U.S. Environmental Protection Agency


### Documentation of OMB Review Under Executive Order 12866 Title of Action:

Docket#: FRL#: RIN: This action was submitted to the Office of Management and Budget (OMB) for review under Executive Order (E.O.) 12866 , titled Regulatory Planning and Review (58 FR 51735, October 4, 1993). Whenever EPA makes publicly available a regulatory action that was reviewed under E.O. 12866, section 6(a)(3)(E) of the E.O. directs the Agency to also: (1) Make available to the public a copy of the information that was provided to OMB’s Office of Information and Regulatory Affairs (OIRA) for review under the E.O., i.e. , the text of the draft regulatory action and, if applicable, an assessment of the potential costs and benefits, as well as additional information for those actions that are determined to be economically significant under the E.O. (Information requirements are described in sections 6(a)(3)(B) and (C)). (2) Identify for the public any substantive changes between the draft submitted to OIRA and the action that was subsequently issued, using a method that is complete, clear, and simple. (3) Identify for the public those substantive changes made at the suggestion or recommendation of OIRA. For this regulatory action, were substantive changes made to information reviewed under E.O. 12866? [Please check the appropriate answer.] No. [In the docket, include the information identified in item (1) below.] Yes. [In the docket, include the information identified in items (1) – (3) below.] Accordingly, the Agency has included this form and the following information in the public docket for this regulatory action: [Please check the appropriate information.] (1) A copy of the information that was provided to OIRA for review under the E.O. (2) Documentation of any substantive changes made to the draft regulatory text that was submitted to OIRA when compared with what was subsequently made publicly available. The documentation is provided on the pages following this form. Changes made at the suggestion or recommendation of OIRA, if any, are clearly identified through attribution to OIRA. EPA has used one or more of the following methods to note changes: [Select the appropriate option(s).] (a) Redline-Strikeout – A copy of the draft regulatory action submitted, using redlinestrikeout to show the substantive changes that were made. (b) Hand Markup – A copy of the draft regulatory action submitted, using handwritten notes to show the substantive changes that were made. (c) Note to the file - A document that identifies the substantive changes that were made, with page and paragraph references to the draft regulatory action that was submitted. If you have any questions about this regulatory action or this documentation, please call the contact: Name: Email: Phone: Revised 05/05/2010 Effluent Limitations Guidelines and Standards for the Oil and Gas Extraction Point Source Category

EPA-HQ-OW-2014-0598 FRL-9917-78-OW 2040-AF35

Lisa Biddle biddle.lisa@epa.gov 202-566-0350*** E. O. 12866 Review

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Page 1 of 92 EO12866_OilandGasEffluentGuidelinesandStan dards RIN 2040-AF35 NPRM FRN_20141015

6560-50-P ENVIRONMENTAL PRO TECTION AGENCY 40 CFR Part 435 [EPA-HQ-OW-2014
- 0598; FRL-9917-78-OW] RIN 2040-AF35 Effluent Limitations Guidelin es and Standards for the Oil and Gas Extraction Point Source Category

AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: The EPA proposes a Clean Water Act regulation that would better protect public health and the environment and protec t the operational integr ity of publicly owned treatment works (POTWs) by establishing pretr eatment standards that would prevent the discharge of pollutants in wastewater from onshore unconventional oil and gas extraction facilities to publicly owne d treatment works. Unconventional oil and gas (UOG) extraction wastewater may be generated in la rge quantities and contains constituents that are potentially harmful to human health a nd the environment. Because they are not typical of POTW influent wastewater, some UOG extraction wastewater constituents may be discharged, untreated, from the POTW to the receiving stream; may disrupt the operation of the POTW (e.g., by inhibiting biol ogical treatment); may accumulate in biosolids (sewage sludge), limiting its use; a nd may facilitate the formation of harmful disinfection by-products. Because the requireme nts in this proposal reflect current industry practice for unconventional oil and ga s extraction facilities, the EPA does not*** E. O. 12866 Review

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Page 2 of 92 project the proposed rule will impose any cost s or lead to pollutant removals, but will ensure that such current industry best practice is maintained over time.

DATES: Comments on this proposed rule must be received on or before [ insert date 60 days after publication in the Federal Register ]. The EPA will conduct a public hearing on the proposed pretreatment standard s on XXX[INSERT DATE] at XXX[INSERT TIME] in the EPA East Building, Room 1153, 1201 Constitution Avenue, NW, Washington, DC.

ADDRESSES: Submit your comments on the proposed rule, identified by Docket No. EPA-HQ-OW-2014-0598 by one of the following methods:

 http:www.regulations.gov: Follow the on-line instructions for submitting

comments.

 Email: OW-Docket@epa.gov, Attention Docket ID No. EPA-HQ-OW-2014-
0598.

 Mail: Water Docket, U.S. Environmenta l Protection Agency, Mail code: 4203M, 1200 Pennsylvania Ave., NW., Washington, DC 20460. Attention Docket ID No. EPAHQ-OW-2014-0598. Please in clude three copies.

 Hand Delivery: Water Docket, EPA Dock et Center, EPA West Building Room 3334, 1301 Constitution Ave., NW, Washington, DC, Attention Docket ID No. EPA-HQOW-2014-0598. Such deliveries are only accepted during the Docket’s normal hours of operation, and you should make special arrangeme nts for deliveries of boxed information by calling 202-566-2426.*** E. O. 12866 Review

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Page 3 of 92 Instructions : Direct your comments to Do cket No. EPA-HQ-OW-2014-0598. The EPA's policy is that all comments received wi ll be included in the public docket without change and may be made available onlin e at http://www.regulations.gov, including any personal information provided, unless the comme nt includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit informa tion that you consider to be CBI or otherwise protected through http://www.regulations.gov or email. The http://www.regulations.gov website is an “anonymous access” system, which means the EPA will not know your identity or contact information unless you pr ovide it in the body of your comment. If you send an email comment directly to the EPA without going through http://www.regulations.gov your email addre ss will be automatica lly captured and included as part of the commen t that is placed in the public docket and made available on the Internet. If you submit an electronic comment, the EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarificatio n, the EPA may not be able to consider your comment. Electronic files should avoid th e use of special characters, any form of encryption, and be free of a ny defects or viruses.

Docket : All documents in the docket are li sted in the http://www.regulations.gov index. A detailed record index, organized by subject, is available on the EPA’s website at http://water.epa.gov/scitech/wastetech/gui de/steam_index.cfm. Although listed in the index, some information is not publicly available, e.g. , CBI or other information whose disclosure is restricted by st atute. Certain other material, such as copyrighted material,*** E. O. 12866 Review

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Page 4 of 92 will be publicly available only in hard c opy. Publicly available docket materials are available either electronically in http://www. regulations.gov or in hard copy at the Water Docket in the EPA Docket Center, EP A/DC, EPA West, Room 3334, 1301 Constitution Ave., NW, Washington, DC. The Public Read ing Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding lega l holidays. The telephone number for the Public Reading Room is 202-566-1744, and th e telephone number for the Water Docket is 202-566-2426.
Pretreatment Hearing Information : The EPA will conduct a public hearing on the proposed pretreatment standards on XXX[I NSERT DATE] at XXX[INSERT TIME] in the EPA East Building, Room 1153, 1201 C onstitution Avenue, NW, Washington, DC. No registration is required for this public hearing. During the hearing, the public will have an opportunity to provide oral comm ent to the EPA on the proposed pretreatment standards. The EPA will not address any issues raised during the hearing at that time but these comments will be included in the public record for the rule. For security reasons, we request that you bring photo identification with you to the meeting. Also, if you let us know in advance of your plans to attend, it wi ll expedite the process of signing in. Seating will be provided on a fi rst-come, first-served basis. Please note that parking is very limited in downtown Washington, and use of public transit is recommended. The EPA Headquarters complex is located near the Federal Triangl e Metro station. Upon exiting the Metro station, walk east to 12t h Street. On 12th Street, walk south to Constitution Avenue. At the corner, turn ri ght onto Constitution Avenue and proceed to the EPA East Building entrance.*** E. O. 12866 Review

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Page 5 of 92 FOR FURTHER INFORMATION CONTACT: For technical information, contact Lisa Biddle, Engineering and Analysis Division, Telephone: 202-566-0350; email: biddle.lisa@epa.gov. For economic information, contact Karen Milam, Engineering and Analysis Division, Telephone: 202-566- 9752; email: milam.karen@epa.gov.

SUPPLEMENTARY INFORMATION: Table of Contents I. Regulated Entities II. How to Submit Comments III. Supporting Documentation IV. Overview V. Legal Authority VI. Purpose and Summary of Proposed Rule A. Purpose of the Regulatory Action B. Summary of the Proposed Rule C. Summary of Costs and Benefits VII. Background A. Clean Water Act B. Effluent Limitations Guid elines and Standards Program 1. Best Practicable Control Tec hnology Currently Available (BPT) 2. Best Conventional Pollutant Control Technology (BCT) 3. Best Available Technology Economically Achievable (BAT) 4. Best Available Demonstrated Co ntrol Technology (BADCT)/New Source Performance Standards (NSPS) 5. Pretreatment Standards fo r Existing Sources (PSES) and Pretreatment Standards for New Sources (PSNS) C. Oil and Gas Extraction Effluent Guidelines Rulemaking History 1. Subpart C: Onshore 2. Subpart E: Agricultural and Wildlife Use D. State Pretreatment Requirements th at Apply to UOG Extraction Wastewater E. Related Federal Requirements in the Safe Drinking Water Act VIII. Summary of Data Collection*** E. O. 12866 Review

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Page 6 of 92 A. Site Visits B. Meetings with Stakeholder Organizations 1. Stakeholder Organizations 2. State Stakeholders C. Secondary Data Sources D. Drilling Info Desktop® Data Set E. The EPA Hydraulic Fracturing Study IX. Description of the Oil and Gas Industry A. Economic Profile B. Industry Structure and Economic Performance C. Financial Performance X. Scope XI. Unconventional Oil and Gas Extraction: Resources, Process, and Wastewater A. Unconventional Oil and Gas Extraction Resources B. Unconventional Oil and Gas Extraction Process 1. Well Drilling 2. Well Completion 3. Production C. UOG Extraction Wastewater 1. Drilling Wastewater 2. Produced Water D. UOG Extraction Wastewater Characteristics 1. TDS and TDS-Contributing Ions 2. Organic Constituents 3. Radioactive Constituents E. Wastewater Management and Disposal Practices 1. Injection into Disposal Wells 2. Reuse in Fracturing 3. Transfer to Centralized Waste Treatment Facilities 4. Transfer to POTWs XII. Subcategorization XIII. Proposed Regulation A. Discussion of Options 1. PSES and PSNS Option Selection 2. Other Options Considered*** E. O. 12866 Review

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Page 7 of 92 B. Pollutants of Concern C. POTW Pass Through Analysis XIV. Environmental Impacts A. Pollutants B. Impacts from the Discharge of Pollu tants Found in UOG Extraction Wastewater C. Impact on Surface Water Designated Uses 1. Drinking Water Uses 2. Aquatic Life Support Uses 3. Livestock Watering Uses 4. Irrigation Uses 5. Industrial Uses XV. Non-Water Quality Envir onmental Impacts Associated with the Proposed Rule XVI. Implementation A. Implementation Deadline B. Upset and Bypass Provisions C. Variances and Modifications XVII. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Pla nning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation a nd Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Ch ildren from Environmental Health and Safety Risks H. Executive Order 13211: Energy Effects I. National Technology Transfer Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations

I. Regulated Entities Entities potentially regulated by this proposed action include:*** E. O. 12866 Review

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Page 8 of 92 Category Examples of Regulated Entities North American Industry Classification System (NAICS) Code Industry Crude Petroleum and Natural Gas Extraction 211111 Natural Gas Liquid Extraction 211112

This section is not intended to be exha ustive, but rather provides a guide for readers regarding entities likely to be regulat ed by this proposed action. Other types of entities that do not meet the a bove criteria could also be regulated. To determine whether your facility would be regul ated by this proposed action, you should carefully examine the applicability crite ria listed in 40 CFR 435.30 and the definitions in 40 CFR 435.33(b) of the proposed rule and detailed further in Section X – Scope, of this preamble. If you still have questions regarding the proposed applicability of this action to a particular entity, consult the person listed for technical information in the preceding FOR FURTHER INFORMATION CONTACT section.

II. How to Submit Comments The public may submit comments in writt en or electronic form. (See the ADDRESSES section above.) Elec tronic comments must be identified by the Docket No. EPA-HQ-OW-2014-0598 and must be submitted as a MS Word, WordPerfect, or ASCII text file, avoiding the use of special char acters and any form of encryption. The EPA requests that any graphics incl uded in electronic comments al so be provided in hard-copy form. The EPA also will accept comments and data on disks in the aforementioned file formats. Electronic comments received on this notice may be filed online at many Federal Depository Libraries. No confidential bus iness information (CBI) should be sent by email.*** E. O. 12866 Review

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Page 9 of 92 III. Supporting Documentation The proposed rule is supported by a numb er of documents including the Technical Development Document for Proposed Pretre atment Standards for Unconventional Oil and Gas Extraction in the Onshore Oil and Gas Subcategory (TDD), Document No. EPAXXX-X-XX-XXX (DCN SGE00704). This and othe r supporting documents are available in the public record for this propos ed rule and on EPA’s website at http://water.epa.gov/scitech/waste tech/guide/oilandgas/unconv.cfm.

