regulatory Determination that by using what it referred to as a "Subtitle D Approach," it could design and implement a program under 40 C.F.R. Part 257 specific to crude oil and natural gas wastes that would effectively address the risks associated with these wastes.¹⁴ This tailored program would enable the EPA to "apply all necessary requirements to the management of the wastes, while ensuring that economic impacts are minimized."¹⁵

As described in the Regulatory Determination, the EPA's program would focus on gaps in existing state and federal regulations. The gaps defined included the regulation of roadspreading, landspreading and impoundments of E&P waste and the control of commercial facilities that treat, store or dispose of oil field wastes in concentrated form. These facilities contain high concentrations of "hazardous constituents" and "are responsible for some of the most significant damages" the EPA documented.¹⁶ The EPA also suggested that the program could result in new requirements under Subtitle D such as run-off controls, procedures for closing facilities, and monitoring in a way that accommodates variations between sites and new clean-up provisions.¹⁷ To date, however, there have been no such new federal

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requirements, and the focus has been on gaps in state, not federal regulations, through the state peer review process. This process has already been supplemented by new state E&P waste regulation in several producing states, as is discussed below.

In the Regulatory Determination, the EPA also clarified the scope of the Bensen Waste exclusion by specifying that the following listed wastes are exempt from Subtitle C:

• Produced water

• Drilling fluids

• Drill cuttings

• Rigwash

• Drilling fluids and cuttings from offshore operations and disposal onshore

• Geothermal production fluids

• Hydrogen sulfide abatement wastes from geothermal energy production

• Well completion, treatment, and stimulation fluids

• Basic sediment and water and other tank bottoms from storage facilities that hold product and exempt waste

• Accumulated materials such as hydrocarbons, solids, sand and emulsin from production separators, fluid treating vessels, and production impoundments

• Pit sludges and contaminated bottoms from storage or disposal of exempt bottoms

• Workover wastes

• Gas plant dehydration wastes, including glycol-based compounds, glycol filters, filter media, backwash, and molecular sieves

• Gas plant sweetening wastes for sulfur removal, including amines, amine filters, amine filter media, backwash, precipitated amine sludge, iron sponge, and hydrogen sulfide scrubber liquid and sludge

• Cooling tower blowdown

• Spent filters, filter media, and backwash assuming the filter itself is not hazardous and the residue in it is from an exempt waste stream)

• Packing fluids

• Produced sand

• Pipe scale, hydrocarbon solids, hydrates, and other deposits removed from piping and equipment prior to transportation

• Hydrocarbon-bearing soil

• Pigging wastes from gathering lines

• Wastes from subsurface gas storage and retrieval, except for the listed nonexempt wastes

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• Constituents removed from produced water before it is injected or otherwise disposed of

• Liquid hydrocarbons removed from the production stream but not from oil refining

• Gases from the production stream, such as hydrogen sulfide and carbon dioxide, and volatilized hydrocarbons

• Materials ejected from a producing well during the process known as blowdown

• Waste crude oil from primary field operations and production

• Light organics volatilized from exempt wastes in reserve pits or impoundments or production equipment.¹⁸

Further, the status of produced water injected for enhanced recovery was clarified: it is not a waste for purposes of RCRA regulation and therefore is not subject to regulation under either Subtitle C or D.¹⁹

The EPA also concluded, however, that wastes which are not "uniquely associated" with exploration, development, and production of crude oil and natural gas are not exempt from Subtitle C regulation,²⁰ and the agency gave the following list of wastes which are not included in the Bensen exemption:

• Unused fracturing fluids or acids

• Gas plant cooling tower cleaning wastes

• Painting wastes

• Oil and gas service company wastes, such as empty drums, drum rinsate, vacuum truck rinsate, sandblast media, painting wastes, spent solvents, spilled chemicals, and waste acids

• Vacuum truck and drum rinsate from trucks and drums transporting or containing non-exempt wastes

• Refinery wastes

• Liquid and solid wastes generated by crude oil and tank bottom reclaimers

• Used equipment lubricating oils

• Waste compressor oil, filters, and blowdown

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• Used hydraulic fluids

• Waste solvents

• Waste in transportation pipeline-related pits

• Caustic or acid cleaners

• Boiler cleaning wastes

• Boiler refractory bricks

• Boiler scrubber fluids, sludges, and ash

• Incinerator ash

• Laboratory wastes

• Sanitary wastes

• Pesticide wastes

• Radioactive tracer wastes

• Drums, insulation, and miscellaneous solids.²¹

Prior to issuing the Regulatory Determination, the EPA gathered and evaluated information on all of the issues required to be analyzed under RCRA,²² and it focused on what it called "three key factors" pertaining to E&P wastes:²³

1. The characteristics, management practices and resulting impacts of these wastes on health and the environment;

2. The adequacy of existing state and federal regulatory programs; and

3. The economic impacts of any additional regulatory controls on industry.

The EPA felt that Subtitle C does not provide sufficient flexibility to take into account the differences in oil and gas drilling and production sites...