ENVIRONMENTAL PROTECTION AGENCY 

                                  

                           [FRL-3403-9] 

                                  

                           53 FR 25447 

                                  

                           July 6, 1988 

 

 

   Regulatory Determination for Oil and Gas and Geothermal

Exploration, Development and Production Wastes 

ACTION: Regulatory determination. 

 

SUMMARY: Section 3001(b)(2)(B) of the Resource Conservation and

Recovery Act (RCRA) requires the Administrator to determine

whether to promulgate regulations under RCRA Subtitle C for

wastes from the exploration, development, and production of crude

oil, natural gas, and geothermal energy. The Adminstrator must

make this determination no later than six months after completing

a Report to Congress on these wastes and after providing an

opportunity for public comment. The Agency has completed these

activities and has decided that regulation under RCRA Subtitle C

is not warranted. Rather, EPA will implement a three-pronged

strategy to address the diverse environmental and programmatic

issues posed by these wastes by: (1) Improving Federal programs

under existing authorities in Subtitle D of RCRA, the Clean Water

Act, and Safe Drinking Water Act; (2) working with States to

encourage changes in their regulations and enforcement to improve

some programs; and (3) working with Congress to develop any

additional statutory authorities that may be required. 

 

 

FOR FURTHER INFORMATION CONTACT: 

 

SUPPLEMENTARY INFORMATION: 

 

Preamble Outline 

 

I. Summary 

 

II. Background 

 

   A. Technical Summary of Report to Congress 

 

   B. Legal Authority 

 

   C. Conclusions of the Report to Congress and Response to

      Comments 

 

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   D. Determination of the Scope of the Temporary RCRA Exemption 

 

III. Factors Considered in Regulatory Determination 

IV. Regulatory Determination for Crude Oil and Natural Gas Wastes

 

   A. Hazard Assessment 

 

   B. Economic Impact Analysis 

 

   C. Adequacy of State and Federal Regulatory Programs 

 

   D. Conclusions 

 

 V. Efforts to Improve State and Federal Programs 

 

   A. Federal Program Improvements Within Existing Authorities 

 

   B. Additional Federal Authorities 

 

   C. Improvements in State Programs 

 

 VI. Regulatory Determination for Geothermal Energy Wastes 

 

   A. Hazard Assessment 

 

   B. Adequacy of State and Federal Regulations 

 

   C. Conclusions 

 

VII. Research, Development, and Demonstration Plan 

 

VIII. EPA RCRA Docket 

 

   

I. Summary 

 

   This action presents the Agency's regulatory determination

required by section 3001(b)(2)(B) of the Resource Conservation

and Recovery Act (RCRA) for drilling fluids, produced waters, and

other wastes associated with the exploration, development, or

production of crude oil, natural gas, or geothermal energy. RCRA

requires the Administrator to determine either to promulgate

regulations under Subtitle C for wastes from oil, gas, and

geothermal exploration, development, and production, or that such

regulations are unwarranted. In making this determination, the

Administrator is required to utilize information developed and

accumulated by the Agency pursuant to a study required under RCRA

section 8002(m). The Agency completed this study and published

its results in December, 1987 in a Report to Congress entitled 

"Management of Wastes from the Exploration, Development, and 

                                               53 FR 25446

Production of Crude Oil, Natural Gas, and Geothermal Energy." 

 

   In completing the Report to Congress and this determination,

EPA gathered and evaluated information on all of the issues

raised in section 8002(m), including three key factors pertaining

to wastes from the exploration, development, and production of

oil, gas, and geothermal energy: (1) The characteristics,

management practices, and resulting impacts of these wastes on

human health and the environment; (2) the adequacy of existing

State and Federal regulatory programs; and (3) the economic

impacts of any additional regulatory controls on industry. 

 

   In considering the first factor, EPA found that a wide variety

of management practices are utilized for these wastes, and that

many alternatives to these current practices are not feasible or

applicable at individual sites. EPA found that oil, gas, and

geothermal wastes originate in very diverse ecologic settings and

contain a wide variety of hazardous constituents. EPA documented

62 damage cases resulting from the management of these wastes,

but found that many of these were in violation of existing State

and Federal requirements. 

 

   As to the second factor, EPA found that existing State and

Federal regulations are generally adequate to control the

management of oil and gas wastes. Certain regulatory gaps do

exist, however, and enforcement of existing regulations in some

States is inadequate. For example, some States have 

insufficient controls on the use of landfarming, roadspreading,

pit construction and surface water discharge practices. Some

States lack sufficient controls for central disposal and

treatment facilities and for associated wastes.  n1 The existing

Federal standards under Subtitle D of RCRA provide general

environmental performance standards for disposal of solid wastes,

including oil, gas, and geothermal wastes, but these standards do

not fully address the specific concerns posed by oil and gas

wastes. Nevertheless, EPA has authority under Subtitle D to

promulgate more tailored criteria. In addition, the authorities

available under the Clean Water Act (CWA) or Safe Drinking Water

Act (SDWA) can be more broadly utilized, and efforts are already

underway to fill gaps under these programs. 

 

   n 1 Associated wastes are those wastes other than produced water,

drilling muds and cutting, and rigwash that are intrinsic to

exploration, developmentand production of crude oil and natural gas. See

Section II D below. 

 

   EPA's review of the third factor found that imposition of

Subtitle C regulations for all oil and gas wastes could subject

billions of barrels of waste to regulation under Subtitle C as

hazardous wastes and would cause a severe economic impact on the

industry and on oil and gas production in the U.S. Additionally,

because a large part of these wastes is managed in off-site

                                            53 FR 25446

commercial facilities, removal of the exemption could cause 

severe short-term strains on the capacity of Subtitle C

Treatment, Storage, and Disposal Facilities (TSDFs), and a

significant increase in the Subtitle C permitting 

burden for State and Federal hazardous waste programs. 

 

   As explained in more detail in Section IV of this notice, EPA

found that regulation under Subtitle C presents several serious

problems. First, Subtitle C contains an unusually large number of

highly detailed statutory requirements. It offers little

flexibility to take into account the varying geological,

climatological, geographic, and other differences characteristic

of oil and gas drilling and production sites across the country.

At the same time, it does not provide the Agency with the

flexibility to consider costs when applying these requirements to

oil and gas wastes. [Page 25447] Consequently, EPA would not be

able to craft a regulatory program to reduce or eliminate the

serious economic impacts that it has predicted. Furthermore,

since existing State and Federal programs already control oil and

gas wastes in many waste management scenarios, EPA needs to

impose only a limited number of additional controls targeted to

fill the gaps in the existing programs. Subtitle C, with its

comprehensive "cradle to grave" management requirement, is not

well suited to this type of gap-filling regulation. EPA concluded

that it would be more efficient and appropriate to fill the gaps

by strengthening under the Clean Water Act and UIC programs and

promulgating the remaining rules needed under RCRA under the less

prescriptive statutory authorities set out in Subtitle D. This

narrower approach would also reduce disruption of existing State

and Federal control programs. 

 

   Thus, the Agency has decided not to promulgate regulations

under Subtitle C for wastes generated by the exploration,

development, and production of crude oil, natural gas, and

geothermal energy for the following reasons: 

 

   (1) Subtitle C does not provide sufficient flexibility to

consider costs and avoid the serious economic impacts that

regulation would create for the industry's exploration and production

operations; 

   (2) Existing State and Federal regulatory programs are

generally adequate for controlling oil, gas, and geothermal

wastes. Regulatory gaps in the Clean Water Act and UIC program

are already being addressed, and the remaining gaps in State and

Federal regulatory programs can be effectively addressed by

formulating requirements under Subtitle D of RCRA and by working

with the States; 

 

   (3) Permitting delays would hinder new facilities, disrupting

the search for new oil and gas deposits; 

 

                                                     53 FR 25447

   (4) Subtitle C regulation of these wastes could severely 

strain existing Subtitle C facility capacity; 

 

   (5) It is impractical and inefficient to implement Subtitle C

for all or some of these wastes because of the disruption and, in

some cases, duplication of State authorities that administer

programs through organizational structures tailored to the oil

and gas industry; and 

 

   (6) It is impractical and inefficient to implement Subtitle C

for all or some of these wastes because of the permitting burden

that the regulatory agencies would incur if even a small

percentage of these sites were considered Treatment, Storage and

Disposal Facilities (TSDFs). 

 

   The Agency plans a three-pronged approach toward filling the

gaps in existing State and Federal regulatory programs by: 

 

   (1) Improving Federal programs under existing authorities in

Subtitle D of RCRA, the Clean Water Act, and Safe Drinking Water

Act; 

 

   (2) Working with States to encourage changes in their

regulations and enforcement to improve some programs; and 

 

   (3) Working with the Congress to develop any additional

statutory authority that may be required. 

 

   EPA plans to revise its existing standards under Subtitle D of

RCRA, tailoring these standards to address the special problems

posed by oil, gas, and geothermal wastes and filling the

regulatory gaps. Also, the Agency is moving ahead with

improvements in its NPDES and UIC programs under the Clean Water

Act and the Safe Drinking Water Act. EPA also plans to work with

Congress to obtain any additional authorities that may be

required. For example, Subtitle D of RCRA currently does not

provide EPA with the authority to address treatment or

transportation of wastes. Throughout the process of improving the

Federal regulatory program, EPA will work closely with States to

encourage improvements in their regulatory programs. 

 

    

II. Background 

 

   Section 3001(b)(2)(A) of the Solid Waste Disposal Act of 1980

(Pub. L. 96-480), which amended the Resource Conservation and

Recovery Act of 1976 (RCRA), prohibits EPA from regulating under

RCRA Subtitle C "drilling fluids, produced waters, and other

wastes associated with exploration, development, or production of

crude oil or natural gas or geothermal energy" until at least 6 

months after the Agency completes and submits to Congress a

comprehensive study required by section 8002(m) (also added by

                                             53 FR 25447

the 1980 amendments). Section 8002(m) directs EPA to conduct    

  [A] detailed and comprehensive study and submit a report on

the adverse effects, if any, of drilling fluids, produced waters,

and other wastes associated with the exploration, development, or

production of crude oil or natural gas or geothermal energy on

human health and the environment, including, but not limited to,

the effects of such wastes on humans, water, air, health,

welfare, and natural resources and on the adequacy of means and

measures currently employed by the oil and gas and geothermal

energy drilling and production industry, Government agencies, and

others to dispose of and utilize such wastes to prevent or

substantially mitigate such adverse effects. 