IV. Overview This preamble describes the reasons for th e proposed rule; the legal authority for the proposed rule; a summary of the options considered for the proposal; background information, including terms, acronyms, and abbr eviations used in this document; and the technical and economic methodologies used by th e Agency to develop the proposed rule. In addition, this preamble also solicits comment and data from the public.

V. Legal Authority The EPA proposes this regulation under the authorities of sections 101, 301, 304, 306, 307, 308, and 501 of the Clean Water Act (CWA), 33 U.S.C. 1251, 1311, 1314, 1316, 1317, 1318, 1324, and 1361.

VI. Purpose and Summary of Proposed Rule
A. Purpose of the Regulatory Action Responsible development of America’s oi l and gas resources offers important economic, energy security, and environmental be nefits. The EPA is working with states and other stakeholders to understand and address potential impacts of hydraulic*** E. O. 12866 Review

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Page 10 of 92 fracturing so the public has confidence that oil and natural gas production will proceed in a safe and responsible manner. The EPA is moving forward with se veral initiatives to provide regulatory clarity with respect to existing laws and using existing authorities where appropriate to enhance public health a nd environmental safeguards. This proposed rule would fill a gap in existing federal wastew ater regulations to ensure that the current practice of not sending wastewater discharg es from this sector to publicly owned treatment works continues into the future. Recent advances in the well completion process, combining hydraulic fracturing and horizontal drilling, have made extr action of oil and natural gas from low permeability, low porosity geologic formations (referred to hereafter as unconventional oil and gas (UOG) resources) more technological ly and economically feasible than it had been. For example, in 2010, U.S natural gas production reached its highest level in more than 30 years with much of the increase resu lting from the production of natural gas from shale formations. The U.S. Department of En ergy projects natural gas production in the U.S. will likely increase by 44 percent by 2040, compared to 2011 production levels (DCN SGE00487). Hydraulic fractu ring is used to extract oil and natural gas from highly impermeable rock formations, such as shale rock, by injecting fracturing fluids at high pressures to create a network of fissures in the rock formations and give the oil and/or natural gas a pathway to travel to the we ll for extraction. Pressure within the low permeability, low porosity geologic formations for ces wastewaters, as well as oil and/or gas, to the surface. In this proposed rulemaking, oil and gas extraction includes production, field exploration, dr illing, well completion, and/or well treatment; wastewater*** E. O. 12866 Review

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Page 11 of 92 sources associated with these activities in low permeability, low porosity formations are collectively referred to as UOG extraction wastewater. Direct discharges of oil and gas extracti on wastewater pollutants from onshore oil and gas resources, including UOG resources, have been regulated since 1979 under the existing Oil and Gas Effluent Limitations Guid elines and Standards (ELGs) (40 CFR part 435), the majority of which fall under subpart C, the Onshore Subcategory. The limitations for direct dischargers in the Ons hore Subcategory represent Best Practicable Control Technology Currently Available (BPT). Based on the availability and economic practicability of underground injection technolog ies, the BPT-based limitations for direct dischargers require zero discha rge of pollutants to waters of the United States. However, there are currently no requirements in s ubpart C that apply to onshore oil and gas extraction facilities that are “indirect dischargers,” i.e. , those that send their discharges to publicly owned treatment works (municipal wastewater treatment facilities) known as
“POTWs.”
UOG extraction wastewater may be genera ted in large quanti ties and contains constituents that are potentially harmful to human health and the environment. Wastewater from UOG wells ofte n contains high concentrati ons of total dissolved solids (TDS) (salt content). The wastewater may also contain various organic chemicals, inorganic chemicals, metals, and naturally-occu rring radioactive materials (referred to as technologically enhanced naturally occurring radioac tive material or TENORM) 1 . This

1 Naturally occurring radioactive ma terials that have been concentr ated or exposed to the accessible environment as a result of human activities such as manufacturing, mineral extraction, or water processing is referred to as technologically enhanced naturally occurring radioactive material (TENORM). “Technologically enhanced” means that the radiological, physical, an d chemical properties of the*** E. O. 12866 Review

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Page 12 of 92 potentially harmful wastewater creates a n eed for appropriate wa stewater management infrastructure and management practices. Hist orically, operators primarily managed their wastewater via underground inje ction (where available). Where UOG wells were drilled in areas with limited underground injection wells, and/or there was a lack of wastewater management alternatives, it became more common for operators to look to public and private wastewater treatment facilities to manage their wastewater.

POTWs collect wastewater from homes, commercial buildings, and industrial facilities and pipe it to a centr al treatment plant. In some cases, industrial dischargers may haul wastewater to the treatment plant by tanker truck. The i ndustrial wastewater, commingled with domestic wastewater, is treated by the POTW and discharged to a receiving waterbody. However, most POTWs ar e designed primarily to treat municipally generated, not industrial, wastewater. They typically provide at least secondary level treatment and, thus, are designed to remove su spended solids and or ganic material using biological treatment. As mentioned previ ously, wastewater fro m UOG extraction may contain high concentrations of TDS, radioactive elements, me tals, chlorides, sulfates, and other dissolved inorganic constituents that POTWs are not designed to remove. Because they are not typical of POTW influent wa stewater, some UOG extraction wastewater constituents can be discharged, untreated, fr om the POTW to the receiving stream; can disrupt the operation of the POTW ( e.g. , by inhibiting biological treatment); can accumulate in biosolids (sewage sludge), limiting its use; and can facilitate the formation of harmful disinfection by-products.

radioactive material have been altered by having been processed, or beneficiated, or disturbed in a way that increases the potential for human and/or environmental exposures. (See EPA 402-r-08-005-v2)*** E. O. 12866 Review

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Page 13 of 92 Under section 307(b) of the Clean Wate r Act (CWA), ther e are general and specific prohibitions on the discharge to POTW s of pollutants in specified circumstances in order to prevent “pass through” or “inter ference.” Pass through is defined as whenever the introduction of pollutants from a user wi ll result in a discharge that causes or contributes to a violation of any requirement of the POTW permit. See 40 CFR 403.3(p). Interference means a discharge that, am ong other things, inhibits or disrupts the POTW or prevents biosolids us e consistent with the POTW’s chosen method of disposal. See 40 CFR 403.3(k). These general and speci fic prohibitions must be implemented through local limits esta blished by POTWs in certain cases. See 40 CFR 403.5(c). POTWs with approved pretreatment programs must develop and enforce local limits to implement the general prohibitions on user discharges that pass through or interfere with the POTW or discharges to the POTW prohibited under the specific prohibitions in 40 CFR 403.5(b) . In the case of POTWs not required to develop a pretreatment program, the POTWs must devel op local limits where there is interference or pass through and the limits are necessary to ensure compliance with the POTW’s NPDES permit or biosolids use.
Under section 307(b) of the CWA, the EPA is authorized to establish nationally applicable pretreatment standards for industr ial categories that discharge indirectly ( i.e. , requirements for an industrial discharge cate gory that sends its wastewater to any POTW) for pollutants not susceptible to treatment by POTWs or for pollutants that would interfere with the operation of POTWs. Gene rally, the EPA designs nationally applicable pretreatment standards for categories of industry (also referred to as categorical pretreatment standards) to ensure that wast ewaters from direct a nd indirect industrial*** E. O. 12866 Review

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Page 14 of 92 dischargers would be subject to similar levels of treatment. The EPA, in its discretion under section 304(g) of the Act, periodically ev aluates indirect dischargers not subject to categorical pretreatment standards to identi fy potential candidates for new pretreatment standards. To date, the EPA has not establ ished nationally appli cable pretreatment standards for the onshore oil and gas extraction point source subcategory.
To legally discharge wastewater, the PO TW must have an NPDES permit that limits the type and quantity of pollutants that it may discharg e. Discharges from POTWs are subject to the secondary treatment effl uent limitations at 40 CFR part 133, which address certain conventional pollutants but do no t address the main parameters of concern in UOG extraction wastewater ( e.g. , TDS, chloride, radionuclid es, etc.). POTWs are also subject to water quality-based effluent lim itations (WQBELs) where necessary to protect state water quality standards, as required under CWA section 301(b)(1)(C).
It is currently uncommon for POTWs to establish local limits for some of the parameters of concern identified for this proposed rulema king. This is due to a number of factors, including lack of suff icient information regarding po llutants in the wastewater being sent to POTWs; lack of national water quality recommendations for key pollutants, such as TDS, and lack of state water quali ty criteria for such key pollutants in some states, all of which can create significant in formational hurdles to including appropriate WQBELs in POTW permits. Where a POTW’s permit does not contain a WQBEL for all of the constituents of concer n in the wastewater being sent to POTWs, it is difficult to demonstrate pass through of industrial pollutants (because “pass through” here means making the POTW exceed its permit limits), a nd thus difficult for POTWs to establish local limits to implement the general prohibi tion in the pretreatme nt regulations.*** E. O. 12866 Review

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Page 15 of 92 As a result of the gap in federal CWA regulations, increases in onshore oil and gas extraction from UOG resour ces and the related generatio n of wastewater requiring management, concerns over the level of treatment provided by public wastewater treatment facilities, as well as potential interference with treatment processes, and concerns over water quality and aquatic life impacts that may result from inadequate treatment, the EPA proposes technology-based categorical pretreatment standards under the CWA for discharges of pollutants in to POTWs from existing and new onshore UOG extraction facilities in subpart C of 40 CFR part 435. Consistent with existing BPT-based requirements for direct dischargers in this subcategory, the EPA proposes pretreatment standards for existing and new sources ( PSES and PSNS, respectively) that would prohibit the indirect discharg e of wastewater pollutants associated with onshore UOG extraction facilities. Based on the informati on reviewed as part of this proposed rulemaking, this proposal reflec ts current industry practice. The EPA has not identified any existing onshore UOG extraction facilities that currently discharge UOG extraction wastewater to POTWs. Because onshore unconv entional oil and gas extraction facilities have discharged to POTWs in the past, a nd because the potential remains that some facilities may consider discharging to POTWs in the future, the EPA proposes this rule.

B. Summary of the Proposed Rule The EPA proposes pretreatment standard s for existing and new sources (PSES and PSNS, respectively) that would prohibi t the indirect discharge of wastewater pollutants associated with onshore UOG extr action facilities. The EPA is defining UOG extraction wastewater as sources of po llutants associated with production, field exploration, drilling, well comp letion, or well treatment ( e.g., produced water (which*** E. O. 12866 Review

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Page 16 of 92 includes formation water, injection water, and any chemicals added downhole or during the oil/water separation process); drilling muds; drill cuttings; produced sand). Because there are no known discharges to POTWs fr om UOG extraction at the time of this proposal, the EPA proposes that PSES and PSNS that would require zero discharge be effective as of the effectiv e date of this rule.
The EPA does not propose pretreatment standards for wastewater pollutants associated with conventional oil and gas extr action facilities at this time. EPA proposes to reserve such standards to a fu ture rulemaking, if appropriate.

C. Summary of Costs and Benefits Because the UOG extraction industry is not currently managing wastewaters by sending them to POTWs, the proposed rule causes no incremental change to current industry practice that the EPA measured as compliance costs or monetized benefits.

Still, the EPA has considered that while states, localities, and POTWs are not currently approving these wastewaters for acceptance at POTWs, some POTWs continue to receive requests to accept UOG extract ion wastewater (DCN SGE00742; DCN SGE00743; DCN SGE00762). This proposed rule would provide regu latory certainty and would eliminate the burden on POTWs to analyze such requests. It would also eliminate the need to deve lop requirements in states where UOG extraction is not currently occurring, but is likely to occur in the future. While the EPA knows there will likely be some reduction in state and POTW staff time and resources, the EPA did not attempt to estimate, quantitatively, monetary savings associated with the reduced burden to states and localities that would result from this proposed rule.*** E. O. 12866 Review

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Page 17 of 92 In addition, the EPA predicts that bo th compliance costs and environmental benefits of the proposed rule would be rea lized in the future if demand returns for POTWs to accept UOG extraction wastewaters. Most POTWs are not able to sufficiently treat TDS and many other pollutants in UOG extraction wastewater, and thus this proposed rule would potentially prevent el evated TDS and the presence of other pollutants in POTW effluent. Prevention of the discharge of TDS accomplished by the proposed rule would further protect water qua lity because national wa ter quality criteria recommendations have not yet been established for many constituents of TDS. The proposed rule could also impose some costs on industry if discharging wastewaters to POTWs becomes economically attractive to UOG operations relative to other management options in the future. The EPA did not estimate these potential compliance costs or environmental benefits because of the uncertainty about future demand for POTWs to accept UOG extraction wastewaters a nd the associated incremental costs or benefits.

