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RCRA Box 321 

Prepped by Ryan Dugan 

Document Number: 

22DOGRC-S0016.F 

Docket Number: 

F-93-OGRC-FFFFF 

Printed 5/8/2007 3:36:32 PM Sheet 221 of 259 
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0<=>fcC-Sc>olk.F 

Request by Waste Crude Oil Reclaimers 

September 18, 1990 

Page -35-

APPendix E. THE REPORT TO CONGRESS 
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&EPA 

United States 

Environmental Protection 

Agency 

Urtice oi SOIIO waste 

and Emergency Response 

Washington. DC 20400 

December 1987 

OGRC-Soo IG-F 

Solid Watte 

Report to Congress 

Management of Wastes from the 

Exploration, Development, and 

Production of Crude Oil, Natural Gas, 

and Geothermal Energy 

Executive Summaries 

y c«» 

• O 

Q> 

0 
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REPORT TO CONGRESS 

MANAGEMENT OF WASTES FROM THE 

EXPLORATION, DEVELOPMENT, AND PRODUCTION 

OF CRUDE OIL, NATURAL GAS, AND GEOTHERMAL ENERGY 

EXECUTIVE SUMMARIES 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

Office of Solid Waste and Emergency Response 

Washington, D.C. 20460 

December 1987 
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This Report to Congress is dedicated to the memory of Susan L. de Nagy, 

United States Environmental Protection Agency, and John F. Cat!in, United 

States Department of the Interior. 
P.6 

EXECUTIVE SUMMARY 

MANAGEMENT OF WASTES FROM THE OIL AND GAS INDUSTRY 

Under Section 3001(b)(2)(A) of the 1980 Amendments to the Resource 

Conservation and Recovery Act (RCRA), Congress temporarily exempted 

several types of solid wastes from regulation as hazardous wastes, 

pending further study by the Environmental Protection Agency (EPA). 

Among the categories of wastes exempted were "drilling fluids, produced 

waters, and other wastes associated with the exploration, development, or 

production of crude oil or natural gas." Section 8002(m) of the 1980 

Amendments requires the Administrator to study these wastes and submit a 

report to Congress evaluating the status of their management. This 

report must include appropriate findings and recommendations for Federal 

and non-Federal actions concerning the effects of such wastes on human 

health and the environment. 

RCRA defines a specific sequence of events that would precede the 

promulgation of any new Federal regulations (including use of Subtitle C): 

1. Study of issues and submission of Report to Congress with 

appropriate recommendations; 

2. Formal public comment period on Report to Congress; 

3. A formal regulatory determination by EPA'; and 

4. If regulations are to be developed: 

a. Proposal of regulations; 

b. Formal public comment period on proposed regulations; and 

c. Revision of proposal. 

Should regulations be developed, the statute provides that they shall 

take effect only when authorized by act of Congress. 

The current report is the first step in this sequence. Recognizing 

that this class of wastes is temporarily exempt because of the complexity 
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of its impacts and the problems of its management, EPA has sought to be 

as comprehensive as possible in its discussion of issues for Congress. 

Further steps noted above will progressively refine the issues of 

concern. Congress retains ultimate control over the scope and direction 

of any additional Federal actions that might be taken to improve the 

management of these wastes. 

SPECIAL WASTES 

Oil and gas wastes fall within a general category of wastes that RCRA 

regards as "special" because of their unusually high volume, which could 

make the application of some RCRA regulatory requirements technically 

infeasible or impractical, and because of their relatively low level of 

apparent environmental hazard (based on data available in 1980). The 

issues raised by all special wastes are complex, requiring the balancing 

of environmental, logistical, and economic considerations. 

Congress' intent in vemporarily exempting these wastes from 

regulation under RCRA Subtitle C.was to provide an opportunity for 

developing an appropriate strategy for their management, should new or 

additional measures prove to be needed. 

PURPOSE OF THIS STUDY 

This study is intended to respond as fully as possible to each of the 

study factors described by Congress in the various paragraphs of Section 

8002(m). The Agency has designed this report to respond specifically to 

each study factor within separate chapters or sections of chapters. 

Although every study factor has been weighed in arriving at the 

conclusions and recommendations of this report, no factor has had a 

determining influence on the study's conclusions and recommendations. 
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Identifying Exempt Wastes: Chapter II, "Overview of the Industry," 

interprets the scope of the exemption as defined in the statute. 

Specifying the Sources and Volumes of Wastes: Estimates of volumes 

of wastes are also presented in Chapter II. 

Characterizing Wastes: EPA conducted a national screening type of 

sampling program of facilities to compile relevant data on waste 

characteristics. Simultaneously, the American Petroleum Institute 

(API) sampled the same sites except for central treatment locations 

and central pit locations, and wastes covered by the EPA survey. 

Chapter II of this report summarizes the results of these programs. 

Describing Current Disposal Practices: The Agency has described the 

principal and common methods of managing field-generated wastes and 

discusses these practices in general qualitative terms in relation to 

their effectiveness in protecting human health and the environment. 

This discussion is presented in Chapter III, "Current and Alternative 

Practices." 

Documenting Evidence of Damage to Human Health and the Environment 

Caused by Oil and Gas Wastes: Chapter IV, "Damage Cases," summarizes 

EPA's effort to collect documented evidence of danger to human health 

or damage to the environment or valuable resources. This collection 

of case studies is not intended to estimate the frequency or extent 

of damages associated with typical operations, nor to judge the 

effectiveness of current State programs in preventing these damages. 

It is intended only to define the nature and range of damages that 

are known to have occurred. 

Assessing Potential Danger to Human Health or the Environment from 

the Wastes: Qualitative and quantitative risk modeling is presented 

in Chapter V, "Risk Modeling." 

Reviewing the Adequacy of Government and Private Measures to Prevent 

and/or Mitigate Adverse Effects: This review is based on both a 

qualitative assessment of all the materials gathered during the 

course-of assembling the report and a review of State and other 

Federal, regulatory programs presented in Chapter VII, "Current 

Regulatory Programs." Chapter VII reviews the elements of programs 

and highlights possible inconsistencies, lack of specificity, 

potential problems in implementation, or gaps in coverage. 

Interpretation of the adequacy of these control efforts is presented 

in Chapter VIII, "Conclusions." 

Identifying Alternatives to Current Waste Management Practices: 

EPA's discussion in response to this study factor is incorporated in 

Chapter III, "Current and Alternative Practices." This chapter 

merges the concepts of current and alternative waste management 

practices. 
P.9 

Estimating the Costs of Alternative Practices: The first several 

sections of Chapter VI, "Economic Impacts of Alternative Waste ; 

Management Practices," present the Agency's analysis of this study 

factor. 

Estimating the Economic Impacts on Industry of Alternative 

Practices: The final two sections of Chapter VI present the Agency's 

analysis of the potential economic impacts of nationwide imposition 

of the hypothetical control scenarios analyzed at the project level. 

ISSUES SPECIFIC TO THE OIL AND GAS INDUSTRY 

To bring this study into perspective, it is important to note a 

number of issues specific to the oil and gas industry that affect how 

this study was conducted and how Congress may interpret its results. 

First, the oil and gas industry is extremely large and varied. In 

1985, there were approximately 842,000 producing oil and gas wells in the 

U.S., distributed throughout 38 States. They produced 8.4 million 

barrels of oil, 1.6 million barrels of natural gas liquids, and 44 

billion cubic feet of natural gas daily. The petroleum exploration, 

development, and production industries employed approximately 421,000 

people in 1985. 

All aspects of exploration, development, and production vary markedly 

from region to region and from State to State. Well depths range from as 

little as 30 feet to over 30,000 feet. Pennsylvania has been producing 

oil for 128 years; Alaska for only 15 years. Maryland has approximately 

14 producing wells; Texas has over 259,000 and completed another 25,721 

in 1985 alone. Production from a single well can vary from a high of 

about 11,500 barrels per day (the 1985 average for wells on the Alaska 

North Slope) to less than 10 barrels per day in many thousands of 

"stripper" wells. (Overall, 70 percent of U.S. oil wells are strippers, 

which account for roughly 14 percent of total U.S. production.) 
P.10 

These variations make it extremely difficult to fully represent the 

scope and breadth of the industry in detail at the national level. EPA 

has consulted extensively with State regulatory agencies, other Federal 

agencies, and industry in assembling data and materials on which to base 

this report. The generalizations that it must necessarily draw in order 

to respond to Congress' directives are, however, the Agency's own. 

Second, although wastes from the oil and gas industry have never been 

subject to RCRA regulation as hazardous wastes, they have long been 

regulated at the State level and are also regulated in part under the 

Federal Clean Water Act and the Federal Safe Drinking Water Act. The 

questions posed by Section 8002(m) must therefore be interpreted in 

relation to a complex and long-established background of existing 

requirements. Furthermore, State programs controlling the management of 

high-volume wastes have improved significantly over the past decade and, 

especially over the last 2 or 3'years, have reflected the national trend 

of increased concern about environmental protection. However, judging 

the environmental success of these recent improvements is difficult. EPA 

recognizes the difficulty of analyzing changing State requirements in 

relation to the regional variations of the industry and therefore wishes 

to pursue this issue further before arriving at a final regulatory 

determination on these wastes. 

DEFINITION OF EXEMPT WASTES 

The following discussion presents EPA's tentative working definition 

of the scope of the exemption. 

Scope of the Exemption 

The current statutory exemption originated in EPA's proposed 

hazardous waste regulations of December 8, 1978 (43 FR 58946). Proposed 
P.11 

40 CFR 250.46 contained standards for "special wastes," which reduced 

requirements for several types of wastes that are produced in large 

volume and that EPA believed may be lower in toxicity than other wastes 

regulated as hazardous wastes under RCRA. One of these categories of 

special wastes was "gas and oil drilling muds and oil production brines." 