 

   The study way to include an analysis of: 

 

   1. The sources and volumes of discarded material generated per

year from such wastes; 

 

   2. Present disposal practices; 

 

   3. Potential danger to human health and the environment from

surface runoff or leachate; 

 

   4. Documented cases that prove or have caused danger to human

health and the environment from surface runoff or leachate; 

 

   5. Alternatives to current disposal methods; 

 

   6. The cost of such alternatives; and 

 

   7. The impact of those alternatives on the exploration for,

and development and production of, crude oil and natural gas or

geothermal energy. 

 

   The 1980 amendments also added section 3001(b)(2)(B), which

requires the Administrator to make a "regulatory determination"

regarding the waste excluded from RCRA Subtitle C regulation.

Specifically, within 6 months after submitting the Report to

Congress, and after the opportunity for public hearings and

public comment on the report, the Administrator must "determine

to promulgate regulations" under RCRA Subtitle C for oil, gas,

and geothermal energy waste, "or that such regulations are

unwarranted." Section 3001(b)(2)(C) also specifies that any new

regulations under RCRA Subtitle C for the crude oil, natural gas,

or geothermal energy industry would not take effect until

authorized by an Act of Congress 

 

   EPA was required to complete the study and submit it to

Congress by October 1982. In August 1985, the Alaska Center for

the Environment sued the Agency for its failure to complete the

study by the statutory deadline. EPA entered into a consent order

                                              53 FR 25447

obligating it to submit the final Report to Congress on or before

August 31, 1987, and to make its regulatory determination by 

February 29, 1988. In April 1987, the court-ordered schedule was

modified, extending the deadline or submittal of the final Report

to Congress to December 31, 1987, and requiring the regulatory

determination to be made by June 30, 1988. In accordance with

this schedule, EPA completed the technical report on methodology

in October 1986, the technical report on the waste sampling and

analysis in January 1987, the interim report in April 1987, the

draft report in August 1987, and the final report in December

1987. 

 

   EPA's Report to Congress, "Management of Wastes from the

Exploration, Development, and Production of Crude Oil, Natural

Gas, and Geothermal Energy," was [Page 25448] transmitted to

Congress on December 28, 1987. A notice announcing the

availability of the report, as well as the dates and locations of

public hearings, was published on January 4, 1988 (53 FR 82). EPA

held public hearings on the report in Washington, DC on February

23, 1988; Denver, Colorado, on February 25, 1988; San Francisco,

California, on March 1, 1988; Anchorage, Alaska, on March 3,

1988; and Dallas, Texas, on March 8, 1988. The comment period on

the report closed on March 15, 1988. 

   EPA's Report to Congress provides information on all of the

study areas mandated by RCRA section 8002(m). The Agency received

approximately 150 written comments on the report and heard

testimony at the hearings from 105 individuals. All individual

comments and transcripts from the public hearings are available

for public inspection in the docket. The docket also contains a

summary of all the comments presented at the hearings or

submitted in writing, along with EPA's response to these

comments. 

 

    

A. Technical Summary of Report to Congress 

 

   1. Definition of Exempt Wastes 

 

   Section 3001(b)(2)(A) exempts produced water, drilling fluids,

and "other wastes associated" with the exploration, development,

and production activities. These are general terms that do not

identify all of the specific waste streams to be exempted and

studied. For study purposes, EPA broadly defined the scope of the

exemption for oil, gas, and geothermal energy wastes to include

not only produced waters and drilling fluids, but also related

wastes (referred to herein as "associated wastes"), generated

during the exploration, development, and production of crude oil,

natural gas, and geothermal energy resources. The Agency excluded

from its study those wastes not uniquely associated with

exploration, development, and production of crude oil and natural

gas which are not exempt from Subtitle C regulation (e.g., used

                                              53 FR 25448

batteries and waste solvents). 

 

   For geothermal energy, the definition of drilling-related

wastes was identical to that of crude oil and natural gas wastes.

Exempt wastes unique to geothermal energy production operations

included: Waste streams produced from materials passing through

the turbine in dry-steam power generation; waste streams

resulting from a geothermal energy fluid or gas that passed

through the turbine in flashed-stream and binary power plants;

waste streams resulting from the geothermal energy products

passing through only the heat exchanger in binary operations or

through the flash separator in the flash process; and most direct

use waste streams. A more detailed description of the scope of

the exemption and study appears in section IV.D. below. 

 

   2. Waste Quantities and Characterization 

 

   In the Report to Congress, EPA estimated that 361 million

barrels of drilling waste were generated in 1985 from about

70,000 crude oil and natural gas wells, and that over 800,000

active production sites generated 20.9 billion barrels (including

produced water injected for enhanced oil recovery (EOR)) of

produced water during that year. Associated waste, such as

workover fluids and tank bottoms, are produced at the rate of 11

million barrels per year. For geothermal energy wastes, EPA

estimated that approximately 111,000 barrels of geothermal

energy-related drilling wastes were generated in 1985, along with

56 billion gallons of liquid wastes (geothermal fluid and

condensed steam) from both binary and flash process plants, and 8

billion gallons of liquid waste from direct use of geothermal

energy. 

 

   For crude oil and natural gas wastes, EPA sampled liquids and

sludges from several locations. Drilling fluids were sampled at

drilling operations while produced water and tank bottoms were

sampled at production operations. Samples from central treatment

and disposal facilities and central pits contained mixtures of all

wastes including associated wastes. The Agency found that organic

pollutants at levels of potential concern (levels that exceed 100 times

EPA's health-based standards) included the hydrocarbons benzene and

phenanthrene. Inorganic

constituents at levels of potential concern included lead,

arsenic, barium, antimony, fluoride, and uranium. 

 

   Tank bottoms, an associated waste sampled and analyzed by the

Agency, contained significant levels of contaminants of concern,

with some levels exceeding the reference doses (RfDs) for

noncarcinogens or the risk-specific doses (RSDs) for carcinogens

(health-based standards) for these contaminants. n2 

 

   n2 It is the Agency's policy to consider Maximum Contaminant

levels (MCLs) (established by the Office of Drinking Water) when

                                               53 FR 25448

available. Where an MCL has not been developed, RfDs for

noncarcinogens and RSDs for carcinogens will be used to set 

health-based limits. These terms are defined as follows: 

 

    -- Maximum Contaminant Level (MCL) is the enforceable

drinking water standard, based on health and technical

feasibility, attained at the tap. This measure is used when

ground water is the main exposure pathway. 

 

    -- Reference Dose (RfD) is an estimate (with uncertainty

spanning perhaps an order of magnitude) of a daily exposure to

the human population (including sensitive subgroups) that is

likely to be without an appreciable risk of deleterious effects

during a lifetime." [Integrated Risk Information System (IRIS)

Vol. 1, Supplementary Documentation Appendix A,

EPA/600/8-86/032A.] 

    -- Risk-Specific Dose (RSD) is the daily dose of a carcinogen

received over a lifetime that will result in an incidence of

cancer equal to the specific risk level. The risk level of A and

B carcinogens is 10E -6 (1 in 1 million) and for C carcinogens it

is 10E -5 (1 in 100,000). [51 FR 21667, June 13, 1986.] The

classes of carcinogens are: Class A = human carcinogen, Class B =

probable human carcinogen, Class C = possible human carcinogen.

[Both RfDs and RSDs are converted into medium specific

concentrations using intake assumptions for selected routes of

exposure. They are expressed in mg/kg/day. Surface and ground

water (ingestion): 2 liters/day for a 70-kg adult for a 70-year

exposure. Air (inhalation): 20 cubic meters air/day for a 70-kg

adult for a 70-year exposure.] 

 

   Analysis of the constituents of several geothermal energy

waste streams indicated that some of the production wastes

exhibited the corrosivity characteristic and extraction procedure

(EP) toxicity for certain metals. Factors such as management

practices, dilution and attenuation of the contaminant, and

hydrogeological characteristics, affect the risk to human 

health and the environment presented by these chemicals. 

 

   3. Current and Alternative Management Practices 

 

   A wide range of management practices are employed for crude

oil and natural gas wastes. The technological diversity is the

result of widely varying geological, climatological, ecological,

topographic, economic, geographic, and age differences among

drilling and production sites across the country and 

partially account for varying State regulatory requirements.

There are, however, variations from State to State in the

stringency of management practices which are not wholly

attributable to the varying physical settings of the operations. 

 

   Current practices include the use of reserve pits for drilling

                                             53 FR 25448

wastes; landspreading of reserve pit contents; disposal of

produced waters through Class II underground injection wells; 

disposal of produced water in unlined pits; discharge of produced

water to surface waters; roadspreading; use of commercial

facilities for treatment and disposal of drilling wastes and

produced water; and some practices unique to the Alaska North

Slope, such as the use of semipermanent production-related

reserve pits, and discharges to the tundra. Less frequently used

current [Page 25449] practices discussed in the report are

closed-cycle drilling mud systems, annular disposal of produced

water and drilling fluid, and trenching of reserve pits to

dispose of reserve pit fluids. 

 

   These practices vary substantially in the protection they

provide to the environment. While changes in State regulatory

requirements over the years have led generally to the use of more

environmentally protective technologies and management practices,

there is a need for increased movement to more protective

approaches for discharge to ephemeral streams, surface water

discharges in estuaries in the Gulf Coast region, road

applications of reserve pit contents and discharge to tundra in

the Arctic, and annular disposal of produced waters. 

 

   For the major waste streams, EPA was unable to identify any

new technologies in the research and development stage that offer

promise for wide application in the near term. More widespread

use of the best existing technologies, however, would provide

substantial additional protection for the environment in many

areas. 