VII. Background
A. Clean Water Act Congress passed the Federal Water Pollution Control Act Amendments of 1972, also known as the Clean Water Act (CWA), to “restore and maintain the chemical, physical, and biological integrity of the Na tion’s waters.” 33 U.S.C. 1251(a). The CWA establishes a comprehensive program for prot ecting our nation’s waters. Among its core provisions, the CWA prohibits the discharge of pollutants from a poi nt source to waters of the U.S., except as aut horized under the CWA. Under section 402 of the CWA, discharges may be authorized through a Nati onal Pollutant Discharge Elimination System*** E. O. 12866 Review

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Page 18 of 92 (NPDES) permit. The CWA establishes a two-pronged approach for these permits, technology-based controls that establish the fl oor of performance for all dischargers, and water quality-based limits where the technol ogy-based limits are insufficient for the discharge to meet applicable water quality standards. To serve as the basis for the technology-based controls, the CWA aut horizes the EPA to establish national technology-based effluent limitations guideli nes and new source performance standards for discharges from different categories of poi nt sources, such as i ndustrial, commercial, and public sources, that disc harge directly into waters of the United States.

The CWA also authorizes the EPA to promulgate nationally applicable pretreatment standards that restrict pollutant discharges from faci lities that discharge pollutants indirectly, by sending wastewater to POTWs, as outlined in sections 307(b) and (c) and 33 U.S.C. 1317(b) and (c). Speci fically, the CWA author izes that the EPA establish pretreatment standards for those pollutants in wastewater from indirect dischargers that the EPA determines are not susceptible to treatment by a POTW or which would interfere with POTW operat ions. Pretreatment standards must be established to prevent the di scharge of any pollutant that may pass through, interfere with, or are otherwise inco mpatible with POTW operati ons. CWA sections 307(b) and (c). The legislative history of the 1977 CWA amendments e xplains that pretreatment standards are technology-based and anal ogous to BAT effluent limitations for the removal of toxic pollutants. As further e xplained in the legislative history, the combination of pretreatment and treatment by the POTW is intended to achieve the level of treatment that would be required if th e industrial source were making a direct discharge. Conf. Rep. No. 95-830, at 87 (1977) , reprinted in U.S. Congress. Senate.*** E. O. 12866 Review

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Page 19 of 92 Committee on Public Works (1978), A Legisla tive History of the Clean Water Act of 1977, Serial No. 95-14 at 271 (1978).
Direct dischargers ( i.e. , those discharging directly to surface waters) must comply with effluent limitations in NPDES permits . Technology-based effluent limitations in NPDES permits for direct dischargers are de rived from effluent limitations guidelines (CWA sections 301 and 304) and new source performance standards (CWA section 306) promulgated by the EPA, or based on best professional judgment (BPJ) where the EPA has not promulgated an applicable effluent guideline or new source performance standard (CWA section 402(a)(1)(B) and 40 CFR 125.3) . Additional limitations based on water quality standards are also requi red to be included in the pe rmit where necessary to meet water quality standards. CWA section 301(b)(1)(C). The e ffluent guidelines and new source performance standards are establishe d by regulation for categories of industrial dischargers and are based on th e degree of control that can be achieved using various levels of pollution control technolo gy, as specified in the Act.
The EPA promulgates national effluent guidelines and new source performance standards for major industrial categories for three classes of polluta nts: (1) Conventional pollutants (total suspended solids, oil and grease, biochemical oxygen demand (BOD 5 ), fecal coliform, and pH), as outlined in CWA section 304(a)(4) and 40 CFR 401.16; (2) toxic pollutants ( e.g. , metals such as arsenic, mercury, selenium, and chromium; and organic pollutants such as benzene, be nzo-a-pyrene, phenol, and naphthalene), as outlined in section 307(a) of the Act, 40 CFR 401.15 and 40 CFR part 423, appendix A; and (3) nonconventional pollutants, which are th ose pollutants that are not categorized as conventional or toxic ( e.g. , ammonia-N, phosphorus, and total dissolved solids).*** E. O. 12866 Review

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Page 20 of 92 B. Effluent Limitations Guidelines and Standards Program The EPA develops ELGs that are tec hnology-based regulations for specific categories of dischargers. The EPA bases thes e regulations on the performance of control and treatment technologies. The legislative history of CWA section 304(b), which is the heart of the effluent guidelines program, desc ribes the need to press toward higher levels of control through research and developm ent of new processes, modifications, replacement of obsolete plants and proce sses, and other improvements in technology, taking into account the cost of controls. Congress has also st ated that the EPA need not consider water quality impacts on indivi dual water bodies as the guidelines are developed; see Statement of Se nator Muskie (October 4, 1972), reprinted in U.S. Senate Committee on Public Works, Legislative Hi story of the Water Pollution Control Act Amendments of 1972, Serial No. 93-1, at 170).
There are four types of standards applicab le to direct dischargers (facilities that discharge directly to surface wa ters), and two types of standa rds applicable to indirect dischargers (facilities that di scharge to POTWs), described in detail below. Subsections 1 through 4 describe standards fo r direct discharges and subs ection 5 describes standards for indirect discharges.

1. Best Practicable Control Technol ogy Currently Available (BPT) Traditionally, the EPA defines BPT efflue nt limitations based on the average of the best performances of facilities within th e industry, grouped to reflect various ages, sizes, processes, or other common characte ristics. BPT effluent limitations control conventional, toxic, and nonconventional polluta nts. In specifying BPT, the EPA looks at a number of factors. The EPA first considers the cost of achieving e ffluent reductions in*** E. O. 12866 Review

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Page 21 of 92 relation to the effluent re duction benefits. The Agency also considers the age of equipment and facilities, the processes em ployed, engineering aspects of the control technologies, any required process change s, non-water quality environmental impacts (including energy requirements), and such other factors as the Administrator deems appropriate. See CWA section 304(b)(1)(B). If, however, existi ng performance is uniformly inadequate, the EPA may estab lish limitations based on higher levels of control than what is currently in place in an industrial category, when based on an Agency determination that the technology is available in a nother category or subcategory, and can be practically applied.

2. Best Conventional Pollutan t Control Technology (BCT) The 1977 amendments to the CWA require th e EPA to identify additional levels of effluent reduction for conventional pollu tants associated with BCT technology for discharges from existing industrial point sources . In addition to other factors specified in section 304(b)(4)(B), the CWA requires that the EPA establish BCT limitations after consideration of a two-part “cost reasonableness” te st. The EPA explained its methodology for the development of BCT limitations in July 9, 1986 (51 Fed. Reg. 24974). Section 304(a)(4) designa tes the following as conventional pollutants: BOD 5 , total suspended solids (TSS), fecal coliform, pH, and any additional pollutants defined by the Administrator as conventional. The Admi nistrator designated oil and grease as an additional conventional pollutant on July 30, 1979 (44 Fed. Reg. 44501; 40 CFR part 401.16).*** E. O. 12866 Review

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Page 22 of 92 3. Best Available Technology Economically Achievable (BAT) BAT represents the second leve l of stringency for controlling direct discharge of toxic and nonconventional pollutants. In gene ral, BAT-based efflue nt guidelines and new source performance standards represent the best available economically achievable performance of facilities in the industrial subcategory or category. Following the statutory language, the EPA considers the technological availabili ty and the economic achievability in determining what level of control represents BAT. CWA section 301(b)(2)(A). Other statutory f actors that the EPA consider s in assessing BAT are the cost of achieving BAT effluent reductions, the age of equipment and facilities involved, the process employed, potential process cha nges, and non-water quality environmental impacts, including energy requirements and such other factors as the Administrator deems appropriate. CWA sect ion 304(b)(2)(B). The Agency retains considerable discretion in assigning the weight to be accorded these factors. Weyerhaeuser Co. v. Costle , 590 F.2d 1011, 1045 (D.C. Cir. 1978).

4. Best Available Demonstrated Control T echnology (BADCT)/New Source Performance Standards (NSPS) NSPS reflect effluent reducti ons that are achievable base d on the best available demonstrated control technology (BADCT) . Owners of new facilities have the opportunity to install the best and most e fficient production proce sses and wastewater treatment technologies. As a result, NSPS shoul d represent the most stringent controls attainable through the applica tion of the BADCT for all pollu tants (that is, conventional, nonconventional, and toxic pollutants). In estab lishing NSPS, the EPA is directed to take*** E. O. 12866 Review

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Page 23 of 92 into consideration the cost of achieving th e effluent reduction a nd any non-water quality environmental impacts and energy requi rements. CWA section 306(b)(1)(B).

5. Pretreatment Standards for Existing S ources (PSES) and New Sources (PSNS) As discussed above, section 307(b) of the Act calls for the EPA to issue pretreatment standards for di scharges of pollutants from existing sources to POTWs. Section 307(c) of the Act calls for the EPA to promulgate pretreatment standards for new sources (PSNS). Both standard s are designed to prevent the discharge of pollutants that pass through, interfere with, or are otherwise incompatible with the operation of POTWs. Categorical pretreatment standards for ex isting sources are technology-based and are analogous to BPT and BAT efflue nt limitations guidelines, and thus the Agency typically considers the same factors in promulgating PSES as it considers in promulgating BAT.
See Natural Resources Defense Council v. EPA, 790 F.2d 289, 292 (3 rd Cir. 1986). Similarly, in establishing pretreatment stan dards for new sources, the Agency typically considers the same factors in promulgating PSNS as it considers in promulgating NSPS (BADCT).

C. Oil and Gas Extraction Effluent Guidelines Rulemaking History The EPA promulgated the first Oil and Ga s Extraction ELGs (40 CFR part 435) in 1979, and substantially amended the regulati on in 1993 (Offshore), 1996 (Coastal), and 2001 (Synthetic-based drilling fluids). Th e Oil and Gas Extraction industry is subcategorized in 40 CFR part 435 as follows : (1) subpart A: Offs hore; (2) subpart C: Onshore; (3) subpart D: Coasta l; (4) subpart E: Agricultura l and Wildlife Water Use; and (5) subpart F: Stripper.*** E. O. 12866 Review

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Page 24 of 92 The existing subpart C regulation covers wastewater discharges from field exploration, drilling, production, well treatment, and well comple tion activities in the oil and gas industry. Although unconventional oil and gas resources occur in offshore and coastal regions, recent development of UOG re sources in the U.S. has occurred primarily onshore in regions to which the regulations in subpart C (Onshore) and subpart E (Agricultural and Wildlife Water Use) apply and thus, the gap in onshore regulations is the focus of this proposed rulemaking effort . For this reason, only the regulations that apply to onshore oil and ga s extraction are described in more detail here.

1. Subpart C: Onshore Subpart C applies to facilities engage d in the production, field exploration, drilling, well completion, and well treatment in the oil and gas extraction industry which are located landward of the i nner boundary of the territorial seas – and which are not included in the definition of other subparts – including subpart D (C oastal). Practically, this means land-based facilities that are not located on a water of the U.S. and are inland of the boundary that is used to define “co astal” oil and gas facilities at 40 CFR 435.40. The regulations at 40 CFR 435.32 specify the following for BPT: there shall be no discharge of waste water pollutants into navi gable waters from any source associated with production, field explor ation, drilling, well comple tion, or well treatment ( i.e. , produced water, drilling muds, drill cutt ings, and produced sand). The existing regulations do not include natio nal categorical pretreatment standards for discharges to POTWs. The existing oil a nd gas extraction ELGs did not establish requirements that would apply to privately-owned wastewater treatment facilities that accept oil and gas extraction wastewaters but that are not enga ged in production, fiel d exploration, drilling,*** E. O. 12866 Review

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Page 25 of 92 well completion, or well treatment. Discharges from such facilities are not subject to 40 CFR part 435, but rather are s ubject to requirements in 40 CFR part 437, the Centralized Waste Treatment Category.

2. Subpart E: Agricultural and Wildlife Use Subpart E applies to onshore facilities loca ted in the continental United States and west of the 98th meridian for which the pr oduced water has a use in agriculture or wildlife propagation when discharged into navigable waters. De finitions in 40 CFR 435.51(c) explain that the term “use in agricultural or wild life propagation” means that (1) the produced water is of good enough quality to be used for wildlife or livestock watering or other agricu ltural uses; and (2) the produced wa ter is actually put to such use during periods of discharge. The regulations at 40 CFR 435.52 specify that the only allowable discharge is produced water, with an oil and grease concentration not exceeding 35 mg/L. The BPT regulations prohibi t the discharge of waste pollutants into navigable waters from any source (other than produced water) associated with production, field explorati on, drilling, well completion, or well treatment ( i.e. , drilling muds, drill cuttings, produced sands).

