# D ISHONORABLE 

# D ISCHARGES 

# :

H OW 

# T O 

# S HIFT 

# C OOK 

# I

NLET 

# ’ S



# O FFSHORE 

# O IL 

# & G AS 

# O PERATIONS TO



# Z ERO 

# D ISCHARGE

Lois N. Epstein, P.E.

Senior Engineer and Oil & Gas Industry Specialist

May 2006

# D ISHONORABLE 

# D ISCHARGES 

# :

H OW 

# T O 

# S HIF T 

# C OOK 

# I

NLET 

# ’ S



# O FFSHORE 

# O IL 

# & G AS 

# O PERATIONS TO



# Z ERO 

# D ISCHARGE

Lois N. Epstein, P.E.

Senior Engineer and Oil & Gas Industry Specialist

Cook Inletkeeper

May 2006

Printed on 100% post

- consumer waste, processed chlorine

- free pap er

### Dishonorable Discharges ii Acknowledgements

The Dishonorable Discharges report on Cook Inlet offshore oil and gas platform discharge s en

tering Cook Inlet

was made possible with the generous support of the following : Acorn Foundation, Alaska Conservation

Foundation, Alaska Ocean s Network, Ben and Jerry’s Foundation, Deer Creek Foundation, Oak Foundation,

and Unitarian Universalist Funding Program. Cook Inletkeeper also th anks the following general s upport

funders: Bullitt Foundation, Hugh and Jane Ferguson Foundation, Harder Fou ndation, George H. and Jane A.

Mifflin Memorial Fund, Patagonia, Skaggs Foundation, True North Foundation, WestWind Foundation, and

Wolfensohn Family Foundation

.

The author greatly

thank s the report’s technical and editorial reviewers who immensely streng thened the

document : chemical engineer John Louie who made valuable comments at an early stage of writing, two former

Alaska Department of Environmental Conservation employees with background and experience in oil and gas

industry operations, Brenda Trefon from the Kenaitze Tribe, Vicki Clark from Trustees for Alaska, and Cook

Inletkeeper Executive Director Bob Shavelson. Thanks also to Will Schlein of Cook Inletkeeper for his

invaluable work on Figure 1.

Comments on the study should be directed to:

Lois N. Epstein, P.E.

Cook Inletkeeper

308 G S t ., Suite 219

Anchorage, Alaska 99501

Phone: (907) 929

- 9371

Fax: (907) 929

- 1562

lois@inletkeeper.org

May 2006

© 2006 Cook Inletkeeper

About the author : Lois N. Epste in, P.E. has worked for Cook Inlet k eeper as a Senior Engineer and an Oil & Gas

Industry Specialist since 2001. Previously she worked for Environmental Defense (formerly Environmental

Defense Fund) in Washington, D.C. Prior to these positions, Ms. Epstei n worked for two private consulting firms

and the U.S. EPA Region 9 Office of Water

. She has presented invited testimony before the U.S. Congress on ten

occasions, including four times representing Cook Inletkeeper

. Ms. Epstein currently serves as a part

- time

consultant for the Pipeline Safety Trust, a non

- profit organization dedicated to improved fuel transportation safety,

located in Bellingham, Washington.

Ms. Epstein is a licensed Professional Engineer in the States of Alaska and Maryland and a mem ber of the federal

Office of Pipeline Safety’s advisory committee on hazardous liquid pipelines. She has a masters degree from

Stanford University in Civil Engineering with a specialization in environmental engineering and science, and

undergraduate degre es from both Amherst College (in English) and MIT (in mechanical engineering). President

Clinton nominated her

in October 2000 to the Chemical Safety and Hazard Investi gation Board, however the U.S.

Senate did not vote on her nomination before the end of the 106th Congress.

About Cook Inletkeeper :

Cook Inletkeeper is a community

- based nonprofit organization dedicated to

protecting Alaska’s 47,000 square mile Cook Inlet watershed and the life it sustains , and a member of the

national Waterkeeper Alliance

. Cook Inletkeeper has office s in Homer and Anchorage. www.inletkeeper.org

### Dishonorable Discharges iii D ishonorable Discharges: How to Shif t Cook Inlet’s

O ffshore Oil and Gas Operations to Zero Discharge

Table of Contents_____________ _________________________________________________________Page

Acknowledgements

............ .......................................................................................... ii

Executive Summary

......... ............................................................................................ v

I. Introduction and Purpose

.................................................................................... 1

II. Why Care ?

............ .......................................................................................... 3

Background on the Cook Inlet exemption

...................................................... 4

Who and what are affected by the Cook Inlet exemption ................................... 5

III. Cook Inlet Offshore Drilling Production and Inje ction Data

.................................... ..... 8

IV. Cook Inlet Produced Water Discharge Data

............................................................ 11

Produced water discharge locations, volume , and composition ........................... 11

Toxic chemicals in produced water discharges ................................................ 15

V. Cook Inlet Offshore Drilli ng Waste Discharges ......................................................... 15

VI. Current Conditions Warrant a Shift to Zero Discharge............................................. ... 16

Economic and Technological Change s

D rilling economics : produced water

................................................ .... . 17

D rilling economics : drilling wa stes

...................................................... 22



### D isposal technology : drilling wastes

................................................... . 23

New S cientific and Traditional Ecological Knowledge

Oil impacts on salmon

......................................................... ......... ... 24

C ontamination in Cook Inlet subsistence foods

..................... ................ 25

Cook Inlet b

eluga whales

................................................................. 25

VII. Conclusion

............................................................................................. ......... 27

Appendi ces

1 EPA’s Regulations for Coastal Oil and Gas Operations ............................................... 29

2 Discharge Monitoring Reports for Pr oduced Water from Cook Inlet’s

Offs hore Platforms for 2005 ................................................................................. 31

### Dishonorable Discharges iv Table of Contents______________________________________________________________________Page

Tables

ES

- 1

- Cook Inlet Discharge Comparison between 1999 and the Present ...................................... vii

1

- Cook Inlet Offshore Platform Information

...................................... .. ................................ 3

2

- Total Cook Inlet Oil, Natural Ga s, and Produce d Water Production and Sea w ater Injection

from Start

- up t hrough 200 5

..................................................................... .................... 9

3

- Cook Inlet Platform and Onshore Facility Produced Water Discharge Locations,

Currently and in the Draft Perm it................................................................................. 13

4

- Produced Water Generation Rate and Annual Average Concentrations of EPA

- Permitted

P ollutants , 2005

............ ............................................................................................ 14

5

- Breakdown of Produced Water and Oil and Grease Generation by Cook Inlet Discharger , 2005

.. 14

6

- We ighted Average Concentration of Metal s in Offshore Discharges to Cook Inlet , 2005...

... ... ..... 15

7

- Annual Quantity of Metal s in Offshore Drilling Discharges to Cook Inlet , 2005 ......................... 15

8

- Active Class II Disposal Wells in the Cook Inlet Watershed

.................................................. 22

9

- Active Drilling Waste Management Facilities in the Cook Inlet Watershed ............................... 23

Figures

1

- Cook Inlet’s Offshore Oil and Gas Platforms and Related Onshore Facilitie s

. ........................... 2

2

- Production f

rom Offshore Cook Inlet Wells Through 200 5 ................................................... 8

3

- Produced Water vs. Injected Sea w ate r by Platform through 2005 .......................................... 10

4

- Annual Production f

rom Offshore Cook Inlet Wells (including Osprey platform)..... ................. 11

5

- Platform Discharge Locations for Produced Water as of January 2006 ................................... 12

6

- Two Zero Discharg e Scenarios for Produced Water Based on Current

Cook Inlet Drilling Condition s

.................................................................................... .. 19

7

- Abundance Estimate s for Cook Inlet Beluga Whales, 1994

- 2004

................................. ......... .. 26

### Dishonorable Discharges v Dishonorable Discharges: How to Shift Cook Inl et’s

Offshore Oil and Gas Operations to Zero Discharge

Executive Summary

T he sixteen

offshore oil and gas drilling platforms located in upper Cook Inlet have produced

over 1 billion barrels (nearly 45 billion gallons) of oil, over 3 trillion cubic feet of natural gas,

over 1.1 billion barrels (over 48 billion gallons) of contaminated “produced water,” and a

significant

quantity of contaminated drilling wastes from the mid

- 1960s through the end of 200 5

. In contrast to other coastal locations throughout t he United States, nearly all the contaminated

produced water and drilling wastes from these offshore oil and gas operations ha ve been

–and

continue to be

– discharged into marine waters despite the 1972 federal Clean Water Act goal of

eliminating the disc harge of pollutants into navigable waters

. I n other coastal locations around

the country

, “zero discharge” is the norm for offshore platforms. Because the U.S.

Environmental Protection Agency (EPA) allows ongoing discharges into marine waters for the

fif teen Cook Inlet

platforms and their three related onshore facilities covered in the general

discharge permit and in this report , Cook Inlet’s offshore oil and gas producers receive an

outdated and unwarranted federal economic subsidy that unnecessarily pol

lutes the Inlet

.

Not all produced water generated by Cook Inlet offshore oil and gas operations is discharged into

the marine environment directly from the platforms. Over 99.8 % of the total produced water

from Cook Inlet’s offshore drilling operations i s sent onshore to three facilities

–with 96% going

to just one facility at Trading Bay

– where advanced treatment and/or zero discharge into a Class

II disposal well would be easier than at the offshore platforms

. Once o nshore, the crude oil

, natural gas

, and produced water pumped up from underground are separated

, and the produced

water is discharged to Cook Inlet following minimal treatment

. P roduced water discharged into

Cook Inlet from the offshore platforms in 2005 contained over 32,000 gallons of o il and grease,

over 50,000 pounds of zinc and over 440 pounds of arsenic.

Despite that fact that oil and gas production in Cook Inlet is in decline and 1995 was the peak

year for produced water generation , t he draft Clean Water Act permit issued in March

2006 by

EPA allows a 69% increase in the amount of produced water the offshore platforms can

discharge . The draft permit allows a maximum annual discharge in produced water o f over

100,000 gallons of oil and grease and nearly 8 87 ,000 lbs of metals such a s mercury, nickel,

copper, manganese and zinc.

This report provides a rationale for re

- examin ing EPA’s previous decisions

–some based on

limited information

– allowing produced water and drilling wastes to be discharged into Cook

Inlet’s biologically

- p roductive and economically

- important coastal waters. The report

recommends that EPA use updated economic, technologic, scientific

, and Traditional Ecological

Knowledge information

to evaluate if zero discharge is warranted in the renewed Clean Water

Act p ermit given known and projected, adverse, economic and environmental impacts on the

Cook Inlet region should the discharges continue.

T here are new, compelling reasons for EPA to require zero discharge in the final Clean Water

Act permit

, including chang ed industry economics and new waste management technologies and

### Dishonorable Discharges vi

facilities available with

in the Cook Inlet region. Additionally, c ontinu ing to allow discharge s

can cause cumulative harm from persistent toxic contaminants , can adversely affect the market

f or

– and quality of

– Cook Inlet commercial fish , and is unnecessary

technolog

i cally

.