In the RCRA amendments of 1980, Congress exempted most of these 

special wastes from the hazardous waste requirements of Subtitle C, 

pending further study by EPA. The oil and gas exemption, Section 

3001(b)(2)(A), is directed at "drilling fluids, produced waters, and 

other wastes associated with the exploration, development, or production 

of crude oil or natural gas." EPA defined the exemption in its 

regulations at 40 CFR 261.4(6) to include these wastes. The legislative 

history does not elaborate on the definition of drilling fluids or 

produced waters, but it does discuss "other wastes" as follows: 

The term "other wastes associated" is specifically included to 

designate waste materials intrinsically derived from primary field 

operations associated with the exploration, development, or 

production of crude oil, natural gas or geothermal energy. It would 

cover such substances as: hydrocarbon bearing soil in and around 

related facilities; drill cuttings; and materials (such as 

hydrocarbons, water, sand, and emulsion) produced from a well in 

conjunction with crude oil, natural gas or geothermal energy; and the 

accumulated material (such as hydrocarbons, water, sand and emulsion) 

from production separators, fluid treating vessels, storage vessels, 

and production impoundments. 

The phrase "intrinsically derived from the primary field operations" 

is intended to differentiate exploration, development, and production 

operations from transportation (from the point of custody transfer or 

of production separation and dehydration) and manufacturing 

operations. 

In order to arrive at a clear working definition of the scope of the 

exemption under Section 8002(m), EPA has used these statements in 

conjunction with the definitions and guidelines included in statutory 

language of RCRA as a basis for determining which oil and gas wastes 

should be included in the present study. 
P.12 

The test of whether a particular waste qualifies under the exemption 

can be made in relation to the following three separate criteria. No one 

criterion can be used as a standard when defining specific waste streams 

that are exempt. These criteria are as follows: 

1. Exempt wastes must be associated with measures (1) to locate oil 

or gas deposits, (2) to remove oil or natural gas from the ground, 

or (3) to remove impurities from such substances, provided that 

the purification process is an integral part of primary field 

operations.1 

2. Only waste streams intrinsic to the exploration for, or the 

development and production of, crude oil or natural gas are 

subject to exemption. Waste streams generated at oil or gas 

facilities that are not uniquely associated with exploration, 

development, or production activities are not exempt. (Examples 

would include spent solvents from equipment cleanup, or air 

emissions from diesel engines used to operate drilling rigs.) 

Those substances that are extracted from the ground or injected 

into the ground to facilitate the drilling, operation, or 

maintenance of a well or to enhance the recovery of oil and gas 

are considered to be uniquely associated with exploration, 

development, or production activities. Additionally, the 

injection into-the wellbore of materials that keep the pipes from 

freezing or serve as solvents to prevent paraffin accumulation is 

intrinsically associated with exploration, development, or 

production activities. With regard to injection for enhanced 

recovery, the injected materials must function primarily to 

enhance recovery of oil and gas and must be recognized by the 

Agency as being appropriate for enhanced recovery. An example 

would be produced water. In this context, "function primarily" 

means that the main reason for injecting the materials is to 

enhance recovery of oil and gas rather than to serve as a means 

for disposing of the injected materials. 

B^Mfirpaters, and othecwas.te^.i.ntrinsica» Maak^l 

"^WS'operations associatedTwith* the !r W ^' A^V J 

n£,; or production of crude oil, natural Q&.- '-t^*1** , 

________ " '" ~ '"'"" '•"-•--• " cp^ loA<J ' 

ysreyc'o^p.ass product ion-related actiiv^t<iie|;j^;44E^.r>, £f>^ r, 

l^PiGfEl^g^fZ^Sr*""* "* *** H^l f W1t# respect tfTM: 

fPffTSToccWTnaIrornear the wel lhead, /'but prior ttvwf ^ 

Thus, wastes associated with such processes as oil refining and petrochemical-related 

manufacturing are not exempt because those processes are not an integral part of primary field 

operations. 
P.13 

Kom jn individual field facility for /a_centrally Win carrier (i.e., pipeline or trucking concert 

15"a refinery or to a refiner. 

With respect to natural gas production, primary field operations 

are those activities occurring at or near the wellhead or at the 

gas plant but prior to the point at which the gas is transferred 

from an individual field facility, a centrally located facility, 

or a gas plant to a carrier for transport to market. Primary 

field operations encompass the primary, secondary, and tertiary 

production of oil or gas. 0<

Y>yM" 

• , • - s * * 

Wastes generated by the transportation process itself are not 

exempt because they are not intrinsically associated with primary 

field operations. An example would be pigging waste from pipeline 

pumping stations. Transportation (for the oil and gas industry) 

may be for short or long distances. 

Wastes associated with manufacturing are not exempt because they 

are not associated with exploration, development, or production 

and hence are not intrinsically associated with primary field 

operations. Manufacturing (for the oil and gas industry) ii 

Hafinpri a<; any activity occurring within a refinery nr nth^T 

manufacturing facility the purpose of which is to render the 

product commerci al_l_y...sal_eab.l e. 

Using these definitions, Table 1 presents definitions of exempt 

wastes as defined by EPA for the purposes of this study. Note that this 

is only a partial list. Although it includes all the major waste streams 

that EPA has considered in the preparation of this report, others may 

exist. In that case, the definitions listed above would be applied to 

determine the status of these wastes under Section 8002(m). 

CHARACTERIZATION OF WASTES 

Organic constituents, present at levels of potential concern in oil 

and gas wastes, are shown on Table 2. These include the hydrocarbons 

^benzene and phenanthrene. Inorganic constituents of concern include 

lead, arsenic, barium, antimony, and fluoride. 
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P . ,^ 

: \ 

ry 

Table 1 

Drill cuttings 

Drilling fluids 

Well completion, treatment, 

and stimulation fluids 

Packing fluids 

Sand, hydrocarbon solids, 

and other deposits removed 

from production wells 

Pipe scale, hydrocarbon 

solids, hydrates, and other 

deposits removed from 

piping and equipment 

Hydrocarbon-bearing soil 

Pigging wastes from 

gathering 1ines 

Wastes from subsurface 

gas storage and retrieval 

EXEMPT WASTES 

Basic sediment and water 

and other tank bottoms 

from storage facilities^ 

and separators 

Produced water 

Constituents removed from 

produced water 

before it is injected or 

otherwise disposed of 

Accumulated materials 

a[s] hydrocarbons, soli(_ 

sahd, and emulsion) frjo 

r taction separators, ^ 

l"uid-treating vessels, 

and production impoundments 

P

ration or treatmef 

f f • ' 

Drilling muds from offshore 

operations 

Appropriate fluids injected 

downhole for secondary and 

tertiary recovery operations 

Liquid hydrocarbons removed 

from the production stream 

but not from oil refining 

Gases removed from the 

production stream, such as 

hydrogen sulfide, carbon 

dioxide, and volatilized 

hydrocarbons 

Materials ejected from a 

production well during well 

blowdown 

Waste, 

prima 

i^liifroni' 

Wra operations 

Light organics volatilized 

from recovered hydrocarbons 

or from solvents or other 

chemicals used for cleaning, 

fracturing, or well completi 

Waste lubricants, hydraulic 

fluids, motor oil, and 

paint 

Waste solvents from cleanup operations 

Off-specification and 

unused materials intended 

for disposal 

Incinerator ash 

Pigging wastes from 

transportation pipelines 

NONEXEMPT WASTES -

Sanitary wastes, trash, and 

gray water 

Gases, such as SOx, NOx, 

and particulates from gas 

turbines or other machinery 

Drums - (filled, partially 

filled, or cleaned) whose 

contents are not intended 

for use 

Waste iron sponge, glycol, a 

other separation media 

Filters 

Spent catalysts 

Wastes from truck- and drumcleaning operations 

Waste solvents from equipmen 

maintenance 

Spills from pipelines or 

other transport methods 
Chemical 

Constituents 

Primary concern 

Benzene 

Phenanthrene 

Lead 

Barium 

Secondary concern 

Arsenic 

Fluoride 

Antimony 

Production 

Midpoint 

L* 

Tank bottom 

Sff S+ 

S « 

S 

Endpolnt 

L LiL LiL 

L 

L» 

Central treatment 

Iniluent 

S i 

S i 

S 

Tank 

5« 

S i 

S i 

Effluent 

L S 

S i 

S i 

S 

5 

Central pit 

Central pit 

S i 

S i 

S i 

S i 

S 

s 

Drilling 

Drilling mud 

s 

S i 

Tank bottoms 

S i 

S i 

L i 

L 

Pll 

5 SLi L- Si Si* 

Li Li* Si SiS SL S 

Legend: 

L: Liquid sample > 100 x health-based number 

S: Sludge sample > 100 x health-based number 

#: Denotes > 1,000 x health-based number 

L.S: EPA samples 

L«,S-: API samples 

+: TCLP extraction 

— All values determined from direct samples except as denoted by "+* 

Table 2 Constituents ol Concern Found In Waste Streams Sampled by EPA and API 

•y 
P.16 

WASTE VOLUME ESTIMATION METHODOLOGY AND ESTIMATED VOLUMES 

Information concerning volumes of wastes from oil and gas 

exploration, development, and production operations is not routinely 

collected nationwide, making it necessary to develop a means for 

estimating these volumes by indirect methods in order to comply with the 

Section 8002(m) requirement to present such estimates to Congress. 

After careful review, estimates of waste volumes compiled by API were 

used in the Quantitative Analyses in this report. API estimates that 361 

million barrels of drilling waste were generated from drilling 69,734 

wells, for an average of 5,183 barrels of waste per well in 1985 and that 

20.9 billion barrels of produced water were generated in 1985. 

CURRENT AND ALTERNATIVE WASTE MANAGEMENT PRACTICES 

It is convenient to divide oil and gas wastes into two broad 

categories. The first category includes drilling muds, wellbore 

cuttings, and chemical additives related to the drilling and well 

completion process; the second includes all wastes associated with oil 

and gas production, primarily produced water. 

Section 8002 (m) requires EPA to consider both current and 

alternative technologies in carrying out the present study. Sharp 

distinctions are difficult to make because of the wide variation in 

practices among States and among different types of operations. Waste 

management technology in the oil and gas industry is fairly simple. For 

the major high-volume streams, EPA has found no newly invented 

technologies in the research or development stage that offer promise for 

wide application in the near term. Virtually every waste management 

practice that exists can be considered "current" in one specific 

situation or another. 

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P.17 

Of the waste management methods in common use today, some pose the 

potential for adverse environmental impact if improperly implemented. 

Reserve Pits 

Reserve pits are an integral part of the drilling process. Usually 

one reserve pit is constructed per drill site. Where pits are unlined 

and constructed above unconfined ground-water aquifers, the potential 

exists for ground-water degradation because of leaching of reserve pit 

constituents into ground water. 