 

   Waste management practices unique to geothermal power

generation wastes include closed-cycle ponding, reinjection into

the producing zone or a nonproducing zone, and consumptive

secondary use. In California, production wastes are tested for

hazardousness, using the California tests for hazardousness,

before disposal to determine the appropriate disposal method. 

After direct use of geothermal energy fluid for heating purposes,

these fluids can be discharged to surface waters, injected into

the producing zone or a nonproducing zone, and consumed by

secondary uses. 

 

   4. Evidence of Damages 

 

   To determine the types and severity of damages caused by crude

oil and natural gas wastes, EPA assembled information on a

substantial number of damage cases, 62 of which were fully

documented and passed EPA's "tests of proof." These cases were

based on recent information gathered from the States of Alaska,

Arkansas, California, Kansas, Kentucky, Louisiana, Michigan, New

Mexico, Ohio, Oklahoma, Pennsylvania, Texas, West Virginia, and

Wyoming. These damage cases were extensively reviewed by the

States, industry, and third parties. On the basis of all

                                             53 FR 25449

available information, the study found that wastes from crude oil

and natural gas operations have endangered human health and 

caused environmental damage when managed in violation of State

and Federal requirements. In some instances damage occurred where

wastes are managed in accordance with currently applicable State

and Federal requirements. 

 

   The major categories of wastes responsible for damages include

reserve pit wastes, fracturing and acidizing fluids, stimulation

chemicals, waste crude oil, produced water, and other

miscellaneous wastes generated by the exploration, development,

and production of crude oil and natural gas. The various

categories of damages to, or endangerment of, human health and

the environment contained in the Report to Congress include: 

 

    -- Damage to agricultural land, crops, ephemeral streams,

livestock, and threats to endangered species, fish, and other

aquatic life in estuaries and bays from produced water and

drilling fluids; 

 

    -- Degradation of soil and ground water from runoff and

leachate from central treatment and disposal facilities, reserve

pits, and unlined disposal pits; 

 

    -- Potential contamination of aquatic and bird life in

estuaries and bays by metals and polycyclic aromatic hydrocarbons

resulting from the discharge of drilling fluids and produced

waters; 

 

    -- Potential for endangerment of human health from

consumption of contaminated fish and shellfish and from ground

water contaminated by seepage from storage and disposal pits; 

 

    -- Potential damage to tundra on the Alaska North Slope from

roadspreading and seepage and discharges from reserve pits; 

 

    -- Damage to ground water, agricultural land, and domestic

and irrigation water caused by seepage of native brines from

improperly plugged and unplugged abandoned wells; and 

 

    -- Ground-water degradation from improper functioning of

injection wells. 

   5. Risk Modeling 

 

   EPA used quantitative modeling and a review of the scientific

literature to evaluate the health and environmental risks

associated with management of oil, gas, and geothermal energy

wastes in order to evaluate risks to human health and the

environment under a variety of conditions. The Agency

characterized selected major risk-influencing factors associated

with current operations: Estimated the management of drilling

                                             53 FR 25449

waste in reserve pits, the underground injection of produced

water, and the surface water discharge of produced water from 

stripper wells. The risk analysis did not consider annular

disposal, storage of produced water in surface impoundments,

migration of produced water contaminants through fractures,

unplugged or improperly plugged and abandoned wells,

landspreading, roadspreading, or disposal of associated wastes. 

 

   For the selected practices, EPA estimated distributions of

these risk-influencing factors across the population of crude oil

and natural gas facilities; evaluated these factors in terms of

their relative effect on risks; and developed initial

quantitative estimates of the possible range of baseline health

and environmental risks for the variety of conditions found.

Risks were analyzed under assumptions that were broadly

consistent with baseline requirements of existing Federal and

State programs. 

 

   For the specific subset of current practices, EPA modeled the

potential effects of arsenic, benzene, boron, sodium, chloride,

cadmium, chromium, and total mobile ions at concentrations

observed in sampled produced water and drilling waste. The study

focused heavily on ground water and indicated that, for the vast

majority of the scenarios modeled, risks from the disposal of drilling

waste in onsite reserve pits and the disposal of produced water by

underground injection were small. Only a few chemicals from either

source appear to be of major concern relative to health or environmental

risk. The actual human health and environmental threats posed by any of

these releases is largely dependent upon site-specific factors,

including geophysical conditions and a site's proximity to human

populations or sensitive ecosystems. Estimated impacts on human

health varied widely, and there were typically a few combinations

of environmental settings and high sample toxic constituent

concentrations where moderate risks were projected. Quantitative

risk modeling indicates the potential in some situations for

carcinogenic risks in excess of 1 in 10,000 and sodium levels in

drinking water in excess of recommended levels for public

drinking water supplies. Modeling of resource damages to ground

and surface water generally did not show significant risks at low

release rates typical of individual stripper wells although

multiple strippers discharging into common water courses were not

modeled. 

 

   6. Costs and Economic Impacts 

 

   EPA developed three estimates of the compliance costs and

economic impacts of implementing alternative waste management

practices for the large-volume drilling wastes and produced

waters in the crude oil and natural gas industries: (1) a

"baseline" scenario reflecting current waste management

practices; (2) an "intermediate" scenario, in which somewhat

                                             53 FR 25449

stricter [Page 25450] controls on waste disposal practices are

assumed; and (3) a "Subtitle C" scenario, in which virtually full RCRA

hazardous waste requirements would be met. EPA estimated

total annual costs for each scenario and then evaluated the

projected economic impacts of these costs on the oil industry as

a whole. 

   Assuming produced waters reinjected for enhanced production

would not be regulated, total annual costs for additional

management requirements ranged from approximately $50 million to

over $6.7 billion, depending on the scenario and on assumptions

regarding the fraction of wastes (10 to 70 percent) that would be

handled as RCRA-hazardous under each scenario. Estimated costs

for the Subtitle C scenario ranged between $1 billion and $6.5

billion without including land-ban and corrective action costs. 

 

   Production declines related to these increased waste

management costs could range up to 12 percent in the year 2000.

Other impacts also varied greatly under different scenario

assumptions. Net impacts on oil prices per barrel could range up

to $0.76 per barrel, with projected maximum costs to consumers of

$4.5 billion per year, and increases in the U.S. balance of

payments deficit of up to $11 billion. 

 

   A significant part of any overall economic impact of new

requirements would be their effects on stripper wells. Stripper

operations (generally, wells producing 10 or fewer barrels of oil

per day during the declining phase of their production cycle)

cumulatively contribute about 14 percent of total domestic oil

production. Generation of production wastes by strippers is more

significant than would be expected, however, because many

strippers produce very high ratios of water to oil. Many stripper

operations are economically marginal and are thus highly

sensitive to small fluctuations in market prices and cannot

easily absorb additional costs for waste management. Stripper

operations, therefore, constitute a special subcategory of the

crude oil and natural gas industry and should be given special

consideration when developing recommendations for improvements in

the management of crude oil and natural gas wastes. At the same

time, any additional regulations must recognize the great

diversity that exists within the stripper industry. The nature of

stripper operations is dependent on the volume of crude oil,

natural gas and wastes generated, the age of the well, the

technology in use, geological, environmental, and economic

considerations, and types of ownership. For example, a

family-owned stripper well in a century-old field in Appalachia

bears little resemblance to a field of stripper wells owned by a

single large petrochemical company in California. Regulations

governing wastes generated by stripper wells must be tailored to

meet this great diversity. 

 

    

                                                  53 FR 25450

B. Legal Authority 

 

   Section 3001(b)(2)(B) of RCRA requires EPA to determine either

to promulgate regulations under Subtitle C for oil, gas, and

geothermal energy wastes, or that such regulations are

"unwarranted." This section thus gives EPA broad discretion both

to identify what factors to consider and to determine what

balance of factors permit the conclusion that Subtitle C

regulations are unwarranted. 

 

   EPA has concluded that its decision whether to regulate oil,

gas and geothermal energy waste under Subtitle C should be based

not just on whether that waste is hazardous (as currently defined

by EPA regulations) but also on a consideration of the other

factors section 8002(m) required EPA to study. The basis of this

conclusion is the language of section 3001(b)(2)(B), which states

that in making the regulatory determination " the Administrator

shall utilize the information developed or accumulated pursuant

to the study required under section 8002(m)." Clearly, Congress

envisioned that the determination would be based on all the

considerations stated in section 8002(m). 

  In reviewing sections 3001(b) and 8002(m), together with the

legislative history of these provisions, EPA has concluded that

Congress believed certain considerations to be particularly

important to the regulatory determination. First, Congress

instructed EPA to study the potential dangers to human health 

and the environment from oil, gas and geothermal energy waste,

indicating that any decision to regulate under Subtitle C must be

based on a finding of such danger. Second, section 8002(m)

required EPA to study "the adequacy of means and measures

currently employed by * * * Government agencies * * * to dispose

of and utilize such wastes and to prevent or substantially

mitigate such adverse effects." The section also permits EPA to

review the actions of other Federal agencies, "with a view toward

avoiding duplication of effort," and requires the Agency to

include in its report of the study "recommendations for Federal

and non-Federal actions concerning" the effects of oil, gas and

geothermal energy wastes on health and environment. Thus,

Congress was concerned that regulations under Subtitle C should

not be promulgated "until further information is developed to

determine whether a sufficient degree of hazard exists to warrant

additional regulations and whether existing State or Federal

programs adequately control such hazards." S. Rep. No. 172, 96th

Cong., 1st Sess. (1979), at 6. Congress apparently believed that

EPA should not impose Subtitle C regulation unless other programs

could not adequately control any hazards identified. 

 

   In addition, Congress instructed EPA to analyze fully the

disposal practices of the industry, including present practices,

alternatives, the cost of alternatives, and the impact of

alternatives on the exploration for, and development and 

                                             53 FR 25450

production of, crude oil and natural gas and geothermal energy.

Thus, EPA was required to consider the impact of Subtitle C

regulations on existing hazardous waste facilities, and both the

cost and impact of such regulations on the oil, gas and

geothermal industries. Clearly, Congress believed that Subtitle C

regulation would be unwarranted if it had severe impacts on the

nation's future energy production capabilities. 