With this report, Cook Inlet k eeper hopes to stimulate dialogue among government regulators,

industry, and the public on the full costs to society of Cook Inlet oil and gas production and how

the following , significant

, recent changes support EPA making a zero discharge decision in the

final permit for these facilities. The report includes two zero discharge scenarios which are far

less costly than those analyzed by EP A prior to issuance of the 1999 Clean Water Act permit for

Cook Inlet’s offshore platform s

.

Economic Changes S ince Permit Issuance in 1999

• The price of crude oil currently is at record levels and experts expect it to remain high.

Oil prices in 2006 for C ook Inlet are 4 48% higher than they were in 1999 in constant

dollars , and Cook Inlet oil producers covered by the Clean Water Act permit made nearly

$5 9 million in profits in 2005 (assuming $10 per barrel profit at $50 per barrel oil

, low

compared to 2006 profits) ;

• When Cook Inlet crude oil was selling for less than $27 per barrel in 2003, the Alaska

legislature reduced the royalties paid to the s t ate by operators of Cook Inlet platforms

producing less than 1,200

- 1,500 barrels of oil per day ( four Cook Inle t platforms qualify) ;

• T he state legislature likely soon will enact a tax credit for re

- investment in Alaskan

infrastructure ;

• Aging Cook Inlet fields currently produc e less oil and gas than in previous years, and

platforms have been, and likely will continu e to be, “ shut

- in” (i.e., the wells cease

production) when they no longer produce sufficient oil or gas . This opens up the

possibility of using the unused pipelines to transport produced water back to th e shut

- in

platform s for i njection

; and,

• ConocoPhilli ps converted the Tyonek platform to zero discharge for its produced water in

2004 and Chevron/Unocal converted the Anna platform in 2005. S ince beginning

production in Cook Inlet in 2002, Forest Oil injects its platform’s produced water and

drilling waste s. Thus, f

or 3 of the 12 operating Cook Inlet platforms, managing produced

water in this way has been demonstrated to be economically feasible.

Technolog y Changes S ince Permit Issuance in 1999

• Improvements in “ grind and inject ” technologies for drilling wastes now can overcome

the Cook Inlet injection well plugging problems that were a large part of the previous

rationale for allowing drilling waste disposal directly into Cook Inlet ; and,

• Marathon and Chevron/ Unocal, both major operators in Cook Inlet, o pened new grind

and inject facilities for drilling wastes in the Cook Inlet region in 1999 and 2 002,

respectively.

### Dishonorable Discharges vii

Scientific Changes and Traditional Ecological Knowledge Evidence S ince Permit Issuance

in 1999

• New data from Exxon Valdez oil spill researc h on hydrocarbon effe cts on salmon show

that far lower levels of contamination than previously recognized have adverse impacts;

• New EPA data collected on oil and gas contaminants in food and Traditional Ecological

Knowledge on the quality / quantity of

subs istence foods , respectively, argue against

allowing additional toxic discharges into Cook Inlet; and

• The National Marine Fisheries Service (NMFS) classified Cook Inlet’s b eluga whales as

a “depleted” stock of marine mammals under the Marine Mammal Protecti on Act in

2000. B ecause the Cook Inlet beluga whale population has not increased in recent years

after sharp restrictions on Alaska Native subsistence hunting

, NMFS currently is

evaluating whether the whale should be classified as “threatened” or “endange red” under

the Endangered Species Act

.

T hese recent development s, taken together, make a compelling case for EPA to require zero

discharge for Cook Inlet offshore oil and gas operations during Clean Water Act permit renewal

.

T able ES

- 1 compares the r easons EPA used in its 1999 permit decision to allow discharges with

current conditions in Cook Inlet

. The current rationale for zero discharge is discussed in detail in

Section VI of this report.

Table ES

- 1

Cook Inlet Discharge Comparison Between 1999 and the Present

Type of Discharge Primary 1999 Rationale Allowing

Discharge s Current Rationale for

Zero Discharge

Produced water Cost High price of crude oil resulting in

higher industry profits ; royalty

reductions; s hut

- in

platforms and

pipelines can b e used for produced

water i njection instead of new

pipeline construction; an injection

well near Trading Bay Production

Facility now may be feasible

Drilling waste Lack of nearby facilities for disposal Technological improvements have

overcome injection problems;

operators opened new disposal

facilities

### Dishonorable Discharges 1

I. Introduction

and Purpose

Offshore Southcentral Alaska

–within view of homes on the hill sides above Anchorage

–stand

sixteen drilling platforms with over 580 oil and natural gas wells protruding fr om their

foundation s ( see Figure 1 ). These wells are approximately 11 ,000 feet deep, and the oldest

platforms and wells date from the mid

- 1960s. Through the end of 200 5 , the wells produced over

1 billion barrels of oil ( nearly 4 5 billion gallons ) , over 3 trillion cubic feet of natural gas, over

1.1 billion barrels of contaminated “produced water” (over 48 billion gallons) and a significant

quantity of contaminated drilling wastes. 1 

### Additionally, Cook Inlet offshore operators inject ed

over 2.3 billion bar

rels of treated seawater (97 billion gallons) to maintain and enhance oil

production

in the underlying formations

.

Cook Inlet o perators (with the exception of Forest Oil and its Osprey platform 2 

### which is not

included in this report

unless otherwise not

ed) discharge n

early all of the contaminated produced

water and drilling wastes generated from the

offshore oil and gas platforms into Cook Inlet.

The discharges occur following only minimal

treatment ( gas flotation

) of the produced water

and no treatment

of the drilling wastes. In

2005, o perators sent o ver 99.8% of the total

produced water from Cook Inlet’s offshore

operations by pipeline to three onshore facilities

–Trading Bay Production Facility, Granite

Point Production Facility, and the East Forela nd

Treatment Facility

– where they separate d the

crude oil , natural gas

, and produced water and

pipe d the still

- contaminated produced water

offshore for discharge

.

Table 1 shows oil and gas field location s

, ownership, ages, and status of existing Cook

I nlet offshore platforms. The platforms are

located in what the federal and state

governments consider a “coastal” area

(generally less than three nautical miles

, almost

3.5 miles

, offshore ) in state waters, and thus

under state jurisdiction.

1 Each Cook Inlet well generates approximately 30,000 barrels (1.26 mill. gallons) of drilling wastes ( Drilling Waste

Disposal Alternatives: A Cook Inlet Perspective , Marathon Oil Company and Unocal Corporation, March 1994, p.

6.)

2 Forest Oil’s Osprey platform, which is permitted individually under the Clean Water Act, began operations in

Cook Inl et in 2002 after issuance of the 1999 Clean Water Act general discharge permit for all other Cook Inlet oil

and gas platforms. Forest Oil’s Osprey platform permit (U.S. EPA Permit Number AK

- 005330

- 9) requires zero

discharge. Produced water : “Produced water” is any water

brought to the surface during oil and gas

production including water containing oil from

the geologic formation, injection water, and

drilling additives. Generally briny, produced

water typically contains pollutants such as oil and

grease, acids, ammonia, benzene, naphthalene,

metals (e.g., chromium, copper, lead, zinc), and

sometimes ra dionuclides, following separation

from crude oil and natural gas.

Drilling wastes

- fluids, muds, and cuttings :

“Drilling wastes” covers all these byproducts.

“Drilling fluids” or “drilling muds” are the

lubricating materials used in the rotary drilling of

wells during well exploration and development

(i.e., prior to production), which clean and

condition well holes, lubricate the drill bit,

transport drill cuttings to the surface, and

maintain down

- hole pressure to prevent well

blowouts. Drilling fluids and muds are mixtures

of water or oil with clay, metals (e.g., cadmium,

mercury, and lead), and organics (e.g., alkylated

benzenes, naphthalenes, phenanthrenes). “Drill

cuttings” are small pieces of formation rock

brought to the surface during drilling.

### Dishonorable Discharges 2

### Dishonorable Discharges 3 Table 1

Cook Inlet Offshore Platform Information

Platform Name Oil/Gas Field Current

Owner/Operator Installation

Date Status

“A” Middle Ground Shoal XTO Energy 1964 Active

Anna Granite Point Chevron/ Unocal 1966 Active

Baker Middle Ground Shoal Chevron/Unocal 1965 Shut

- in* (2003)

Bruce Granite Point Chevron/Unocal 1966 Active

“C” Middle Ground Shoal XTO Energy 1967 Active

Dillon Middle Ground Shoal Chevron/Unocal 1966 Shut

- in* (2003)

Dolly Varden McArthur River Chevron/Unocal 1967 Active

Granite Point Gra nite Point Chevron/Unocal 1966 Active

Grayling McArthur River Chevron/Unocal 1967 Active

King Salmon McArthur River Chevron/Unocal 1967 Active

Monopod Trading Bay Chevron/Unocal 1966 Active

Spark Trading Bay Marathon 1968 Injection only

Spurr Trading Bay Marathon 1968 Shut

- in * (1993)

Steelhead McArthur River Chevron/Unocal 1986 Active

Tyonek North Cook Inlet Phillips 1968 Active (gas only)

* “Shut

- in” means the platform’s well s no longer produce oil or gas, nor are they used to inject wastes

.



### Alaska’s Cook Inlet is the only coastal area in the nation where produced water and drilling

wastes can be released into marine waters. The 1999 Clean Water Act general 3 

### discharge permit

for Cook Inlet’s offshore oil and gas operations contains this U.S . Environmental Protection

Agency (EPA) exemption (see Appendix 1 for the applicable regulation). In contrast, EPA does

not allow discharge of produced water and drilling wastes in coastal areas in the Gulf of Mexico

, off the coast of California

, and else where

.

This report provides a rationale for re

- examin ing EPA’s earlier permit decision allowing

produced water and drilling wastes to be discharged into Cook Inlet’s biologically

- productive

and economically

- important coastal waters. I t now is appropriate for EPA to mandate

requirements more protective of Cook Inlet’s valuable marine environment because

circumstances have changed significantly

. Moreover , ongoing discharges pose the increased risk

of cumulative harm to Cook Inlet ’s marine organisms.

II. W hy Care?

Long after Cook Inlet’s oil and gas resources are extracted, fishing, tourism and recreation, and

subsistence will continue if the ecosystem remains healthy. A healthy Cook Inlet ecosystem also

provides substantial jobs and revenue to Southcentr al Alaska residents, approximately half the

state’s population.

3 The permit is considered a “general” permit because it covers multiple facilities.

### Dishonorable Discharges 4

It i s reasonable to ask why EPA created a coastal

- area exemption for Cook Inlet’s offshore

drilling operations in the first place and why the exemption is a concern.

Background on the Cook I nlet exemption

. As shown in Table 1, operators installed nearly all of

Cook Inlet’s offshore platforms in the late 1960s, prior to passage of the Clean Water Act in

1972. Cook Inlet’s relatively old platforms were designed in an era before extensive disch arge

regulation, making it potentially more difficult and costly for the platforms to achieve the zero

discharge norm

. Congress recognized the importance of allowing for an orderly upgrading of

facility infrastructure to meet the Clean Water Act discharge elimination goal 4 

### and designed the

statute to encourage strengthening of discharge permits during the five

- year permit renewal s

.