Annular Disposal of Produced Waters 

Although it is not a very widespread practice, some produced water is 

disposed of through the use of annular injection into producing wells. 

Using this method, produced water is injected through the annular space 

between the production casing and the production tubing. This method has 

the potential to adversely affect underground sources of drinking water 

(USDWs) because of the vulnerability of the single protective string of 

casing. However, it is usually restricted to low-volume wastes injected 

at little or no pressure. Testing of annular disposal wells is involved 

and expensive. 

Disposal of Produced Water in Injection Wells 

Injection wells used for the disposal of produced water have the 

potential to degrade fresh ground water in the vicinity if they are 

inadequately designed, constructed, or operated. Highly mobile chloride 

ions can migrate into freshwater aquifers through corrosion holes in 

injection tubing, casing, and cement. The Federal Underground Injection 

Control (UIC) program requires mechanical integrity testing of all Class 

II injection wells every 5 years. All States meet this requirement, 

although some States have requirements for more frequent testing. 

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P.18 

Many States have primacy for the UIC program. Both the criteria used 

for passing or failing an integrity test for a Class II well and the 

testing procedure itself can vary. There is considerable variation in 

the actual construction of Class II wells in operation nationwide, both 

because many wells in operation today were constructed prior to the 

enactment of current programs and because current State programs vary 

significantly. State requirements for new injection wells can be quite 

extensive. However, State requirements for construction of injection 

wells prior to the enactment of the UIC program have evolved over time, 

and construction ranges from injection wells in which all ground-water 

zones are fully protected with casing and cementing to shallow injection 

wells with one casing string and little or no cement. 

Disposal of Produced Water in Unlined Pits 

Use of unlined pits for the disposal of produced water is now allowed 

in only a few States. The use of these pits has the potential to degrade 

usable ground water through seepage of produced water constituents into 

unconfined, freshwater aquifers underlying such a pit. 

Discharge of Produced Water to Sensitive Surface Waters 

Discharge of produced waters to surface water bodies must meet State 

or Federal permit standards. Although pollutants such as total organic 

carbon are limited in these discharges, large volumes of discharges 

containing low levels of such pollutants may be damaging to aquatic 

communities. 

Drilling Wastes on the Alaska North Slope 

Drilling waste disposal practices on the North Slope of Alaska are 

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P.19 

very different from disposal practices elsewhere. Production-related 

reserve pits on the North Slope are semipermanent, and their contents 

need to be disposed of periodically. This is generally done by pumping 

the aqueous phase of the pit onto the tundra after the pit contents have 

been allowed to settle for a period of 1 year. This discharge is done 

under permitted effluent limits set by the State of Alaska. The National 

Pollutant Discharge Elimination System (NPDES) currently does not 

regulate these discharges. The long-term effects of discharging large 

quantities of liquid reserve pit waste on the sensitive tundra 

environment is of concern to EPA, Alaska Department of Environmental 

Conservation, and officials from other Federal agencies. The existing 

body of scientific evidence is insufficient to conclusively demonstrate 

whether or not there are adverse environmental impacts resulting from 

this practice. 

Improperly Plugged and Unplugged Abandoned Wells 

There are an estimated 1,200,000 abandoned oil or gas wells in the 

United States. To avoid degradation of ground water it is vital that 

abandoned wells be properly plugged. Lack of plugging or improper 

plugging of a well may allow high-chloride produced water or injected 

wastes to migrate to freshwater aquifers. 

DAMAGE CASES 

The purpose of the damage case study was to respond to the 

requirements of Section 8002(m)(l)(C) by providing an overview of the 

nature of damages associated with oil and gas exploration, development, 

or production activities. In general, case studies were used to gain 

familiarity with ranges of issues involved in a particular study topic, 

not to provide a statistical representation of the scope or nature of 

damages. In addition, although many of the cases involved violations of 

State or Federal regulations, or would involve violations of a State or 

14 

r 
P.20 

Federal regulation if they were to occur today, EPA did not consider this 

to be relevant to whether or not those cases should be included in this 

report. 

Types of damage of concern to this study were human health effects 

(acute and chronic), environmental effects, effects on wildlife, effects 

on livestock, and impairment of other natural resources. Case 

information was assembled from the major petroleum-producing States: 

Alaska, Arkansas, California, Kansas, Louisiana, Michigan, New Mexico, 

Ohio, Oklahoma, Pennsylvania, Texas, West Virginia and Wyoming. The 

damage case effort focused on gathering information on cases that had 

occurred most recently. Ninety-five percent of all cases used in the 

report date from 1981 to the present, and approximately half of these 

involved violations of State regulations. 

Test of Proof for Cases Used in the Study 

All cases were classified according to whether they met one or more 

formal tests of proof, a classification that was to some extent 

judgmental. Three tests were used; cases were considered to meet the 

documentation standards of Section 8002(m)(l)(C) if they met one or more 

of them, and most met more than one. The tests were as follows: 

1. Scientific investigation: Scientific investigations could 

include either a qualitative scientific evaluation of a case, in 

which a conclusion of damage might be reached by the author(s) of 

the study, or through the results of scientific measurements, such 

as a monitoring study, or both. In the latter event, damage could 

be accepted as documented if the levels of contamination reported 

exceeded applicable State or Federal standards* or guidelines for 

the pollutant involved. 

2. Administrative finding: Damage was accepted as documented if it 

was reported by a State or Federal official in the course of 

official duties and if that report was not later invalidated or 

withdrawn. 

15 
P.21 

3. Court decision: Court rulings finding presence of health or 

environmental damages were accepted as conclusive. 

EPA distributed draft versions of the case studies, based on an 

interpretation of the documentation gathered in the initial phases of the 

study, for review and validation. The Agency received voluminous 

responses on these cases from the States, from industry, and sometimes 

from third parties. The cases were extensively revised and expanded to 

incorporate all commentary; where issues of fact or interpretation could 

not be resolved, EPA has provided numerous footnotes within the report so 

as to present all sides of the issues. 

Several patterns became apparent after analysis was performed on the 

damage cases collected. They are described below: 

Ground-Water Degradation 

Degradation of ground water from improper operation of injection 

wells for the purpose of disposal or enhanced recovery is a potential 

hazard and has important implications given the large number of wells 

used for injection, either for enhanced recovery of oil or for final 

disposal of oil and gas wastes. Damage to ground water from improperly 

operated injection wells tends to be long-term since it is difficult and 

costly to remediate contaminated ground water. Such damage can result in 

loss of domestic water supplies and damage to agricultural land and crops 

through irrigation with saline water. . . 

Many States have primacy under the Federal Underground Injection 

Control program. In order to obtain primacy, the State has to 

demonstrate that its programs are effective in protecting underground 

sources of drinking water, meet all requirements of Section 1421 

(b)(1)(A) through (D) of the Safe Drinking Water Act (SDWA) and in 

general conform to guidance issued by EPA pursuant to Section 1425 of 

16 

t 

\ 

>r 

>/*•-

\

fJ-* 

... t/ \ • 

r'r' 

j 

.</• 

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P.22 

SDWA. Individual State programs however, may vary in their specific 

requirements within the discretion allowed under this program. 

The. only State with significant oil and gas production that allows 

annular disposal of produced water is Ohio. This practice makes ground 

water in the vicinity of a disposal well especially vulnerable to 

degradation because the ground water is protected with only one string of 

casing. 

Ground-Water Contamination from Leaching of Reserve Pit Contents 

Contamination of ground water from leaching of reserve pit contents 

is a situation found in many areas of the U.S. Where reserve pits are 

overlying unconfined aquifers, the potential exists for seepage or : 

leaching of potentially toxic reserve pit constituents into the ground 

water. Such leaching can result in lost domestic and agricultural water 

i 

supplies and irrigation water supplies and can endanger human health. 

Reserve pits may contain high levels of chlorides, barium, chromium, 

cadmium, copper, arsenic, lead, zinc, and organic toxic constituents, 

which can be mobile in ground water. 

Discharge of Drilling Fluids and Produced Water into Bays and 

Estuaries 

Discharge of waste drilling mud and produced water into bays and 

estuaries of the Gulf of Mexico is allowed by Gulf Coast States (Texas 

and Louisiana). This practice has been shown to be detrimental to 

aquatic life in the affected bays and estuaries, with the potential for 

contamination of aquatic life and bird life with heavy metals and 

polycyclic aromatic hydrocarbons (PAHs). Of greater concern is the 

potential for heavy metals, taken up in such organisms as clams and 

oysters, to travel up the food chain, possibly endangering human health 

through consumption of contaminated fish and shellfish. EPA has not yet 

issued NPDES permits for these discharges. Permits for such discharges 

may be issued by the States. 

17 
Discharge of Oily Wastes to Unlined Pits 

California permits the discharge of oily wastes to large, unlined 

sumps or pits and ephemeral streams. This practice has resulted in 

mortality to wildlife, including some endangered species, when exposed to 

the oily waste. 

Unlined Produced Water Disposal Pits 

The use of unlined produced water disposal pits is still allowed in 

some western States. Studies have illustrated how produced water 

constituents, including benzene and chlorides, migrate into 

unconsolidated soil surrounding some such disposal pits and seep into 

shallow ground water. 

Discharge of Produced Water to Surface Streams 

Under the NPDES permit system, discharge of produced water to live 

and ephemeral streams is allowed in some western states. Studies have 

shown that high-volume discharges containing low levels of organic carbon 

can have severe impacts on fish in receiving streams. 

Illegal Disposal 

Illegal disposal is a pervasive problem that may result in damage to 

surface water, wetlands, native aquatic life, soil, ground water, 

wildlife, crops, and livestock and may endanger human health. Damages 

may be temporary, but they can be significant at the time of the 

incident. Incidents of illegal disposal of oil and gas wastes-are found 

throughout the U.S. About half the damage cases used in the Report 

appear to involve violations of State regulations, and a smaller number 

involve violations of Federal regulations. Detailed information on 

18 
P.24 

compliance status was not-always available and, in many cases, practices 

that may have been legal at the time of an incident may now be illegal 

under revised State regulations. 

