CHAPTER 7 OVERVIEW OF ENVIRONMENTAL REGULATIONS OF HAZARDOUS SUBSTANCES IN THE OIL PATCH

• Jurisdiction: United States

Environmental Regulation of the Oil and Gas Industry
(Feb 1993)
CHAPTER 7
OVERVIEW OF ENVIRONMENTAL REGULATIONS OF HAZARDOUS SUBSTANCES IN THE OIL PATCH
Patricia M. Botsko ¹
Texaco Inc.
Denver, Colorado

The major wastes resulting from oil and gas exploration and production operations are produced water, drilling muds and cuttings, and other associated wastes. At its peak, the U.S. oil and gas industry produced nearly 21 billion barrels of produced water, most of which was disposed of by underground injection, and 361 million barrels of drilling muds and cuttings disposed of by underground injection and through evaporation ponds, surface waters, onto land, or at commercial disposal facilities.² Decades ago, regulation of oilfield wastes was a left to the states. The last two decades, however, have witnessed an exponential growth of Federal regulation of how we handle our wastes. This paper will attempt to outline the various Federal³ laws which govern the management of hazardous wastes in the oil and gas industry as well as address the oil and gas producer's obligations to report releases of hazardous substances.

RCRA

The Resource Conservation and Recovery Act (RCRA) was passed in 1976⁴ to regulate solid wastes and municipal landfills. The goals of RCRA are (1) to protect human health and the environment, (2) to reduce waste and conserve energy and natural resources, and (3) to reduce or eliminate the generation of hazardous waste as expeditiously as possible. Four main programs under RCRA were set up to meet these goals: Subtitle C establishes a system for managing

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hazardous waste from the time it is generated through to its ultimate disposal; Subtitle D requires states to develop programs to manage nonhazardous solid wastes; Subtitle I regulates certain underground storage tanks; and Subtitle J tracks medical wastes. This section of this paper will focus on regulation of hazardous wastes under Subtitle C. It shall first attempt to outline how to determine whether your operations are covered by RCRA Subtitle C. The next section will describe briefly the regulation of petroleum in underground storage tanks under RCRA Subtitle I.

Hazardous Waste Management Under RCRA

Terminology

Before venturing into Subtitle C of RCRA and its impact on the oil and gas industry, it is helpful to understand some terminology. The following are some relevant definitions under RCRA:

"Disposal" is defined as "the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including ground waters. 42 U.S.C.S. § 6903(3).

"Generator" is any person, by site, whose act or process produces hazardous waste or whose act first causes a hazardous waste to become subject to regulation. 40 C.F.R. § 260.10.

"Hazardous Waste" is defined by Congress 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;

(B) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, disposed of, or otherwise managed.

42 U.S.C.S. § 6903(5).

"Hazardous Waste Management" is defined as "the systematic control of the collection, source separation, storage, transportation, processing, treatment, recovery, and disposal of hazardous wastes. 42 U.S.C.S. § 6903(7).

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"Person" is defined as "an individual, trust firm, joint stock company, corporation (including government corporation), partnership, association, State, municipality, commission, political subdivision of a State, or any interstate body." 42 U.S.C.S. § 6903(15).

"Solid Waste" is defined as "any garbage, refuse, sludge from a waste treatment plant, water supply treatment 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..." 42 U.S.C.S. § 6903(27). Specifically excluded from the definition of solid waste is any industrial discharge which is a point source subject to an NPDES permit issued under the Clean Water Act. Id.

"Storage" when used in connection with hazardous waste, is defined as "the containment of hazardous waste, either on a temporary basis or for a period of years, in such a manner as not to constitute disposal of such hazardous waste." 42 U.S.C.S. § 6903(33). The Code of Federal Regulations further defines "storage" to mean the holding of hazardous waste for a temporary period, at the end of which the hazardous waste is treated, disposed of or stored elsewhere. 40 C.F.R. § 260.10.

"Transporter" is any person engaged in the offsite transportation of hazardous waste by air, rail, highway or water. 40 C.F.R. § 260.10.

"Treatment" when used in connection with hazardous waste, is defined as "any method, technique, or process, including neutralization, designed to change the physical, chemical, or biological character or composition of any hazardous waste so as to neutralize such waste or so as to render such waste nonhazardous, safer for transport, amenable for recovery, amenable for storage, or reduced in volume...[and] includes any activity or processing designed to change the physical form or chemical composition of hazardous waste so as to render it nonhazardous." 42 U.S.C.S. § 6903(34).

Hazardous Waste Determination

Note that under RCRA, hazardous waste is a subset of solid waste. EPA's jurisdiction, therefore, is limited to solid waste, so the first question to ask is whether the material with which you are dealing constitutes a solid waste. The step-by-step-process for determining whether a waste is hazardous is as follows:

First, determine if the material is defined as a solid waste. A solid waste is any "discarded material" that is not excluded by 40 C.F.R. § 261.4(a). A "discarded material" is any material that is disposed of, burned, incinerated or accumulated, stored or treated before its disposal; used in a manner constituting disposal (such as land farming), burned as a fuel,

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reclaimed (in certain situations) or accumulated speculatively; or considered inherently wastelike. 40 C.F.R. § 261.2. If the material is not a solid waste, the RCRA does not apply.

If the material is defined as a solid waste, the second step is to determine if the solid waste is excluded from regulation. Excluded wastes under 40 C.F.R. § 261.4 include: domestic sewage; irrigation return flows; source, special nuclear, or by-product material as defined by the Atomic Energy Act; materials subjected to in situ mining techniques that are not removed from the ground during extraction; certain pulping liquors used in the production of paper; spent sulfuric acid used to produce virgin sulfuric acid; household wastes; materials returned to the soil as fertilizers; mining overburden returned to the mine site; certain utility wastes generated primarily from the combustion of coal or other fossil fuels; drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal energy; certain wastes from the tannery industry; wastes from the extraction and beneficiation of ores and minerals; cement kiln dust; discarded wood that fails the toxicity test for arsenic as a result of being treated with arsenical compounds; certain wastes generated in a product-storage tank; and samples⁵ being analyzed for the purpose of hazardous waste identification for treatability studies.

Note the very important exemption for certain oil and gas exploration and production (E&P) wastes under Section 261.4(b)(5). Pursuant to this section, the following E&P wastes are exempt from hazardous waste regulation under Subtitle C:

— produced water

— drilling fluids

— drill cuttings

— rigwash

— drilling fluids and cuttings from offshore operations disposed of onshore

— geothermal production fluids

— hydrogen sulfide abatement wastes from geothermal operations

— 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 emulsion from production separators, fluid-treating vessels, and production impoundments

— workover wastes

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— gas plant dehydration wastes, including glycol-based compounds, glycol filters, filter media, backwash, precipitated amine sludge, iron sponge, and hydrogen sulfide scrubber liquid and sludge

— cooling tower blowdown

— spent filters, filter media, 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 solid, 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 wastes listed below as not exempted

— constituents removed from produced water before injection or disposal

— liquid hydrocarbons removed from the production stream (but not by refining)

— gases from the production stream, such as H₂S, and carbon dioxide, and volatilizing hydrocarbons

— materials from well blowouts

— waste crude oil from production and field operations

— light organics volatilized from exempt wastes in pits, impoundments, or production equipment.

As these substances comprise such a large volume of the waste generated in the oil patch, it is...