In 1999, EPA issued the Clean Water Act general discharge permit for Cook Inlet’s fifteen

offshore platforms ( i.e., not inclu ding Osprey

platform ) and their three related onshore facilities 5



### based on a previously

- issued EPA technical and economic document known as the Effluent

Limitations Guideline (ELG) for coastal oil and gas extraction operations. 6 

### ELGs contain

technology

- ba sed discharge limits for all facilities in a particular industrial category , which then

are incorporated into discharge permits nationwide

. EPA issued the final ELG for coastal oil and

gas extraction operations in 1996 and ha s not updated it since . In re sponse to requests from

several stakeholders to update the ELG in 200 4

, EPA stated it would not do so in part because

the EPA permit writer could “require an operator to demonstrate that zero discharge is not

technically feasible for a specific project. ” 7 

### EPA did not, however, require a demonstration of

technical feasibility prior to development of the current draft general discharge permit.

Th e 1999 Clean Water Act permit for Cook Inlet offshore oil and gas operations expire d on April

1, 2004 but has bee n extended until EPA issues a new permit, probably in 2006

. T he new permit

can contain different permit conditions

–including prohibiting discharges to Cook Inlet

–so long

as it is in compliance with the federal Clean Water Act. Prior to permit issuanc e in 1999, EPA’s

stated rationale for the Cook Inlet exemption wa s: “The EPA rejected zero discharge for muds &

cuttings in large part because the technology of grinding and injection has not been demonstrated

to be available throughout Cook Inlet. The EP A rejected zero discharge of produced water

because zero discharge is not economically achievable in Cook Inlet.” 8

4 See 33 USC 1251(a)(1) which states that “it is the national goal that the discharge of pollutants into the navigable

waters be eliminated by 1985.” EPA reiterates this goal in the preamble to th e final rule covering coastal oil and gas

extraction point source discharges, 61 Federal Register 66088 (December 16, 1996).

5 U.S. EPA Permit Number AKG

- 28

- 5000.

6 Development Document for Final Effluent Limitations Guidelines and Standards for the Co astal Subcategory of

the Oil and Gas Extraction Point Source Category , U.S. Environmental Protection Agency, EPA

- 821

- R

- 96

- 023,

October 1996.

7 Technical Support Document for the 2004 Effluent Guidelines Program Plan, U.S. Environmental Protection

Agency, EPA

- 821

- R

- 04

- 014, p. 5

- 230 (for Drilling Fluids and Drill Cuttings) and p. 5

- 231 (for Produced Water),

August 2004.

8 Response to Comments Received on the Proposed Reissuance of the Cook Inlet General NPDES Permit, U.S.

EPA, p. 14 (undated).

### Dishonorable Discharges 5

EPA issued the draft discharge permit in March 2006. 9 

### In th e draft permit, the offshore

pla tforms are permitted to discharge in their produc ed water over 100,000 gallons of oil and

grease annually and nearly 8 87 ,000 lbs of metals such as mercury, nickel, copper, manganese

and zinc. 10 

### The draft permit also allows nine Cook Inlet discharge locations, a significant

increase from the four location s now discharging produced water (the current permit allows up to

eight discharge locations).

As a result of th

e earlier ELG and permitting decision s

, Cook Inlet’s offshore oil and gas

producers covered by the permit ( i.e., Chevron/ Unocal and XTO Energy 11 

### ) do not pay the costs

other companies with coastal offshore oil and gas operations in the U.S. pa y to achieve zero

discharge

, i.e., conversion of platforms and wells so produced water and drilling wastes ar e

injected

. Additionally, these operato rs do no t pay the true costs of production since they do n ot

pay to discharge contaminants into public waters. When EPA allows operators to discharge

pollution into Cook Inlet

, that decision is a federal subsidy to Cook Inlet operato rs which

– in

turn

– degrades the valuable Cook Inlet ecosystem.

Who and what are affected by the Cook Inlet exemption

. Though Cook Inlet has relatively strong

tides, at least some of the toxic pollutants discharged from drilling operations remain in Cook

Inlet

, dispersed and dissolv ed in the water column and adsorbed onto sediments

. 12



### C ontamination near the platform s has not been measured , however

. M arine organisms are

exposed to these pollutants via consumption and/ or dermally

. Heavy metals are among the toxic

discharges from offs hore oil and gas operations that can persist in fish, shellfish, and marine

mammals. Those who eat fish and shellfish from Cook Inlet may ingest some quantity of toxic

pollutants from offshore oil and gas operations , though the lack of complete testing ma kes it

difficult to know the full extent of the health impacts (see Section VI)

.

Cook Inlet is a world

- renown fishery , prized for its salmon

(especially red, king, and silver)

, halibut and other groundfish

, herring, and shellfish

. 13 

### The value of upper a nd lower Cook Inlet

9 National Pollutant Discharge Elimination System Permit No.: AKG

- 31

- 5000. See

http://yosemite.epa.gov/r10/WATER.NSF/NPDES+Permits/DraftPermitsAK for the draft permit and related

i nformation (last visited on May 24, 2006).

10 Calculations based on the draft permit’s maximum projected discharge rates for produced water discharges by

facility and facility

- specific effluent limits. See Fact Sheet, Oil and Gas Exploration, Developmen t and Production

Facilities Located in State and Federal Waters in Cook Inlet , Permit Number AKG

- 31

- 5000, U.S. Environmental

Protection Agency Region 10, February 23, 2006, Table 2 (p. 34) and Appendix B (pp. 69

- 73).

11 ConocoPhillips and Marathon, which operate Cook Inlet platforms, currently do not discharge produced water

into Cook Inlet.

12 Tides move materials both into and out of upper Cook Inlet, where the platforms are located. The hydraulics of

Cook Inlet are extremely complicated and not fully understood. Only a sufficient net current out of the area

containing the discharges throughout the year would disperse all the toxic materials, and that is not the case because

there is little or no flow into Cook Inlet from upper Cook Inlet rivers in win ter

13 See http://www.cf.adfg.state.ak.us/region2/finfish/salmon/uci/cookinlet.php (last visited on April 17, 2006).

### Dishonorable Discharges 6

commercial salmon was

$33 million

in 2005

, 14 

### which does not includ e the value of sportfishing,

A laska Native subsistence, personal use fishing for Alaska residents not practicing subsistence,

and non

- salmon fisheries. T he “Kenai Wild” b rand of salmon from Cook Inlet has, in recent

years, gain

ed market

- share outside of Alaska as a high

- quality , valuable, wild Alaskan salmon

product from presumably unpolluted waters.

One in eight private

- sector jobs in Alaska is tourism

- related, Alaska’s fastest growing industry. 15



### According to the state Chamber of Commerce, approximately 1.2 million visitors traveled to

Alaska in 2002 and spent between $1200 and $1300 on average per visitor. 16 

### In 1993, the last

year such data were collected, 67% of summer visitors to Alaska traveled in Southcentral Alaska

including the Cook Inlet region. 17 

### Using these numbers, Southcentral Alaska received over $1

billion in summer revenue from tourism in 2002.

Native communities including Port Graham, Nanwalek, Chickaloon , Eklutna, Seldovia,

Ninilchik, and Tyonek

, members of the Kenaitze Tribe

, and others depend on the Cook Inlet

watershed’s healthy waters and habitats for their livelihoods. These villages pursue a subsistence

lifestyle that is centuries old, with wild

, i ncluding marine

, foods supplying a high percentage of

villagers’ diets. Because a higher percentage of their food supply comes from Cook Inlet

- related

sources than for most non

- N ative individuals, many of those living in these communities may be

dispropor tionately impacted by toxic chemicals in their foods compared with non

- Natives.

As part of the draft general discharge permit’s Environmental Assessment, EPA “facilitated the

collection of Traditional Ecological Knowledge (TEK) from Cook Inlet Area tribes .” 18 

### While it

is impossible to know if contaminants are the sole cause of the changes noted by Alaska Natives,

EPA documented in its Fact Sheet for the draft permit that:

Tribal members frequently noted an overall decline in the population of important f ood

species being caught or harvested. These changes include salmon with thinner and less

firm meat and smaller halibut with chalky and fibrous meat. In addition, Tribal members

noted a disappearance in bull kelp and a decrease in the abundance of clams, cockles,

bidarkis, cod, flounder, crab, shrimp, mussels, algae, seals and sea lions. Clams and

mussels were observed to have thinner and sometimes transparent shells. Furthermore,

Tribal members observed a higher incidence of red tide that has resulted in a decrease in

the community’s ability to collect traditional food, including shellfish and octopus.

14 Alaska Department of Fish and Game, Season Summ aries,

http://www.cf.adfg.state.ak.us/region2/finfish/salmon/salmhom2.php (last visited on May 9, 2006).

15 See http://www.alaskachamber.com/artman/publish/tourism.html (last visited May 5, 2006).

16 Ibid.

17 Recreation and Tourism in South

- Central Alaska: Patterns and Prospects , Steve Colt, Stephanie Martin, Jenna

Mieren, and Martha Tomeo, prepared f or the U.S. Forest Service, PNW

- GTR

- 551, October 2002, p. 36.

18 Fact Sheet, Oil and Gas Exploration, Development and Production Facilities Located in State and Federal

Waters in Cook Inlet , Permit Number AKG

- 31

- 5000, U.S. Environmental Protection Agency Region 10, February

23, 2006, p. 47.

### Dishonorable Discharges 7

Tribal members also observed a decrease in the number of sea ducks, such as mergansers

and scoters. A number of Tribal members noted finding lesions, g rowths and deformities

on fish. Some Tribal members noted that non

- commercial fish, such as hooligans and

sticklebacks, have declined in numbers; thus, indicating that commercial and recreational

fishing are not the sole causes for the observed decline in population...

The impact[s] on Tribes include traveling farther to collect food and the inability to

o b tain a sufficient quantity of traditional food. Since a significant portion of a Tribal

member’s diet consists of seafood from Cook Inlet, there is incr easing concern regarding

the impact on health from contaminants that may accumulate in seafood and the affect

(sic) of eating lower quality fish. This fear has led some parents to stop feeding their

children traditional foods. 19



### Last, the impact of the di

scharges on Cook Inlet ’s b eluga whale population is unknown, but it

may be significant . According to EPA, “The discharge of produced water may affect, but is not

likely to adversely affect, all of the considered species except the Beluga whale...The Beluga

whales, which frequent the upper Inlet, may be adversely affected by pollutants in produced

water. This species may be affected either directly (through exposure) or indirectly (through

ingestion and bioaccumulation) (Avanti 1992)” (emphasis in original). 20

19 Ibid., pp. 48

- 9.

20 Cook Inlet (Reissuance) Fact Sheet , September 7, 1995, p. 38. A recent EPA analysis which does not address the

accumulation of persistent toxic chemicals, however, doubts the likelihood of adver se effects from the discharges on

Cook Inlet’s beluga whales despite the lack of recovery of the population in recent years. This study states

– without backup documentation

– that:

Drilling fluid discharges could adversely affect prey availability in th e immediate vicinity of the discharges

because of the burial of benthic organisms or changes in bottom habitat characteristics. Such effects would

be of limited size and duration. Exposure to increased pollutant concentrations within designated mixing

zo nes are unlikely to cause adverse effects to beluga whales because of the whales’ mobility and limited

amount of time within (sic) spent within these areas. Exposure to discharge waters that comply with

chronic water quality standards are not expected to adversely af fect beluga whales ( Biological Evaluation

for the Cook Inlet NPDES Permit , prepared for U.S. EPA Region 10 Office of Water by Tetra Tech, Inc.,

January 20, 2006, p. 5

- 13).