 

    

C. Conclusions of the Report to Congress and Response to Comments

 

   Based on the study done by EPA, the Report to Congress

developed a number of initial general conclusions. Extensive

comments were received on these conclusions. A summary of the

comments and EPA's response follows each conclusion (underlined

statements) below. 

 

   1. Available waste management practices vary in their

environmental performance. Some individuals argued that since

crude oil and natural gas operations very significantly across

the country, Federal regulations could not be effectively

enforced or applied, and would therefore not be beneficial. Other

commenters focused on local issues and regional environmental

problems, calling for increased Federal regulations to solve

them. Still others observed that the crude oil and natural gas

industry does not manage its "hazardous" wastes in the same

manner as other industries manage similar hazardous wastes. 

 

   The Agency acknowledges that there are valid reasons for

differences in practices among areas. This points to a need for

individual, tailored regulations at the State and local level for

the management of these wastes, rather than a RCRA Subtitle C

program. The Agency also agrees, however, that there may be a

need for minimum Federal standards covering basic waste 

management practices. The Agency agrees that because of the large

volumes of these wastes, along with the other [Page 25451]

factors discussed in the report, some crude oil and natural gas

wastes require different disposal methods than may be used for

management of wastes generated by other industries. 

 

   2. Any program to improve management of oil and gas wastes in

the near term will be based largely on technologies and practices

in current use. Commenters agreeing with this conclusion asserted

that existing technologies are adequate and that new technologies

would be economically infeasible and would serve no 

valid purpose. Others, especially those concerned with issues in

Alaska, believe that many new technologies are available but

seldom used and called for their increased use. A few State

regulatory agencies called for increased technical assistance and

guidance from EPA. 

 

                                              53 FR 25451

   The Agency continues to believe that there are very few

techniques that are not in use under some conditions. There is,

however, a need to disseminate knowledge and encourage or perhaps

require adoption of improved methods nationwide. States and the 

industry should continue to develop, refine, and encourage the

implementation of new and improved waste management techniques. 

 

   3. Increased segregation of waste may help improve management

of oil and gas wastes. Many commenters strongly opposed the

proposal for segregation of wastes and believed that the scope of

the exemption in RCRA section 3001 should be construed to

include, and should be maintained for, all associated wastes in

addition to the currently exempt large-volume wastes. Many

commenters asserted that mixing various wastes with produced

water prior to injection is environmentally safe and economically

beneficial. Other commenters argued that each waste stream

generated by the crude oil and natural gas industry should be

tested separately to determine its RCRA characteristics and that

wastes determined to be hazardous according to RCRA definitions

should remain segregated and be disposed of according to RCRA

regulations. Some individuals claimed that many hazardous wastes

generated by the crude oil and natural gas industry are

commingled with nonhazardous wastes prior to landspreading or

injection, causing significant environmental damage. 

 

   The Agency believes that under certain circumstances waste

segregation is technically and economically feasible and

environmentally desirable. 

 

   4. Stripper operations constitute a special subcategory of the

oil and gas industry. Many commenters strongly agreed with this

conclusion, stating that new or additional Federal regulations

would be financially harmful to already economically ailing

stripper well operators. Other commenters were of the 

opinion that some stripper wells can cause significant

environmental damage, which must ultimately be paid for through

general taxes. Some commenters urged that stripper operations

should be treated in the same manner as the rest of the crude oil

and natural gas industry. 

 

   As previously described, the agency recognizes that many,

though not all, stripper operations are economically vulnerable

to any new regulatory burdens. Stripper wells in many parts of

the country are also associated with smaller, independent oil and

gas companies that do not have flexibility in pricing and 

may suffer disproportionate economic impacts from any additional

regulation. The Agency is required under the Regulatory

Flexibility Act to evaluate impacts of any new regulations on

small business enterprises. 

 

   5. Documented damage cases and quantitative modeling results

indicate that, when managed in accordance with State and Federal

                                             53 FR 25451

requirements, exempt oil and gas wastes rarely pose significant

threats to human health and the environment. Opinion on this

conclusion was sharply divided. Some commenters strongly agreed,

saying that State regulations are fully adequate to control crude oil

and natural gas operations and challenged the validity of a

few selected damage cases. Others strongly opposed this

conclusion, saying that State and Federal regulations are

inadequate and seldom enforced. A number of commenters stated

that many documented damage cases were omitted from the final

Report to Congress. Some commenters provided studies and

analytical data alleging environmental damage from crude oil and

natural gas wastes; others claimed that the risk modeling

conducted for the Report underestimated damage to the environment

and did not adequately characterize the significance of human

health risks from crude oil and natural gas wastes. 

 

   A number of comments were received on the quantitative risk

modeling on which this conclusion is partly based. Criticisms

included: 

 

    -- The quantitative risk modeling should not have been

performed at all because of the severe lack of suitable data. 

 

    -- The risk analysis is fatally flawed because it used

nonconservative assumptions. 

 

    -- Values for input parameters used in the liner location

model (LLM) have been developed on the basis of limited data,

worst-case assumptions, or modeling limitations. 

 

    -- The study underestimates toxicity because too much of the

sampling was performed on diluted and weathered crude oil and

natural gas wastes. 

 

    -- Very few of the contaminants at the waste sites were

analyzed. 

 

    -- EPA made no effort to correlate its quantitative risk

model with the actual damage cases. 

 

    -- The health-based standards incorporated in the model are

insufficiently documented. 

 

    -- TCLP extractions used in risk modeling for reserve pits

misrepresent conditions at pits. 

 

    -- Risk is overestimated in the risk analysis. 

 

   The Agency believes the damage cases in the Report to Congress

demonstrate that violations of existing State and Federal

requirements lead to most observed damages, although some damages

have been shown to result from practices currently allowable in

                                                   53 FR 25451

some States. The risk assessment also showed little risk at most

locations from the management practices that were analyzed. The

Agency believes from the available evidence that State

regulations are generally but not entirely adequate for 

management of crude oil and natural gas wastes. Additionally,

enforcement of and compliance with State regulations vary widely

from State to State. 

 

   With respect to the specific criticisms of the risk modeling,

the Agency disagrees that the modeling should not have been

performed because of a severe lack of suitable data. Extensive

data were gathered from a variety of sources, including EPA field

investigation and waste sampling study, numerous Federal and

State agencies, an industry survey conducted by API, comments

submitted on interim reports and given during peer review

meetings, over 300 topographic maps, automated data bases, and a

general literature review. The Agency believes these data are the

best available and that they adequately support a risk

assessment. 

 

   As with any detailed modeling study, a number of assumptions

in the risk assessment had to be made, sometimes with respect to

values used for model inputs. The Agency rejects the notion,

however, that the assumptions made were generally worst-case,

significantly nonconservative, or driven only by modeling

limitations. For most variables, several realistic representative

values were selected to evaluate a variety of circumstances.

Whenever assumptions were made, best available data and [Page

25452] professional judgment were used and proposed approaches

were subjected to peer review, and often outside public review.

As noted in the above comments, some of the assumptions tended to

result in either overestimates or underestimates of risk. While

over- and underestimates are inevitable in any predictive

modeling, the Agency believes their impacts on this study have

been minimized by (1) analyzing risks under a wide range of

conditions across the industry as a whole, in an attempt to even

out over- and underestimates of risk for any single scenario; and

(2) fully documenting each assumption and its likely effect on

risk estimates. 

 

   The Agency disagrees that the waste characterization used in

the risk assessment was inappropriate. Many of EPA's samples of

drilling waste were taken from open reserve pits where the waste

could have been "weathered", but these samples were not

purposefully diluted and are believed to be representative of

drilling waste as it exists in a reserve pit. Contrary to the

above comment, all of the contaminants detected in drilling pit

waste and produced water were reviewed and considered as

candidates for the risk assessment. The eight constituents

selected for quantitative modeling were the constituents judged

most likely to contribute most significantly to risk to health or

the environment. The selection of contaminants for quantitative

                                                    53 FR 25452

modeling was based on their frequency of detection,concentration,

inherent toxicity, and mobility and persistence in the environment.

Finally, the Agency used TCLP extraction results

only to model leachate from closed reserve pits (not from 

operating pits). While uncertainties concerning the applicability

of TCLP tests to leachability of reserve pit wastes are

acknowledged, the Agency believes the TCLP results were the best

data available for modeling this leachate. 

 

   The Agency did not attempt to correlate the risk modeling with

the damage cases because the risk assessment was intended to

complement the damage cases by focusing on different issues.

Specifically, the risk assessment analyzed potential current and

future effects assuming compliance with a limited subset of

typical existing regulations, whereas the damage cases covered

past and current effects, many of which were for incidents

involving regulatory violations. The risk assessment also focused

on more subtle or very long-term impacts, some of which possibly

would not be evidenced in the contemporary damage case file. In

addition, several of the damage cases represented situations

(e.g., releases through abandoned boreholes) that could not be 

modeled adequately given existing data and modeling techniques.

Other scenarios not modeled include annular deposits, storage of

produced water in surface impoundments, migration of produced

water contaminants through fractures, and landspreading. (Use of

impoundments for produced waters and landspreading are both still

frequently practiced.) 

   The Agency believes that the health-based standards

incorporated in the risk model incorporated the best available

scientific knowledge at the time of the study. These standards

and the studies that support them were summarized only briefly in

the Report to Congress; readers are referred to the two-volume

technical background report on risk assessment for more detail. 

n3 

 

   n 3 U.S. EPA, December 1987. Office of Solid Waste. Onshore

Oil and Gas Exploration, Development and Production: Human Health

and Environmental Risk Assessment. 

Note:  Office of Solid Waste, OSW, was renamed Office of Resource Conservation and Recovery, ORCR, on January 18, 2009

 

   6. Damages may occur in some instances even where wastes are

managed in accordance with currently applicable State and Federal

requirements. No comments specifically addressed this conclusion,

but comments on the previous conclusion relate in part to the

substance of this one. 

