CHAPTER 8 ENVIRONMENTAL REGULATION OF OUTER CONTINENTAL SHELF OIL AND GAS OPERATIONS
| Jurisdiction | United States |
(Feb 1994)
ENVIRONMENTAL REGULATION OF OUTER CONTINENTAL SHELF OIL AND GAS OPERATIONS
Liskow & Lewis
New Orleans, Louisiana
TABLE OF CONTENTS
I. INTRODUCTION
II. SOLVING THE JURISDICTIONAL PUZZLE
A. Outer Continental Shelf Lands Act ("OCSLA")
B. The Minerals Management Service ("MMS")
C. The Environmental Protection Agency ("EPA")
D. The U.S. Coast Guard and Occupational Safety and Health Administration
E. Memoranda of Understanding ("MOUs")
III. REGULATION OF DISCHARGES TO SURFACE WATERS FROM OFFSHORE FACILITIES
A. NEW NSPS/BAT Effluent Limitations for Offshore Oil and Gas Industry
B. Best Practicable Control Technology Currently Available (BPT) Limitations
C. Best Available Technology Economically Achievable (BAT) Limitations
D. Best Conventional Pollutant Control Technology (BCT) Limitations
E. New Source Performance Standards
F. Judicial Challenges to New Standards
G. General NPDES Permits
IV. OUTER CONTINENTAL SHELF WASTE DISPOSAL ISSUES
A. Solid Wastes Generated by the Offshore Oil and Gas Industry; Applicability of Onshore Regulations to Offshore Activities
B. Hazardous Waste Regulations
C. Onshore Disposal of Production Wastes
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D. Disposal of Naturally Occurring Radioactive Material (Norm)
E. Onshore Disposal of Solid Wastes
F. Liability under CERCLA
G. Toxic Tort Liability
V. REGULATION OF AIR EMISSIONS ON THE OCS
A. Jurisdiction of the EPA and MMS
B. Typical Waste Streams and Problems
VI. FINANCIAL RESPONSIBILITY REQUIREMENTS FOR OFFSHORE FACILITIES
A. The Prior Statutory Regime
B. Changes Arising Under OPA '90
VII. PLATFORM ABANDONMENT ISSUES
A. General Requirements
B. Liability for Abandonment Costs
C. The Rigs to Reef Program
D. Endangered Species Act, the Marine Mammals Protection Act and Platform Removal Operations
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I. INTRODUCTION.
Oil and gas operators on the Outer Continental Shelf ("OCS") must comply with a formidable array of environmental laws and regulations. This paper will review significant environmental laws and offer suggestions for compliance. In particular, it will show:
• Which federal agencies are responsible for environmental issues on the OCS and what is the relationship among these agencies?
• What changes have occurred in the regulation of water discharges from offshore facilities?
• What rules control the disposal of hazardous waste and Nonhazardous Oilfield Waste from OCS facilities?
• What changes have resulted from the 1990 Amendments of the Clean Air Act?
• What are the requirements for platform removal, site clearance and plugging and abandonment of wells on the OCS?
II. SOLVING THE JURISDICTIONAL PUZZLE.
A. Outer Continental Shelf Lands Act ("OCSLA").
The principal authority for the protection of the environment in connection with oil and gas operations on the OCS is vested in the Secretary of the Interior by the Outer Continental Shelf Lands Act ("OCSLA"), 43 U.S.C. § 1331 et seq. The Secretary "shall enforce
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...environmental regulations" promulgated pursuant to the OCSLA, and must inspect facilities from time to time. Id. at § 1348(a) and (c). Lessees under OCSLA leases are required to conduct their operations in compliance with environmental regulations, and must allow "prompt access" to inspectors. Id. at § 1348(b).
The Act requires the Secretary to conduct environmental studies of regions subject to lease sales, § 1346(a)(1), and to conduct additional studies after development of the areas. Id. at § 1346(b). The Secretary must consider "relevant environmental information" in making decisions relating to, for example, drilling permits, exploration plans and future regulations. Id. at § 1346(d).
The OCSLA also requires the Secretary to consider environmental factors in deciding whether to approve a development and production plan, and must disapprove the plan if its implementation would, inter alia, "cause serious harm...to the marine, coastal or human environments." 43 U.S.C. § 1351(h).
B. The Minerals Management Service ("MMS").
The MMS, an agency within the Department of the Interior, is charged with the responsibility of regulating OCS operations, and MMS regulations on this subject are found at 30 C.F.R. Part 250. Sections 250.40-46 expressly address "pollution prevention and control," but many other provisions of Part 250 also have environmental significance.
C. The Environmental Protection Agency ("EPA").
The EPA also has jurisdiction over certain environmental issues on the OCS. The Clean Water Act, the Resource Conservation and Recovery Act ("RCRA"), and the Clean Air Act (after 1990) give EPA a significant role in regulating the environmental aspects of OCS operations. Each of these statutes is addressed in detail below.