### Dishonorable Discharges 8

III. Cook Inlet Offshore Drilling Production and Injection Data

Table 2 contains production data for Cook Inlet offshore oil and gas wells by platform, compiled

from Alaska Oil and Gas Con servation Commission (AOGCC) databas es. The offshore oil we lls

produce crude oil, natural gas, and produced water, while the gas wells generate only natural gas

and produced water. 21 

### Table 2 also shows the total volume of seawater injected (i.e.,

“waterflooding”) to enhance or maintain oil production.

Figure 2, b ased on data from Table 2, graphically displays total oil, natural gas, and produced

water generation from each Cook Inlet offshore platform through the end of 2005.

Figure 2

Production from Offshore Cook Inlet Wells through 2005

0 50,000,000 100,000,000 150,000,000 200,000,000 250,000,000 300,000,000 350,000,000 400,000,000

"A" "C" Anna Baker Bruce Dillon Dolly Varden Granite Point Grayling

King Salmon Monopod Osprey Spark Spurr

Steelhead Tyonek

PlatformCrude oil and Produced Water Production (bbls)

0 200,000,000 400,000,000 600,000,000 800,000,000 1,000,000,000 1,200,000,000 1,400,000,000 1,600,000,000 1,800,000,000Natural Gas Production (mcf)

Crude Oil

Produced Water

Natural Gas

21 AOGCC reporting instructions for Form 10

- 405, the Monthly Production Report, require producers to identify

wells as either Type 1

– oil producer or Type 2

– gas producer.

### Dishonorable Discharges 9 Table 2

Total Cook Inlet Oil, Natural Gas, and Produced Water Production and Seawater Injection from Start

- up through 2005



## TOTALS

Offshore

Platform Oil Wells

-

Crude Oil

(bbls) Oil Wells

-

Nat. Gas

(mcf) Oil Wells

-

Prod. H20

(bbls) Gas Wells

-

Nat. Gas

(mcf) Gas Wells

-

Prod. H20

(bbls) Total Cr. Oil

(bbls) Total Nat. Gas

(mc f) Total Prod.

H20 *

(bbls) Total Sea H2O

Injected

(bbls) Yrs.

Operat.

"A" 78,084,542 36,407,113 16,576,152 476,535 0 78,084,542 36,883,648 16,576,152 110,056,531 41

Anna 54,220,394 46,819,728 11,236,296 54,220,394 46,819,728 11,236,296 62,636,913 3 9

Baker 31,931,536 20,618,600 15,747,129 15,907,806 131 31,931,536 36,526,406 15,747,260 83,202,736 40

Bruce 26,766,481 24,831,530 2,750,230 872,758 0 26,766,481 25,704,288 2,750,230 37,978,339 39

"C" 54,723,858 25,139,677 19,572,417 54,723,858 25,1 39,677 19,572,417 98,854,815 38

Dillon 28,323,625 10,337,409 56,624,197 28,323,625 10,337,409 56,624,197 44,365,995 39

Dolly Varden 213,694,235 72,213,308 243,277,390 34,550,784 0 213,694,235 106,764,092 243,277,390 457,415,259 38

Granite Point 62,0 27,630 55,873,666 3,065,934 62,027,630 55,873,666 3,065,934 56,697,019 39

Grayling 246,994,106 93,605,049 363,519,807 127,065,445 2,260 246,994,106 220,670,494 363,522,067 624,241,330 38

King Salmon 147,891,083 55,423,117 260,837,506 44,926,210 0 147 ,891,083 100,349,327 260,837,506 517,782,364 38

Monopod 75,308,434 63,434,084 70,881,514 75,308,434 63,434,084 70,881,514 132,396,589 39

Osprey * * 1,830,072 448,057 2,052,463 1,830,072 448,057 2,052,463 1,747,751 3

Spark 17,508,888 4,603,045 23,6 94,809 2,165,027 198,430 17,508,888 6,768,072 23,893,239 27,276,029 37

Spurr 9,935,186 2,744,796 8,500,078 3,543,248 0 9,935,186 6,288,044 8,500,078 6,471,739 37

Steelhead 12,668,057 8,123,692 51,103,953 821,920,335 370,414 12,668,057 830,044,027 51,474, 367 58,850,021 19

Tyonek 1,707,924,357 665,051 1,707,924,357 665,051 240,781 37

Total 1,061,908,127 520,622,871 1,149,439,875 2,759,352,505 1,236,286 1,061,908,127 3,279,975,376 1,150,676,161 2,320,214,211

Total (gals) 44,600,141,334 4 8,276,474,750 44,600,141,334 48,328,398,762 97,448,996,862

Notes: There are 42 gallons per barrel (bbl).

“mcf ” means thousand cubic feet.

* A tiny fraction of the column Total , approximately 0.05%, has been injected (most of Osprey platform’s prod uced water and a small portion of Anna and Tyonek platforms’

produced water).

* * Forest Oil’s Osprey platform is not included in the Cook Inlet general discharge permit.

### Dishonorable Discharges 10

Table 2 shows that total injected seawater in Cook Inlet is approximately twice the amount of

total produced water generated. Figure 3 compares the volume of produced water generated to

the volume of treated seawater injected by platform for platforms covered by the general

discharge permit . This figure shows that

–with the exception of currently shut

- in Dillon and

Spurr p latform

s

– the volume of injected seawater by platform has been less than the volume of

produced water generated and discharged to Cook Inlet. Figure 3 indicates that there wa s

enough capacity in each platform’s resp ective injection zone to accommodate the volume of

produced water generated by the platforms ’ wells had a decision been made during platform

start

- up to design the platforms for produced water injection.

Figure 3

Produced Water vs. Injected Seawater by Platform through 2005

0 100,000,000 200,000,000 300,000,000 400,000,000 500,000,000 600,000,000 700,000,000

"A" "C" Anna Baker Bruce Dillon Dolly Varden Granite Point Grayling

King Salmon Monopod Spark Spurr Steelhead Tyonek

PlatformVolume (bbls)

Produced Water

Injected Seawater



### Injection of liquids serves two key pu rposes: it increases formation pressure which helps oil

production, and it provides a well

- regulated (by the AOGCC) means of wastewater disposal, e.g.,

of produced water. Both industry and public needs are well

- served by produced water injection

into oil

- producing formations

.

Figure 4 shows total annual production from Cook Inlet’s offshore oil and gas wells (AOGCC

data). As field development proceeds, oil and gas production initially increases quickly and then

declines over a longer period. As shown in Figure 4 , produced water generation increases as oil

and gas fields age

, though this quantity may be affected by the water injection rate into oil and

gas reservoir s. Note that the quantity of Cook Inlet produced water generation has remained

roughly unc hanged or decreased since 1991. Nevertheless, the draft Clean Water Act permit

### Dishonorable Discharges 11 Figure 4

Annual Production from Offshore Cook Inlet Wells (including Osprey platform)

0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 160,000,000

1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005

YearProduction

Crude Oil (bbls)

Natural Gas (mcf)

Produced Water (bbls)



### allows an increase in annual produced water discharge from Cook Inlet offshore platforms of

69%.

IV. Cook Inlet Produced Water Discharge Data

Cook Inlet oil and g

as producers report offshore discharges from their platforms monthly to EPA

and the state under EPA

’s general discharge permit requirements in “Discharge Monitoring

Reports” (DMRs). Nearly all states have “delegated” programs under the federal Clean Water

Act where the states issue and enforce discharge permits, however Alaska does not. 22 

### Thus, EPA

currently issues and enforces Alaska n water discharge permits

from its Seattle office

, but the

S tate of Alaska provides input into EPA’s development of the perm its. Monthly DMRs contain

information on produced water (this section) and drilling wastes (Section V), as well as other

forms of wastewater discharges covered by the Clean Water Act (e.g., deck drainage, sanitary

wastes, etc. ; t hese other discharges are not covered in this report ).

P roduced water discharge locations, volume , and composition

. Not all produced water generated

by Cook Inlet offshore oil and gas platform s is discharged into the marine environment d irectly

. Figure 5 illustrates which platf orms send their produced water onshore

, where operators separate

22 The State of Alaska enacted legislation in 2005 which enables the state to apply for Clean Water Act delegation

from EPA.

### Dishonorable Discharges 12 

# Figure 5

P latform D ischarge L ocations for Produced W ater as of January 2006

A C Dillon Baker Dolly Steel

- Grayling King Mono

- Spark Spurr Granite Anna Bruce Tyonek

Varden head Sa lmon pod Point

Shut

- in Shut

- in Zero Zero

Dis charge Disch

arge

East Foreland Trading Bay Injection Only Granite P oint Di rect

Treatment Fac. Pr oduction Facility (zero discharge) Production Fac. D ischarge to

(onshore) (onshore) (onshore) Cook Inlet

(16 m. depth)

Discharge to Discharge to Discharge to

Cook Inlet Cook Inlet Cook Inlet

( 8 m. depth) (11 m. depth) (17 m. depth)

### Dishonorable Discharges 13

the crude oil , natural gas, and produced water and discharge the still

- contaminated produced

water into Cook Inlet. Figure 5 also shows that Bruce platform is the only platform currently

discharg ing produced water direct ly into Cook Inlet

.

T able 3 compares current produced water discharge locations shown in Figure 5 with discharge

locations allowed in the draft Clean Water Act permit. T here are five locations where discharges

a re allowed in the draft permit which are no t discharging at the present time.

Table 3

Cook Inlet Platform and Onshore Facility Produced Water Discharge Locations,

Currently and in the Draft Permit

Platform/Onshore Facility Discharge Location as of

January ‘06 Discharge Allowed in the

Draft Per

mit?

Platform

“A” Sent onshore No

– unchanged

Anna Zero discharge Yes

– new

Baker Shut

- in Yes

– new

Bruce Direct discharge Yes

– not new

“C” Sent onshore No

– unchanged

Dillon Shut

- in Yes

– new Dolly Varden Sent onshore No

– unchanged

Granite Poin t Sent onshore Yes

– new Grayling Sent onshore No

– unchanged

King Salmon Sent onshore No

– unchanged

Monopod Sent onshore No

– unchanged

Spark Injection only No

– unchanged

Spurr Shut

- in No

– unchanged

Steelhead Sent onshore No

– unchanged

Tyonek Z ero discharge Yes

– new

Onshore Facility

East Foreland

Treatment Facility Discharge to Cook Inlet Yes

– not new

Granite Point Production

Facility Discharge to Cook Inlet Yes

– not new

Trading Bay Production

Facility Discharge to Cook Inlet Yes

– not ne w



### Table 4 shows average daily produced water generation rates from Cook Inlet’s offshore oil and

gas operations and the average concentration of the pollut ants reported to EPA for 2005 on

DMRs (see Appendix 2 for monthly DMR data)

. Although they are ope rating under a general

discharge permit, each facility has different monitoring and reporting requirements based on the

likelihood of the discharge to exceed water quality standards at the edge of the discharge’s

“mixing zone” 23 

### whose distance is determined by the state. T he Table 4 value for annual

produced water generation reported to EPA agrees with that reported to AOGCC within 0.3%.