 

   The quantitative risk modeling showed that for the specific

management practices and scenarios modeled, a few crude oil and

natural gas sites (less than five percent) could pose significant

risks even if drilling waste and produced water were managed in

accordance with existing regulations. In addition, the damage

case results indicate that some waste management practices

                                                53 FR 25452

permitted in some States can have undesirable environmental

impacts. These practices include landspreading of high chloride

drilling mud, annular disposal of produced water, discharge of

produced water and drilling fluids to tidally affected wetlands, 

discharge of produced water to live streams, and discharge of

reserve pit contents to tundra. 

 

   7. Unplugged and improperly plugged abandoned wells can pose

significant environmental problems. Opinion on this conclusion

was divided. Many of the commenters asserted that there is no

evidence to support this conclusion, and that State regulations

adequately address the potential problems associated with

unplugged and improperly plugged and abandoned wells. Others felt

that it is economically infeasible to plug or re-plug abandoned

wells properly. Conversely, commenters agreeing with this

conclusion mentioned specific instances in which unplugged wells

have caused significant contamination of ground-water supplies.

Some State regulatory agencies commented that inadequate funds

are available to properly plug all abandoned wells. 

 

   The Agency believes there is adequate evidence to indicate a

potential threat to ground water from unplugged and improperly

plugged abandoned wells based on the large number of unplugged or

improperly plugged abandoned wells, the difficulty in observing

plugging of abandoned wells, and the difficulty in enforcing

State regulations on plugging of abandoned wells. The damage

cases collected and the information presented to the Agency

support this conclusion. The Agency recognizes that the full

extent of the problem is not well defined. The Agency also

recognizes that high costs could be incurred if all unplugged or

improperly plugged abandoned wells were required to be plugged,

and that such a requirement may not be necessary, as not all

unplugged or improperly plugged abandoned wells pose a problem. 

 

   8. Discharges of drilling muds and produced waters to surface

waters have caused locally significant environmental damage where

discharges are not in compliance with State and Federal statutes

and regulations or where NPDES permits have not been issued.

Comments were divided on this issue even among those who were

critical of similar conclusions; some agreed, while others stated

that there is no evidence that drilling muds or produced water

cause environmental damage. Some stated that both drilling muds

and produced water are relatively nonhazardous and nontoxic.

Several comments specific to Alaska stated that the Clean Water

Act adequately regulates the management of large-volume wastes in

Alaska. 

 

   Those agreeing with this conclusion often argued that current

State and Federal regulations are not adequate or are not

enforced properly. They also asserted that drilling muds and

produced waters contain RCRA hazardous constituents and have

caused significant environmental damage. 

                                                 53 FR 25452

 

   Documented damage cases indicate that disposal of drilling

muds and produced waters in violation of State regulations and

where NPDES permits have not been issued, has clearly caused 

damages to the environment and endangered human health,

particularly [Page 25453] in Alaska, the Gulf Coast and the

Appalachian States. Also, discharges of produced water from

stripper well to surface waters were estimated to cause cancer

risks greater than one in one hundred thousand in roughly 17

percent of the conservative cases studied in the quantitative

risk modeling for 90th percentile produced water constituent

concentrations. 

 

   9. For the nation as a whole, regulation of all oil and gas

field wastes under unmodified Subtitle C of RCRA would have a

substantial impact on the U.S. economy. Those agreeing with this

conclusion did so strongly, stating that RCRA regulations applied

to the crude oil and natural gas industry would cause the loss of

a significant number of jobs. Some said that RCRA regulation

would increase oil imports and pose a threat to national

security. Others claimed that the potential costs to industry

have been underestimated. 

 

   Those in favor of regulating wastes determined to be

RCRA-hazardous generally recognized the potential economic

impacts of regulation, but nevertheless believed that such wastes

should be disposed of consistent with RCRA Subtitle C

requirements. 

 

   In specific comments on the methodologies used to analyze

these issues, some commenters believed that the lower 48 State

model masks or understates costs and impacts in some regions, and

that data limitations and exclusions of some costs lead to

understated economic impacts in all scenarios. Some commenters

stated that the number of economically marginal wells that would

be forced to shut down if RCRA Subtitle C regulations were

imposed has been underestimated, and that certain assumptions in

the model are unrealistic. Some commented that the analysis

ignores impacts on undiscovered energy reserves and gas

production. 

 

   Taking the opposite point of view, other commenters argued

that the cost analysis ignores public health costs associated

with continued improper disposal of crude oil and natural gas

wastes, and that the report does not take into account the

financial consequences of contamination of ground water and other

natural resources. Some claimed that long-term financial burdens

to taxpayers to mitigate environmental damage, to provide health

care, and to sustain financial burden from lost productivity,

will be greater than the cost to the crude oil and natural gas

industry to prevent that damage. 

 

   The Agency believes that its estimates of impacts to the

                                                 53 FR 25453

industry of full regulation under RCRA Subtitle C are reasonable

and that such impacts would be substantial. The Agency

acknowledges that costs related to public health effects and 

contamination of ground water and other natural resources because

of improper disposal of crude oil and natural gas wastes have not

been determined. 

 

   10. Regulation of all exempt wastes under full, unmodified

RCRA Subtitle C appears unnecessary and impractical at this time.

Opinion was divided on this conclusion. Those agreeing did so

strongly, while those opposed generally stated that if a waste is

RCRA hazardous, it should be treated under RCRA regulations

regardless of its origin. Many of those in disagreement with this

conclusion argued that the crude oil and natural gas industry can

afford the financial burden of RCRA regulation. 

 

   For reasons described in Section IV of this regulatory

determination, the Agency continues to believe that regulation of

all crude oil and natural gas wastes under RCRA Subtitle C is

unnecessary and impractical. The Agency believes that these

wastes can be managed in a manner so as to protect human health

and the environment without regulating them under RCRA Subtitle

C. 

 

   11. States have adopted variable approaches to waste

management. Most commenters agreed with this conclusion, but

there was considerable disagreement over whether current State

regulations are adequately designed and enforced. 

 

   Variable approaches to waste management are partly the result

of varying environmental conditions, geology, and economics among

the producing States. EPA believes, however, that there are many

cases where more stringent requirements are both feasible and

desirable, and that many States have recognized this in changes

made to their regulations in the last few years. Some States have

taken significant leadership roles in the development of more

environmentally protective requirements. 

 

   12. Implementation of existing State and Federal requirements

is a central issue in formulating recommendations in response to

section 8002(m). Opinion was divided on this conclusion. Some

commenters urged that existing State and Federal regulations are

adequate and that additional State or Federal regulations are

unnecessary and impractical. Others argued that existing State

and Federal regulations have not been adequately enforced and

that additional Federal regulations are necessary. 

 

   The Agency believes that the design, enforcement, and

implementation of existing State and Federal regulations can

clearly be improved. 

 

   Public comments on the Geothermal Energy Portion of Report to

                                                  53 FR 25453

Congress: Only two comments specifically addressed geothermal

energy wastes. 

 

   One commenter presented additional information relating to

damages resulting from the offsite disposal of geothermal energy

production wastes (such as hydrogen sulfide abatement wastes

which test nonhazardous by California standards) in commercial

facilities. The information alleged potential damages and/or risk

by contamination of surface and ground water from the disposal of

hydrogen sulfide abatement wastes in centralized or commercial

disposal facilities in California. These facilities are

designated strictly for the disposal of geothermal energy

production wastes determined to be nonhazardous by California

standards. 

 

   The other commenter specifically addressing geothermal energy,

fully supported the conclusions of the report and stated that the

California statutes regarding the management of geothermal energy

wastes are comprehensive and effective. 

   The Agency continues to believe that geothermal energy wastes

are generally well regulated under existing State and Federal

programs. However, the Agency acknowledges that at least one

significant undesirable disposal practice is occurring and has

taken this into consideration in making this final regulatory

determination. 

 

    

D. Determination of the Scope of the Temporary RCRA Exemption 

 

   Based on the language of RCRA section 3001(b)(2)(A) of the

1980 amendments to RCRA, review of the statute, and supporting

legislative history, the Agency believes that the following

wastes were included in the temporary exemption set forth in the

statute. 

 

    -- Produced water; 

 

    -- Drilling fluids; 

 

    -- Drill cuttings; 

 

    -- Rigwash; 

 

    -- Drilling fluids and cuttings from offshore operations

disposed of onshore; 

 

    -- Geothermal production fluids; and 

 

    -- Hydrogen sulfide abatement wastes from geothermal energy

production. 

 

                                             53 FR 25453

    -- Well completion, treatment, and stimulation fluids; 

 

    -- Basic sediment and water and other tank bottoms from 

storage facilities that hold product and exempt waste; [Page

25454]

 

    -- Accumulated materials such as hydrocarbons, solids, sand,

and emulsion from production separators, fluid treating vessels,

and production impoundments; 

 

    -- Pit sludges and contaminated bottoms from storage or

disposal of exempt wastes; 

 

    -- Workover wastes; 

 

    -- Gas plant dehydration wastes, including glycol-based

compounds, glycol filters, filter media, backwash, and molecular

sieves; 

 

    -- Gas plant sweetening wastes for sulfur removal, including

amines, amine filters, amine filter media, backwash, precipitated

amine sludge, iron sponge, and hydrogen sulfide scrubber liquid

and sludge; 

 

    -- Cooling tower blowdown; 

 

    -- Spent filters, filter media, and 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 solids, 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 nonexempt wastes listed below; 

 

    -- Constituents removed from produced water before it is

injected or otherwise disposed of; 

 

    -- Liquid hydrocarbons removed from the production stream but

not from oil refining; 

 

    -- Gases from the production stream, such as hydrogen sulfide

                                                 53 FR 25454

and carbon dioxide, and volatilized hydrocarbons; 

 

    -- Materials ejected from a producing well during the process known

as blowdown; 

 

    -- Waste crude oil from primary field operations and

production; and 

 

    -- Light organics volatilized from exempt wastes in reserve

pits or impoundments or production equipment. 