D. State Pretreatment Requir ements that Apply to UOG Extraction Wastewater In addition to applicable federal re quirements, some states regulate the management, storage, and disposal of UOG ex traction wastewater, in cluding regulations concerning pollutant discharges to POTWs fr om oil and gas extraction facilities. In addition to pretreatment requirements, some st ates have indirectly addressed the issue of pollutant discharges to POTWs by limiting the management and disposal options available for operators to use.*** E. O. 12866 Review

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Page 26 of 92 During initial development of Marcellu s shale gas resources, some operators managed UOG wastewater by tr ansfer to POTWs. The EPA did not identify other areas in the United States where POTWs routin ely accepted UOG extraction wastewaters. Refer to TDD Chapter A.2 which summari zes how Pennsylvania, Ohio, and West Virginia responded to UOG extraction wastew ater discharges into their POTWs.

E. Related Federal Requirements in the Safe Drinking Water Act As required by the Safe Drinking Water Act section 1421, the EPA has promulgated regulations to protect unde rground sources of drinking water through Underground Injection Contro l (UIC) programs that regulat e the injection of fluids underground. These regulations are found at 40 CFR parts 144–148, and specifically prohibit any underground inje ction not authorized by UIC permit. 40 CFR 144.11. The regulations classify underground in jection into six classes; wells that inject fluids brought to the surface in connection w ith oil and gas production are classified as Class II UIC wells. Thus, onshore oil and gas extraction facili ties that seek to meet the zero discharge requirements of the existing ELGs or pr oposed pretreatment standard through underground injection of wastewat er must obtain a Cla ss II UIC permit for such disposal.

VIII. Summary of Data Collection
In developing the proposed rule, the EPA considered information collected through site visits and telephone contacts with UOG facility operators, fa cilities that treat and/or dispose of UOG extraction wastewater , and wastewater management equipment vendors. The EPA also collected information through outreach to stakeholders including industry organizations, environmental orga nizations, and state regulators. The EPA*** E. O. 12866 Review

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Page 27 of 92 conducted an extensive review of published information and participated in industry conferences and webinars. The following desc ribes the EPA’s data collection activities that support the proposed rule.

A. Site Visits The EPA conducted seven site visits between May, 2012 and September, 2013 to UOG extraction companies and UOG extraction wastewater treatment facilities. The purpose of these visits was to collect inform ation about facility operations, wastewater generation and management practices, and wast ewater treatment and reuse. Six of the seven visits were to facil ities in Pennsylvania, and one was in Arkansas, however, information collected often covered operati ons beyond just those vi sited during the site visits, at times including comp any operations in many UOG formations across the U.S. In addition to site visits, the EPA conducted 11 telephone conferences or meetings with UOG operators and facilities that treat and/or dispose of UOG extraction wastewater. The EPA collected detailed information from the facilities visited and contacted, such as information about the operations associated with wastewater ge neration, wastewater treatment, and reuse. The EPA also contac ted 11 vendors of equipment and processes used to manage and treat UOG extraction wast ewater. The EPA prepared site visit and telephone meeting reports, a nd telephone call reports summarizing the collected information. The EPA has included in the public record site visit reports, meeting reports, and telephone contact reports th at contain all information collected for which facilities have not asserted a claim of CBI.*** E. O. 12866 Review

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Page 28 of 92 B. Meetings with Stakeholder Organizations Since announcing initiation of this pr oposed rulemaking activity, the EPA has actively reached out to interested stakeholders to solicit input from well operators, industry trade associat ions, interested regulatory au thorities, technology vendors, and environmental organizations. Stakeholder i nvolvement in the regulatory development process is essential to the success of this effo rt. The EPA will continue to engage with the affected regulated sector and concerned stak eholders throughout th e rulemaking process.

1. Stakeholder Organizations In addition to the site vis it related activities described above, the EPA participated in multiple meetings with industry stakehol ders, their representatives, and/or their members, including America’s Natural Ga s Alliance (ANGA), American Petroleum Institute (API) and the Independent Petrol eum Association of America (IPAA). The purpose of the meetings was to discuss th e EPA’s thinking concer ning a pretreatment standard for the UOG extraction industry, to better understand industry wastewater management practices, and to gather informa tion to inform its proposed rulemaking (see DCN SGE00967).
The EPA participated in a conference ca ll with the environmental stakeholder, Environmental Defense Fund (EDF). The purpos e of this meeting was to explain the EPA’s thinking about the standa rd under development and lear n about the perspectives of EDF regarding wastewater manageme nt in the UOG extraction industry.
The EPA participated in a two conference calls with the Center for Sustainable Shale Development (CSSD), a collaborat ive group made up of environmental*** E. O. 12866 Review

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Page 29 of 92 organizations, philanthropic foundations, a nd energy companies from the Appalachian Basin. The purpose of these calls was to learn about the performance standards under development by the CSSD for sustainable shale gas development, based on an “independent, third-part y evaluation process.”

2. State Stakeholders In an effort to improve future impl ementation of any UOG regulation, the EPA initiated an EPA–State implementation pilo t project coordinated by the Environmental Council of States (ECOS) and the Associati on of Clean Water Administrators (ACWA) to draw on experience of state agency expert s. Through this pilot project, the EPA has been able to more thoroughly consider the strengths and weaknesses of different approaches in order to select one that pr oduces environmental results while more fully considering implementation burden. This pilot e ffort with the states has also been an opportunity to hear ideas on how technology innovation can be fo stered during both development and implementation of the regulation.
In addition to the state implementation pilo t, the EPA also reached out to the EPA Regional, as well as state, pretreatment c oordinators. One way the EPA did this was by participating in calls, where the EPA staff l earned about past or pr esent discharges to POTWs from UOG operations. S ee DCN SGE00742; DCN SGE00743.

C. Secondary Data Sources The EPA conducted an extensive search and review of published information about UOG development, wastewater gene ration and management practices, and wastewater treatment, disposal , and reuse. Because of the rapid developments in the*** E. O. 12866 Review

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Page 30 of 92 UOG industry, in addition to reviewing publishe d information, the EPA participated in more than 12 industry conferences and webinars between March 2012 and June 2014. Presenters at these conferen ces provided information about current industry wastewater management practices. The EPA also obtaine d information from the EPA Regions and states. The EPA Region 3 provi ded information about the development of the Marcellus shale gas industry and disposal of shale gas wastewater, including di scharges to POTWs.

D. Drilling Info Desktop® Data Set The EPA used a propriety database of a ll oil and gas wells in the United States, called DI Desktop®, obtained from DrillingInf o. This comprehensive database includes information such as well API number, operator name, basin ( e.g. , Western Gulf), formation ( e.g. , Eagle Ford), well depth, drilling type ( i.e. , horizontal, directional, vertical), spud date, and completion date. It also includes annual oil, gas, and water production for each well. The EPA primarily used this database to quantify and identify locations of existing UOG wells, quantify wast ewater generation rates, and supplement geological information ( e.g. , basin, formation) in other data sources.

E. The EPA Hydraulic Fracturing Study At the request of Congress, the EPA's Office of Research and Development is conducting a study to better unde rstand any potential impacts of hydraulic fracturing on drinking water resources. The scope of the rese arch includes the full lifecycle of water in hydraulic fracturing, including wastewater mana gement and disposal. In support of its study, the EPA conducted a series of tec hnical workshops, including, among others, a workshop on Wastewater Treatment and Rela ted Modeling. In support of the proposed rule, the EPA reviewed information collected in support of the C ongressionally-mandated*** E. O. 12866 Review

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Page 31 of 92 study and attended meetings, workshops, and ro undtable discussions pertaining to water and wastewater management and treatment in the UOG extraction industry. See DCN SGEXXX, DCN SGEXXX [ORD Materials, note: all publicly available except FracFocus report which will be published in fall of 2014].

IX. Description of the Oil and Gas Industry Oil and Gas Extraction is the exploration and production of crude oil and natural gas from wells. Refer to Section XI. for additional background of unconventional gas resources, extraction processes, and wastewat er generation. As expl ained previously, the scope of this proposed rulemaking is limited to pretreatment standards for wastewater generated from unconventional, ra ther than conventi onal, oil and gas extraction facilities. The description here provides a broader description of the oil and gas industry in order to provide the context in wh ich the UOG industry lies.

A. Economic Profile The major products of the Oil and Gas Ex traction Industry are petroleum, natural gas, and natural gas liquids. 2 Domestic consumption of crude oil and petroleum products is met by a combination of domestic pr oduction and imports. Like oil consumption, natural gas consumption is met both by domes tic production and imports of natural gas – although imports contribute a much lower shar e of total domestic consumption for natural gas than for oil. Domestic consumption of natural gas rose throughout the 1980s and 1990s due to low prices relative to prices for oil products. This led to investments in

2 Natural gas can include “natural gas liquids” (NGLs), components that are liquid at ambient temperature and pressure. NGLs are hydrocarbons —in the same family of molecules as natural gas and crude oil, composed exclusively of carbon and hydrogen. Ethane, propane, butane, isobutane, and pentane are all NGLs.*** E. O. 12866 Review

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Page 32 of 92 infrastructure for natural gas, especially electric generation facil ities (DCN SGE00809). In 2010, total consumption of natural gas in the United States was about 24 quadrillion British thermal units (Btu). Of total consum ption, about 22 quadrilli on Btu, was delivered to consumers – residential, commercial, indus trial, vehicle fuel, and electric power.
Natural gas can be produced both from conventional natural gas deposits and unconventional deposits. Natural gas, and es pecially unconventional natural gas, has become increasingly significant to the U. S. energy economy. The rising importance of natural gas largely results from its lower ai r pollution characteristics compared to other fossil fuels; its substantial, and increasi ng, domestic supply; and the presence of a welldeveloped processing and transmission/distri bution infrastructure in the U.S. (DCN SGE00010). The energy sector has become progre ssively more reliant on natural gas with the electric power sector’s c onsumption of natural gas increasing by more than 50 percent between 1996 and 2005 (DCN SGE00809). In 20 09, natural gas accounted for just under a quarter (23.4 percent) of total U.S. ener gy supply and the majority of natural gas was from domestic resources. Increased natural gas production from shale formations also has the potential to reduce U.S. depe ndence on energy-related imports.
Between 2000 and 2012, total marketed production of natural gas in U.S. as a whole grew by 25 percent, with an average annual growth rate of 0.8 percent (DCN SGE00908). The sharp rise in production of sh ale gas contributed to a lower price of natural gas, thereby increasing the gap between prices of gas and oil, which made oil a relatively more attractive option for producer s. Beginning in 2005, the disparity between oil and natural gas prices starte d to grow as oil prices conti nued to rise while natural gas prices declined. Many firms that produce bot h gas and oil began to focus on acquisition*** E. O. 12866 Review

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Page 33 of 92 of, and production from, liquids-rich forma tions over natural gas production (DCN SGE00817, DCN SGE00832).
Overall, domestic crude oil producti on steadily declined between 2000 and 2008, while steadily increasing after that. This shif t towards liquids production is evident in the sharp rise in production from tight oil re sources, including shale, beginning in 2008. From 2007 to 2013, the Energy Information Admini stration (EIA) estimated that tight oil production increased 10-fold, from 0.34 to 3.48 million barrels per day (DCN SGE00902). Future domestic demand for liquid fuels will depend on the future level of activities dependent on liquid fuels, such as transportation. Demand will also be affected by the fuel efficiency of the consumpti on technology. The transportation sector will continue to account for the larg est share of total consumpti on despite its share of total consumption falling due to improvements in vehi cle efficiency. The industrial sector is the only end-use sector likely to see an incr ease in consumption of petroleum and liquids (DCN SGE00913).
While oil and natural gas are often consid ered together, the way in which prices are set for each greatly differs. While the price of oil is set at the global level, natural gas prices for the United States tend to be set re gionally, because of tran sportation factors. In recent years, the ratio of oil prices to natural gas prices has reached historically high levels (DCN SGE00547). While these two pr oducts have some commonalities in their uses, oil and gas are not perfect substitutes as they require different transportation and processing infrastructure, and have a number of differentiated uses.*** E. O. 12866 Review

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Page 34 of 92 The EPA gathered information on the i ndustry via the North American Industry Classification System (NAICS), which is a standard created by the U.S. Census for use in classifying business establishments within the U.S. economy. The industry category that would be affected by this proposed rule is Oil and Ga s Extraction Industry (NAICS 21111). This industry has two subcategorie s: (1) Crude Petroleum and Natural Gas Extraction (NAICS 211111), which is made up of facilities that have wells with petroleum or natural gas or produce crude pe troleum from surface shale or tar sands, and Natural Gas Liquid Extraction (NAICS 211112) , which recover liquid hydrocarbons from oil and gas field gases and su lfur from natural gas.

