CHAPTER 11 RECENT DEVELOPMENTS IN ENVIRONMENTAL LAW AFFECTING GULF COAST MINERAL OPERATIONS
| Jurisdiction | United States |
(May 1989)
RECENT DEVELOPMENTS IN ENVIRONMENTAL LAW AFFECTING GULF COAST MINERAL OPERATIONS
Kean, Miller, Hawthorne, D'Arnold, McCowan, & Jarman
Baton Rouge, Louisiana
TABLE OF CONTENTS
I. INTRODUCTION
II. RECENT DEVELOPMENTS UNDER RCRA AFFECTING E&P OPERATIONS
III. RECENT DEVELOPMENTS UNDER THE CLEAN WATER ACT AFFECTING OFFSHORE OPERATIONS
A. Background on The Clean Water Act
B. Status of Proposed Effluent Limitation Standards for Off-Shore and Coastal Discharges
C. Final NPDES General Permit for Gulf of Mexico E & P Operations
D. Proposed Stormwater Regulations for E & P Facilities
E. EPA's Wetlands Action Plan
IV. RECENT DEVELOPMENTS IN LOUISIANA ENVIRONMENTAL LAW AFFECTING GULF COAST E & P OPERATIONS
A. Background on State Regulation of E & P Wastes
B. Amendment to Louisiana Water Quality Regulations to Require Testing of Produced Waters
C. Promulgation of Regulations Pertaining to Technologically Enhanced Naturally Occurring Radioactive Material (NORM)
V. CONCLUSION
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I. INTRODUCTION
The exploration and production (E & P) arm of the oil and gas industry for many years has operated under exemptions from or exceptions to environmental statutes and regulations affecting other industries.1 These exemptions and exceptions were based primarily on the quantities of waste material generated by these operations and their low toxicity. However, in recent years, the E & P arm of the industry is being subjected to increasingly stringent environmental standards as a result of pressures from state and federal regulatory agencies and environmental activists.
This paper will address certain recent developments related to the more stringent environmental standards being applied to the E & P operations in the Gulf Coast area. In discussing
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these recent developments, a brief review of the history and applicability of the major environmental statutes relating to the production, discharge and disposal of industrial waste, primarily the Resource Conservation and Recovery Act (RCRA) and the Clean Water Act (CWA), is a necessary precedent to a full understanding of the issues presented by these recent developments. It is primarily within the context of these statutes, RCRA and CWA, that recent developments of impact relating to E & P operations in the Gulf Coast region arise.
This paper will also address in abbreviated fashion certain recent developments in Louisiana regarding environmental issues affecting the E & P industry. This discussion is limited to Louisiana because the author is most familiar with Louisiana environmental law developments. However, because Louisiana is a major producing state, in which many who are attending this institute have or will have operations, producers can expect similar issues to arise in other states in the Gulf Coast region.
II. RECENT DEVELOPMENTS UNDER RCRA AFFECTING E & P OPERATIONS
The Resource Conservation and Recovery Act of 1976 (RCRA) is the primary, comprehensive federal statute governing the
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management, storage, transportation and disposal of solid waste materials, including hazardous wastes.2
When RCRA was enacted in 1976, Congress mandated that the United States Environmental Protection Agency (EPA) classify solid waste materials produced as either hazardous or non-hazardous.3 The EPA was also directed to adopt regulations setting standards for hazardous waste management, including transporation, storage and disposal of hazardous waste.4 Pursuant to this charter, the EPA adopted regulations addressing the management of hazardous waste,5 identifying hazardous waste,6 and regulating hazardous waste generators,7 transporters8 and operators of hazardous waste facilities.9
Because hazardous waste is a subcategory of solid waste, it is necessary to examine the definition of solid waste for a
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complete understanding of what constitutes hazardous waste. RCRA defines "solid waste" as:
{A}ny garbage, refuse, sludge from a waste treatment plant, water supply plant, or air pollution control facility and other discarded material, including solid, liquid, semisolid or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations, and from community activities, but does not include solid or dissolved materials in sewerage, or solid or dissolved materials in irrigation return flows or industrial discharges which are point sources and subject to permits under section 1342 of Title 33, or source, special nuclear, or byproduct material as defined by the Atomic Energy Act of 1954 as amended.10
The subcategory of "hazardous wastes" is defined as:
{A} solid waste, or combination of solid wastes, which because of its quantity, concentration, or physical, chemical or infectious characteristics may -
(A) cause, or significantly contribute to an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness; of
(B) pose a substantial present or potential hazard to human health or the environment when properly treated, stored, transported, or disposed of, or otherwise managed.11
RCRA contains two specific exclusions or exemptions to its applicability which relate to the management of E & P wastes: (1) an exclusion in the definition of "solid waste" for any
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industrial point source discharge which is subject to an NPDES permit issued under the CWA;12 and (2) an exemption from the hazardous waste management provisions (subtitle C) for wastes associated with the exploration, development or production of crude oil or natural gas.13
Because RCRA excludes from the definition of solid waste any industrial discharge which is a point source subject to an NPDES permit issued under Section 402 of the CWA, E & P wastes subject to a federal NPDES permit are not regulated by RCRA, regardless of the constituents of such wastes. Recent developments in the regulation of these wastes under the CWA and the NPDES permit program are impacting E & P operations and are discussed under a separate heading below.