23 A “mixing zone” is the are a within a receiving water body where the State of Alaska allows discharged

contaminants to exceed traditional water quality standards designed to protect people and fish. At the zone’s edge,

### Dishonorable Discharges 14 Table 4

Produced Water Generation Rate and Annual Average Concentrations of EPA

- Permitted Pollutants, 2005

Platform/Fac ility Prod. H2O Oil/Grease Copper Mercury Zinc Silver Lead Arsenic TAH 24 TAqH

25

(mgd) (ppm) (ug/l) (ug/l) (ug/l) (ug/l) (ug/l) (ug/l) (ppb) (ppb)

Anna Platform 26 0

Bruce Platform 0.006984 16.3 3617 2.5 15734

Granite Point Prod. Fac. 0.01569 1 18.1 17.11 0.2311 4.134 13181

Trading Bay Prod. Fac. 4.369068 19.6 12.11 2.583 8722 8932

East Foreland Trtmt. Fac. 0.160833 11.5 0.69 0.0000 6.65 0.099 31.85 14140 14475

Total 4.552576

Total (gals/year) 1,661,690,240

Tot al (bbls/year) 39,564,053

Column Average 16.4 9.97 0.1156 3617 4.58 2.272 31.85 12944 11704



### Table 5 shows the percentage of produced water and oil and grease generated by each Cook Inlet

discharg e location for 2005 . This table shows that:

1. Th e Trading Bay Production Facility, located onshore on the west side of Cook Inlet,

represent s nearly 96% of the produced water and over 97% of the oil and grease

discharged into Cook Inlet from offshore oil and gas operations in 2005 ;

2. If all three onshore facilities (Trading Bay Production Facility, Granite Point Production

Facility, and East Foreland Treatment Facility) injected their discharges to the

subsurface, over 99.8% of the produced water discharges into Cook Inlet in 2005 would

be eliminated.

T able 5

Breakdown of Produced Water and Oil and Grease Generation by Cook Inlet Discharger, 2005

Platform/Facility Prod. H20 gen. Prod. H20 Oil/Grease Oil/Grease

(gallons/yr) (percent) (gallons/yr) (percent)

Bruce Platform 2,549,160 0.15 42 0.13

Granite Point Prod. Fac. 5,727,215 0.34 104 0.32

Trading Bay Prod. Fac. 1,594,709,820 95.97 31,256 97.44

East Foreland Trtmt. Fac. 58,704,045 3.53 675 2.10

Total 1,661,690,240 32,077

the permit writers consider dilution sufficient to meet the sta ndards. Permit writers use hydraulic models to

determine the level of dilution necessary.

24 TAH is Total Aromatic Hydrocarbons.

25 TaqH is Total Aqueous Hydrocarbons.

26 As of January 12, 2005, Anna Platform began injecting its produced water (February 18, 2005 letter from Dale A.

Haines of Chevron/Unocal to Mr. Chae Park of U.S. EPA Region 10).

### Dishonorable Discharges 15

Toxic chemicals in produced water discharges

. Cook Inlet offshore oil and gas operations’

DMRs for produced water for 200 5 can be used to assess the quantity of metals released into

Cook Inlet

from these facilities. Table 4 shows that many pollutants are not measured for e very

disc harge location

, however . In order to calculate total discharges into Cook Inlet from these

facilities, Cook Inletk eeper calculated a weighted average concentration for each pollutant based

on produced water flow rates and data from the facilities which me asure d particular chemical

concentration

s . The weighted average concentrations for the discharges’ various metals for 2005

are shown in Table 6

.

Table 6

Weighted Average Concentration of Metals in Offshore Discharges to Cook Inlet , 2005

Metal Weighted Average Concentration (micrograms/liter)

Copper 11.72

Mercury 0. 0 2

Zinc 3617

Silver 6.48

Lead 2.73

Arsenic 31.85



### Using the data from Table 6 and the total produced water generation rate listed in Table 5 results

in the annual quantit ie s of metals released into Cook Inlet from offshore oil and gas operations

shown in Table 7

.

Table 7

Annual Quantity of Metal s in Offshore Drilling Discharges to Cook Inlet , 2005

Metal Annual Discharge (lbs)

Copper 16 3

Mercury 0.28

Zinc 50,16 2

Si lver 90

Lead 3 8

Arsenic 44 2



### V. Cook Inlet Offshore Drilling Waste Discharges

When wells are drilled, drilling fluids ( commonly referred to as drilling muds) lubricate and cool

the drill bit, carry drill cuttings (rock solids) to the surface, and m aintain down

- hole pressure to

prevent well blowouts. These fluids are specially formulated to achieve appropriate pressure,

viscosity (ease of flow), corrosion prevention, and other characteristics . The fluids include

miner a ls such as barite

, which may c ontain cadmium and mercury

contaminants . As drilling

proceeds and the fluids become mixed with drill cuttings from the hole, the fluids must be

diluted and have solids, or cuttings

, removed to ensure proper flow characteristics. Excess fluid

volume gener

ated is disposed of as drilling waste; the removed cutting s, with some residual

drilling fluid, are dis posed of as drill cuttings

. Drilling fluids can be oil

- based, water

- based, or

synthetic

- based

.

### Dishonorable Discharges 16

Drilling waste discharges, representing drilling fluid s a nd drill cuttings, do not occur on a regular

basis

. T hese discharges occur periodic ally over a multi

- month period when wells are drilled

from offshore platforms or when well workovers occur to increase production. Drilling waste

discharges also occur duri ng exploratory operations, i.e., drilling in areas without an existing

platform or well s in order to determine whether a formation (s) is commercially viable

(“exploratory” operations differ from “production” operations ; production operations are the

main f ocus of this report).

C ook Inlet operators are precluded from discharg ing oil

- based drilling fluids into Cook Inlet by

the requirements of the existing general discharge permit. D rilling wastes that do not meet the

general discharge permit requirements a nd are not discharged offshore into Cook Inlet or into an

offshore Class II disposal well 27 

### are s ent onshore for disposal

.

EPA allows discharges of water

- based drilling fluids and drill cuttings from coastal operators in

Cook Inlet, but not from other coas tal operators in the U.S. (see Appendix 1). This is due to

EPA’s presum ing (in its mid

- 1990s ELG analyses ) that Cook Inlet contained large areas unfit for

grinding and injection of drilling wastes. As discussed in Section VI, the existence of two new

gri nd and inject facilities and several Class II disposal wells in the region belie this assumption.

In Cook Inlet in 2005 , operators reported that no drilling wastes (fluids/muds and cuttings) were

discharged directly into Cook Inlet from platforms covered by the general discharge permit

. It is

unclear if the lack of water

- based drilling wastes discharged into Cook Inlet in 2005 will

continue. Escopeta Oil

, a new operator in Cook Inlet

, recently stated that it intends to inject its

exploratory and producti

on

- related drilling wastes 28 

### even though EPA does not require operators

to inject exploratory drilling wastes

. In 2001 and 2002, Cook Inlet oil and gas operators reported

over 27,410 barrels of drilling wastes discharged directly into Cook Inlet from five platforms:

XTO’s “A” and “C” platforms, Chevron/Unocal’s Steelhead and Monopod platforms, and Forest

Oil’s Osprey platform (exploratory drilling wastes only). 29



### VI. Current Conditions Warrant a Shift to Zero Discharge

The new general discharge permit fo r Cook Inlet’s offshore oil and gas operations is the critical

means the federal government use s to protect Cook Inlet waters (the state provides input into

federal permit issuance). EPA accept ed comments on the draft permit through May 31, 2005

.

Among the mo st favorable economic changes for Cook Inlet offshore oil operations which ha ve

occurred since EPA made its 1999 decision to allow discharges is the dramatic increase in the

price of oil . The wellhead price of Cook Inlet oil has increased from $12. 56 per barrel in 1999 to

27 Class II disposal wells

– part of U.S. EPA’s Underground Injection Control program under the Safe Drinking

Water Act

– are disposal injection wells permitted to accept wastes from oil and gas operations.

28 Steve Sutherland, Escopeta Oil, Cook Inlet Regional Citizens Advisory Council board meeting on May 19, 2006.

29 Cook Inletkeeper review of operator

- submitted Discharge Monitoring Reports for 2001

- 2.

### Dishonorable Discharges 17

$56.33 per barrel in 2006, an increase of 4 4 8 % in constant 2006 dollars

. 30 

### This extraordinary

increase should completely change the economic analysis which resulted in the previous EPA

decision allowing produced water and drilling waste to be discharged into Cook Inlet.

Using data from the Alaska Department of Revenue Tax Division, the average Cook Inlet

wellhead price for a barrel of crude oil in 2005 was $50.21. 31 

### Given the $30

- 45 costs of

production in Cook Inlet presented to th e legislature in April 2006 by Chevron, 32 

### earnings were

approximately $10 per barrel for a total of nearly $5 9 million profit for Cook Inlet operations in

2005 (almost 5.9 million barrels of oil were produced in Cook Inlet; AOGCC data)

.

In addition to th

e enormous increase in the price of oil, Cook Inlet’s offshore oil operations

benefit from royalty reductions given the companie s by the Alaska legislature in 2003 33 

### when

Cook Inlet crude oil was selling for less than $27 per barrel. 34 

### These royalty reducti ons

, i.e.,

reductions in the amount of money paid to the state for oil produced on its leased acreage

(typically 12.5%), range from 2 .5 % to 7 .5 % depending on the oil production rate per platform

. Four of the te n Cook Inlet platforms producing oil and cove red by the general discharge permit

currently receive royalty reduction s (Bruce, Monopod, and Steelhead platforms owned by

Chevron/Unocal and “C” platform owned by XTO Energy)

.

Another economic change likely to benefit the industry is the Alaska legislatu re’s probable

passage of some version of the Petroleum Production Tax

, includ ing

a 20% or more tax credit for

qualified capital expenditures. Upgrading Cook Inlet platforms’ treatment and disposal systems

for produced water and drilling wastes certainly w ould qualify for this tax credit.

Other new economic, technologic, and scientific and TEK evidence and data since the 1999

general discharge permit issuance follow:

D rilling economics : produced water

. EPA used a 1994 industry

- developed zero discharge stu dy 35



### to develop its estimate of the cost to Cook Inlet operators to achieve zero discharge of produced

water. The industry’s cost analysis included construction of four new pipelines from onshore to

offshore platforms for produced water injection and modif

ications to ten

(of the fifteen

general

30 Spr ing 2006 Revenue Sources Book , Alaska Department of Revenue, Tax Division, Real $2006 Crude Oil &

Natural Gas Prices

, http://www.tax.state.ak.us/sourcesbook/Real$2006Oil&NatGasPrices.pdf

.

31 See http://www.tax.state.ak.us/programs/oil/prices/hi storicaldata/Cookwellhead.asp (last visited on May 11,

2006).

32 See http://www.akdemocrats.org/ppt/chevron_testimony_4_6_06.pdf , p. 9 (last visited on May 11, 2006)

.

33 See SB18 5, http://www.legis.state.ak.us/basis/get_bill.asp?session=23&bill=SB185 (last visited on May 11,

2006).