B. Industry Structure and Economic Performance According to data from the Statistics of U.S. Businesses (SUSB), in 2011 there were 6,528 firms under the overall oil and gas extraction sector. This is a total 2.4 percent growth since 2000 to 2011 and an averag e annual growth rate of 0.2 percent. The Crude Petroleum and Natural Gas Extracti on segment contributed 6,523 (or 99%) firms to the total Oil and Gas Extraction sector, and the Natural Gas Liquid Extraction segment contributed 136 (less than 1%) firms to th e overall sector. Although the Natural Gas Liquid Extraction segment is much smaller in numbers compared to the Crude Petroleum and Natural Gas Extraction segm ent, the total percent change from 2000 to 2011 is much higher for natural gas liquids extraction at 61.9% as compared to 1.7% for crude petroleum and natural gas extraction. If the ra tio of oil-to-natural gas prices remains high, there may be a shift towards drilling in liqui ds-rich shale formations , making this sector increasingly important to oil and ga s extraction firms (DCN SGE00832; DCN SGE00807; DCN SGE00817; DCN SGE00921).*** E. O. 12866 Review

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Page 35 of 92 In 2011, 98.5% of the Oil and Gas Extraction Industry was estimated to be a small business when using the Small Business Admini stration definition of a small business as having 500 or fewer employees. Average revenues for firms for the overall oil and gas extraction sector in 2007 were estimated at $43 million, a 99% increase from 1997 to 2007. This is an average revenue of $36 m illion per firm in the crude petroleum and natural gas extraction segment, and averag e revenue of $333 million per firm in the natural gas liquid extraction segment. The o il and gas extraction overall sector has an average of 17.9 employees per firm. Breaking it out per segment, the natural gas liquid extraction segment has an average of 73.5 employees per firm, whereas the crude petroleum and natural gas extraction segmen t shows an average of 16.7 employees per firm.
The oil market is a globally integrated market with multiple supply sources that are connected to multiple markets. Because of the international carte l’s (the Organization of Petroleum Exporting Countries’ (OPEC’s )) high accounting of global oil reserves, OPEC is able to place producer quotas on me mbers in an effort to manage world oil prices. This means crude oil producers, like many U.S. companies, do not exert control over the price they receive at the point of production (price-takers). Global oil prices are also greatly influenced by global demand for oil, with the largest source of demand being the U.S. and China (DCN SGE00854). While the U.S. is one of the largest sources of crude oil production, it still is a major importe r of oil and, therefore, has an important influence over oil prices. The recent upsurge in U.S. oil production, largely from tight and shale oil resources, has led to a drop in U.S. imports, which in turn has exerted downward pressure on intern ational oil prices.*** E. O. 12866 Review

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Page 36 of 92 In North America, specifically within the United States, there is a relatively mature, integrated natural gas market with a robust spot market for the natural gas commodity. Essentially, the spot market is the daily market, wher e natural gas is bought and sold for immediate delivery. For understand ing the price of natu ral gas on a specific day, the spot market price is most informativ e. In U.S. natural gas markets, natural gas spot prices are determined by overall supply and demand (DCN SGE00547).
Large volume consumers of natural gas, mainly individual consumers and electricity generators, generally have the ab ility to switch between oil and natural gas. When the price of gas is low relative to oil, these consumers may switch to gas, increasing demand for natural gas and increa sing gas prices. Alte rnatively, when gas prices are high, demand may shift in the opposit e direction causing a relative decrease in natural gas prices (DCN SGE00921).

C. Financial Performance The EPA reviewed financial performance of UOG extraction firms and other oil and gas firms. The EPA found no deteriorati on in financial performance and conditions for UOG firms over the previous decade, a nd this suggests that UOG firms are wellpositioned for continued investment in UOG ex ploration and development. The strong growth in revenue and total capital outlays by the UOG firms during th e latter part of the last decade – which coincides with the growth in UOG exploration and production activity – underscores the economic opportuni ty provided by the emerging UOG resource and the industry’s commitment to inves ting and producing UOG for the foreseeable future. See the Industry Profile (D CN SGE00932) for more information.*** E. O. 12866 Review

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Page 37 of 92 X. Scope Through the proposed rule, the EPA is not reopening the regulatory requirements applicable to direct dischargers. Rather , the EPA would amend subpart C only to add requirements for indirect dischargers wher e there currently ar e none: specifically, pretreatment standards for f acilities engaged in oil and gas extraction from UOG sources that send their discharges dire ctly to POTWs. For purposes of this proposed rulemaking, the EPA proposes to define “unconventional o il and gas (UOG)” as “crude oil and natural
gas 3 produced by a well drilled into a lo w porosity, low permeability formation (including, but not limited to, shale gas, shale oil, tight gas, tight oil).” As a point of clarification, although coalbed methane would fit this definition, the proposed pretreatment standards would not apply to pollutant discharges to POTWs associated with coalbed methane extraction. The EPA not es that the requirements in the existing effluent guidelines for direct dischargers al so do not apply to coalbed methane extraction, as this industry did not exist at the time that the effluent guidelines were developed and was not considered by the Agency in esta blishing the effluent guidelines (DCN SGE00761). To reflect the fact that neither the proposed pr etreatment standards nor the existing effluent guideline requirements appl y to coalbed methane extraction, the EPA is expressly reserving a separate unregulated subcategory for coalbed methane in the proposed rule. For information on CBM, see http://water.epa.gov/scitech/wastetech/guide /oilandgas/unconv.cfm. The remainder of

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Page 38 of 92 the information presented in this document is specific to the UOG resources subject to the proposed rule.

XI. Unconventional Oil and Gas Extraction: Resources, Process, and Wastewater
A. Unconventional Oil and Gas Extraction Resources For purposes of the proposed rule, UOG consists of crude oil and natural gas 4 produced by wells drilled into formations with low porosity and low permeability. UOG resources include shale oil and gas, resour ces that were formed, and remain, in low permeability shale. UOG resources also include tight oil and gas, resources that were formed in a source rock and migrated into a reservoir rock such as sandstone, siltstones, or carbonates. The tight oil/gas reservoir rocks have permeability and porosity lower than reservoirs of conventional oil and gas res ources but with permeability generally greater than shale. As described above, while CBM is sometimes referred to as an unconventional resource, the proposed rule does not apply to this industry.

B. Unconventional Oil and Gas Extraction Process
1. Well Drilling Prior to the well development processes described in the following subsections, operators conduct exploration and obtain su rface use agreements, mineral leases, and proper permits. These steps can take a few months to several years to complete. When completed, operators construct the well pad an d begin the well development process, as described in the following subsections.

4 Natural gas can include “natural gas liquids,” components that are liquid at ambient temperature and pressure.*** E. O. 12866 Review

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Page 39 of 92 Drilling occurs in two phases: explorati on and development. Exploration activities are those operations involv ing the drilling of wells to locate hydrocarbon bearing formations and to determin e the size and production potenti al of hydrocarbon reserves. Development activities involve the dril ling of production wells once a hydrocarbon reserve has been discov ered and delineated.
Drilling for oil and gas is generally perf ormed by rotary drilling methods, which involve the use of a circularly rotating drill bit that grinds through the earth’s crust as it descends. Drilling fluids (muds) are injected down through the drill bit via a pipe that is connected to the bit, and serv e to cool and lubricate the bi t during drilling. Drilling fluids can be water or synthetic based. Synthetic-bas ed drilling fluids are also referred to as non-aqueous drilling fluids. Air is also used in place of water or s ynthetic based drilling fluids for the vertical phase of wells. The rock chips that are genera ted as the bit drills through the earth are termed drill cuttings. The drilling fluid also serves to transport the drill cuttings back up to the surface through the space between the drill pipe and the well wall (this space is termed the annulus), in ad dition to controlling downhole pressure. As drilling progresses, pipes called “casing” are in serted into the well to line the well wall. Drilling continues until the hydrocarbon b earing formations are encountered.

In UOG resources, the crude oil and natura l gas often occur continuously within a formation. As a result, UOG drilling often em ploys “horizontal drilling.” Horizontal drilling involves a sequence of drilling steps: (1) vertical (described above) and (2) horizontal. In horizontal drilli ng, operators drill vertically do wn to a desired depth, about 500 feet above the target formation (called th e “kickoff point”), and then gradually turn the drill approximately 90 degrees to conti nue drilling laterally continuously through the*** E. O. 12866 Review

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Page 40 of 92 target formation. UOG wells are also dr illed vertically or directionally, 5 depending on the characteristics of the formation. Directional dril ling is a technique used to drill a wellbore at an angle off of the vertical to reach an end location not directly below the well pad; horizontal drilling is considered a type of directional drilling. In UOG well drilling, well depths range from approximately 1,000 to 13,500 f eet deep (but the majority of wells are drilled between 6,000 and 12,000 feet ), wells often have a long horizontal lateral which can vary in length between 1,000 and 5,000 feet, and it takes approximately 5 to 60 days to complete well drilling. See TDD, Chapter B.3.

2. Well Completion Once the target formation has been reach ed, and a determination has been made as to whether or not the formation has comm ercial potential, the well is made ready for production by a process termed “well comp letion.” Well completion involves cleaning the well to remove drilling fluids and debr is, perforating the casing that lines the producing formation 6 , inserting production tubing to tr ansport the hydrocarbon fluids to the surface, installing the surface wellhead, s timulating the well, setting plugs in each stage, and eventually drilling th e plugs out of the well and allowing fluids to return to the surface. During perforation, operators lower a pe rforation gun into the stage using a line wire. The perforation gun releas es an explosive charge to create holes that penetrate approximately one foot into the formation ro ck in a radial fashion. These perforations create a starting point for the hydraulic fractures.

5 Shale oil and gas wells, are primarily drilled directionally (and specifically horizontally), while tight oil and gas wells are drilled vertically and directionally. 6 In some instances, open-hole completions may be used , where the well is drilled into the top of the target formation and casing is set from the top of the format ion to the surface. Open-hole well completions leave the bottom of the wellbore uncased.*** E. O. 12866 Review

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Page 41 of 92 Since UOG resources are extracted from formations with low porosity and low permeability in which the natural reservoir and fluid characteristics do not permit the oil and/or natural gas to readily flow to the we llbore, hydraulic fracturi ng is often used to complete the well and extract UOG resources. 7 Although there are some vertical and directional UOG wells that are hydraulically fractured, existing literature indicates that the majority of UOG wells are horizontally drilled and hydrau lically fractured. Therefore, the remainder of this discussion focuses on th e hydraulic fracturing of horizontally drilled UOG wells; however, all drill types (including ve rtical and directional) would be covered by this proposed rule.
Hydraulic fracturing involves the injection of fracturing fluids ( e.g. , mixtures of water, sand, and other additives) at high pressure s into the well to create small fractures in the rock formation. The primary component of fracturing fluid is the base fluid into which proppant ( e.g. , sand) and chemicals are added. Currently, the most common base fluid is water; however, other fluids such as liquid nitrogen and propane (LPG) are also used. Historically, base fluid consisted exclus ively of freshwater, but as more wastewater is increasingly reused/recycled, base fluid ma y contain mixtures of fresh water blended with reused/recycled UOG extraction wastewater . Chemical additives, used to adjust the fracturing fluid properties, vary accord ing to the formation, target resource ( e.g., shale oil), chemical composition of base fluid ( e.g., volume of reused/rec ycled wastewater in base fluid), and operator prefer ence (DCN SGE00721 DCN SGE00070; DCN SGE00780; DCN SGE00781). Additives common ly include, among other things, acids

7 Hydraulic fracturing techniques are also often used to improve recovery from conventional oil and gas wells. However, the scope of this section is focused on UOG extraction, therefore, the application of this process to conventional wells is not further discussed here.*** E. O. 12866 Review

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Page 42 of 92 ( e.g., hydrochloric acid), biocides ( e.g. , glutaraldehyde), friction reducers ( e.g. , ethylene glycol, petroleum distillate), and gelling agents ( e.g. , guar gum, hydroxyethyl cellulose) (DCN SGE00721 DCN SGE00070; DCN SG E00780; DCN SGE00781). See TDD, Chapter C.1.
The amount of fracturing fluid required per well typically depends on the well trajectory ( e.g. , vertical, horizontal), well le ngth, and target resource ( e.g. , shale oil). UOG wells require between 50,000 to over ten mill ion gallons of fracturing fluid per well (DCN SGE00532; DCN SGE00556; DCN SGE00637.A 3). Operators typically fracture a horizontal well in eight to 23 stages using between 250,000 and 420,000 gallons (6,000 and 10,000 barrels) of fracturing fluid per stag e (SGE00280). Literature reports that tight oil and gas wells typically requ ire less fracturing fluid than shale oil and gas wells (DCN SGE00533).