Practices on the Alaska North Slope 

Waste disposal practices on the North Slope of Alaska are very 

different from those in other areas of the U.S. Discharge of excess 

liquid directly onto the tundra and roads from production reserve pits is 

permitted under regulations of the Alaska Department of Environmental 

Conservation (ADEC). ADEC estimates that 100 million gallons of this 

liquid are pumped onto the tundra and roadways on the North Slope each 

year, potentially carrying with it reserve pit constituents such as 

chromium, barium, chlorides, and oil. Scientists who have studied the 

area believe this practice has the potential to lead to bioaccumulation 

of heavy metals and other contaminants in local wildlife, thus affecting 

the food chain. Results from recently released studies suggest that the 

possibility exists for adverse impact on Arctic wildlife because of 

discharge of reserve pit liquid to the tundra; however, these studies are 

inconclusive. New regulations recently enacted by the State of Alaska 

should significantly reduce the potential for tundra and wildlife impacts. 

Improperly Plugged and Unplugged Abandoned Wells 

Degradation of ground water caused by waste seepage through 

improperly plugged and unplugged abandoned wells is known to occur in 

various parts of the U.S. Improperly plugged and unplugged abandoned 

wells can also enable native brine to migrate up the well bore and into 

freshwater aquifers. The damage to ground water can be extensive, 

resulting in lost domestic water and irrigation water supplies. When 

agricultural land is irrigated with this water, long-term damage to the 

soil is sustained. Because thousands of wells were abandoned throughout 

19 
P.25 

the U.S. before there were any State regulatory plugging requirements, 

the potential for environmental and resource damage through ground-water 

degradation is high. Existing State regulations concerning plugging and 

abandonment of oil and gas wells vary widely. Some States have adequate 

regulations currently in place. 

RISK MODELING 

EPA used quantitative modeling and a review of scientific literature 

to evaluate health and environmental risks associated with management of 

oil and gas wastes. The Agency did not attempt to estimate absolute 

risks in terms of the number of persons in the U.S. likely to experience 

health problems, or the volume of ground water likely to suffer various 

degrees of degradation, because of a lack of adequate sample data on 

regional waste characterization and inadequate empirical information on 

waste management system failure probabilities. Rather, the principal 

purpose of this effort was to investigate and compare potential risks to 

human health and the environment under a wide variety of current waste 

management conditions. 

The specific objectives of the risk analysis were to (1) characterize 

and classify the major risk-influencing factors (e.g., waste types, waste 

management practices, environmental settings) associated with current 

operations at oil and gas facilities; (2) estimate distributions of these 

risk-influencing factors across the population of oil and gas facilities 

within various geographic zones; (3) evaluate these factors in terms of 

their relative effect on risks; and (4) develop, for different geographic 

zones of the U.S., initial quantitative estimates of the possible range 

of baseline health and environmental risks for the variety of conditions 

found. A qualitative review of the potential human health and ecological 

damage on Alaska's North Slope, and of the proximity of oil and gas 

activities to environments of special interest (i.e., endangered species 

habitats, wetlands, and public lands). 

20 
P.26 

Methodology 

Model scenarios were defined to simulate over 3,000 realistic 

combinations of variables representing waste streams, management 

practices, and environmental settings at oil and gas facilities. The 

focus was on the principal large-volume waste streams, including mixed 

drilling muds, liquids, and cuttings managed in conventional lined and 

unlined reserve pits, and produced water disposed by injection in Class 

II deep injection wells and by surface water discharge. Several other 

waste streams and current management practices were not included in the 

quantitative modeling analysis, but the ones considered represent the 

major waste streams and the most common management practices within the 

scope of this study. Also, no attempt was made to examine all release 

and migration pathways for the waste streams that were 

considered.2 EPA evaluated scenarios under both "best-estimate" 

(typical) and "conservative" (i.e., higher risk, but not necessarily 

worst-case) assumptions. In general, the practices modeled correspond 

reasonably well with the oaseline requirements of existing State and 

Federal regulatory programs. Risks from illegal disposal or other 

compliance problems were not specifically studied in this modeling 

project. 

EPA selected eight constituents for modeling: arsenic, benzene, 

boron, sodium, chloride, cadmium, chromium, and, mobile ions (including 

chloride, sodium, potassium, calcium, magnesium, and sulfate). The 

constituents were selected because they were detected frequently and in 

elevated concentrations in EPA's waste samples, and because they have a 

relatively high potential to migrate through ground water and cause 

adverse environmental and human health effects. The Agency modeled 

median and upper 90th percentile concentrations of these constituents 

For instance, no attempt was nude to model the migration of reinjected produced water 

along fractures, or through unplugged abandoned wells, after Demg injected underground. 

21 
P.27 

based on existing sample data. Waste releases, environmental transport 

and fate, and risks effects via ground-water and surface water pathways 

were modeled for a 200-year period using a modified version of the 

Agency's Liner Location Risk and Cost Analysis Model (LLM). Chemical 

transport in rivers was modeled using equations developed for performing 

waste load allocations in rivers and streams. All risks were calculated 

for the "most exposed individual" at downgradient center line plume 

concentrations. 

General Findings 

• For the vast majority of model scenarios evaluated in this 

study, only very small to negligible risks would be expected to 

occur even under the conservative set of assumptions modeled in 

this analysis. Risk levels of concern would be expected at only a 

small percentage of oil and gas sites. 

• Of the hundreds of chemical constituents detected in both 

reserve pits and produced water, only a few from either source 

appear to be of primary concern relative to health or 

environmental damage. 

• Both for reserve pit waste and produced water, there is a wide 

(generally five or more orders of magnitude) variation in 

estimated health risks across model scenarios, depending on 

concentrations of toxic chemicals present, hydrogeologic 

parameters, waste amounts, management practices, and distances to 

exposure points. 

• Modeling of resource damages to surface water, in terms of both 

ecological impact and resource degradation, generally did not show 

significant risk values. 

Drilling Waste Disposal in Onsite Reserve Pits 

• Health risk estimates for cancer (arsenic) never exceeded 1 x 

10"5 (one in 100,000) for reserve pit wastes. Roughly 2 percent 

of the reserve pit scenarios, analyzed under a conservative set of 

assumptions, had cancer risks greater than 1 x 10"'. For 

noncancer effects, sodium concentrations in drinking water 

exceeded threshold levels for hypertension in only 1 to 2 percent 

of the scenarios examined. The highest sodium concentration 

estimated at an exposure point was 32 times the threshold. The 

22 
P.28 

higher risk cases occurred for a large unlined reserve pit, a 

60-meter exposure distance, and high subsurface permeability and 

infiltration. 

• Differences in risk across geographic zones generally did not 

vary by more than one order of magnitude, but this may have 

reflected limitations of the study approach to estimating regional 

risk distributions and lack of data on regional variation in waste 

composition. 

• Ground-water flow field type and exposure distances had the 

greatest influence on risk (several orders of magnitude). 

Recharge rate, subsurface permeability, and pit size had less 

impact. Depth to ground water and presence/absence of a single 

synthetic liner had virtually no measurable influence over the 

200-year modeling period; however, risk estimated over shorter 

time periods, such as 50 years, would likely be lower for lined 

pits compared to unlined pits. 

• Ground-water resource risk from leaching of reserve pit contents 

was very limited and was confined to the closest modeling distance 

(60 meters). No surface-water damage was predicted for the 

seepage of leachate-contaminated ground water into flowing surface 

water. 

Produced Water Disposal in Injection Wells 

• Health risk estimates for both cancer and noncancer effects were 

substantially below levels of possible concern in a majority of 

scenarios under both best-estimate and conservative modeling 

assumptions. Under conservative assumptions, from 22 to 35 

percent of the scenarios had cancer risks (caused by the ingestion 

of arsenic and benzene) greater than 1 x 10"', and from 0.4 to 5 

percent, of the scenarios had cancer risks greater than 1 x 

10"*. The highest cancer risk estimate was 9 x 10"4 . Also 

under the conservative modeling assumptions, the sodium 

concentration in drinking water wells was predicted to exceed the 

threshold for hypertension for a maximum of 22 percent of the 

scenarios 

• In general, the highest risk scenarios correspond to a short 

(60-meter) exposure distance, as relatively high injection 

pressure or rate, and a few specific ground-water flow fields. 

The highest cancer risks were associated with relativel-y high 

ground-water velocities and flow rates, while the highest 

noncancer risks were associated with relatively low ground-water 

velocities and flow rates. 

23 
P.29 

• As for the reserve pit results, there was little variation of 

risk among zones. 

• Exposure distance and ground-water velocity flow had the 

greatest influence on risk. Injection rate and pressure had less, 

but still measurable, influence. 

• Risk of ground-water degradation from injection well failure was 

predicted to be extremely limited, but modeling did not take into 

account seepage through abandoned boreholes or fractures in 

confining layers, leaching from brine pits, or spills. 

• No risk of degradation of surface water was predicted for 

seepage into flowing surface water of ground water contaminated by 

direct release from injection wells. 

Discharge of Produced Water to Surface Water by Stripper Wells 

• Substantial risks to human health or aquatic habitats were not 

predicted by the model scenarios for the normal range of stripper 

well discharges (under 100 barrels per day), except for the 

possible combination of high (90th percentile) waste 

concentrations and very small (generally less than 5 cubic feet 

per second) receiving water stream flows. 

Drilling and Production Wastes Disposed on Alaska's North Slope 

• Adverse effects to human health caused by drilling and 

production wastes on the North Slope are expected to be 

negligible. The greatest potential for adverse environmental 

impacts is caused by discharge and seepage of reserve pit fluids 

containing toxic substances onto the tundra. A 1983 Fish and 

Wildlife Service study and industry investigations indicate that 

these fluids can adversely effect water quality, vegetation, and 

tundra invertebrates in nearby surrounding areas. Strengthened 

State regulations concerning drilling waste disposal, however, 

reduce the potential for these impacts today. The Fish and 

Wildlife Service is in the process of studying the effects of 

reserve pit fluids on tundra organisms, and these studies need to 

be completed before more definitive conclusions can be made with 

respect to environmental impacts on the North Slope. 

•Locations of Oil and Gas Activities in Relation to Environments of 

Special Interest 

• As would be expected with any large and widespread industry, 

there are numerous oil and gas sites in the vicinity of endangered 

and threatened species habitats and wetlands. In accordance with 

existing controls for the management of public lands, a small 

24 
P.30 

portion of the country's National Forests and Parks also have 

existing and potential oil and gas activities within their 

boundaries. More detailed study is needed to determine what 

effect, if any, oil and gas wastes may actually have on these 

environments of special interest. 