34 See http://www.tax.state.ak.us/programs/oil/prices/historicaldata/Cookwellhead.asp (last visited on May 11,

2006).

35 Zero Discharge Analysis: Trading Bay Production Facility, Cook Inlet, Alaska , Marathon Oil Company, Uno cal

Corporation, March 1994.

### Dishonorable Discharges 18

discharge permit) platforms in preparation for injection . The capital costs of constructing four

new offshore pipelines to transport produced water for injection (three new pipelines from

Trading Bay Production Faci lity and one new pipeline from the East Foreland Treatment

Facility) are the single most expensive items in industry’s/ EPA’s zero discharge cost estimate

. T hese four pipelines

and their associated equipment represent 71 % of the predicted $96.9 million

cap ital costs, 36 

### or $ 69.0 million for the pipelines ( all costs are in 1995$).

Additionally, the estimate included the following currently

- unnecessary capital costs for

modifications to: 1) two shut

- in platforms (Dillon and Baker)

- $4.6 million, and 2) three

platforms that

already inject produced water (Anna, Spark, and Tyonek)

- $9.5 million. These

currently

- unnecessary capital costs represent an additional 15% of the predicted capital costs

.

A re

- examination of industry’s/EPA’s zero discharge analysis bas ed on current platform

operat ing conditions would result in substantially less cost to achieve zero discharge because

there currently is no need for four new onshore to offshore pipelines

, nor for multiple

, new

platform injection sites

. Consider the follo wing

, two

, lower

- cost zero discharge scenario s :

36 Development Document , op. cit., Appendix XI

- 2, Capital Costs for Option 3, Zero Discharge Via Injection, pp. A

33

– A

- 42.

### Dishonorable Discharges 19 Figure 6

Two Zero Discharge Scenario s for Produced Water Based on

Current Cook Inlet

Drilling Conditions

Scenario 1:

First, if it is in good repair

, u s e the existing pipeline connecting the closed Dillo n platform to the

East Foreland Treatment Facility as a return line for produced water from onshore, with

injection occurring either at Dillon or at “C ” platform (connected to Dillon by pipeline)

, rather

than injecting treated seawater at “C” to maintain o il field pressure ;

Second, continue us ing the pipeline( s ) from the Granite Point Production Facility to Spark

platform as a return line ( s ) for produced water injection at Spark platform. Th i s line ( s ) should

be able to

carry produced water

from Bruce and Granite Point platforms for injection at Sp ark

platform ; and

Third

, there are two

, comparatively low

- cost zero discharge options for the Trading Bay

Production Facility. One or both of these options might need to be utilized to address the large

volume o f Trading Bay produced water. T hese options are: 1) construct a single, new large

diameter produced water pipeline from Trading Bay Production Facility to an offshore platform

in the McArthur River (King Salmon, Grayling, Steelhead, or Dolly Varden platf orms ) or

Trading Bay (Monopod

platform ) fields for injection at a platform (s) , with optional feeder lines

to nearby platforms ( assuming the injection formation could assimilate the quantity of produced

water generated

) ; 2) when one of the McArthur River fi eld’s platforms shuts down or when

Monopod shuts down

, require that one of the pipelines connecting these platforms to the Trading

Bay Production Facility be used ( if it is good repair ) as a return line for produced water,

followed by injection at the shut

- in platform

.

Scenario 2:

Utilize current geologic (including recent well) data and modern subsurface analysis techniques

and drill a Class II disposal well (s) near the Trading Bay Production Facility for produced

water disposa l. Given the studies poin ting to problems with an injection well within three miles

of the Trading Bay f

acility, 37 

### however, such a well may need to be as much as five miles away.

Under Scenario 1 , there may need to be zero or perhaps only one new major underwater pipeline

constru cted

. Even with existing discharge s from the Bruce platform continuing ( EPA estimates

this platform will cost $4.6 million to upgrade in 1995$ 38 

### ) , more than 99% of current produced

water discharges would be eliminated under S cenario 1

. Thus, by eliminatin g up to 71% of the

estimated capital costs for new pipelines plus the 15% of the estimated capital costs which are

unnecessary due to changes in platform status since the industry/EPA zero discharge analysis,

37 Zero Discharge Analysis , op. cit., p. 2.30 ff.

38 Development Document , op. cit., p. A

- 39.

### Dishonorable Discharges 20

86% of the estimated capital costs likely are u nnecessary. As a result, EPA’s previous overall

cost estimate may be as much as seven times as high as today’s conditions warrant :

100% / (100%

- 86%) = 7.1 times too high an estimate

In its Development Document for the ELG, EPA states that potential sc aling and well

- plugging

problems due to produced water injection in the seawater injection wells can be overcome with

proper water treatment:

EPA reviewed the effects of produced water injection and concluded that downhole

problems such as calcium carbona te scale precipitation and bacterial growth can be

mitigated through the use of proper operating procedures. These procedures consist of

pretreatment of the produced water for oil and grease and [total suspended solids], and

continued chemical treatment o f the injection stream. The proper usage of scale

inhibitors can minimize scale deposits in the injection equipment, tubing flow lines, and

injectors. The usage of biocides can minimize bacterial growth, thus reducing the

formation of hydrogen sulfide. In addition to chemical treatment, annual well workovers

can minimize scale build

- up. 39



### As for Scenario 2, drilling one or more o nshore disposal injection well s near the Trading Bay

Production Facility would eliminate 96% of the produced water now discharg ed into Cook Inlet

. While the 1994 industry

- developed Zero Discharge Analysis study concluded that a disposal

injection well in the vicinity of the Trading Bay Production Facility was not technically feasible 40



### or cost effective, the study provided very li mited documentation and raise d a number of

questions which

need to be resolved by independent

, EPA technical experts familiar with the

region’s subsurface geology. Additionally, since the time of the study, Forest Oil has

successfully drilled and operated a Class II disposal well nearby

, drilled into the Kenai formation

approximately three miles from the Trading Bay Production Facility

. 41



### Savings from the zero discharge scenarios proposed above include the lack of need for the

existing onshore oil/water se paration operations now used to meet permit discharge requirements

since produced water (which is contaminated with hydrocarbons) could be injected; and no need

for a diffuser for the Trading Bay Production Facility discharge. 42 

### C osts likely would include

analysis of injection strata; pumping costs; modification of wastewater treatment operations prior

39 Ibid., p. XI

- 39.

40 Zero Discharge Analysis , op. cit. p. 2.30 ff. The two technical concerns raised in the study were the potential for

an over

- pressurized formation which could result in undesirable vertical fractures (potentially contaminating a

drinking water

aquifer)

, and injection of produced water negatively impacting perm e ability of the formation’s clays.

The authors acknowledge the uncertain nature of both concerns, however. In fact, numerous water injection wells

exist 5

- 9 miles from Trading Bay Produc tion Facility (data from Stephen Davies, AOGCC).

41 West McArthur River Unit 4 Class II disposal injection well.

42 See draft U.S. EPA Pemit No.: AKG

- 31

- 5000, section G.2.

### Dishonorable Discharges 21

to injection; permitting of injection wells; and pipeline and injection well construction and/or

reconditioning costs (as needed)

.

UK Offshore Operators A ssociation and member companies issued a zero discharge study in

2005 43 

### where the authors found the average cost of converting seawater injection wells to

produced water injection wells

, n ot including new pipeline costs

, was 5,000 British P ounds per

ton of oil removed , or approximately $30 per g al lon of oil not entering the marine environment

. 44



### This industry

- derived figure is far less than calculated by EPA in its Development Document for

the ELG ; EPA ’s estimate for platform modifications and well injection costs alone (i.e., not

including engineering, insurance and other costs, as well as not including expensive new

pipelines) based on designs s ubmitted by industry w as $ 36.4 million (1995$) 45 

### for capital and

operations & maintenance costs. Assuming 10 years of operation with 32,077 gallons of oil

generated annual

ly (see Table 5 ), the cost of platform

- based injection would be at least $ 113 per

gallon of oil (1995$) not entering the marine environment

. S ince 2005$ are worth over one

fo u rth more than 1995$

, EP A’s Development Document figure is likely to be low

. EPA’s

cost /gallon figure is nearly four times higher than estimated by industry in the UK for injection

of produced water into platform

- based wells rather than

seawater injection.

Table 8 lists all ac tive Class II oil and gas waste injection wells in the Cook Inlet watershed, i.e.,

permitted wells designed to accept oil and gas

- related wastewater s such as the produced water

generated by the Cook Inlet offshore platform wells

. This t able shows that all offshore platform

operators ha ve at least one offshore Class II injection well in operation during 2005 which can

be used for produced water disposal

. Currently, ConocoPhillips injects produced water from its

Tyonek platform, Chevron/Unocal injects water from its Anna platform and, since late 2002,

Forest Oil inject s its produced water at the Osprey platform following onshore oil

- water

separation. Clearly, t he industry already has started moving towards injection of produced water

, with each of these exa mples support ing the assertion that produced water injection is

economic ally viabl

e for Cook Inlet’s offshore platforms

.

Because of

:

• the high price of oil

and state royalty reductions,

• the lack of adequate technical evaluation by EPA to date of lower

- co st, zero discharge

scenarios

,

• the number and ownership of usable Class II wells offshore, and

• the fact that three of twelve (25%) operating Cook Inlet platforms already inject their

produced water,

43 Management of Produced Water on Offshore Oil Installations: A Comparative Assessm ent Using Flow Analysis

– Final Report , Policy Studies Institute for the UK Offshore Operators Association and its member companies, March

2005. See http://www.psi.org.uk /docs/2005/UKOOA/ProducedWater

- Workingpaper.pdf

(last visited on May 9,

2006).

44 Ibid., p. 50.

45 Development Document , op. cit., Table XI

- 18 (including only Platform Modification, Injection Equipment,

Injection Well, and O & M costs), p. XI

- 41.

### Dishonorable Discharges 22

EPA needs to update its economic analysis of zero discha rge for Cook Inlet produced water to

incorporate these factors

.

Table 8

Active Class II Disposal Wells in the Cook Inlet Watershed 46

Facility Owner/

Operator Location Yr.

Opened

Class II Injection Wells (for produced water)

Beaver Creek Unit 2 Marathon Beaver Creek Gas Field 1967

Beluga River Unit BRWD

- 1 ConocoPhillips Beluga Gas Field 1986

Deep Creek NNA 1 Chevron/Unocal Ninilchik area 2002

Granite Point ST 44

- 11 Chevron/Unocal Granite Point Field (offshore) 1968

Ivan River Unit 14

- 31 Chevron/Unoca l Beluga area 1975

Kenai Unit 11

- 17 Marathon Kenai Gas Field 1982

Kenai Unit 24

- 7RD Marathon Kenai Gas Field 2005

Kenai Unit WD

- 1 Marathon Kenai Gas Field 1982

Middle Ground Shoal C44

- 14RD XTO Energy Middle Gr ou nd Shoal F ie ld (offshore) 1978

North Coo k Inlet Unit A

- 12 ConocoPhillips N orth Cook Inlet Gas Field (offshore) 1970

North Trading Bay S

- 05 Marathon Trading Bay Field (offshore) 1969

Redoubt Unit D1 Forest Oil Redoubt Shoal Field (offshore) 2001

Sterling Unit 43

- 09 Marathon Soldotna area 1963

Swanson River Unit 31

- 33WD Chevron/Unocal Kenai National Wildlife Refuge 1981

Swanson River Unit 32

- 33 WD Chevron/Unocal Kenai National Wildlife Refuge 1981

West McArthur River Unit 4 Forest Oil W. McArthur River Field 1998



### D rilling economics : drilli ng wastes

. In its 1996 final rule covering coastal oil and gas extraction

point source discharges, 47 

### EPA assumed that Cook Inlet drilling wastes would be disposed of in a

landfill because it could not evaluate the availability of local grind and inject faci lities. At the

time, EPA knew of only a single landfill for drilling wastes within Cook Inlet (the Kustatan

landfill), and it was unclear if all producers of drilling waste s would be able to use this landfill.

