CHAPTER 4 OVERVIEW OF CLASS II UNDERGROUND INJECTION CONTROL PROGRAM

• Jurisdiction: United States

Environmental Regulation of the Oil and Gas Industry II
(Feb 1994)
CHAPTER 4
OVERVIEW OF CLASS II UNDERGROUND INJECTION CONTROL PROGRAM
Susan G. Zachos
Kelly, Hart & Hallman
Austin, Texas

TABLE OF CONTENTS

SYNOPSIS

I. INTRODUCTION 4

II. SAFE DRINKING WATER ACT REQUIREMENTS 4

III. THE MID-COURSE EVALUATION AND CREATION OF THE ADVISORY COMMITTEE 4

IV. CURRENT ISSUES 4

A. Construction Requirements 4

1. Depth of Surface Casing 4

2. Levels of Protection 4

3. Newly Converted Wells 4

4. Special Circumstances -- Annular Disposal Wells and "Slimholes" 4

a. Annular Disposal 4

b. Slimholes 4

c. Compromise for Historical Practices 4 -

B. Monitoring and Record Keeping 4 -

1. Mechanical Integrity Testing ("MIT") 4 -

2. Cementing Records 4 -

C. Area of Review 4 -

1. Background 4 -

2. Proposed Changes 4 -

D. Temporarily Abandoned Class II Wells 4 -

V. SUMMARY OF SUBSURFACE DISPOSAL ISSUES 4 -

APPENDICES

Appendix A. Environmental Protection Agency Class II Injection Well Organizational Protocols (July 15, 1991)

Appendix B. Environmental Protection Agency Class II Injection Well Advisory Committee, Final Document (March 23, 1992)

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I. INTRODUCTION

Class II underground injection wells ("Class II wells") are oil and gas production related injection wells used for disposal of produced fluids, for enhanced oil recovery ("EOR") projects or for storage of hydrocarbons which are liquid at standard temperature and pressure (i.e., oil, but not gas storage).¹ The United States is estimated to have over 161,000 Class II wells considered to be in the "active inventory" of wells either active, under construction, or temporarily abandoned.² Texas has the most, with over 53,000 permitted wells.³ Class II wells are regulated under a program established by the Safe Drinking Water Act ("SDWA" or the "Act") and implemented by federal and state regulatory authorities. Currently EPA is drafting new regulations to amend Class II well construction requirements, including casing and cementing requirements; monitoring and testing requirements, including mechanical integrity testing ("MIT") frequency; area of review requirements for existing injection wells; and reporting and monitoring requirements for temporarily abandoned wells.

The United States Environmental Protection Agency ("EPA") the federal agency responsible for implementing the Class II injection well program, actively participated in the EPA Class II Underground Injection Well Program Advisory Committee (the "Advisory Committee"), which was established in 1991 with the goal of obtaining an advisory opinion from industry and environmental groups that could be presented as a statement of consensus on the regulatory issues. The Advisory Committee completed its work in early 1992 and, EPA plans to propose new regulations based on the final recommendation of the Committee. This paper discusses current Class II well issues and the possible scope of future regulatory changes.

II. SAFE DRINKING WATER ACT REQUIREMENTS

The Safe Drinking Water Act (the "Act"), which applies to all classes of injection wells, was enacted in 1974 and subsequently amended numerous times, most recently in 1986.⁴ Although the Act establishes a frame-work for state-administered underground injection control programs, it requires EPA to enact federal regulations for implementing

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state programs to protect underground sources of drinking water. An underground source of drinking water ("USDW") is defined in the Act as water "which supplies or can reasonably be expected to supply a public water system."⁵ Under existing federal regulations, a USDW includes water which is of sufficient quantity to supply a public water system and which contains fewer than 10,000 milligrams per liter ("mg/1") of total dissolved solids ("TDS").⁶ The EPA drinking water standard is 500 mg/1 TDS and may vary in individual states. In Texas, for example, the drinking water standard is 1,000 mg/1 TDS. The TDS limit for USDWs is set at 10,000 mg/1 to protect not only currently used drinking water but also potential future drinking water sources, considering the increasing scarcity of fresh water, especially in certain parts of the country.⁷