Because laterals in hor izontally drilled UOG wells are between 1,000 and 5,000 feet long, operators typically hydraulically frac ture horizontal wells in stages to maintain the high pressures necessary to stimulate the well over th e entire length. Stages are completed starting with the stage at the end of the wellbore and working back towards the wellhead. 8 Operators may use anywhere between ei ght and 23 stages (DCN SGE00280). A fracturing crew may fracture two to thr ee stages per day when operating 12 hours per day or four to five stages per day when operating 24 hours per day. 9 Consequently, a

8 The first stage is fractured with what is known as the pad fracture. The pad is the injection of high pressure water and chemical additives ( i.e. , no proppant) to create the initial fractures into the formation. After the pad is pumped down hole, proppant is introduced to the fracturing fluid for the additional stages. 9 The hours per day depends on the operator, local ordinances, and weather.*** E. O. 12866 Review

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Page 43 of 92 typical well may take between two and seve n days to complete (DCN SGE00239; DCN SGE00090). Once the stage is hydraulica lly fractured, a stage pl ug is inserted down the wellbore separating it from add itional stages until all stages are completed. After all of the stages have been completed, the plugs are drilled out of th e wellbore allowing the fracturing fluids and other fluids to return to the surface. At the wellhead, a combination of liquid ( i.e. , produced water), sand, oil, and/or ga s are routed through phase separators that separate products from wastes.
A portion of produced water may return to the wellhead at this time; this waste stream is often referred to as “flowback” a nd consists of the portion of fracturing fluid injected into the wellbore that returns to the surface during initial well depressurization often combined with formation water. 10 Higher volumes of water are generated in the beginning of the flowback process. Over time , flowback rates decr ease as the well goes into the production phase. Op erators typically store flow back in 500 barrel fracturing tanks onsite before treatment or transport offsite. 11 In addition to flowback, small quantities of oil and/or gas may be produced during the initial flowback process. The small quantities of produced gas may be flared or captured if the operator is using “green completions”, which involves capturing the gas rather than flaring. 12

10 Formation water is naturally occurring water contained in the reservoir rock pores. 11 Fracturing tanks cannot be transported when th ey contain wastewater. Wa stewater is typically transported via trucks with approximately 100 to 120 barrel capacities or vi a pipe (DCN SGE00635). 12 On April 17, 2012, the U.S. EPA issued regulations under the Clean Air Act, requiring the natural gas industry to reduce air pollution by using green completions, or reduced emission completions. EPA identified a transition period until January 1, 2015 to allow operators to locate and install green completion equipment (40 CFR part 60 and 63).*** E. O. 12866 Review

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Page 44 of 92 The flowback period typically lasts from a few days to a few weeks before the production phase commences (DCN SG E00010; DCN SGE00011; DCN SGE00622; DCN SGE00592; DCN SGE00286). At some wells, the majority of fracturing fluid may be recovered within a few hours (DCN SGE00010; DCN SGE 00011; DCN SGE00622; DCN SGE00592; DCN SGE00286). See TDD, Chapter B.3.

3. Production After the initial flowback period, the well begins produci ng oil and/or gas, this next phase is referred to as the produ ction phase. During the production phase, UOG wells produce oil and/or gas and generate long-term produced water. Long-term produced water, generated during the well production phase, consists primarily of formation water and continues to be produced throughout the lifetime of the well, though typically at much lower rates than flowb ack (DCN SGE00592). This long-term produced water is typically stored onsite in ta nks or pits (DCN SGE00280; DCN SGE00275 ; DCN SGE00636) and is periodically trucked, or sometimes piped, offsite for treatment, reuse, or disposal. See TDD, Chapter B.3.

C. UOG Extraction Wastewater UOG extraction wastewater, as EPA proposes to define it (see Section VI.B.) includes the following sources of wastewater pollutants 13 :

 Produced water – the water (brine) brought up from the hydrocarbon-bearing strata during the extraction of oil and ga s. This can include formation water,

13 Stormwater is not considered a source of UOG extr action wastewater. In general, no permit is required for discharges of stormwater from any field activities or operations associated with oil and gas production, except as specified in 40 CFR 122.26(c)(1)(iii) for discharg es of a reportable quantity or that contribute to a violation of a water quality standard.*** E. O. 12866 Review

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Page 45 of 92 injection water, and any chemicals added downhole or dur ing the oil/water separation process. Based on the stage of completion and production the well is in, produced water can be further broken down into the following components:

o Flowback – After the hydraulic fr acturing procedure is completed and pressure is releas ed, the direction of fl uid flow reverses, and the fluid flows up through the wellbore to the surface. The water that returns to the surface is co mmonly referred to as “flowback.”

o Long-term produced water – This is the wastewater generated by UOG wells during the production ph ase of the well after the flowback process. Long-term pr oduced water continues to be produced throughout the lif etime of the well.

 Drilling wastewat er, including:

o Drill cuttings – The particles generated by drilling into subsurface geologic formations and carried out from the wellbore with the drilling fluid.

o Drilling muds – The circulating fl uid (mud) used in the rotary drilling of wells to clean a nd condition the hole and to counterbalance formation pressure.

 Produced sand – The slurried particle s used in hydraulic fracturing, the accumulated formation sands and scale particles generated during production. Produced sand also includ es desander discharge from the*** E. O. 12866 Review

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Page 46 of 92 produced water waste stream, and blowdown of the water phase from the produced water treating system.
The EPA identified drilling wastewater and produced water as the major sources of wastewater pollutants associat ed with UOG extraction, theref ore, these wastewaters are described further below.
1. Drilling Wastewater As discussed in Section XI.B.1., operators inject drilling fluids down the well bore during drilling to cool the drill bit and to remove fragme nts of rock (drill cuttings) from the wellbore (DCN SGE00090; DCN SG E00274). Drilling fluid can be water or synthetic based. Air has recently been used in pl ace of drilling fluids in the vertical phase of wells. Operators may use a combination of drilling fluids and air during the drilling process of a single well. Th e drilling fluid used depends on the properties of the formation, the depth, and associated regulati ons, safety, and cost considerations (DCN SGE00090; DCN SGE00635; TDD Chapter B.3).
When returned to the surface, ground rock removed from the wellbore (drill cuttings) is entrained in the drilling fluid. Operators separate the solids from the drilling fluid on the surface, striving to remove as much solids ( i.e. , drill cuttings) from the drilling fluid as possible. Th e separation process generates two streams: a solid waste stream referred to as drill cuttings and a liquid waste stream referred to as drilling wastewater. Operators typically transfer their drill cuttings to a landfill (DCN SGE00090, DCN SGE00635). Drilling wastewater is ofte n reused/recycled un til well drilling is complete (though in some cases it is pro cessed for discharge a nd/or disposal).*** E. O. 12866 Review

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Page 47 of 92 At the end of drilling, operators use a va riety of practices to manage drilling wastewater, primarily reuse/recycle in dr illing subsequent wells. The following list presents drilling wastewater manageme nt options used by UOG operators (DCN SGE00740):

 Reuse/recycle wastewater in subseq uent drilling and/or fracturing jobs 14

 Disposal via landfill 15

 Disposal via underground injection wells

 Land application

 Transfer wastewater to a CWT facility

 On-site burial 15

Nearly all of the volume of drilling fluid circulated during drilling is recovered as drilling wastewater and requires management . Typical drilling wastewater volumes for UOG drilling vary from 100,000 to 300,000 gallons per well depending primarily on vertical depth, horizontal length, and th e well bore diameter (DCN SGE00740).

2. Produced Water a. Flowback As explained above, the portion of produced water that returns to the wellhead after the plugs are drilled out of the wellbore is often refe rred to as “flowback” and the largest daily volume of produced water gene rated occurs during the flowback period. Over time, flowback rates decrease as the well begins to produce oil and gas. Initially, flowback has characteristics that may resemb le the fracturing fluid. During the flowback

14 Synthetic fluids, which are more expensive than water-based drilling fluid, are almost always reused/recycled in drilling additional wells. 15 Burial and landfill disposal options are generally li mited to “semisolid” waste. Solidification processes may occur prior to transferring the waste to the landfill or they may occur at the landfill. (DCN SGE00139).*** E. O. 12866 Review

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Page 48 of 92 period, the generated wastewater increasingl y resembles characteristics of the underlying formation.
The volume of flowback produced by a we ll varies, and it is often looked at in relation to the volume of the fracturing fluid used to fract ure the well (as explained in Section XI.B.2. above, fracturing fluid volumes used depend on many factors, including the total number of stages drilled). Flowb ack recovery percentages also vary due to factors such as resource type ( e.g., shale oil) and well trajectory and have been documented anywhere between 3 and 75 percen t of the volume of the fracturing fluid injected, with median flowback recovery between 4 and 29 percent (DCN SGE00724). These percent recoveries may result in to tal flowback volumes ranging from less than 210,000 gallons per well to more than 2,100,000 gallons per well (5,000 to 50,000 barrels per well) (DCN SGE00724). See TDD, Chapter C. 2.

b. Long-term Produced Water After flowback generation, long-term produ ced water is generated during the well production phase. Long-term produced water has characteristics that primarily reflect the formation. The long-term produced water flow rate from a UOG well gradually decreases over time. In addition, the amount of produ ced water generated per well varies by formation. Median long-term produced wate r flow rates vary by resource type ( e.g., shale oil) and well trajectory and can be between 200 and 800 gallons per day (4.8 to 19 barrels per day), depending on well trajectory, form ation type and well age (DCN SGE00635; DCN SGE00724). See TDD, Chapter C.2.*** E. O. 12866 Review

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Page 49 of 92 D. UOG Extraction Wastewater Characteristics The EPA reviewed published charac terization data for UOG extraction wastewater. Produced water data included measurements of total dissolved solids (TDS), anions/cations, metals, hardness, radio active constituents, and organics. Drilling wastewater characterization da ta included suspended solids, salts, metals, and organics. Because drilling wastewater is typically recycled/re-used for drilling another well, detailed pollutant specific information is less readily available for drilling wastewater than for produced water. As such, the remai nder of this section is specific to produced

water. 16

1. TDS and TDS-Contributing Ions The characteristics of UOG produced wa ter vary primarily depending on the characteristics of the UOG formation (DCN SGE00090). The primary constituents found in UOG produced water are total dissolved solids (TDS), anions/cations, metals, hardness, and radioac tive constituents.
TDS provides a measure of the disso lved matter, including salts ( e.g. , sodium, chloride, nitrate), organic matter, and mine rals (DCN SGE00046). TD S is not a specific chemical, but is defined as the portion of so lids that pass through a filter with a nominal pore size of 2.0 micron (μm) or less (EPA Method 160.1). Table XI-1. shows ranges and median TDS concentrations associated w ith various shale and tight oil and gas formations.

16 As explained above, produced water includes both flowback and long-term produced water.*** E. O. 12866 Review

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Page 50 of 92 Table XI-1. Concentrations of TDS in Produced Waters in Various UOG Formations Shale/Tight Oil and Gas Formation TDS Concentration Range (mg/L) TDS Median Concentration (mg/L) Number of Data Points Bakken 98,000 – 220,000 150,000 13 Barnett 25,000 – 150,000 50,000 40 Bradford-Venango-Elk (Tight) 32,000 – 400,000 180,000 5 Cleveland (Tight) 84,000 – 220,000 120,000 11 Cotton Valley/Bossier (Tight) 110,000 – 230,000 170,000 3 Dakota (Tight) 2,900 – 7,700 6,000 3 Devonian 320 – 250,000 130,000 11 Eagle Ford 3,700 – 89,000 21,000 1,648 Fayetteville 13,000 – 57,000 25,000 6 Haynesville/Bossier 110,000 – 120,000 120,000 2 Marcellus 680 – 350,000 92,000 383 Mississippi Lime (Tight) -- 150,000 1 New Albany -- 88,000 1 Niobrara 39,000 – 140,000 100,000 8 Pearsall 300,000 – 380,000 370,000 3 Spraberry (Tight) 58,000 – 160,000 130,000 26 Utica 6,500 – 44,000 16,000 8 Woodford-Cana-Caney 14,000 – 110,000 36,000 8 Source: See TDD, Chapter C.3. Salts are the majority of TDS in UOG produced water, and sodium chloride constitutes approximately 50 percent of the TDS in UOG produced water (DCN SGE00046). In addition to sodium and chlori de, UOG produced water typically contains divalent cations such as calcium, strontium, magnesium, and, in some formations, barium and radium. Other ions such as potassium, br omide, fluoride, nitrat e, nitrite, phosphate, and sulfate may also contribute to TDS in UOG produced water. Metals, other than those contributing to TDS ( e.g. , calcium, magnesium, strontium) , are typically not found in high concentrations in UOG produced water. Table XI-2. presents ranges and median concentrations of TDS and TDS-contribu ting ions in UOG produced water. Based on available data, concentrations of TDS and TDS-contributing ions, including divalent cations, typically increase from flowback to long-term produced water. See TDD, Chapter C.3.*** E. O. 12866 Review

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Page 51 of 92 Table XI-2. Concentrations of TDS and TDS-Contributing Ions in UOG Produced Waters

Constituent Concentration Range (mg/L) Median Concentration (mg/L) Number of Data Points TDS 20 – 400,000 110,000 2,223 Chloride 64 – 230,000 48,000 2,063 Sodium 64 – 98,000 25,000 1,913 Calcium 13 – 34,000 3,400 2,068 Strontium 0 – 8,000 580 207 Magnesium 3 – 15,000 570 2,030 Bromide 0.2 - 4,300 540 119 Potassium 0 - 5,800 290 344 Barium 0 - 16,000 100 289 Sulfate 0 - 3,400 71 1,585 Phosphate 12 - 88 12 3 Nitrate 5 - 10 5 3 Nitrite -- 5 2 Fluoride 0.045 - 390 2.5 99 Source: See TDD, Chapter C.3.