 

   The Agency believes that the following wastes were not

included in the original exemption: 

 

    -- Unused fracturing fluids or acids; 

 

    -- Gas plant cooling tower cleaning wastes; 

 

    -- Painting wastes; 

 

    -- Oil and gas service company wastes, such as empty drums,

drum rinsate, vacuum truck rinsate, sandblast media, painting

wastes, spent solvents, spilled chemicals, and waste acids; 

 

    -- Vacuum truck and drum rinsate from trucks and drums

transporting or containing non-exempt waste; 

 

    -- Refinery wastes; 

 

    -- Liquid and solid wastes generated by crude oil and tank

bottom reclaimers; 

 

    -- Used equipment lubrication oils; 

    -- Waste compressor oil, filters, and blowdown; 

 

    -- Used hydraulic fluids; 

 

    -- Waste solvents; 

 

    -- Waste in transportation pipeline-related pits; 

 

    -- Caustic or acid cleaners; 

 

    -- Boiler cleaning wastes; 

 

    -- Boiler refractory bricks; 

 

    -- Boiler scrubber fluids, sludges, and ash; 

 

    -- Incinerator ash; 

 

                                                      53 FR 25454

    -- Laboratory wastes; 

 

    -- Sanitary wastes; 

    -- Pesticide wastes; 

 

    -- Radioactive tracer wastes; 

 

    -- Drums, insulation, and miscellaneous solids. 

 

   In order to determine the scope of the exemption, the Agency

reviewed the statute and legislative history. The Agency

interprets the term "other wastes associated" to include rigwash,

drill cuttings, and wastes created by agents used in facilitating

the extraction, development and production of the resource, and

wastes produced by removing contaminants prior to the

transportation or refining of the resource. Drill cuttings and

rigwash are generally co-mingled with drilling muds, and the

Agency therefore has grouped them with large-volume wastes for

purposes of discussion in this determination. The remaining

wastes on the above list of exempt wastes are considered

"associated wastes" for purposes of this determination. 

 

   The Agency has determined that produced water injected for

enhanced recovery is not a waste for purposes of RCRA regulation

and therefore is not subject to control under RCRA Subtitle C or

RCRA Subtitle D. Produced water used in enhanced recovery is

beneficially recycled and is an integral part of some crude oil

and natural gas production processes. Produced water injected in

this manner is already regulated by the Underground Injection

Control program under the Safe Drinking Water Act. The Agency

notes, however, that if the produced water is stored in surface

impoundments prior to injection, it may be subject to RCRA

Subtitle D regulations. 

 

    

III. Factors Considered in Regulatory Determination 

 

   Section 3001(b)(2)(B) of RCRA states that in making the

regulatory determination, the Agency must "utilize the

information developed or accumulated pursuant to the study

required under section 8002(m)." Clearly, Congress envisioned

that the determination would be based on all factors specifically

enumerated in section 8002(m), as well as general issues raised

by the text of section 8002(m) as a whole. Therefore, in making

today's determination, EPA considered not just the impact of

these wastes on human health and the environment, but also the

other factors that RCRA section 8002(m) required EPA to study. 

 

   Specifically, EPA considered three major factors in developing

this determination: (1) The characteristics, management

practices, and impacts of oil, gas, and geothermal wastes on

                                               53 FR 25454

human health and the environment; (2) the adequacy of existing

State and Federal regulatory programs for controlling these

wastes; and (3) the economic impacts of any additional

regulations on the exploration for, and development and 

production of, crude oil, natural gas, and geothermal energy.

Section 8002(m) required EPA to study each of these factors. 

 

    

IV. Regulatory Determination for Crude Oil and Natural Gas Wastes

 

   The following discussion summarizes information on the three

major factors (discussed above) used in making this regulatory

determination and then presents EPA's conclusions and rationale

for the regulatory determination for crude oil and national gas

wastes. The information summarized here incorporates information

received during the public comment period and additional

refinement of the data presented in EPA's December 1987 Report to

Congress. 

 

    

A. Hazard Assessment 

 

   For the Report to Congress, EPA conducted a limited analysis

which modeled the potential effects of disposal of drilling waste

in reserve pits and the disposal of produced water by underground

injection and found that the potential risks to human health and

the environment were small. Only a few constituents appeared to

be of major concern when these wastes are managed in accordance

with existing State and Federal regulations. The actual threats

posed were largely dependent upon site-specific factors such as

populations or sensitive ecosystems. Other management practices

such as storage of produced water in unlined pits were not

modeled and may pose higher risks. 

 

   Analysis of field data collected by EPA and presented in the

January 1987 technical report shows that a portion of oil and gas

wastes contain constituents [Page 25455] of concern above EPA

health- or environmental-based standards. For example, wastes at

7 percent of the sites generating drilling fluids and 23 percent

of the statistically weighted sample sites generating produced

water contain one or more of the toxic constituents of concern at

levels greater than 100 times the health-based standards. The

constituents typically exceeding the standards in drilling fluids

are fluoride, lead, cadmium, and chromium. The constituents

exceeding the standards in produced water are benzene, arsenic,

barium, and boron. In addition, wastes at 78 percent of the

sample sites generating drilling fluids, and 75 percent of the

sample sites generating produced water, contain chlorides at

levels greater than 1,000 times the EPA secondary maximum

contaminant level for chloride. Like large-volume wastes,

associated wastes contain a wide variety of hazardous

                                             53 FR 25455

constituents. Many associated wastes contain constituents that

are similar in chemical composition and/or toxicity to other

wastes currently regulated under RCRA Subtitle C. 

   The presence of constituents in concentrations exceeding

health- or environmental-based standards does not necessarily

mean that these wastes pose significant risks to human health and

the environment. In evaluating the risks to human health and the

environment, several factors beyond the toxicity of the waste

should be considered. These factors include the rate of release

of contaminants from different management practices, the fate and

transport of these contaminants in the environment, and the

potential for human health or ecological exposure to the

contaminants. 

 

   On the basis of available data, EPA can only roughly estimate

how much currently exempt oil and gas waste would be considered

hazardous under current or proposed RCRA Subtitle C standards. It

is clear that some portions of both the large-volume and

associated waste would have to be treated as hazardous if the

Subtitle C exemption were lifted. EPA estimates that

approximately 10 to 70 percent of large-volume wastes and 40 to

60 percent of associated wastes could potentially exhibit RCRA

hazardous waste characteristics under EPA's regulatory tests. 

 

   EPA has documented 62 damage cases caused by crude oil and

natural gas wastes. Because large-volume wastes and associated

wastes are often managed and disposed of together, it is often

difficult to isolate the specific waste stream that contributed

greatest to the damage. However, available data does not indicate

that significant damage can occur from mismanagement of both 

large-volume wastes and associated wastes. EPA believes that most

of these damages could have been prevented if the wastes had been

managed in accordance with existing State and Federal

requirements. However, because of certain regulatory gaps,

damages have occurred even where wastes are managed in 

compliance with existing requirements. 

 

    

B. Economic Impact Analysis 

 

   Application of RCRA Subtitle C to exploration, development,

and production wastes could be extremely costly if large portions

of these wastes were hazardous. The Agency estimates that

implementation of RCRA Subtitle C on 10 to 70 percent of the

large-volume drilling waste and non-EOR produced water would cost

the industry and consumers $1 billion to $6.7 billion per year in

compliance costs (not including costs for land ban or corrective

action regulations mandated by Congress). This would reduce

domestic production by as much as 12 percent. 

 

   In response to questions raised subsequent to the Report of

                                                53 FR 25455

Congress, the Agency also conducted a preliminary evaluation of

the likely range of potential compliance costs and industry

impacts that could result from removal of the RCRA Subtitle C

exemption for associated wastes. The Agency's preliminary

estimate is that the cost to the crude oil and natural gas

industry of RCRA Subtitle C management for associated wastes 

would range between $200 million and $550 million per year. These

cost estimates are based on American Petroleum Institute survey

estimates on the quantities of associated wastes produced and

their current management practices, together with the Agency

assumption that 40 to 60 percent of these wastes might require

management under RCRA Subtitle C, and Agency estimates of the

probable range of unit costs for managing these various waste

types. 

   However, it is important to note that these estimates do not

include the cost of corrective action. The application of

corrective action requirements to facilities that manage

associated wastes on-site would impose substantial costs on the

units managing the associated wastes as well as any other solid

waste management units that exist within the facility boundaries

to the extent that the wastes continue to be managed on-site.

Since nearly half of the associated wastes are currently managed

on-site, this could result in significant costs to the industry.

The cost estimates also assume that "land-ban" treatment of

hazardous solids and sludges consists of recycling and resource

recovery. It is likely that some fraction of these wastes would

need to be incinerated in compliance with the treatment standards

established by the "land-ban," implying higher costs of

regulating the associated wastes under Subtitle C. 

 

    

C. Adequacy of State and Federal Regulatory Programs 

 

   EPA evaluated State regulations pertaining to large-volume

wastes and associated wastes. Often, some of these wastes are

co-mingled and disposed of together. Consequently, they are

usually managed together under one regulatory program at the

State level. 

 

   With regard to large-volume wastes, EPA found most existing

State regulations are generally adequate for protecting human

health and the environment. Most States have requirements

specifically controlling the management of drilling muds and

produced waters. However, certain gaps do exist in State

regulations for large-volume wastes. For example, some States do

not have adequate requirements controlling roadspreading or

landspreading of large-volume wastes, design or maintenance rules

for reserve pits, or have insufficient management specifications

for centralized and commercial disposal facilities. As noted

previously, EPA also found damages which occurred due to surface

discharges not prohibited by State regulation. 

                                              53 FR 25455

 

   Another regulatory gap for some States are controls for

associated wastes. Most State regulations do not include specific

controls for the management of these wastes. General standards

are often difficult to enforce unless a specific pollution

incident is discovered and can be attributed to a particular 

waste disposal event. However, a few States such as Texas do

specifically address associated wastes and other States have

general standards that provide partial control of these wastes. 

 

   The Agency has examined changes in State regulatory programs

over the past two years. Some States have improved their

regulatioins, while other States have relaxed specific waste

management requirements. For example, while reserve pit

management has been strengthened in some States, other States

have relaxed controls pertaining to land application of

large-volume wastes. Problems also remain regarding adequate

State implementation and enforcement of existing regulations. 