COST AND ECONOMIC IMPACTS 

EPA developed estimates of the compliance costs and economic impacts 

of implementing alternative waste management practices in the oil and gas 

industry by modeling three waste management scenarios: (1) a "baseline" 

scenario reflecting current waste management practices; (2) an 

"intermediate" scenario, in which somewhat stricter controls on waste 

disposal practices are assumed, and (3) a "Subtitle C" scenario, in which 

full RCRA requirements must be met. EPA estimated total annual costs for 

each scenario based on the cost of management using practices that 

conform to the requirements of the scenario. 

The Baseline Scenario represents the current situation and 

encompasses the waste management practices now permitted under State and 

Federal regulations. These waste management practices are principally 

disposal onsite in lined and unlined pits for drilling wastes and either 

deepwell injection (for disposal or enhanced energy recovery) or surface 

disposal (e.g., discharge to water bodies, evaporation pits, or land) for 

produced water. 

The hypothetical alternative regulatory scenarios require additional 

waste management controls on wastes considered hazardous. In the absence 

of regulatory determination or detailed regional waste categorization, 

EPA made two separate estimates of the costs of each scenario based on 

rough assumptions that either 10 percent of 70 percent of wastes would be 

considered hazardous for costing purposes. 

25 
P.31 

In the Intermediate Scenario, hazardous drilling wastes would be 

disposed of in reserve pits with single synthetic liners, and hazardous 

produced waters would be injected into Class II wells. For the Subtitle 

C Scenario, all wastes considered hazardous (using the same 10 percent 

and 70 percent assumptions) would have to meet pollution control 

requirements consistent with existing Subtitle C regulations. Under this 

scenario, drilling wastes considered hazardous would be disposed of in 

Subtitle C facilities (e.g., a synthetic lined facility with leachate 

collection and monitoring (SCLC) impoundment, hazardous waste 

incinerator), and hazardous produced water would be injected into Class I 

injection welIs. 

A second Subtitle C scenario (the Subtitle C-l Scenario) was also 

considered. The requirements of this scenario are exactly the same as 

those of the Subtitle C Scenario, except that produced water used in 

waterflood operations for enhanced oil recovery (EOR) is considered part 

of the production process. Under this scenario, produced water injected 

into producing zones for oil recovery would not be considered a waste and 

would therefore be exempt from Subtitle C (i.e., Class I disposal well) 

requirements. Produced water injected for disposal purposes would still 

be subject to Subtitle C requirements. 

The Subtitle C Scenarios do not, however, impose all of the potential 

technological requirements of the Solid Waste Act amendments, such as the 

land ban and corrective action requirements, for which EPA regulatory 

proposals are currently under development. 

Hi 

To determine the incremental cost of waste disposal under the 

alternative waste management scenarios, the Agency calculated capital and 

operating costs for the array of individual waste management practices 

that might be used in the different scenarios. These costs were 

developed using literature sources, EPA engineering models, original 

engineering estimates, vendor quotations, and other sources. Capital 

26 
P.32 

costs were annualized at an 8 percent discount rate, the approximate 

after-tax real costs of capital in the industry, and were added to O&M 

costs. The results are expressed in dollar-per-barrel disposal costs and 

are presented in Table 3 for the lower 48 States (Lower 48). 

Drilling waste disposal costs for the Lower 48 were found to range 

from $2.04 per barrel for onsite unlined pit disposal to $157.50 per 

barrel for incineration. Costs of injecting produced water were 

estimated to vary between SO.10 per barrel for Class II disposal and 

$0.92 per barrel for Class I disposal. Costs for Class I facilities are 

substantially higher because of increased drilling, completion, 

monitoring, and surface equipment costs associated with waste management 

facilities that accept hazardous waste. 

After selecting the waste management' practices appropriate under each 

scenario, the least-cost methods for each scenario were identified. In 

this way, such options as landfarming or incineration under the Subtitle 

C scenario were eliminated as viable waste management options. 

EPA then estimated the incremental costs of these alternative waste 

disposal practices under each scenario for representative oil and gas 

projects in each of 9 major regions of the U.S. For each "model 

project," the after-tax rate of return and the cost of production per 

barrel of oil were calculated under each scenario, including the 

baseline. Table 4 shows the impacts of waste management costs on a 

weighted average model oil and gas project designed to represent the 

Lower 48 States, for each of the six alternative regulatory scenarios 

relative to the 1985 baseline. 

National costs for each scenario were estimated by extrapolating the 

waste management costs for model projects in each region to the national 

level. Table 4 shows these annual national costs to range from $49 

million in the Intermediate 10% case to over $12 billion for the Subtitle 

C 70% case. 

27 
P.33 

Table 3 Cost of Waste Disposal Options 

in the Lower 48 States 

Disposal Option $/bbl 

Drillinq Wastes 

Surface impoundment 

- unlined (0.25 acre) 2.04 

- single liner (0.25 acre) 4.46 

- SCLC facility (15 acre)* 15.42 

Landfarming 

- current 15.47 

- Subtitle C 37.12 

Solidification 8.00 

Incineration 157.50 

Volume Reduction

 a 

- single liner disposal 6.74 

- SCLC disposal 11.95 

Produced Water 

Class II injection 

- E0R 0.10 

- disposal 0.14 

Class I injection 

- E0R . 0.78 

- disposal0 0.92 

Note: Base year for costs is 1985. 

a Costs include equipment rental, transport and disposal of reduced 

volume of waste. All costs are allocated over the original volume of 

waste so that-per-barrel costs of waste disposal are comparable to the 

other cost estimates in the table. 

D Includes transportation and loading/unloading charges. 

28 

J 
Table 4 Impact of Waste Management Cost 

on Oil and Gas Projects 

P.34 

Factor 

Inter- Intermediate mediate 

Baseline 10% 70% 

Subtitle Subtitle Subtitle Subtitle 

C 10% C 70% C-l 10% C-l 70% 

Weighted . 23.9 

average internal 

rate of 

return (:'.)a 

Weighted 

average 

ir.crenientj I 

cist cf 

product ion 

($/50E)a 

28.8 

$0.01 

23.0 

$0 11 

26.6 

$0.40 

13.0 

$2.68 

27.6 

<C20 

19.7 

$0.55 

Total annual 

national 

compllance cost 

{$ mil)ion ) 

$49 $420 $1,710 $12,125 $980 $6,671 

Note: Base year for costs is 1985. 

For typical lower 48 oil and gas projects. 

29 
P.35 

EPA then estimated short-term and long-term production declines that 

could be linked to these increased waste disposal costs using Department 

of Energy production forecasting models. Long-term results are shown in 

Table 5. In the year 2000, no detectable change was seen for the 

intermediate scenario when 10 percent of the wastes were considered 

hazardous; the decline was 1 percent, however, when 70 percent of wastes 

were assumed hazardous. Under the Subtitle C scenario, production 

decline ranged from 4 to 18 percent in the year 2000; under the Subtitle 

C-l Scenario (waterflooding operations exempt from Subtitle C 

requirements), the projected decline ranged from 1 to 12.5 percent. 

The Agency estimated the impact of the projected production declines 

on several economic aggregates, including oil price, balance of trade, 

oil imports, Federal revenues, and State revenues. The impacts vary 

greatly, depending on the cost of the waste management scenarios. 

Increases in oil imports range from a "not detectable" level to 1.1 

million barrels per day because of the U.S. production decline. 

Increases in oil prices under the alternative scenarios range from a 

negligible change to $1.08 per barrel because of the declining supply and 

increasing cost of U.S. production. This shifting of oil supply and 

price results in a deterioration in the U.S. balance of trade ranging 

from "not detectable" to $17.5 billion per year and a cost to U.S. 

consumers of up to $6.4 billion per year. 

CURRENT STATE AND FEDERAL REGULATORY PROGRAMS 

A variety of programs exist at the State level to control the 

environmental impacts of waste management related to the oil and gas 

industry. State programs have been in effect for many years, and many 

have evolved significantly over the last decade. Chapter VII provides a 

brief overview of the requirements of these programs and presents summary 

statistics on the implementation of these programs, contrasting the 

30 
P.36 

Table 5 Long-term Impacts on Production of Cost 

Increases Under Waste Management Scenarios 

(Percent decrease from Baseline) 

Scenario 1990 2000 2010 

Intermediate 10% 

Intermediate 70% 

Subtitle C 10% 

Subtitle C 70% 

Subtitle C-l 10% 

Subtitle C-l 70% 

ND = Not detected. 

ND 

ND 

ND 

3.2% 

ND 

2.1% 

ND 

1.4% . 

4.2% 

18.1% 

1.4% 

12.5% 

ND 

1.6% 

6.3% 

28.6% 

3.2% 

19.0% 

31 
P.37 

numbers of wells and other operations regulated by these programs with 

resources available to implement regulatory requirements. In an effort 

to characterize these State programs, EPA evaluated programs in the major 

oil- and gas-producing States: Alaska, Arkansas, California, Colorado, 

Kansas, Louisiana, Michigan, New Mexico, Ohio, Oklahoma, Texas, West 

Virginia, and Wyoming. Chapter VII presents the results of this analysis. 

Almost all of the States evaluated have general performance standards 

that require reserve and produced water pits to be designed and operated 

to prevent ground-water or surface-water degradation. Furthermore, most 

of the States have liner and permit requirements for these pits. 

Specific pit requirements generally depend on the pit's location, size, 

and contents. Deadlines for pit closure range from 60 days to 1 year 

after drilling has ceased. 

Practices for the disposal of reserve pit wastes vary widely across 

the nation. Most of the States studied in this report have established 

concentration limits for land application and surface-water discharge of 

reserve pit contents, while a few States prohibit these disposal methods 

altogether. Nearly all of the States allow annular injection of reserve 

pits contents but place limits on the injection pressure and require that 

the surface casing extend below freshwater aquifers. 

Disposal of produced water is also closely regulated by many of the 

States studied in this report. A majority of the States do not allow 

produced water discharge by nonstripper wells to onshore surface waters; 

however, discharge to coastal waters and discharges for beneficial uses 

are more common. Where discharges are allowed, the States generally 

require permits and compliance with established concentration limits. 