2. Organic Constituents Organic constituents in UOG produced water may originate from both the fracturing fluid that is injected down the wellbore and from the UOG formation itself. Organic constituents and hydrocarbons in UOG produced water appear to be less frequently sampled in comparison to the we ll-documented TDS concentrations. The EPA has reviewed available data on organic pollu tants in produced water and found a range of pollutant concentrations: phe nol (0.7 to 460 ppb), pyridine (1.1 to 2,600 ppb), benzene (0.99 to 800,000 ppb), ethyl benzene (0.63 to 650 ppb), toluene (0.91 to 1,700,000 ppb), and total xylenes (3 to 440,000) (DCN SGE00724). See TDD, Chapter C.3.

3. Radioactive Constituents Oil and gas formations contain varying levels of radioac tivity resulting from uranium decay which can be transferred to UOG produced water. Radioactive decay products typically include uranium 238, radi um 226, and radium 228. The EPA identified*** E. O. 12866 Review

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Page 52 of 92 available data on some radioactive elements in UOG produced water, including radium 226, radium 228, gross alpha, and gross beta, a nd, therefore, focused the radioactive constituent discussion and data presentation on data for these parameters. Radium 226, which has a half-life over 1,000 years, ha s been found in UOG produced water at concentrations up to 16,900 picocuries per liter (pCi/L) (DCN SGE00241; DCN SGE00724). As a point of comparison, the In ternational Atomic Energy Agency (IAEA) published a report in 2014 that included radi um isotope concentrations in rivers and lakes. The average of measured concentrations of radium 226 found in U.S. rivers and lakes was 0.56 pCi/L (21 millibecquerel per liter (mBq/L)) and the measured values ranged from 0.01 to 1.7 pCi/L (0.37 to 63 mB q/L) (DCN SGE00769). Data for radium 228 were limited.
Data characterizing produced water ra dioactivity concentrations were not available for all shale and tight oil and gas fo rmations. However, the available data from five different tight or shale oil and gas forma tions show that the concentrations of one or more radioactive constituents ( i.e. , radium 226, radium 228, gross alpha, gross beta) in UOG produced water was above naturally occurr ing concentrations in rivers and lakes throughout the world. The highest reported radi um 228 value was in the Ganges River in India and was measured at 0.07 pCi/ L (2.6 mBq/L). (See DCN SGE00769)

E. Wastewater Management and Disposal Practices Historically, UOG operators primarily managed their wastewater using the following four methods 17 :

17 Occasionally, UOG operators in the western U.S. may use evaporation as a means of wastewater management.*** E. O. 12866 Review

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Page 53 of 92  Disposal via underground injection wells;

 Reuse in subsequent fracturing jobs;

 Transfer to a POTW; or

 Transfer to a privately owned wastew ater treatment facility (also called centralized waste treatment (CWT) facilities). 18 (DCN SGE00613; DCN SG E00276); DCN SGE00528).
The frequency with which UOG operators use each of the management options listed above varies by operator, formation, and sometimes within each region of the formation (DCN SGE00579; DCN SGE00276). This proposed rule addresses only transfers to a POTW. Histori cally, the oil and gas industr y has most commonly managed its wastewater by underground injection (DCN SGE00182), but the industry is increasingly turning to reuse, and in some areas transfer to CWT facilities, to manage increasing volumes of UOG extraction wa stewater (see TDD, Chapter D).

1. Injection into Disposal Wells Underground injection i nvolves pumping wastes into a deep underground formation with a confining layer of impermeab le rock. The receiving formation must also be porous enough to accept the wastewater. Hi storically, underground injection has been the most commonly used UOG extraction wast ewater management method. As of 2009, over 90 percent of oil and gas wastewat er (conventional and unconventional) was disposed of via Class II injection wells (DCN SGE00623; DCN SGE00132).

18 Operators may haul wastewater to CWT facilities that handle the wastewater by (1) treating for reuse; (2) direct discharging to surface water; or (3) indi rect discharging to surface water through a POTW.*** E. O. 12866 Review

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Page 54 of 92 The availability of underground injection as a disposal method varies by state. Some states have a large number of Class II disposal wells ( e.g. , Texas, Oklahoma, Kansas) while others have very few ( e.g. , Pennsylvania, West Virginia). In many UOG formations, distances from the average produc ing well to the nearest disposal well are short and disposal capacity is abundant maki ng it the least expensive disposal practice (DCN SGE00635).

2. Reuse in Fracturing Reuse involves mixing flowback and/ or long-term produced water from previously fractured wells with source water 19 to create the base fluid used to fracture a new well (DCN SGE00046). Reused UOG extracti on wastewater is typically transported, by truck, from storage to the fracturing site ju st prior to the start of hydraulic fracturing. When hydraulic fracturing commences, the stor ed UOG wastewater is pumped from the fracturing tanks and blended with source wa ter to form the base fluid. The blending occurs upstream of other steps such as sand and fracturing chemical addition or pressurization by the pump trucks (DCN SGE00625).
In considering whether to reuse wastew ater, operators evaluate wastewater generation rates compared to water demand for new fracturing jobs, water quality and treatment requirements for use in fracturi ng, and the risks and costs of wastewater management and transportation for reuse comp ared to disposal, or transfer practices. Typically, for an operator to reuse wastewater , the cost per barrel for reuse must be less than the cost per barrel for disposal or transfer (DCN SGE00095). The cost for reuse

19 Source waters may include freshwater, ground water, treated municipal wastewat er, and other industrial wastewater.*** E. O. 12866 Review

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Page 55 of 92 depends on several factors th at vary by formation and operator; and, therefore, the potential for reusing UOG extraction wastewat er for fracturing varies by formation and operator.
Since the late 2000’s, UOG operators have increased wastewater reuse (DCN SGE00613). The Petroleum Equipment Supplie rs Association (PESA) surveyed 205 UOG operators in 2012 about their wastewater management practices. Survey results included 143 operators active in major UOG fo rmations. UOG operators reported reusing 23 percent of the total volume of wastewater generated to refracture another well. The survey results also showed that most operato rs anticipated reusing higher percentages of their wastewater in the two to three y ears following the survey (DCN SGE00707; DCN SGE00708; DCN SGE00575). The EPA participated in several site visits and conference calls with operators in several UOG formations that have been able to reuse 100 percent of the volume of their wast ewater under certain circum stances (DCN SGE00625; DCN SGE00635; DCN SGE00275; DCN SGE00636).

3. Transfer to Centralized Wa ste Treatment Facilities Some operators manage UOG extracti on wastewater by tr ansporting it to centralized waste treatment (“ CWT”) facilities for treatment. Following treatment, these facilities may return it to an operator for reus e to fracture another well (“zero discharge”) and/or discharge it, either to surface wate r or to a POTW. Operators may choose to use CWT facilities if they drill and complete relatively few wells, making discharging to CWT facilities more feasible than inves ting in other management options (DCN SGE00300), or if other wastew ater management options ar e not available or cost effective in the region where they are operating (DCN SGE00139; DCN SGE00182). The*** E. O. 12866 Review

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Page 56 of 92 EPA identified 73 commercial CWT facili ties that accept UOG extraction wastewater. See TDD, Chapter D.3. The EPA found that th e number of CWT fac ilities available to operators in the Marcellus and Utica Shale fo rmations has increased with the number of wells drilled. A similar trend was observe d in the Fayetteville Shale formation in Arkansas (DCN SGE00704).
Operators may haul their wastewater to “zero discharge” CWT facilities that treat but do not discharge UOG extraction wastewater , either to surface water or to a POTW. Instead, they return the wastewater to UOG operators for reuse in subsequent hydraulic fracturing jobs. Commercial CWT facilities th at fall into this category typically allow operators to unload a truck load of wastewater for treatment and take a load of treated wastewater on a cost per ba rrel basis (DCN SGE00245). Some of these facilities offer operators the option of unload ing a truck load of wastewat er without taking a load of treated wastewater for a surcharge, as long as other operators are in need of additional treated wastewater. The CWT facility may also provide this service if it can dispose of the wastewater without discharge (DCN SG E00299). For example, one facility in Wyoming treats UOG extraction wastewater for reuse by removing TDS and other pollutants through electrocoagul ation followed by reverse os mosis (RO). The facility evaporates the concentrated brine from the RO unit in large evaporat ion ponds to dispose of wastewater not reused by operators (DCN SGE00374).
Some operators may haul their wastewater to CWT facilities that discharge directly to surface waters. Discharges fr om these CWT facilities are controlled by NDPES permits that include pollutant di scharge limitations based on the technologybased ELGs set out in 40 CFR part 437 (represen ting the floor), or more stringent effluent*** E. O. 12866 Review

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Page 57 of 92 limitations if the technology-based effluent lim its are not sufficiently stringent to meet applicable state water quality standards. The ELGs do not include limitations for TDS; however, to meet applicable state water qua lity standards, dir ect discharging CWT facilities may use treatment processes ( e.g. , evaporation/condensation, reverse osmosis) that remove TDS.
Finally, other operators may haul their wastewater to CWT facilities that discharge indirectly to a PO TW. Discharges from the CWT facility to the POTW are controlled by an Industrial User Agreement (IU A) that must incorporate the pretreatment standards set out in 40 CFR part 437.

4. Transfer to POTWs Historically, in locations where disposal wells and CWT facilities were limited, operators had managed UOG extraction wast ewater by transfer to POTWs (DCN SGE00739; DCN SGE00598). This practice can be problematic because POTWs are not able to remove many of the constituents found in UOG extraction wastewater (DCN SGE00011; DCN SGE00600; DCN SGE00765). Becau se they are not typical of POTW influent wastewater, UOG extrac tion wastewater constituents may be discharged, largely untreated, from the POTW to the receiving stream, may disrupt the operation of the POTW ( e.g. , by inhibiting biological treatment), may accumulate in biosolids, limiting its use; and may facilitate the formation of ha rmful disinfection by-products (DBPs) (which are a concern for downstream drinking water us es). These constituents may interfere with POTW operations and may increase salt loads in receiving streams to the detriment of downstream water use. (DCN SGE0 0286; DCN SGE00345; DCN SGE00579; DCN SGE00531; DCN SGE00633). See TDD, Chapter D.5. As discussed above, the EPA has*** E. O. 12866 Review

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Page 58 of 92 not been able to identify any existing UOG discharges at present to POTWs. (DCN SGE00579; DCN SGE00286; DCN SGE00345).

XII. Subcategorization In developing ELGs, the EPA may divide an industry category into groupings called "subcategories" to provide a method for addressing variations among products, processes, and other factors, which result in distinctly diffe rent effluent characteristics that affect the determination of th e “best available” technology. See Texas Oil & Gas
Ass'n. v. US EPA , 161 F.3d 923, 939-40 (5th Cir.1998). Regulation of a category by subcategories provides that each subcategory ha s a uniform set of effluent limitations or pretreatment standards that take into account technological achievability, economic impacts, and non-water quality environmental impacts unique to that subcategory. In some cases, effluent limitations or pretreatme nt standards within a subcategory may be different based on consideration of these sa me factors, which are identified in CWA section 304(b)(2)(B). The CWA requires the EPA, in developing effluent guidelines and pretreatment standards, to cons ider a number of different fact ors, which are also relevant for subcategorization. The CWA also author izes the EPA to take into account other factors that the Administrator deem s appropriate. CWA section 304(b).
Within the oil and gas extraction cate gory, the EPA has already established subcategories. As explained in Section V II.C., the existing oil and gas extraction ELGs are divided into five subcategories. The scope of the proposed rule is specific to subpart C: onshore. The proposed rule is specific to pollutant discharges from UOG extraction as defined in Section X. The EPA considered whether further subcategorization of the UOG extraction industry was warranted. The EPA evaluated a number of factors including*** E. O. 12866 Review

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Page 59 of 92 available data regarding wastewater chemical constituents, generation volumes, and rates. Although some differences can be observed among these characte ristics (between different types of unconventional resource and geologic formations, and sometimes between wells within the same source), the EPA proposes that further subcategorization is not appropriate because the EPA has not identified any onshore UOG operations that currently discharge to POTWs.