Thus, EPA utilized land disposal costs that were far too high for current conditions in its

economic analysis , i.e., EPA assum e d that the drilling wastes would be sent to a landfill in

Oregon. 48



### Table 9 lists all active drilling waste management facilities in the Cook Inlet watershed

. This

table shows that

–for drilling wastes

–Chevron/Unocal and Marathon opened facilities to grind

and inject drilling wastes since the 1999 Cook Inlet gen eral discharge permit was issued

. Additionally, XTO Energy sends its drilling wastes to a nearby Class II inj ection well the

company operates 49 

### (see Table 8 )

. Moreover, s ince beginning oil production on the Osprey

46 Class II well data from the Alaska Oil and Gas Conservation Commission.

47 See 61 Federal Register 660 90 (December 16, 1996).

48 Ibid.

49 Personal communication with Brad Hill, XTO Energy, May 9, 2006.

### Dishonorable Discharges 23 Table 9

Active Drilling Waste Management Facilities in the Cook Inlet Watershed 50

Facility Owner/

Operator Location Yr.

Opened

Landfills (for d rilling wastes)

Beaver Creek Drilling Waste LF Marathon Beaver Creek Gas Field Early

1980s

Beluga Central Drilling Waste LF ConocoPhillips Beluga Gas Field 1987

Envirotech Drilling Waste Treatment

Facility and Inert Waste LF Envirotech Tyonek area 2003

Envirotech Nikiski Drilling Waste

Treatment

Facility Envirotech Nikiski 2004

Kustatan Ridge Drilling Waste LF Chevron/Unocal Trading Bay 1990

Swanson River Central Drilling Waste LF Chevron/Unocal Swanson River Oil and Gas

Field 1986

West McArthur Rive r Drilling Waste LF Forest Oil Trading Bay 1996

Grind & Inject Facilities (for drilling wastes)

Bruce Platform G & I Facility Chevron/Unocal Bruce Platform 2002

41

- 18 G & I Treatment Facility Marathon Kenai Gas Field 1999



### platform and for its fifth a nd last exploratory well , Forest Oil has grind ed and inject ed its drilling

wastes

. 51 

### The industry already has moved towards injection of drilling wastes

, with each of these

examples showing that grinding and injecting drilling wastes is economically viable for Cook

Inlet’s offshore platforms.

Because of

:

• the high price of oil

and state royalty reductions, and

• the construction of several new drilling waste management facilities in the area

, EPA needs to update its economic analysis of zero discharge for Cook Inle t drilling wastes to

incorporate these factors

.

D isposal technology : drilling wastes

. EPA needs to re

- evaluate its previous assessment that

shows injection of drilling wastes to be technically infeasible in the Cook Inlet region given

Forest Oi l’s current practice with Osprey, Chevron/ Unocal and Marathon

’s recently

- opened

grind and inject facilities , and XTO Energy’s use of its Class II disposal well for drilling wastes

.

50 Drilling waste management facility data from Bob Blanken burg, Alaska Department of Environmental

Conservation.

51 Correspondence from Matt Rader, Alaska Department of Natural Resources to Lois Epstein, July 10, 2003.

### Dishonorable Discharges 24

R ecent technological developments to prevent injection well plugging mean it is more feasible

than ever for Cook Inlet operators to inject drilling wastes. 52 

### In its 1996 Development Document

, EPA stated that the Agency was “unable to estimate the degree to which injection would be

available in Cook Inlet

. ” 53 

### Given the technolog y and facility changes since, EPA clearly should

re

- examine this portion of its analysis in consultation with the AOGCC prior to issuance of a

new general discharge permit.

Further , in 2003 Marathon stated it ha d reduced its exploration and production dis posal costs for

its Cook Inlet operations by using water

- based drilling fluids and beneficial reuse of materials

following water

- washing

, thus reducing the amount of its drilling wastes requiring Class I I

disposal wells . These changes reduced Marathon’s d isposal costs from $53.63 per barrel in 1995

to $5.85 per barrel in the 2000

- 2003 time period

. 54



### Because :

• Cook Inlet operato rs now are injecting substantial amounts of Cook Inlet drilling wastes

,

• improved drilling waste injection technologies are available throughout the Cook Inlet

region , and

• Marathon has developed innovative ways to reduce the amount of drilling wastes

requiring injection

, EPA

– in conjunction with AOGCC

– needs to update its technological analysis of zero

discharge for Cook Inlet drill ing wastes to incorporate these factors

.

Oil impacts on salmon

. National Marine Fisheries Service (NMFS) scientis ts who have done

research following the 1989 Exxon Valdez crude oil spill found that

crude oil constituents are

significantly

more toxic to pi

nk salmon and herring than previously recognized

. Instead of

toxicities in the parts per million (ppm) range, NMFS research ers observed toxicities in the parts

per billion (ppb) rang

e for salmon and herring eggs . H atchlings were deformed at levels of

con taminants 1,000 times less than previously measured. 55



### Because salmon and herring eggs are adversely impacted by oil contamination at levels 1,000

times less than previously recognized , EPA needs to update its scientific analysis of the impacts

of o ffshor e discharges on Cook Inlet marine organisms.

52 “ Problem solver: Invention can handle rock disposal on Slope ,” Sarana Schell, Anchorage Dail y News,

September 8, 2003.

53 Development Document , op. cit., p. VII

- 52.

54 Onshore Drilling Waste Management: Beneficial Reuse of Cuttings , Mark L. Susich (Marathon Oil Company) and

Max W. Schwenne (OASIS Environmental, Inc.), undated.

55 See http://www.afsc.noaa.gov/abl/oilspill/fish.htm (last visited on April 17, 2006).

### Dishonorable Discharges 25

C ontamination in Cook Inlet subsistence foods

. A 2003 EPA study 56 

### shows that Cook Inlet

seafoods contain varying levels of polycyclic aromatic hydrocarbons (chemicals from petroleum

production) and metals (inclu ding mercury, cadmium, and lead, which are contained in oil

industry discharges) for

seafood samples collected in 1997. T he contaminants found were not

–

and are not

– at levels affecting fish populations , however

, the contaminants

can c ontribut e to the

a dverse changes in seafood described by Tribal members and documented by EPA , described in

Section II.

Importantly, th

e EPA study focused solely on the effects of individual pollutants, not the impacts

of two or more pollutants simultaneously contained i n fish tissue s consumed by humans. A

s tudy of multiple pollutants acting in concert to produce biological impacts c ould help shed light

on the adverse changes in seafood described by Tribal members.

T he presence of toxic contaminants in subsistence foo ds documented in EPA’s study, however,

argues against allowing additional toxic discharges into Cook Inlet because of potential, adverse

cumulative impacts over time

.

Recent collectio n of scientific and TEK data on Cook Inlet seafoods show levels of conta mination

that may be impa ir ing seafood quality, so EPA should update its scientific analysis of the

impacts of offshore discharges on Cook Inlet marine organisms.

Cook Inlet b eluga whales

. Cook Inlet’s b eluga whale population was classifi ed as “depleted”

under the Marine Mammal Protection Act in 2000 by NMFS . Declining b eluga whale

populations are shown in F igure 7

, based on data from NMFS

. 57

56 Survey of Chemical Contaminants in Seafoods Collected in the Vicinity of Tyonek, Seldovia, Port Graham and

Nanwalek in Cook Inlet, Alaska , U.S. Environmental Protection Agency, Region 10, EPA 910

- R

- 01

- 003, December

2003.

57 U.S. Marine Mammal Commission

– Annual Report for 2004, Bethesda, MD, May 2005, p. 40

( http://www.mmc.gov/reports/annual/pdf/2004annualreport.pdf , last visited on May 25, 2006).

### Dishonorable Discharges 26 Figure 7

Abundance Estimates for Cook Inlet Beluga Whales, 1994

- 2004

As noted in Section II, EPA acknowledged in the past that Cook Inlet’s offshore oil and gas

operations’ discharges may be contributing to the beluga whale’s decline. There have not been

any studies to date looking at whether Cook Inlet belugas are metabolizing oil. One chemical

discharged by Co ok Inlet operations in particular however , copper, has b een found in high

concentrations in Cook Inlet beluga whales 58



### –the toxicologic implications of high copper levels

currently are unknown.

Based on NMFS’ data on the lack of growth in the number of th e relatively few Cook Inlet

beluga whales (see Figure 7), NMFS recently began a process to determine whether the Cook

Inlet beluga whale should be classified as a “threatened” or “endangered” species under the

federal Endangered Species Act. 59



### EPA

– in c onjunction with NMFS

– needs to determine based on rece nt scientific data whether

zero discharge is necessary to protect Cook Inlet’s “depleted” and potentially “threatened” or

“endangered” b eluga whale population.

58 Concentrations of polychlorinated biphenyls (PCB’s), chlorinated pesticides, and heavy metals and other

elements in tissues of beluga, Delphinapterus leucas , from Cook Inlet, Alaska , Stephen A. Wise, Marine Fisheries

Review, June 22, 2000.

59 See 71 Fed eral Register 14836 (March 24, 2006). This Federal Register notice from NMFS is a request for

information relevant to reassessing the status of the Cook Inlet beluga whale.

### Dishonorable Discharges 27

VIII. Conclusion

EPA likely will issue a new discharge permit for Cook Inlet offshore oil and gas operations in

200 6 . This new permit’s discharge specifications, including pollutant limits, monitoring

frequency and techniques, and reporting requirements, are the primary means the federal

gove rnment uses to keep Cook Inlet marine waters healthy.

The aging

, and consequently less productive nature

, of nearly all Cook Inlet offshore oil and gas

fields

–illustrated in Figure 4

– means that additional platform closures are possible regardless

of EPA’s actions on this permit. Bearing this in mind, Cook Inlet k eeper makes the following

key recommendation to EPA for consideration in general discharge permit renewal:

EPA needs to update the economic, technologic, and scientific information used in t he 1999

general discharge permit process

. EPA should re

- evaluate its decision that zero discharge

is not wa rranted in the renewed permit given known and projected , adverse,

economic and

environmental impacts on the Cook Inlet region should the discharges continue

.

### Dishonorable Discharges 28



# Appendices

### Dishonorable Discharges 29 Appendix 1

EPA’s Regulations for Coastal Oil and Gas Operations

Excerpted from 40 CFR 435.43:

---------------------------------------------------------------------------------------------------------------- Stream Pollutant parameter BAT effluent limitations

----------------------------------------------------------------------------------------------------------------

Produced Water:

(A) All coastal are as except Cook .................................... No discharge.