Most of the surveyed States have general standards that require 

underground injection operations to be protective of freshwater 

aquifers. These States generally require casings that extend below the 

32 
P.38 

lowest underground sources of drinking water and mechanical integrity 

tests that must be conducted before injection begins and every 5 years 

thereafter. Areas of review for identification of improperly plugged 

abandoned wells range from 1/4 mile to 2 1/2 miles. Finally, all of the 

surveyed States require plugging of oi'l and gas wells within 60 days to 1 

year from the time at which operations ceased. 

The only current information on implementation of these programs that 

EPA was able to gather relates to enforcement capabilities. The surveyed 

States have designated from 8 to 120 positions per State for enforcement 

of their oil and gas waste requirements. 

The Federal Underground Injection Control Program _' iC .^"^ 

^ " ^ 

The Underground Injection Control (UIC) program was established under 

Part C of the Safe Drinking Water Act (SDWA) to protect USDWs from 

endangerment by subsurface emplacement of fluids. Part C of the SDWA 

requires EPA to promulgate regulations establishing minimum requirements 

for State programs and, in cases where States cannot or will not assume 

primary enforcement responsibility, to promulgate State-specific Federal 

regulations. 

In 1980, Congress amended the SDWA by adding Section 1425. This 

section allows States to demonstrate the effectiveness of their in-place 

regulatory programs for Class II (oil- and gas-related) wells in lieu of 

demonstrating that they meet the minimum requirements specified in the 

UIC regulations. In order to be deemed effective, State Class II 

programs have to meet the same statutory requirements as the other 

classes of wells, including prohibition of unauthorized injection and 

protection of USDWs. All Class II programs currently approved by EPA 

were approved under Section 1425. 

33 
P.39 

Because of the large number of Class II wells, the Federal 

regulations allow for authorization by rule for existing enhanced 

recovery wells (i.e., wells that were injecting at the time that a State 

program was approved or prescribed by EPA). Wells authorized by rule are 

subject to requirements similar to those of permitted wells but are not. 

subject to the administrative difficulties of obtaining a permit. During 

the first 5 years of the program, EPA and the States have been conducting 

file reviews on all wells authorized by rule. File reviews are 

assessments of technical issues that would normally be part of a permit 

decision and are conducted to ensure that injection wells not subject to 

permitting are technically adequate and will not endanger USDWs. 

In approving programs under Section 1425 the Agency has accepted 

variations among States. This is consistent with the requirements of the 

SDWA. However, the program has been in place for several years now and 

the Agency has acquired experience in implementation of the regulations. 

Based on this experience, the Agency has begun- to look at the adequacy of 

the current requirements and may eventually require more specificity and 

less variation among States. 

Bureau of Land Management 

Exploration, development, drilling, and production of onshore oil and 

gas on Federal and Indian lands are regulated separately from non-Federal 

lands. This separation of authority is significant for western States 

where oil and gas activity on Federal and Indian lands is a large portion 

of statewide activity. The Department of Interior administers its 

regulatory program through the Bureau of Land Management (BLM) offices in 

the producing States. These offices generally have procedures in place 

for coordination with State agencies on regulatory requirements. The 

Bureau works closely with the U.S. Forest Service to define surface 

stipulations for using Federal forests and Federal grasslands. 

34 
P.40 

Historically, BLM has controlled oil and gas activities through 

Notices to Lessees (NTLs) and through the issuance of permits. Leases, 

where drilling is to take place, must be covered by a bond. A single 

lease bond is currently $10,000. Statewide bonds are $25,000; 

nationwide bonds are $150,000. BLM considers reserve pits to be 

temporary, and except in special circumstances they do not have to be 

lined. Produced waters may be disposed of by underground injection, by 

disposal into lined pits, or "by other acceptable methods." When a dry 

hole is drilled, plugging must take place before removal of the drilling 

equipment. Ninety days after a well ceases production, the operator may 

request approval for temporary abandonment. Thereafter, reapproval for 

abandonment status may be required every 1 to 2 years. Plugging 

requirements for wells are determined by the BLM District Office. 

Implementation of State and Federal Programs 

Tables 6 and 7 present statistics for State' and Federal 

implementation of regulatory programs. 

CONCLUSIONS 

From the analysis conducted for this report, it is possible to draw a 

number of general conclusions concerning the management of oil and gas 

wastes. The conclusions are presented below. 

Available waste management practices vary in their environmental 

performance. 

Based on its review of current and alternative waste management 

practices, EPA concludes that the environmental performance of existing 

waste management practices and technologies varies significantly. The 

reliability of waste management practices will depend largely on the 

environmental setting. However, some methods will generally be less 

35 
Table 6 Slsta Enlorcamanl alalrli 

Slaia Oas Production Oil Production Oas walla Oil walla ln|actlon walla Naw walls Agancy Parsonnsl* 

oa 

Alaska 

Arkansas 

Caatomia 

Kansaa 

Louisiana 

NawUaiico 

Ohio 

Oklahoma 

Pennsylvania 

Texas 

Wast Virginia 

Wyoming 

316.000 Mmd 1066 

194.483 Mmd 1985 

493.000 Mmd 198S 

466.600 Mmd 1984 

5.867.000 Mmd 1984 

893.300 Mmd 1985 

182.200 Mmd 1985 

1.996.000 Mmd 1984 

166.000 Mmd 1984 

5.805.000 Mmd 1985 

142.500 Mmd 1986 

597.896 Mmd 1985 

661.309,821 bbl 1986 

19,715.691 bbl 1985 

423,900.000 bbl 1985 

75.723.000 bbl 1984 

449,545.000 bbl 1984 

78.500.000 bbl 1985 

14.987.592 bbl 1985 

153.250.000 bbl 1984 

4.825.000 bbl 1984 

830.000.000 bbl 1985 

3.600.000 bbl 1986 

130.984.917 bbl 198S 

104 

2.492 

1.566 

12.680 

14.436 

18.308 

31.343 

23.647 

J 

24.050 

68.811 

32.500 

2.220 

1.191 

9.490 

55.079 

57.633 

25.823 

21.986 

29.210 

99.030 

20.739 

210.000 

15.896 

12.218 

472 Class! 

425 EOR 

47 Disposal 

1.211 Class U 

239 EOR 

972 Disposal 

11.066 Class II 

10.047 EOR 

1,019 Disposal 

14.902 Class II 

9.366 EOR 

5.536 Disposal 

4.436 Class II 

1.283 EOR 

3.153 Disposal 

3.871 Claw II 

3.508 EOR 

363 Disposal 

3.966 Class II 

127 EOR 

3.829 Disposal 

22.803 Class II 

14,901 EOR 

7,902 Disposal 

6,183 Class II 

4.315 EOR 

1,868 Disposal 

53,141 Class II 

45.223 EOR 

7.918 Disposal 

761 Class It 

687 EOR 

74 Disposal 

5.880 Class II 

5.257 EOR 

623 Disposal 

100 new onshore weHs 

completed in 1965 

1.055 naw welts 

completed In 1985 

3.413 new walls 

completed in 1985 

6.025 new weds 

completed in 1985 

5.447 new onshore 

waks completed 1985 

1.747 new weds 

compiled In 1985 

6.297 new weDs 

completed in 1985 

9.176 new wells 

compleled in 1985 

4.627 new weds 

compleled in 1985 

25.721 new weds 

compleled in 1985 

1.839 new weUs 

compleled in 1985 

1.735 new weBs 

completed In 1985 

Ol and Gas Conservation Commission 

Department d Environmental Conservation 

Arkansas Oil and Gas Commission 

Department ol Polulion Control and Ecology 

Conservation Dept. Division d Oil and Gas 

Department ot Fish and Game 

Kansas Corporation Commission 

Department d Environmental Ouafly 

Otlica ol Conservation - Injection and Mining 

Energy and Minerals Department. 

Oil Conservation Division 

Ohio Department ol Natural Rasourcas. 

Division ot Oil and Gas 

Oklahoma Corporation Commission 

Department ot Environmental Resources. 

Bureau d Oil and Gas Management 

Texas Railroad Commission 

Wesl Virginia Department ol Energy 

Ol and Gas Conservation Commission 

Department ol Environmental dually 

8 enforcement positions 

8 enforcement positions 

7 enforcement positions 

2 enforcement positions 

31 enforcement positions 

30 enlorcamanl positions 

32 enforcement positions 

36 enforcement positions 

10 enforcement positions 

66 enforcement positions 

52 enforcement positions 

34 enforcement positions 

120 enforcement positions 

IS enlorcamanl positions 

7 enforcement positions 

4.5 enforcement positions 

'Only field slat! are Included in total enforcement positions. 
P.42 

Tablo 7 BLM Enforcement Matrix* 

Of flea Other States Producing oil and gaa Nonproducing oil and gaa 

location for which offlca laaaaa leaaee" 

Is responsible 

Alaska 

California 

Colorado 

Idaho 

Mississippi 

Alabama 

Arkansas 

Rohda 

Kentucky 

Louisiana 

Virginia 

Total 

Montana 

North Dakota 

South Dakota 

Total 

Nevada 

Naw Mexico 

Arizona 

Kansas 

Oklahoma 

Texas 

Total 

Oregon 

Utah 

Wlaconain 

Maryland 

Michigan 

Misaoun 

Ohio 

Pennaylania 

West Virginia 

Total 

Wyoming 

Nebraska. 

Total 

Total 

43 

305 

3,973 

0 

116 

12 

161 

1 

13 

121 

1 

425 

958 

456 

93 

1.512 

43 

5,725 

10 

150 

Z767 

61 

8.713 

0 

1.664 

0 

2 

28 

1 

33 

6 

48 

116 

5.037 

42 

5.079 

22.037 

8.443 

1.383 

4.463 

471 

1.519 

567 

1.099 

0 

65 

487 

523 

4J260 

4,721 

1.991 

572 

7284 

3.045 

9.306 

386 

227 

2.754 

279 

12,952 

1513 

7222 

0 

11 

603 

6 

69 

1 

54 

844 

28.044 

582 

28.628 

102251 

* Oil and gas inspectors working in tho field as of March 30,1987. At that lima 

there ware sight vacancies nationwide. 

" Includes leasas that hava never baan drilled, hava baan drillad and abandonad, 

or are producing watts that hava baan temporarily shut down. 