 

   The Agency also evaluated the Federal Underground Injection

Control [Page 25456] (UIC) program under the Safe Drinking Water

Act and regulatory programs under the Clean Water Act. The UIC

program effectively controls underground injection from the point

of the wellhead, while the NPDES program addresses point source

discharges to surface water bodies. These programs are

particularly important in controlling management of large-volume

wastes. However, EPA has identified certain gaps in these

programs. For example, UIC regulations currently allow the

practice of annular disposal and lack uniform mechanical

integrity testing standards. The Clean Water Act regulatory

program gaps include the lack of national effluent limitations at

the Best Available Technology Economically Achievable (BAT) and

Best Conventional Pollutant Control Technology (BCT) levels.

These national limitations are needed to more effectively deal

with discharges from facilities in the onshore and coastal

subcategories of the industry. EPA also found that improvements

are needed regarding implementation and enforcement of existing

regulations. The Agency has already undertaken steps to address

these deficiencies; these are discussed in Section V of today's

notice. 

 

   Finally, EPA evaluated the existing Federal criteria under

Subtitle D of RCRA. These criteria (40 CFR Part 257) include

general environmental performance standards applicable to the

disposal of any solid waste, including oil, gas, and geothermal

wastes. These criteria include among other things, standards

related to surface water discharges, ground-water contamination,

and endangered species. Because the programs' criteria are aimed

principally at municipal solid waste, EPA believes they do not

now fully address oil and gas waste concerns. In addition, many

of these criteria, such as control of disease vectors and

aviation hazards, are not appropriate for oil and gas waste.

Nevertheless, EPA has authority under Subtitle D to tailor

                                            53 FR 25456

requirements appropriate for the disposal of oil and gas wastes. 

 

    

D. Conclusions 

 

   The Agency has decided not to promulgate regulations under

Subtitle C for large-volume and associated wastes generated by

the exploration, development and production of crude oil and

natural gas. The Agency decision is based on the following

reasons: 

 

   (1) Subtitle C contains an unusually large number of highly

detailed statutory requirements, some of which are not only

extremely costly, but also are unnecessary for the safe

management of oil and gas wastes. Subtitle C does not, however,

allow the Agency to consider costs where applying these 

requirements to oil and gas wastes. Consequently, EPA would not

be able to craft a regulatory program to reduce or eliminate the

serious economic impacts that it has predicted. Thus, in light of

Congress' concern for the protection of the nation's future

energy supply, Subtitle C regulations must be considered

unwarranted. A tailored Subtitle D program, by contrast, will

enable the Agency to apply all necessary requirements to the

management of these wastes, while ensuring that economic impacts

are minimized. 

 

   (2) As discussed in Section II. B., Congress has indicated

that Subtitle C regulations are unwarranted where existing

programs can be employed to protect human health and the

environment from the problems created by oil and gas 

wastes. EPA has concluded that, in fact, existing State and

Federal programs are generally adequate, and that remaining gaps

can be filled by modifying these programs. Subtitle C regulation

is, therefore, unwarranted. Moreover, Subtitle C, with its

comprehensive "cradle to grave" management requirement, simply is

not well suited to this type of gap-filling regulation. It is

thus both more efficient and appropriate to fill the gaps by

strengthening regulations under the Clean Water Act and UIC

program and promulgating the remaining rules needed under RCRA

under the less prescriptive statutory authorities set out in

Subtitle D. 

   (3) Since the States and EPA have consistently required long

periods of time to process Subtitle C permits, regulation under

Subtitle C could delay the start of operations at new facilities.

These delays would be particularly disruptive to the exploration

phase of oil and gas development. 

 

   (4) Subtitle C regulation of these wastes would subject them

to all of the land disposal restriction requirements, including

BDAT, and thus could severely strain existing Subtitle C facility

capacity. 

                                               53 FR 25456

 

   (5) The Agency believes that it is impractical and inefficient

to implement Subtitle C for all or some of these wastes because

of the disruption and, in some cases, duplication of State

authorities that administer programs through organizational 

structures tailored to the oil and gas industry. 

 

   (6) It is impractical and inefficient to implement Subtitle C

for all or some of these wastes because of the permitting burden

that the regulatory agencies would incur if even a small

percentage of these sites were considered Treatment, Storage and

Disposal Facilities (TSDFs). 

 

    

V. Efforts to Improve State and Federal Programs 

 

   The Agency plans a three-pronged approach toward filling the

gaps in existing State and Federal programs that regulate the

management of wastes from the crude oil, and natural gas,

industries. This effort will include: 

 

   1. Improving Federal programs using existing authorities under

Subtitle D of RCRA and the Clean Water and Safe Drinking Water

Acts; 

 

   2. Working with the States to encourage changes in their

regulations and enforcement programs to achieve more uniformity

in the administration of their programs; and 

 

   3. Working with Congress to develop any additional statutory

authority that may be required. 

 

    

A. Federal Program Improvements Within Existing Authorities 

 

   1. Clean Water and Safe Drinking Water Act Programs 

 

   The Agency believes certain improvements in the Safe Drinking

Water and Clean Water Acts are desirable with respect to their

application to crude oil and natural gas wastes. In the case of

the UIC program, the Agency had previously determined that a

critical examination of the overall program was in order. The

program has now been in effect for approximately 5 years or more,

depending on when a State program was approved or a Federal

program was promulgated in a State. This examination, currently

underway, includes a review of the adequacy of the regulations

and policies governing the program and of the way in which States

and EPA Regions are implementing and enforcing the program. The

review of the adequacy of State implementation is complex because

approval of State programs was, by statute, governed by a

determination of their effectiveness in protecting underground

sources of drinking water, rather than by their conformity with

minimum Federal regulations. 

                                                   53 FR 25456

   Implementation of the UIC program by the EPA Regions is

undergoing a peer review process, which will be completed by the

fall of 1988. Implementation of the State programs is reviewed 

routinely by the EPA Regions. In addition, the EPA's Office of

Drinking Water has undertaken a cycle of in-depth reviews of the

UIC program. The California, Texas, and Kansas programs were

[Page 25457] reviewed in 1987. A review of Wyoming and at least

one other State, not yet selected, will be conducted in 1988. The

States have also undertaken a peer review project directed by the

Underground Injection Practices Council. 

 

   The Agency has formed a workgroup, which will include

participation by the States and other Federal agencies, to review

issues pertinent to the UIC regulations. The stategy for this

review is available in the RCRA docket. A final report and the

recommendations of the workgroup are expected to be available in

the winter of 1988-89. 

 

   In conjunction with the Clean Water Act, the Agency is

currently developing national discharge regulations for the

offshore crude oil and natural gas industry and is planning for

the development of national discharge regulations for the coastal

oil and gas industry. The coastal segment generally includes 

exploration, development and production facilities that are

located in or adjacent to tidal wetlands. These regulations will

cover the discharges of produced water, drilling fluids, drill

cuttings and various low-income waste streams to surface waters

of the U.S. The regulations will address the best available

technology (BAT), best conventional technology (BCT) and new

source performance standards (NSPS) levels of control. These

regulations may result in a prohibition on the discharge of a

significant portion of high volume drilling wastes (drilling

fluids and cuttings) into U.S. offshore waters. As such, these

wastes will be transported to shore by the offshore operators for

land disposal. These wastes would then be subject to regulation

under RCRA Subtitle D. 

 

   The Agency is also planning to begin development of national

effluent regulations for onshore stripper oil and gas production.

The onshore stripper well regulations will cover the discharges

of produced water and well treatment wastes to surface waters of

the U.S. These regulations will be established at increasing

levels of stringency compared to the best practicable technology

(BPT) level of control. Non-stripper wells located onshore are

already subject to a "zero-discharge" requirement under NPDES. 

 

   22. RCRA Subtitle D Approach 

 

   (a) General Approach. EPA believes it can design and implement

a program specific to crude oil and natural gas wastes under

Subtitle D of RCRA that effectively addresses the risks

associated with these wastes. EPA is already in the process of

                                            53 FR 25457

developing revised Subtitle D criteria for facilities that may

receive hazardous household waste or small quantity generator

hazardous wastes as well as for mining waste disposal facilities. The

Agency intends to augment the Subtitle D program by

developing appropriate standards and taking other actions as

appropriate for crude oil and natural gas wastes. 

 

   In developing these tailored Subtitle D standards for crude

oil and natural gas wastes, EPA will focus on gaps in existing

State and Federal regulations and develop appropriate standards

that are protective of human health and the environment. Gaps in

existing programs include adequate controls specific to 

associated wastes and certain management practices and facilities

for large-volume wastes, including roadspreading, landspreading,

and impoundments. EPA is particularly concerned about centralized

and commercial facilities that treat, store, or dispose of oil

field wastes in concentrated form. Pits or impoundments at these

facilities often contain hazardous constituents in high 

concentrations. In addition, centralized facilities are

responsible for some of the most significant damages the Agency

documented. 

 

   To ensure proper control over oil and gas disposal facilities

and practices, EPA will consider requirements under Subtitle D

such as: (1) Engineering and operating practices, including

run-off controls, to minimize releases to surface water and

groundwater; (2) proper procedures for closing facilities; (3)

monitoring that accommodates site-specific variability; and (4)

clean-up provisions. EPA will tailor these standards to the

special problems posed by oil and gas waste disposal facilities,

as well as incorporate appropriate flexibility to address

site-specific variability. 

 

   In developing a tailored Subtitle D program for oil and gas

wastes, EPA will use its RCRA section 3007 authority to collect

any additional information needed on the characteristics and

management practices of oil and gas wastes. EPA believes this

authority does not limit information collection to "hazardous"

waste identified under Subtitle C, but also authorizes the

collection of information on any solid waste that the Agency

reasonably believes may pose a hazard when improperly managed.

(EPA may also use this authority in preparing enforcement

actions.) 