Inlet.

(B) Cook Inlet...................... Oil & Grease..................... The maximum for any one day

shall not exceed 42 mg/l, and

the 30

- day average shall not

exceed 29 mg/l

. Drilling Fluids, Drill Cuttings, and

Dewatering Effluent: \ 1 \

(A) All coastal areas except Cook .................................... No discharge.

Inlet.

(B) Cook Inlet:.....................

Water

- based drilling fluids, dri ll SPP Toxicity....................... Minimum 96

- hour LC5. of the SPP

cuttings, and dewatering effluent. Toxicity Test \ 4 \ shall be 3%

by volume.

Free oil............................ No discharge. \ 2 \

Diesel oil.......................... No discharge.

Mercury............................. 1 mg/kg dry weight maximum in

the stock barite.

Cadmium............................. 3 mg/kg dry weight maximum in

the stock barite.

Non

- aqueous drilling fluids and .................................... No discharge.

dewatering effluent.

Dr ill cuttings associated with non

- .................................... No discharge. \ 5 \

aqueous drilling fluids.

Well Treatment, Workover and Completion

Fluids:

(A) All coastal areas except Cook ..................................... No d ischarge.

Inlet.

(B) Cook Inlet...................... Oil & Grease...................... The maximum for any one day

shall not exceed 42 mg/l, and

the 30

- day average shall not

exceed 29 mg/l.

Produced Sand........................... .................. ................... No discharge.

Deck Drainage........................... Free Oil \ 3 \ ......................... No discharge.

Domestic Waste.......................... Foam................................. No discharge.

------------------------------- ---------------------------------------------------------------------------------

### Dishonorable Discharges 30 Appendix 1, continued

1 \ BAT limitations for dewatering effluent are applicable prospectively, BAT limitations in this rule are not

applicable to discharges of dew atering effluent from reserve pits which as of the effective date of this rule

no longer receive drilling fluids and drill cuttings. Limitations on such discharges shall be determined by

the NPDES permit issuing authority.

2 \ As determined by the static sheen test (see appendix 1 to 40 CFR Part 435, subpart A).

3 \ As determined by the presence of a film or sheen upon or a discoloration of the surface of the receiving

water (visual sheen).

4 \ As determined by the suspended particulate phase (S PP) toxicity test (see Appendix 2 of Subpart A of this

part).

5 \ When Cook Inlet operators cannot comply with this no discharge requirement due to technical limitations (see

Appendix 1 of Subpart D of this part), Cook Inlet operators shall meet th e same stock limitations (C16

- C18

internal olefin) and discharge limitations for drill cuttings associated with non

- aqueous drilling fluids for

operators in Offshore waters (see § 435.13) in order to discharge drill cuttings associated with non

- aqueous drilling fluids.

### Dishonorable Discharges 31 Appendix 2

Discharge Monitoring Reports for Produced Water from Cook Inlet’s

Offshore Platforms for 2005

Operator /Facility Pr. H2O

(mgd) O/G

(av) O/G

(max) Cu

(av) Cu

(max) Hg

(av) Hg

(max) Zn

(av) Zn

(max) Ag (av) Ag

(max) P b (av) Pb

(max) As (av) As (max) TAH

(av) TAH

(max) TAqH

(av) TAqH

(max)

Chevron/ Unocal

Anna Platform

12/5 0.000000

11/5 0.000000

10/5 0.000000

9/5 0.000000

8/5 0.000000

7/5 0.000000

6/5 0.000000

5/5 0.000000

4/5 0.000000

3/5 0.000000

2/5 0.000000

1/5 0.000000

Average

Bruce Platform

12/5 0.007277 14.0 16.0 154 154 2.0000 2.0000 15640 15640

11/5 0.000000

10/5 0.005229 20.0 20.0 631 631 3.0000 3.0000 15640 15640

9/5 0.009904 22.0 29.0 683 683 8.0000 8.0000 14890 14890

8/5 0.007509 13.0 15.0 274 274 2.0000 2.0000 16440 16440

7/5 0.007680 19.0 20.0 609 609 2.0000 2.0000 13720 13720

6/5 0.007212 17.0 21.0 994 994 1.0000 1.0000 14390 14390

5/5 0.007494 16.0 28.0 1270 1270 2.0000 2.0000 14790 14790

4/5 0.008013 15.0 18.0 1230 1230 1.0000 1.0000 17480 17480

3/5 0.007160 13.0 21.0 1870 1870 2.0000 2.0000 15660 15660

2/5 0.007306 19.0 23.0 23900 23900 2.0000 2.0000 15455 15455

1/5 0.009027 11.0 14.0 4710 4710 2.0000 2.0000 18870 18870

Average 0.006984 16.3 20.5 3617 3617 2.5000 2.5000 15734 15734

Granite Pt. Prod. Fac.

12/5 0.018627 19.0 26.0 7.00 7.00 0.2000 0.2000 2.000 2.000 13900 13900

11/5 0.019458 16.0 17.0 7.00 7.00 0.2000 0.2000 7.600 7.600 10740 10740

10/5 0.017983 14.0 19.0 84.00 84.00 0.2000 0.2000 11.000 11.000 12590 12590

9/5 0.019360 15.0 23.0 10.00 10.00 0.2000 0.2000 1.000 1.000 15200 15200

8/5 0.016867 20.0 28.0 11.00 11.00 0.2000 0.2000 3.700 3.700 13000 13000

7/5 0.016715 20.0 28.0 15.00 15.00 0.2000 0.2000 3.300 3.300 11630 11630

### Dishonorable Discharges 32 Appendix 2, continued

Operator /Facility Pr. H2O

(mgd) O/G

(av) O/G

(max) Cu

(av) Cu

(max) Hg

(av) Hg

(max) Zn

(av) Zn

(max) Ag (av) Ag

(max) Pb (av) Pb

(max) As (av) As (max) TAH

(av) TAH

(max) TAqH

(av) TAqH

(max)

Granite Pt. Prod. Fac.

6/5 0 .012440 21.0 28.0 10.00 10.00 0.2000 0.2000 1.610 1.610 14190 14190

5/5 0.015539 18.0 22.0 5.00 5.00 0.2000 0.2000 5.000 5.000 13840 14390

4/5 0.028644 18.0 18.0

- - - - - - - -

3/5 0.000000

2/5 0.000000

1/5 0.022662 20.0 22.0 5.00 5.00 0.4800 0.4800 2.000 2.000 13540 13540

Average 0.015691 18.1 23.1 17.11 17.11 0.2311 0.2311 4.134 4.134 13181 13242

Trading Bay Production. Fac.

12/5 4.25 4137 24.0 33.0 6.80 8.00 2.000 3.000 8280 9820 8374 9919

11/5 4.473566 21.0 28.0 37.30 93.00 4.000 9.000 12320 22920 12429 23023

10/5 4.402039 19.0 22.0 23.80 86.00 5.000 8.000 8388 9100 8505 9250

9/5 4.410095 20.0 24.0 27.70 50. 00 1.000 2.000 7763 8620 7887 8760

8/5 4.437456 19.0 27.0 7.70 10.00 5.000 10.000 9083 9890 9177 9972

7/5 4.611490 16.0 22.0 6.70 8.00 2.000 3.000 7254 8160 7348 8280

6/5 4.481904 18.0 24.0 5.60 6.00 2.000 3.000 9520 1470 0 9644 14819

5/5 4.459338 17.0 24.0 5.00 5.00 2.000 2.000 10208 21020 10356 21174

4/5 4.380642 29.0 60.0 5.40 12.00 2.000 3.000 7788 8380 7928 8516

3/5 4.129437 18.0 24.0 4.80 7.00 2.000 2.000 7618 8080 7754 8237

2/5 4.236486 16 .0 27.0 9.70 25.00 2.000 2.000 7382 8090 7818 8707

1/5 4.152223 18.0 26.0 4.80 8.00 2.000 3.000 9059 9760 9968 10816

Average 4.369068 19.6 28.4 12.11 26.50 2.583 4.167 8722 11545 8932 11789

XTO Energy

E. Foreland Trtmt. Fac.

12/5 0.218000 11.0 15.0 0.00 0.00 0.0000 0.0000 61.2000 61.2000 0.000 0.000 186.0000 186.0000 15340 15340 15340 15340

11/5 0.212000 8.0 9.0 0.00 0.00 0.0000 0.0000 0.0381 0.0381 0.000 0.000 0.098 5 0.0985 15990 15990 16191 16191

10/5 0.177000 8.0 13.0 0.00 0.00 0.0000 0.0000 0.0000 0.0000 0.000 0.000 0.0000 0.0000 14260 14260 14438 14438

9/5 0.159000 11.0 12.0 7.54 7.54 0.0000 0.0000 11.8000 11.8000 1.080 1.080 163.0000 163.0000 14000 14000 1 4229 14229

8/5 0.137000 12.0 16.0

- - - - - - - - - - - - - -

7/5 0.141000 12.0 16.0 0.00 0.00 0.0000 0.0000 0.0000 0.0000 0.007 0.007 0.0400 0.0400 11530 11530 11702 11702

6/5 0.138000 14.0 20.0 0.00 0.00 0.0000 0.0000 0.0000 0.0000 0.000 0.000 0 .0400 0.0400 11010 11010 11242 11242

5/5 0.138000 11.0 14.0 0.00 0.00 0.0000 0.0000 0.0000 0.0000 0.000 0.000 0.0400 0.0400 9821 9821 10151 10151

4/5 0.140000 15.0 23.0 0.00 0.00 0.0000 0.0000 0.0000 0.0000 0.003 0.003 0.0400 0.0400 17900 17900 18136 18136

3/5 0.148000 13.0 20.0 0.00 0.00 0.0000 0.0000 0.0016 0.0016 0.000 0.000 0.0362 0.0362 15790 15790 16026 16026

2/5 0.165000 6.0 7.0 0.01 0.01 0.0002 0.0002 0.1000 0.1000 0.001 0.001 0.0025 0.0025 14120 14120 14518 14518

1/5 0.157000 17.0 23.0 0.00 0.00 0.0000 0.0000 0.0000 0.0000 0.000 0.000 1.0000 1.0000 15780 15780 17254 17254

Average 0.160833 11.5 15.7 0.69 0.69 0.0000 0.0000 6.6491 6.6491 0.099 0.099 31.8452 31.8452 14140 14140 14475 14475

### Dishonorable Discharges 33 Appendix 2, continued

Operator /Facility Pr . H2O

(mgd) O/G

(av) O/G

(max) Cu

(av) Cu

(max) Hg

(av) Hg

(max) Zn

(av) Zn

(max) Ag (av) Ag

(max) Pb (av) Pb

(max) As (av) As (max) TAH

(av) TAH

(max) TAqH

(av) TAqH

(max)

Phillips Petroleum

Tyonek A Platform

12/5 0. 000000

11/5 0.000000

10/5 0.000000

9/5 0.000000

8/5 0.000000

7/5 0.000000

6/5 0.000000

5/5 0.000000

4/5 0.000000

3/5 0.000000

2/5 0.000000

1/5 0.000000

Average 0.000000