Under the original Act, EPA was required to enact regulations setting minimum requirements for an effective state underground injection program that would prevent underground drinking water sources from being endangered.⁸ Until the 1980 amendments, the Act mandated that EPA enact federal regulations requiring states to (1) prohibit underground injection without a permit (unless authorized by state rule) and (2) require inspection, monitoring and record keeping, and reporting requirements.⁹ Under a statutory provision added by a 1980 amendment, a state now can obtain approval for its underground injection control ("UIC") program without expressly satisfying each of EPA's regulations, as long as the state demonstrates that its program meets the specific statutory requirements set forth above and is an "effective program" to prevent underground injection which endangers USDWs.¹⁰ This amendment removed a state's obligation to follow each federal regulation to the letter. As discussed below, EPA makes the initial determination of whether the state's program is sufficient.

The Act places certain limits on EPA's authority to impose regulations or require changes to a state's regulatory program. EPA may not enact regulations or impose requirements that interfere with or impede state Class II underground injection programs, unless the changes are "essential to assure that underground sources of drinking water will not be endangered by such injection."¹¹ The 1977 amendments to the Act required EPA to avoid, "to the extent feasible," unnecessary disruption of or conflicts with underground

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injection programs existing and being enforced in a substantial number of states.¹² In other words, existing practices should be preserved where they are consistent with the statutory mandate to protect a USDW. The 1977 amendments also added a provision requiring EPA's regulations for state programs to allow "consideration of varying geological, hydrological, or historical conditions in different States and in different areas within a state."¹³

The Act also contains the procedural requirements for EPA's approval of state programs.¹⁴ Basically, a state has 270 days after the publication of any final regulations to demonstrate to EPA that its UIC program meets the statutory standards in view of the new regulatory requirements. Within 90 days thereafter, EPA must either approve or disapprove the state's program. If the state's program is approved, then the state has — or continues to have — primary enforcement authority, or "primacy," for the UIC program in that state. If the state's program is not approved, or if EPA determines that it no longer meets the federal requirements, then EPA must regulate all or part of the UIC program for that state. States with approved UIC programs are called "primacy states," and states with EPA administered programs are called "direct implementation" or "DI" states. Table I contains a list of the primacy and DI states with Class II injection wells.

EPA published its first set of final regulations for the UIC program in 1980.¹⁵ The regulations have been amended several times since first publication. The current regulations for Class II wells can be found in sections 146.21 to 146.25 of Chapter 40 of the Code of Federal Regulations ("C.F.R."). References to specific requirements for each of the DI and primacy states are found in Part 147 of Chapter 40 of the C.F.R. The regulations governing Class II wells in each of the primacy states are found within that state's statutes and regulations. In Texas, the regulations pertaining to underground injection wells are found in Rules 9, 13, 46 and 74 of the Railroad Commission of Texas.¹⁶

III. THE MID-COURSE EVALUATION AND CREATION OF THE ADVISORY COMMITTEE

In January 1988, EPA initiated a Mid-Course Evaluation ("MCE") of the adequacy of its regulations for Class II injection wells. Through this evaluation, EPA sought (1) to review the adequacy of existing primacy state programs, (2) to ensure that the regulations

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adequately reflect the Agency's current insight based on nine years of experience in administering the program, and (3) to consider the findings of EPA's 1987 Report to Congress and Regulatory Determination on oil and gas production wastes which recommended improvements in the areas of implementation and enforcement of certain existing state programs.¹⁷ EPA's Office of Drinking Water identified five major areas of concern to be evaluated in the MCE. These were:

(1) operating, monitoring, and reporting requirements;

(2) plugging and abandonment;

(3) area of review and corrective action requirements;

(4) mechanical integrity testing requirements; and

(5) casing and cementing (i.e., construction) requirements.¹⁸

The MCE, which was completed in August 1989, did result in a report recommending certain changes to the Class II program which are discussed below; however, no final resolution of the issues has yet been reached.

In response to concerned industry representatives and environmental groups, EPA established a Federal Advisory Committee to advise EPA on recommendations for regulatory changes or guidance documents regarding Class II wells.¹⁹ The Committee was composed of representatives of the Department of Energy ("DOE"); Bureau of Land Management ("BLM"); environmental groups, including Friends of the Earth and the National Audubon Society; state regulators, including representatives from Kansas, Ohio, California, and Texas; and industry representatives, including ARCO Oil and Gas Company, Shell Oil Company, Conoco, Inc., as well as the American Petroleum Institute ("API") and

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