When RCRA was originally adopted in 1976, E & P wastes were not exempted or otherwise provided special treatment under the Act. However, in 1978, EPA recommended that because of their high volume and low toxicity, E & P wastes be treated less stringently than other wastes classified as hazardous. Responding to EPA's recommendations and an effective industry lobby, when RCRA was amended in 1980, Congress specifically provided a temporary exemption for "drilling fluids, produced
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water and other wastes associated with the exploration, development or production of crude oil or natural gas..." from regulations as hazardous wastes until completion of a study of the subject by the EPA.14
Congress also directed the EPA to conduct a study on the adverse effects of drilling fluids, produced waters and other E & P waste streams on human health and the environment,15 and to provide Congress with recommendations on regulations to govern these exempted waste materials within two years.16 Under the terms of the Congressional directive, the EPA was to consider in its recommendations the following factors:
(1) The source and volume of the waste;
(2) Existing disposal methods;
(3) The potential risk to human health and the environment associated with the waste;
(4) Documented cases of danger to health and the environment;
(5) The cost of disposal options;
(6) Alternative disposal methods; and
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(7) The overall impact of diposal of E & P Waste.17
The EPA failed to meet the deadline set forth in RCRA for the study and was sued by the Alaska Center for the Environment.18 As a result of this lawsuit, the EPA entered into a consent order under the terms of which the EPA completed the study and published its findings in a Report to Congress entitled "Management of Wastes from the Exploration, Development and Production of Crude Oil, Natural Gas and Geothermal Energy" (Report to Congress).19 On July 8, 1988, the EPA next published a document entitled "Regulatory Determination for Oil and Gas and Geothermal Exploration, Development and Production Wastes" (Regulatory Determination)20 in which it reviewed the findings of the Report to Congress.
In the Report to Congress, the EPA evaluated information based on factors mandated by Congress, including the characteristics of E & P wastes, present management practices and the impact of E & P wastes on health and the environment. The Report to Congress also considered the adequacy of existing regulations and the economic impact of additional regulations on
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industry. Among the pollutants of concern noted in sampling of E & P wastes were organic pollutants such as benzene and phenanthrene, and inorganic constituents such as lead, arsenic, barium, antimony, flouride, and uranium. The Report to Congress also noted that current E & P waste practices include the use of reserve pits for drilling wastes, the disposal of produced wastes through Class II injection wells, the disposal of produced waters in unlined pits, the discharge of produced waters into surface waters, and landspreading.
In the Regulatory Determination, the EPA reviewed the findings of the Report to Congress and concluded that existing regulations are generally adequate to control the management of E & P wastes. However, the EPA noted that certain regulatory gaps exist and that state enforcement is sometimes inadequate. The EPA also found that the imposition of RCRA, Subtitle C Regulations (pertaining to the management of hazardous wastes) could cause severe economic impact on the oil and gas industry. Specifically, it was noted that a significant part of the impact of new regulations would be felt by stripper operations which account for approximately 14% of domestic crude production.
As a result of...
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