37 

Paraonnal 

(for producing laasas only) 

1 enforcement position 

7 enforcement positions 

10 enforcement positions 

0 enforcement positions 

3 enforcement positions 

12 enforcement positions 

1 enforcement position 

43 enforcement positions 

0 

10 enforcement positions 

1 enforcement position 

27 enforcement positions 

115 enforcement positions 

-
P.43 

reliable than others because of more direct routes of potential exposure 

to contaminants, lower maintenance and operational requirements, 

inferiority of design,, or other factors. Dependence on less reliable 

methods can in certain vulnerable locations increase the potential for 

environmental damage related to malfunctions and improper maintenance. 

Examples of technologies or practices that are less reliable in locations 

vulnerable to environmental damage include: 

e Annular disposal of produced water (see damage case OH 38, 

page IV-16); 

• Landspreading or roadspreading of reserve pit contents (see 

damage case WV 13, page IV-24); 

• Use of produced water storage pits (see damage case AR 10, 

page IV-36); and 

• Surface discharges of drilling waste and produced water to 

sensitive systems such as estuaries or ephemeral streams (see 

damage cases TX 55, page IV-49; TX 31, page IV-50; TX 29, 

page IV-51; WY 07, page IV-60; and CA 21, page IV-68). 

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. 

Current technologies and practices for the management of wastes from 

oil and gas operations are well established, and their environmental 

performance is generally understood. Improvements in State regulatory 

requirements over the past several years are tending to increase use of 

more desirable technologies and practices and reduce reliance on others. 

Examples include increased use of closed systems and underground 

injection and reduced reliance on produced water storage and disposal 

pits. 

Long-term improvements in waste management need not rely, however, 

purely on increasing the use of better existing technology. The Agency 

does foresee the possibility of significant technical improvements in 

future technologies and practices. Examples include incineration and 

other thermal treatment processes for drilling fluids; conservation, 

recycling, reuse, and other waste minimization techniques; and wet air 

oxidation and other proven technologies that have not yet been applied to 

oil and gas operations. 

38 
P.44 

Because of Alaska's unique and sensitive tundra environment, there 

has been special concern about the environmental performance of waste 

management practices on the North Slope. Although there are limited and 

preliminary data that indicate some environmental impacts may occur, 

these data and EPA's initial analysis do not indicate the need to curtail 

current or future oil exploration, development, and production operations 

on the North Slope. However, there is a need for more environmental'data 

on the performance of existing technology to provide assurance that 

future operations can proceed with minimal possible adverse impacts on 

this sensitive and unique environment. The State of Alaska has recently 

enacted new regulations which will provide additional data on these 

practices. . 

EPA is concerned in particular about the environmental desirability 

of two waste management practices used in Alaska: discharge of reserve 

pit supernatant onto tundra and road application of reserve pit contents 

as a dust suppressant. Available data suggest that applicable discharge 

limits have sometimes been exceeded. This, coupled with preliminary 

biological data on wildlife impacts and tundra and surface water 

impairment, suggests the need for further examination of these two 

practices with respect to current and future operations. The new 

regulations recently enacted by the State of Alaska should significantly 

reduce the potential for tundra and wildlife impacts. 

Increased segregation of waste may help improve management of oil and 

gas wastes. 

The scope of the exemption, as interpreted by EPA in Chapter 11 of 

this report, excludes certain relatively low-volume but possibly 

high-toxicity wastes, such as unused pipe dope, motor oil, and similar 

materials. Because some such wastes could be hazardous and could be 

segregated from the large-volume wastes, it may be appropriate to require 

39 
P.45 

that they be segregated and that some of these low-volume wastes be 

managed in accordance with hazardous waste regulations. While the Agency 

recognizes that small amounts of these materials may necessarily become 

mixed with exempt wastes through normal operations, it seeks to avoid any 

deliberate and unnecessary use of reserve pits as a disposal mechanism. 

Segregation of these wastes from high-volume exempt wastes appears to be 

desirable and should be encouraged where practical. 

Altnough this issue is not explicitly covered in Chapter VII, EPA is 

aware that some States do require segregation of certain of these 

low-volume wastes. EPA does not have adequate data on which to judge 

whether these State requirements are adequate in coverage, are 

enforceable, are environmentally effective, or could be extended to 

general operations across the country. The Agency concludes that further 

study of this issue is desirable. 

Stripper operations constitute a special subcategory of the oil and gas 

industry. 

Strippers cumulatively contribute approximately 14 percent of total 

domestic oil production. As such, they represent an economically 

important component of the U.S. petroleum industry. Two aspects of the 

stripper industry raise issues of consequence to this study. 

First, generation of production wastes by strippers is more 

significant than their total petroleum production would indicate. Some 

stripper wells yield more than 100 barrels of produced water for each 

barrel of oil, far higher on a percentage production basis than a typical 

new well, which may produce little or no water for each barrel of oil. 

Second, stripper operations as a rule are highly sensitive to small 

fluctuations in market prices and cannot easily absorb additional costs 

for waste management. 

40 
P.46 

Because of these two factors—inherently high waste-production rates 

coupled with economic vulnerability--EPA concludes that stripper 

operations constitute a special subcategory of the oil and gas industry 

that should be considered independently when developing recommendations 

for possible improvements in the management of oil and gas wastes. In 

the event that additional Federal regulatory action is contemplated, such 

special consideration could indicate the need for separate regulatory 

actions specifically tailored to stripper operations. 

Documented damage cases and quantitative modeling results indicate 

that, when managed in accordance with State and Federal requirements, 

exempted oil and gas wastes rarely pose significant threats to human 

health and the environment. 

Generalized modeling of human health risks from current waste 

management practices suggests that risks from properly managed operations 

are low. The damage cases researched in the course of this project, 

however, indicate that exempt wastes from oil and gas exploration, 

development, and production can endanger human health and cause 

environmental damage when managed in violation of existing State 

requirements. 

Damage Cases 

In a large portion of the cases developed for this study, the types 

of mismanagement that lead to such damages are illegal under current 

State regulations although a few were legal under State programs at the 

time when the damage originally occurred. Evidence suggests that 

violations of regulations do lead to damages. It is not possible to 

determine from available data how frequently violations occur or whether 

violations would be less frequent if new Federal regulations were imposed. 

Documented damages suggest that all major types of wastes and waste 

management practices have been associated to some degree with 

41 
P.47 

endangerment of human health and damage to the environment. The 

principal types of wastes responsible for the damage cases include 

general reserve pit wastes (primarily drilling fluids and drill cuttings, 

but also miscellaneous wastes such as pipe dope, rigwash, diesel fuel, 

and crude oil); fracturing fluids; production chemicals; waste crude oil; 

produced water; and a variety of miscellaneous wastes associated with 

exploration, development, or production. The principal types of damage 

sometimes caused by these wastes include contamination of drinking-water 

aquifers and foods above levels considered safe for consumption, chemical 

contamination of livestock, reduction of property values, damage to 

native vegetation, destruction of wetlands, and endangerment of wildlife 

and impairment of wildlife habitat. 

Risk Modeling 

The results of the risk modeling suggest that of the hundreds of 

chemical constituents detected in both reserve pits and produced fluids, 

only a few from either source appear to be of concern to human health and 

the environment via ground-water and surface water pathways. The 

principal constituents of potential concern, based on an analysis of 

their toxicological data, their frequency of occurrence, and their 

mobility in ground water, include arsenic, benzene, sodium, chloride, 

boron, cadmium, chromium, and mobile salts. All of these constituents 

were included in the quantitative risk modeling; however, boron, cadmium, 

and chromium did not produce risks or resource damages under the 

conditions modeled. 

For these constituents of potential concern, the quantitative risk 

modeling indicates that risks to human health and the environment are 

very small to negligible when wastes are properly managed. However, 

although the risk modeling employed several conservative assumptions, it 

was based on a relatively small sample of sites and was limited in scope 

to the management of drilling waste in reserve pits, the underground 

injection of produced water, and the surface water discharge of produced 

water from stripper wells. Also, the risk analysis did not consider 

42 
P.48 

migration of produced water contaminants through fractures or unplugged 

or improperly plugged and abandoned wells. Nevertheless, the relatively 

low risks calculated by the risk modeling effort suggest that complete 

adherence to existing State requirements would preclude most types of 

damages. 

Damages may occur in some instances even where wastes are managed in 

accordance with currently applicable State and Federal requirements. 

There appear to be some instances in which endangerment of human 

health and damage to the environment may occur even where operations are 

in compliance with currently applicable State and Federal requirements. 

Damage Cases 

Some documented damage cases illustrate the potential for human 

health endangerment or environmental damage from such legal practices as 

discharge to ephemeral streams, surface water discharges in estuaries in 

the Gulf Coast region, road application of reserve pit contents and 

discharge to tundra in the Arctic, annular disposal of produced waters, 

and landspreading of reserve pit contents. 

Risk Modeling 

For the constituents of potential concern, the quantitative 

evaluation did indicate some situations (less than 5 percent of those 

studied) with carcinogenic risks to maximally exposed individuals higher 

-4 then 1 in 10,000 (1x10 ) and sodium levels in excess of interim limits 

for public drinking water supplies. Although these higher risks resulted 

only under conservative modeling assumptions, including high (50th 

percentile) concentration levels for the toxic constituents, they do 

indicate potential for health or environmental impairment even under the 

43 
P.49 

general assumption of compliance with standard waste management 

procedures and applicable State and Federal requirements. Quantitative 

risk modeling indicates that there is an extremely wide variation (six or 

more orders of magnitude) in health and environmental damage potential 

among different sites and locations, depending on waste volumes, wide 

differences in measured toxic constituent concentrations, management 

practices, local hydrogeological conditions, and distances to exposure 

points. 

Unplugged and improperly plugged abandoned wells can pose significant 

environmental problems. 

Documentation assembled for the damage cases and contacts with State 

officials indicate that ground-water damages associated with unplugged 

and improperly plugged abandoned wells are a significant concern. 

Abandoned disposal wells may leak disposed wastes back to the surface or 

to usable ground water. Abandoned production wells may leak native 

brine, potentially leading to contamination of usable subsurface strata 

or surface waters. 

Many older wells, drilled and abandoned prior to current improved 

requirements on well closure, have never been properly plugged. Many 

States have adequate regulations currently in place; however, even under 

some States' current regulations, wells are abandoned every year without 

being properly plugged. 