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D. The U.S. Coast Guard and Occupational Safety and Health Administration ("OSHA").
OSHA and the Coast Guard have overlapping jurisdiction on the OCS. See 29 U.S.C. § 653(a) (OSHA Act); 43 U.S.C. § 1333(d) (setting forth Coast Guard jurisdiction under OCSLA). OSHA regulations only apply where the Coast Guard or MMS have failed to regulate a hazardous working condition on the OCS.
E. Memoranda of Understanding ("MOU").
Because of the numerous agencies with direct responsibility on the OCS, a series of Memoranda of Understanding have been entered into among relevant agencies in an attempt to define their respective roles.
1. OSHA-Coast Guard MOU.2 On December 19, 1979, OSHA and the Coast Guard entered into an MOU "to establish procedures to increase consultation and coordination between the United States Coast Guard [USCG] and [OSHA] with respect to matters affecting the occupational safety and health of personnel working on the [OCS]." That memorandum provides, in effect, that OSHA regulations only apply where the Coast Guard and MMS have failed to regulate a hazardous working condition on the OCS. The legal effect of this is that the agencies preserve a "two bites of the apple" position: if the Coast Guard or MMS does not regulate the workplace condition, OSHA may.3
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2. MOU Between EPA Region VI and Gulf of Mexico Regional Office, MMS. 4 In 1989, Region VI, U.S. EPA (the region having jurisdiction over the Western Gulf of Mexico), and the Gulf of Mexico OCS Regional Office, MMS, entered into an MOU addressing post-lease monitoring and inspection of OCS oil and gas operations and enforcement of discharge requirements.5 Under this MOU, the MMS agreed to inspect facilities for compliance with the NPDES permit program. EPA remains responsible for enforcement of all NPDES permit conditions. MMS inspectors remain free to take enforcement action under OCSLA or its implementing regulations, but are obliged to notify EPA of NPDES noncompliance.
3. MMS-Coast Guard MOU.6 On September 28, 1989, the MMS and the Coast Guard published a revised MOU to "minimize duplication of effort, and to promote consistent, coordinated and less burdensome regulation of [OCS] facilities." 54 Fed. Reg. 39820. This MOU lists the statutory and regulatory authority under which each agency acts. A
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particularly useful section of this MOU, Section VI designates lead agencies for investigations. Thus, the Coast Guard would normally be the lead agency in investigating collisions, deaths or injuries, and incidents involving damage to drilling facilities or vessels. In contrast, the MMS would be the lead agency for investigating fires or explosions involving drilling or production operations, incidents involving pollution from all OCS facilities, or damage to OCS production facilities.
4. EPA-Coast Guard MOU. 7 On April 14, 1993, the EPA and the Coast Guard published a MOU concerning the enforcement of Section 311 of the Clean Water Act, as amended by the Oil Pollution Act of 1990. 58 Fed. Reg. 19420. A determination of the lead enforcement agency may depend on the agency responsible for providing an On-Scene Coordinator pursuant to the National Contingency Plan.
III. REGULATION OF DISCHARGES TO SURFACE WATERS FROM OFFSHORE FACILITIES.
During the past year, there have been several significant developments with regard to EPA regulation of the offshore oil and gas extraction industry under the Clean Water Act. EPA has recently published New Source Performance Standards and Effluent Limitations for the Industry, and has also issued important new general NPDES permits.
A. New NSPS/BAT Effluent Limitations for Offshore Oil and Gas Industry.
1. Effluent Limitations Guidelines and Standards.
The Clean Water Act requires the EPA to establish technology-based effluent limitations guidelines on a nationwide, industry-by-industry basis. 33 U.S.C. §§ 1311, 1314. The relevant levels of technology include:
° Best Practicable Control Technology Currently Available ("BPT"). BPT is applicable to existing sources.
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° Best Available Technology Economically Achievable ("BAT"). BAT applies to existing sources, and involves control of toxic and nonconventional pollutants.
° Best Conventional Pollutant Control Technology ("BCT"). BCT is applicable to existing sources and controls conventional pollutants, e.g., pH, oil and grease.
° New Source Performance Standards ("NSPS"). NSPS are applicable to new sources and involve control of toxic, conventional and nonconventional pollutants.
The oil and gas extraction industry, which involves facilities engaged in exploration for, and development and production of, oil and gas, is divided into five sub-categories: offshore, onshore, coastal, agricultural/wildlife water use and stripper. Offshore facilities are located primarily in the Gulf of Mexico offshore of Texas and Louisiana, with a number of facilities located offshore of California and Alaska.
BPT effluent limitations for the offshore industry were promulgated on April 13, 1979, and are found at 44 Fed...
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