 

   In specifying the appropriate standards, EPA also will further

analyze existing Federal and State authorities and programs and

determine future plans for administering their oil and gas waste

programs. Additionally, EPA will perform analyses of costs,

impacts, and benefits and will comply fully with Executive Orders

12291 and 12498, the Regulatory Flexibility Act, and the 

Paperwork Reduction Act. 

 

                                             54 FR 25457

   The Agency will specifically consider the impact of future

regulations on small business operations in the process of

regulatory development under the Agency guidelines with respect 

to the Regulatory Flexibility Act. The Agency believes that the

tailored RCRA Subtitle D regulations can provide the flexibility

necessary to reflect the marginal economic nature of certain 

segments of the industry, while at the same time affording

improved environmental protection. For example, the Agency

recognizes that many stripper operations are, by their nature,

more vulnerable to regulatory burdens imposed by any new controls

over crude oil and natural gas wastes, and that many stripper

wells are associated with small, non-integrated producers. This

is particularly significant in certain producing regions such as

Appalachia. 

 

   (b) Alaska's North Slope. Tailored standards under Subtitle D

will specifically address controls necessary to protect fragile

or sensitive environments; one such sensitive environment is the

Arctic North Slope. EPA is particularly concerned about the

management of crude oil and natural gas wastes in this area,

where oil extraction is performed on a very large scale, 

accounting for roughly 20 percent of total U.S. production. There

also exists the likelihood for future development of potentially

significant crude oil and natural gas reserves on the North Slope

in areas surrounding Prudhoe Bay and areas in the Arctic National

Wildlife Refuge. 

 

   The Arctic North Slope is particularly sensitive and fragile,

with unique geographic and climatic conditions that make its

environment fundamentally different from the lower 48 States. The

area is primarily an arctic desert, frozen for about 9 months out

of the year and underlain by up to 2,000 feet of permafrost.

During the summer months, surface water exists in the form of 

interconnected tundra ponds, which exhibit little or no flow

during the summer season. This, in addition to the severity of

the climate and the shortness of the growing season, makes the

area particularly vulnerable to ecological impacts, or impacts

from less than rigorous waste management practices. 

 

   There is a lack of long-term historical data on impacts of

crude oil and natural gas industry activities on the North Slope.

Based on preliminary studies, [Page 25458] current waste

management practices used on the North Slope pose the 

potential for environmental degradation. As stated in the Report

to Congress, a 1983 U.S. Fish and Wildlife Service study found

chromium, arsenic, cadmium, nickel, and barium to be present in

tundra ponds adjacent to reserve pits at levels significantly

greater than in control ponds. Levels of chromium in 

adjacent ponds were also found to exceed EPA chronic toxicity

criteria, and affected distant ponds were found to contain

chromium levels significantly higher than background levels. The

authors of this study caution, however, that these findings

                                                 53 FR 25458

cannot be extrapolated to present-day oil field practices on the

North Slope because some industry practices have changed and the

State's regulations have become increasingly more stringent since 1983. 

 

   Historically, enforcement of environmental controls on the

North Slope has been inadequate. EPA believes this inadequacy has

contributed to the use of undesirable waste management practices

in some cases. For example, as discussed in the Report to

Congress, an incident developed involving an oil field service

company that was disposing of drums and waste chemicals in an

inappropriate manner. The Agency believes that a greater

enforcement presence in addition to improved regulations could

prevent such incidents from recurring. 

 

   Recently, the State of Alaska has improved waste management

regulations pertaining to the North Slope. In addition, some

operators plan to implement more desirable waste management

practices, including the possibility of phasing out reserve pits

through the use of closed drilling systems and injection for

waste drilling muds and cuttings. If implemented, these changes

would be major improvements in waste management practices on the

North Slope. 

 

    

B. Additional Federal Authorities 

 

   EPA is concerned over the lack of Federal authority under

Subtitle D of RCRA to address treatment and transportation of oil

and gas wastes. The Administrator therefore will work with

Congress to develop any additional legislative authorities that

may be needed to address these issues. In the interim, EPA will

use section 7003 of RCRA and sections 104 and 106 of CERCLA to

seek relief in those cases where wastes from oil and gas sites

pose substantial threats or imminent hazards to human health and

the environment. Oil and gas waste problems can also be addressed

under RCRA section 7002 which authorizes citizen lawsuits for

violations of Subtitle D requirements in 40 CFR Part 257. 

 

    

C. Improvement in State Programs 

 

   While in the process of completing improvements in the Federal

programs, EPA plans to work with the States to improve the

content, implementation, and enforcement of existing State

regulations. This will be a cooperative effort with voluntary

State participation. For example, the Interstate Oil Compact 

Commission has already begun work in this area and has expressed

an interest in cooperating with EPA in this regard. Specifically,

the Agency plans to encourage States to take steps to fill the

following gaps (where present) in their existing regulatory

programs: 

                                                  53 FR 25458

 

   (1) Controls for roadspreading and landspreading; 

 

   (2) Surface impoundment (i.e., pit) location, design, and

maintenance; 

 

   (3) Controls for associated wastes; and 

 

   (4) Plugging abandoned oil and gas wells. 

 

   According to State officials, many States have tens of

thousands of unplugged or improperly plugged abandoned wells.

EPA's December 1987 Report to Congress documented ground-water

contamination with chlorides from unplugged or improperly plugged

abandoned crude oil and natural gas wells and indicated that

State requirements for plugging and abandoning crude oil and

natural gas wells vary, with inadequacies apparent in some State

programs. For example, many States do not require a plugging bond

from operators who drill crude oil and natural gas wells. Where

bonding is required, the amount is often not adequate to provide

for proper plugging once a well is abandoned. 

 

   EPA encourages States to develop programs to address abandoned

wells. However, the Agency recognizes that locating and

identifying these wells is difficult, and sometimes impossible,

because of poor record keeping or the absence of records. Because

many unplugged wells are several decades old, the owner or

operator often cannot be identified. Some States have plugging

funds to use in such circumstances, some do not. 

 

   The Agency will also work with States to improve

implementation and enforcement of existing State regulations. EPA

believes that improvements in enforcement of existing regulations

will significantly increase protection of human health and the

environment. 

 

   EPA will also work closely with the State of Alaska on

addressing problems associated with management of crude oil and

natural gas wastes on the Arctic North Slope. Because of the

remoteness and severe climatic conditions, enforcement is

particularly difficult in this area. The Agency will explore with

the State of Alaska and the Department of the Interior ways to

improve enforcement in this area. The Agency believes operators

should continue research into impacts on the environment of their

waste management practices. The Agency will develop a list of

recommended areas for research in the research, demonstration,

and development plan required by RCRA section 8002(m)(2). 

 

    

VI. Regulatory Determination for Geothermal Energy Wastes 

 

    

A. Hazard Assessment 

                                                 53 FR 25458

 

   There is only a limited record of damages or danger to human 

health or the environment resulting from the exploration,

development, and production of geothermal energy. Based on the

limited information available, the Agency has determined that the

risk to human health and the environment resulting from the

exploration, development, and production of geothermal energy is

relatively low. The geothermal energy industry is comparatively

small, with a total of 395 wildcat, production, and injection

wells drilled between 1981 and 1985. Most geothermal energy

production is in California (321 out of 395 wells) and Nevada. It

is unlikely that there will be further large-scale development of

geothermal energy resources outside of the State of California

because the occurrence of accessible geothermal energy is

extremely limited. 

 

    

B. Adequacy of State and Federal Regulations 

 

   As indicated in the Report to Congress, the Agency believes

that existing State and Federal regulations are generally

adequate for controlling wastes from geothermal energy

production. However, one public comment on the Report to Congress

suggests a possible gap in California's regulatory program

addressing these wastes. The commenter documented potential

endangerment of human health and damage to the environment

because of the disposal of geothermal energy hydrogen sulfide

abatement wastes in commercial facilities in California. 

 

    

C. Conclusions 

 

   EPA has decided not to regulate wastes generated by the

exploration and development of geothermal energy resources under

RCRA Subtitle C. EPA believes that Subtitle C control for these

[Page 25459] wastes is unwarranted because of the relatively low

risk of these wastes and the presence of generally effective

State and Federal regulatory programs. Because these wastes are

largely confined to California and Nevada, EPA will work closely

with these States to address any gaps in their regulatory

programs for the management of hydrogen sulfide abatement wastes.

 

    

VII. Research, Development, and Demonstration Plan 

 

   The Agency will develop a research, development, and

demonstration plan based on the findings of the Report to

Congress and subsequent public comments on the report. This plan

will outline various topics that the Federal and State

governments and/or industry could pursue. This plan will include

the following topics: 

 

                                                   53 FR 25459

    -- Alternative waste management technologies; 

    -- Waste minimization techniques; 

 

    -- Materials substitution; 

 

    -- Recycling and reuse; 

 

    -- Reserve pit construction (percolation, leaching, and

erosion control issues); 

 

    -- Plugging and abandonment of crude oil and natural gas

wells; 

    -- Better characterization of produced waters and associated

wastes generated by stripper crude oil and natural gas wells; and

     -- Field monitoring to evaluate the adequacy of waste

containment practices. 

 

VIII. EPA RCRA Docket 

 

   The EPA RCRA docket is located at: 

 

   United States Environmental Protection Agency, EPA RCRA Docket

(Sub-basement), 401 M Street, SW., Washington, DC 20460. 

 

   The docket is open from 9:30 a.m. to 3:30 p.m., Monday through

Friday, except for Federal holidays. The public must make an

appointment to review docket materials. Call the docket clerk at

(202) 475-9327 for appointments. 

 

   The following documents related to this regulatory

determination are available for inspection in the docket: 

 

    -- Report to Congress on Management of Wastes from the

Exploration, Development, and Production of Crude Oil, Natural

Gas, and Geothermal Energy; 

 

    -- All supporting documentation for the regulatory

determination, including public comments on the Report to

Congress and EPA response to comments; and 

 

    -- Transcripts from the public hearings on the Report to

Congress. 

 

   Dated: June 29, 1988. 

 

A. James Barnes, 

 

   Acting Administrator.   

[FR Doc. 88-15097 Filed 7-5-88; 8:45 am]