Occasionally companies may file for bankruptcy prior to implementing 

correct plugging procedures and neglect to plug wells. Even when wells 

are correctly plugged, they may eventually leak in some circumstances in 

the presence of corrosive produced waters. The potential for 

environmental damage occurs wherever a well can act as a conduit between 

usable ground-water supplies and strata containing water with high 

44 
P.50 

chloride levels. This may occur when the high-chloride strata are 

pressurized naturally or are pressurized artificially by disposal or 

enhanced recovery operations, thereby allowing the chloride-rich waters 

to migrate easily into usable ground water. 

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. 

Damage cases indicate that surface water discharges of wastes from 

exploration, development, and production operations have caused damage or 

danger to lakes, ephemeral streams, estuaries, and sensitive environments 

when such discharges are not carried out properly under applicable 

Federal and State programs and regulations. This is particularly an 

issue in areas where operations have not yet received permits under the 

Federal NPDES program, particularly along the Gulf Coast, where permit 

applications have been received but permits have not yet been issued, and 

on the Alaskan North Slope, where no NPDES permits have been issued. 

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. 

The most costly hypothetical hazardous waste management program 

evaluated by EPA could reduce total domestic oil production by as much as 

18 percent by the year 2000. Because of attendant world price increases, 

this would result in an annual direct cost passed on to consumers of over 

$6 billion-per year. This scenario assumes that 70 percent of all 

drilling and production wastes would be subject to the current 

requirements of Subtitle C of RCRA. If only 10 percent of drilling 

wastes and produced waters were found to be hazardous, Subtitle C 

regulation would result in a decline of 4 percent in U.S. production and 

45 
P.51 

a $1.2 billion cost increase to consumers, compared with baseline costs, 

in the year 2000. 

EPA also examined the cost of a Subtitle C scenario in which produced 

waters injected for the purpose of enhanced oil recovery would be exempt 

from Subtitle C requirements. This scenario yielded production declines 

ranging from about 1.4 to 12 percent and costs passed on to consumers 

ranging from $0.7 to $4.5 billion per year, depending on whether 10 

percent or 70 percent of the wastes (excluding produced waters injected 

for enhanced oil recovery) were regulated as hazardous wastes. 

These Subtitle C estimates do not, however, factor in all of the 

Hazardous and Solid Waste Act Amendments relating to Subtitle C land 

disposal restrictions and corrective action requirements currently under 

regulatory development. If these two requirements were to apply to oil 

and gas field wastes, the impacts of Subtitle C regulation would be 

Substantially increased. 

The Agency also evaluated compliance costs and economic impacts for 

an intermediate regulatory scenario in which moderately toxic drilling 

wastes and produced waters would be subject to special RCRA requirements 

less stringent than those of Subtitle C. Under this scenario, affeted 

drilling wastes would be managed in pits with synthetic liners, caps, and 

ground-water monitoring programs and regulated produced waters would 

continue to be injected into Class II wells (with no surface discharges 

allowed for produced waters exceeding prescribed constituent 

concentration-limits). This scenario would result in a domestic 

production decline, and a cost passed on to consumers in the year 2000, 

of 1.4 percent and S400 million per year, respectively, if 70 percent of 

46 
P.52 

the wastes were regulated. If only 10 percent of the wastes were subject 

to regulation, this intermediate scenario would result in a production 

decline of less than 1 percent and an increased cost to consumers of 

under $100 million per year. 

The economic impact analysis also estimates effects on U.S. foreign 

trade and State tax revenues. By the year 2000, based on U.S. Department 

of Energy models, the EPA cost results projected an increase in national 

petroleum imports ranging from less than 100 thousand to 1.1 million 

barrels per day and a corresponding increase in the U.S. balance of 

payments deficit ranging from less than $100 thousand to $18 billion 

annually, depending on differences in regulatory scenarios evaluated. 

Because of the decline in domestic production, aggregated State tax 

revenues would be depressed by an annual amount ranging from a few 

million to almost a billion dollars, depending on regulatory assumptions. 

Regulation of all exempt wastes under full, unmodified RCRA Subtitle C 

appears unnecessary and impractical at this time. 

There appears to be no need for the imposition of full, unmodified 

RCRA Subtitle C regulation of hazardous waste for all high-volume exempt 

oil and gas wastes. Based on knowledge of the size and diversity of the 

industry, such regulations could be logistically difficult to enforce and 

could pose a substantial financial burden on the oil and gas industry, 

particularly on small producers and stripper operations. Nevertheless, 

^elements of the Subtitle C regulatory program may be appropriate in 

select circumstances. Reasons for the above tentative conclusion are 

described below. 

The Agency considers imposition of full, unmodified Subtitle C 

regulations for all oil and gas exploration, development, and production 

wastes to be unnecessary because of factors such as the following. 

47 
P.53 

Damages and risks posed by oil and gas operations appear to be 

linked, in the majority of cases, to violations of existing State 

and Federal regulations. This suggests that implementation and 

enforcement of existing authorities are critical to proper 

management of these wastes. Significant additional environmental 

protection could be achieved through a program to enhance 

compliance with existing requirements. 

State programs exist to regulate the management of oil and gas 

wastes. Although improvements may be needed in some areas of 

design, implementation, or enforcement of these programs, EPA 

believes that these deficiencies are correctable. 

Existing Federal programs to control underground injection and 

surface water discharges provide sufficient legal authority to 

handle most problems posed by oil and gas wastes within their 

purview. 

The Agency considers the imposition of full Subtitle C regulations 

for all oil and gas exploration, development, and production wastes ,to be 

impractical because of factors such as the following: 

• EPA estimates that the economic impacts of imposition of full 

Subtitle C regulations (excluding the corrective action and land 

disposal restriction requirements), as they would apply without 

modification, would significantly reduce U.S. oil and gas 

production, possibly by as much as 18 percent. 

• If reserve pits were considered to be hazardous waste management 

facilities, requiring permitting as Subtitle C land disposal 

facilities, the administrative procedures and lengthy application 

processes necessary to issue these permits would have a drastic 

impact on development and production. 

e Adding oil and gas operations to the universe of hazardous waste 

generators would potentially add hundreds of thousands of sites to 

the universe of hazardous waste generators, with many thousands of 

units being added and subtracted annually. 

• Manifesting of all drilling fluids and produced waters offsite to 

RCRA Subtitle C disposal facilities would pose difficult.logistical 

and administrative problems, especially for stripper operations, 

because of the large number of wells now in operation. 

48 
P.54 

States have adopted variable approaches to waste management. 

State regulations governing proper management of Federally exempt oil 

and gas wastes vary to some extent to accommodate important regional 

differences in geological and climatic conditions, but these regional 

environmental variations do not fully explain significant variations in 

the content, specificity, and coverage of State regulations. For 

example, State well-plugging requirements for abandoned production wells 

range from a requirement to plug within 6 months of shutdown of 

operations to no time limit on plugging prior to abandonment. 

Implementation of existing State and Federal requirements is a central 

issue in formulating recommendations in response to Section 8002(m). 

A preliminary review of State and Federal programs indicates that 

most States have adequate regulations to control the management of oil 

and gas wastes. Generally, these State programs are improving. Alaska, 

for example, has just promulgated new regulations. It would be 

desirable, however, to enhance the implementation of, and compliance 

with, certain waste management requirements. 

Regulations exist in'most States to prohibit the use of improper 

waste management practices that have been shown by the damage cases to 

lead to environmental damages and endangerment of human health. 

Nevertheless, the extent to which these regulations are implemented and 

enforced must be one of the key factors in forming recommendations to 

Congress on appropriate Federal and non-Federal actions. 

49 
P.55 

RECOMMENDATIONS 

Following public hearings on this report, EPA will draw more 

specific conclusions and make final recommendations to Congress regarding 

whether there is a need for new Federal regulations or other actions. 

These recommendations will be made to Congress and the public within 

6 months of the publication of this report. 

Use of Subtitle 0 and other Federal and State authorities should be 

explored as a means for implementing any necessary additional controls on 

oil and gas wastes. 

EPA has concluded that imposition of full, unmodified RCRA Subtitle C 

regulation of hazardous waste for all exempt oil and gas wastes may be 

neither desirable nor feasible. The Agency believes, however, that 

further review of the current and potential additional future use of 

other Federal and State authorities (such as Subtitle D authority under 

RCRA and authorities under the Clean Water Act and the Safe Drinking 

Water Act) is desirable. These authorities could be appropriate for 

improved management of both exempt and nonexempt, high-volume or 

low-volume oil and gas wastes. 

EPA may consider undertaking cooperative efforts with States to review 

and improve the design, implementation, and enforcement of existing State 

and Federal programs to manage oil and gas wastes. 

EPA has concluded that most States have adequate regulations to 

control most impacts associated with the management of oil and gas 

wastes, but it would be desirable to enhance the implementation of, and 

compliance with, existing waste management requirements. EPA has also 

50 
P.56 

concluded that variations among States in the design and implementation 

of regulatory programs warrant review to identify successful measures in 

some States that might be attractive to other States. For example, EPA 

may want to explore whether changes in State regulatory reporting 

requirements would make enforcement easier or more effective. EPA 

therefore recommends additional work, in cooperation with the States, to 

explore these issues and to develop improvements in the design, 

implementation, and enforcement of State programs. 

During this review, EPA and the States should also explore 

nonregulatory approaches to support current programs. These might 

include development of training standards, inspector training and 

certification programs, or technical assistance efforts. They might also 

involve development of interstate commissions or other organizational 

approaches to address waste management issues common to operations in 

major geological regions (such as the Gulf Coast, Appalachia, or the 

Southwest). Such commissions might serve as a forum for discussion of 

regional waste management efforts and provide a focus for development and 

delivery of nonregulatory programs. 

The industry should explore the potential use of waste minimization, 

recycling, waste treatment, innovative technologies, and materials 

substitution as long-term improvements in the management of oil and gas 

wastes. 

Although in the near term it appears that no new technologies are 

available for making significant technical improvements in the management 

of exempt wastes from oil and gas operations, over the long term various 

innovative technologies and practices may emerge. The industry should 

explore the use of innovative approaches, which might include 

conservation and waste minimization techniques for reducing generation of 

drilling fluid wastes, use of incineration or other treatment 

technologies, and substitution of less toxic compounds wherever possible 

in oil and gas operations generally. 

51