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Environmental Blog

  • 06
  • May
  • 2016

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Enviros Launch New Assault Against RCRA E&P Exemption

On May 4, 2016, the National Resources Defense Council (NRDC), the Environmental Integrity Project (EIP), Earthworks, and three other environmental groups filed a complaint in the U.S. District Court for the District of Columbia pursuant to the Resource Conservation and Recovery Act (RCRA). The suit seeks to compel the U.S. Environmental Protection Agency (EPA) to review, and, if necessary, promulgate revised regulations and guidelines for the disposal, storage, transportation, and handling of oil and natural gas wastes. The complaint follows-through on the NRDC’s and EIP’s Notice of Intent to sue EPA sent to the agency last fall. 

Citing the rapid expansion of oil and natural gas drilling activities across the U.S. over the past decade, the environmental groups assert that EPA regulations do not address the concerns associated with the growing volumes of oil and natural gas wastes, including flowback and produced water, that they contend may contain hazardous chemicals and naturally occurring radioactive materials. The complaint also includes their arguments that more seismicity events are related to the increased use of underground injection wells. Taken together, the complaint asserts that there is growing evidence that the scope of RCRA’s exemption for oil and natural gas exploration and production wastes needs reexamination.

Statutory Framework

RCRA contains separate requirements for hazardous wastes, regulated under Subtitle C, and non-hazardous wastes, regulated under Subtitle D. Regulation under Subtitle C imposes “cradle to grave” obligations for the transportation, storage and disposal of hazardous wastes and can result in significant costs for operators. In 1978, the EPA proposed to exempt drilling fluids, produced waters and certain other wastes related to oil and natural gas drilling activities from regulation under Subtitle C (the “E&P Exemption”), and, in 1980, Congress passed the Solid Waste Disposal Act Amendments of 1980, codifying the E&P Exemption. The exemption, however, was not unlimited in scope, and provided the EPA with some authority to impose additional regulations on E&P wastes.

Pursuant to RCRA section 2002(b), EPA has a nondiscretionary duty to review and, if necessary, revise hazardous and nonhazardous waste rules at least once every three years. The lawsuit claims that the last time the agency performed this review with respect to Subtitle D regulations was in 1988 and that, although EPA stated it would consider further regulation of E&P wastes, no further action has been taken. A similar requirement exists for EPA guidelines for states on the management of solid wastes, which includes oil and natural gas wastes.

The complaint filed by environmental groups does not explicitly seek a repeal of the E&P Exemption. Rather, the complaint seeks to compel EPA to undertake certain reviews and actions mandated by statute. The environmental groups ask the court to either: (i) order EPA to promulgate whatever revisions the EPA deemed necessary as a result of its 1988 review of the E&P exemption; (ii) alternatively, to the extent EPA’s 1988 review did not identify the need for any revisions to the E&P Exemption, to compel EPA review the exemption now and promulgate any revisions the agency deems necessary; and (iii) separately, review state plan guidelines for the management of oil and natural gas wastes and promulgate any revisions the agency deems necessary.

Implications

The consequences of losing, or even just a narrowing of, the E&P Exemption has the potential to send shockwaves through the entire oil and natural gas industry. Loss of the exemption does not automatically render E&P wastes hazardous wastes, but it will subject these waste to waste characterization requirements, and could result in the need to perform EPA’s Toxicity Characteristic Leaching Procedure (TCLP). Given the large volume of E&P wastes, especially flowback and produced waters, resulting from hydraulically fractured wells, the costs to run TCLP tests would be exorbitant. 

The characterization of produced water or flowback water as hazardous waste would severely limit wastewater disposal options for oil and natural gas operators. The most common method for disposal of flowback and produced water is in Class II injection wells. The federal Safe Drinking Water Act (SDWA) regulates these wells under the statue’s Underground Injection Control Program. Class II injection wells, however, cannot receive hazardous wastes. The SDWA only authorizes Class I wells to dispose of hazardous wastes. 

Construction, permitting, operating, and monitoring requirements are more stringent for Class I waste disposal wells than for other UIC program wells. Class I well permit applications must also address seismic considerations, a growing concern related to the hydraulic fracturing waste disposal. However, many states, including Texas, have already promulgated new rules related to these matters. Also, according to EPA, only 17% of the 800 Class I disposal wells are permitted to dispose of hazardous waste. When compared to the approximately 180,000 Class II disposal wells currently permitted for E&P waste disposal, it becomes apparent the loss of the E&P exemption would result in a radical shift in wastewater disposal practices for the oil and natural gas industry. 

States continue to adapt to E&P wastes disposal issues at a pace significantly faster than EPA could hope to match, calling into question the need for additional federal regulation in this area. Even if successful, there is no guarantee that this lawsuit will result in significant changes to the scope of the E&P exemption.

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Author

Mattew T. Dobbins

Matthew Dobbins Senior Associate