XIII. Proposed Regulation
A. Discussion of Options
1. PSES and PSNS Option Selection The EPA proposes to establish PSES a nd PSNS that apply to wastewater discharges from onshore UOG extraction facilit ies. Generally, the EPA designs PSES and PSNS to ensure that wastewaters from direct and indirect industrial dischargers are subject to similar levels of treatment prior to discharge to waters of the U.S. This means that, typically, the requ irements for indirect dischargers are analogous to those for direct dischargers. As explained in Section VII.C., the existing requirements for BPT for the Onshore Subcategory are zero discharge of wast ewater pollutants into waters of the U.S. from any source associated with producti on, field exploration, drilling, well completion, or well treatment.
Most POTWs are designed primarily to tr eat municipally generated wastewater. POTWs typically provide at least secondary level treatment and, thus, are designed to remove settleable solids, suspended solid s and organic material using biological treatment. The EPA is not aware of any PO TWs that are designed to treat dissolved pollutants in UOG extraction wa stewater such as TDS ( e.g., chlorides, sulfates, metals) or*** E. O. 12866 Review

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Page 60 of 92 radioactive elements. As a result, the mass of untreated pollutants would be discharged from the POTW to the receivi ng water; or the pollutants c ould disrupt the operation of the POTW ( e.g. , by inhibiting biological treatment) or could facilitate the formation of harmful disinfection by-products (DBPs).
As explained in Section XI.E., the EPA ev aluated the practices currently used to manage UOG extraction wastewaters. Based on the information reviewed as part of this proposed rulemaking, the EPA identified that cu rrent industry practice is not to discharge pollutants from onshore UOG extraction to POTWs. Rather, the vast majority of this wastewater is managed by disposal in unde rground injection wells and/or re-use in fracturing another well. 20 A small, but in some geographi c areas increasing, portion of the industry also transfers its wastewater to pr ivately owned wastewater treatment facilities (also referred to as centralized wast e treatment, or CWT, facilities).

Because of this information, the EPA identified one candidate PSES/PSNS option; that is, zero discharge of wastew ater pollutants to POTWs. UOG extraction wastewater is discussed in Section XI.C.
The technology basis for the proposed PSES is disposal in UIC wells and/or wastewater reuse/recycling to fracture a nother well. Because existing UOG extraction facilities currently employ alternative wastew ater management practices, the technology basis for meeting a zero discharge requireme nt is widely available. While the EPA

20 While pollutant discharges from onshore oil and gas extraction produced water are allowed under subpart E in certain geographic locations for use in agriculture or wildlife propagation, the EPA has not identified any permits for unconventional oil and gas (as defined for the proposed rule) that allow such discharges.*** E. O. 12866 Review

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Page 61 of 92 estimates that there will be no incrementa l pollutant reductions associated with the proposed PSES, the technology basis is best performing in that it achieves zero discharges of pollutants in UOG extraction wastewater. Additionally, because this technology represents current industry practice nationwide, no facilitie s will incur incremental costs for compliance with the proposed PSES and, therefore, the proposed PSES is economically achievable. For the same reasons, the proposed PSES will result in no incremental non-water quality environmen tal impacts. Finally, because the proposal represents current industry pr actice, the EPA proposes that PSES requiring zero discharge of wastewater pollutants be effective as of the effective date of this rule.
As previously noted, under section 307(c) of the CWA, new sources of pollutants into POTWs must comply with standards which reflect the greatest degree of effluent reduction achievable through application of the best available demonstrated control technologies. Congress envisioned that new treatment systems could meet tighter controls than existing sources because of the opportunity to incorporate the most efficient processes and treatment system s into the facility design. The EPA proposes PSNS that would control the same pollutants using the same technologies proposed for control by PSES. The technologies used to control pollu tants at existing sour ces, disposal in UIC wells and/or wastewater reuse/recycling to fracture another well, are fully available to new sources. They achieve the greatest degree of effluent reducti on available: zero discharge of pollutants in UOG extraction wa stewater. Furthermore, the EPA has not identified any technologies that are demonstrat ed to be available fo r new sources that are different from those identified for existing so urces. Finally, the EPA determined that the proposed PSNS present no barrier to entry. While the EPA cannot say with certainty*** E. O. 12866 Review

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Page 62 of 92 exactly how new sources will manage their UOG extraction wastewater, information in the record indicates that ne w sources would continue to manage their UOG extraction wastewater following current industry practice. The EPA ha s found that overall impacts from the proposed standards on new sources wo uld be minimal, as for existing sources, since the costs faced by new sources generally will be the same as those faced by existing sources. The EPA projects no (and, therefore, acceptable) incrementa l non-water quality environmental impacts. Therefore, the EPA pr oposes to establish PSNS that are the same as those proposed for PSES.

2. Other Options Considered a. “No Rule” In addition to the PSES/PSNS option of zer o discharge of wastewater pollutants, the EPA also considered the option of no proposed PSES or PSNS, a “no rule” option. Based on the discussion above that no UOG facilities are curre ntly transferring wastewater to POTWs, and given available alternative management options such as disposal in UIC wells and re use/recycling, the EPA consider ed the option of no proposed rule. A “no rule” option would impose no chan ge to the existing pretreatment regulatory regime, or industry practice, and would, th erefore, be a “no incremental cost and pollutant reduction” option.

The EPA, however, did not select this “no rule” option for several reasons. First, there is no national federal regulation that w ould prevent or require pretreatment of such discharges – and, as mentioned above, the EPA is not aware of any POTWs that are designed to treat dissolved pollutants co mmon in UOG extraction wastewater. This means that constituents of such wastewater could be discharged to receiving waters when*** E. O. 12866 Review

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Page 63 of 92 other [available] options such as reuse and pr oper disposal in a Cla ss II UIC well better protect water quality and aquatic communities an d help further the zero discharge goal of the CWA. CWA section 101(a)(1 ). Second, few states have re gulations or policies that prevent discharges of pollutants in UOG ex traction wastewater to POTWs or that mandate pre-treatment prior to discharge to a POTW. In the absence of such regulations or policies, resource-constrained control authorities and/or POTWs must evaluate transfers of UOG extraction wast ewater to POTWs on a case-by- case basis. Third, history demonstrates that absent controls preventing the transfer of or requiring pretreatment of such wastewater, POTWs may accept it, as o ccurred in Pennsylvania (see TDD Chapters A.2 and D.5), where POTWs were used to manage UOG extraction wastewater until the state took action, including promulgating new regulations requiring pretreatment. Among the drivers behind these actions taken by Pennsylvania was that some waters were impaired by TDS. (DCN SGE00187).

To avoid future scenarios where POTWs receive UOG extraction wastewater, it is reasonable to solidify the good practice al ready adopted by the industry that is technologically and economically viable. More over, it is beneficial to the states as a practical matter to establish federal regulati ons that mandate this existing practice, in order to avoid the burden for each state to po tentially repeat the effort of promulgating state-level regulations. The EPA has discussed this proposed ru le with several states, who have indicated a federal pretreatment standa rd would reduce their administrative burden (DCN SGE00762; DCN SGE 00762; DCN SGE00743).

The EPA also considered the future burden that continued lack of pretreatment standards may impose on POTWs. The UOG extract ion industry is pred icted to continue*** E. O. 12866 Review

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Page 64 of 92 to grow in the future, resulting in the instal lation, fracturing, and possible refracturing of hundreds of thousands of wells. Well operators will continue to generate UOG extraction wastewater and may request local POTWs to accep t their wastewater for discharge. In the absence of federal pretreatment standard s, POTWs may legally accept UOG extraction wastewater to the extent that such wastewat er transfers are in compliance with state and local requirements. Evaluating each potential customer (industrial user), developing a determination for each new UOG extraction wast ewater source on a case-by-case basis, and, where a POTW determines it may accept this wastewater, complying with applicable reporting requirements may be a significan t burden to some POTWs. The EPA concluded that a national-level determinati on that UOG extraction wastewater contains pollutant concentrations that will pass through POTWs, and development of categorical pretreatment standards, will avoid burden ing individual POTWs with evaluating each individual request. Thus, the national categor ical pretreatment standards will reduce the process burden on pretreatme nt Control Authorities ( e.g. , POTWs). While the EPA does not have the information to quantify the redu ctions in administrative burden that will likely result from the proposed rule, states generally support the EPA’s position that such reductions will be realized (DCN SGE00762; DCN SGE00762; DCN SGE00743).
Moreover, as explained above, because some pollutants of concern in UOG extraction wastewater will not be physically, chemically, or biologically reduced by the treatment processes typically used at POTWs, these pollutants are expected to be discharged from the POTW into receiving wa ters. In addition, these pollutants can cause operational problems for the POTW’s biolog ical treatment processes and alter the POTW’s ability to adequately remove BOD, TSS, and other pollutants for which it is*** E. O. 12866 Review

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Page 65 of 92 regulated. For some UOG pollutants, such as radionuclides, the data indicate POTWs will remove some portion while discharging the remainder (DCN SGE00136). In these cases, some portion of the radionuclides will partition to the POTW biosolids, which may cause the POTW to incur incr eased costs to change its se lected method of biosolids management (DCN SGE00615). S ee also TDD Chapter D.5.
Finally, the EPA did not sele ct the “no rule” option b ecause it concluded that national pretreatment standard s provide clear direction and certainty to industry, POTWs, states, and the public that UOG extraction wa stewaters are not treated by POTWs and should not be transferred to them. Categori cal pretreatment standards support the CWA goal that the discharge of pollutants into th e nation’s navigable waters be eliminated. CWA section 101(a).

b. Non-Zero Numeric Discharge Pretreatment Requirements The EPA considered an option that w ould have included non-zero numerical discharge pre-treatment requirements prior to discharge to a POTW. Such an option could be similar to the one a dopted in Pennsylvania in 2010 that requires pretreatment of oil and gas wastewaters before discharg e to a POTW to meet a maximum TDS concentration of 500 mg/L as well as specific numerical concentrations for other pollutants. Some have suggested this would provide an “escape-valv e” for the future in the event that UIC disposal well capacity is exhausted. Others have suggested this would allow the water to be available for re-use (other than in fracturing another well) if technologies become available to pre-treat it to remove dissolved pollutants in a cost effective manner.*** E. O. 12866 Review

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Page 66 of 92 The EPA does not propose an option w ith numerical discharge pretreatment requirements prior to discharge to a POTW fo r the following reasons. First, the existing requirements for direct discharges of UOG extraction wastewater in the Onshore Subcategory require no discharge of pollutant s. As explained a bove, the EPA generally establishes requirements for direct and indirect discharges so that the wastewater receives comparable treatment prior to discharge to waters of the U.S.
Second, the option EPA proposes, zero disc harge of pollutants in UOG extraction wastewater to POTWs, is widely available, economically achievable and has no incremental (and, therefore, acceptable) non-water quality environmental impacts. Because the proposed zero pollutant discha rge requirement is current practice and, therefore, clearly both available and ach ievable, any option that includes non-zero discharge requirements for any pollutants woul d potentially increase pollutant discharges from current industry best practices. Such an option would not fulfill the CWA requirement to establish limitations base d on “Best Available Technology Economically Achievable” (CWA section 301(b)(2)(A)), or the CWA goals of eliminating the discharge of pollutants into navigable wa ters (CWA sec tion 101(a)(1)).
Third, the EPA does not have any data to demonstrate that UIC capacity nationwide will be expended and that this current management approach will not be available in the future (DCN SGE00613). In fact, industr y has been managing oil and gas extraction wastewater through underground injection for decades. In recent years, industry has greatly expanded its knowledge a bout the ability to re-use UOG flowback and long-term produced water (the major cont ributors to UOG extr action wastewater by volume) in fracturing another well. Consequently, while the UOG industry continues to*** E. O. 12866 Review

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Page 67 of 92 grow and new wells are being fractured, the need for UIC capacity for UOG extraction wastewater is decreasing, even in geog raphic locations with an abundance of UIC capacity (see TDD Chapter D.2).

Fourth, the EPA identified t echnologies that currently exist to treat dissolved pollutants in UOG extraction wastewater. Relative to underground injection and reuse/recycling to fracture another well (the basis for the preferred option EPA proposes), these technologies are costly, would result in more pollutant discharges, and are energy intensive. While the EPA did not attempt to cal culate a numerical sta ndard for TDS, data collected for this proposed rulemaking demons trate that the current technologies are capable of reducing TDS (and other dissolved pollutants) well below 500 mg/L. To the extent that these technologies or others are developed in the future to reduce pollutants in UOG extraction wastewater to enable them to be reused for purposes other than fracturing another well, these pre-treated wast ewaters may be used directly for the other applications without going through a POTW. 21

c. Conventional Oil and Gas Wastewater
As explained in Section VII., while the existing oil and gas re gulation applies to both conventional and UOG extraction (except coalbed methane), the proposed rule would add pretreatment standards only for facilities engaged in oil and gas extraction from UOG sources that send their discharg es to POTWs. EPA proposes to reserve standards for conventional oil and gas extr action for possible future rulemaking, if

21 As a point of clarification, except in certain geograp hic areas, these wastewater s would remain subject to the requirements in the Onshore Sub category that require no discharge of pollutants to waters of the U.S. (40 CFR 435.30).*** E. O. 12866 Review

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Page 68 of 92 appropriate. This is consistent with the EPA’s stated scope throughout the development of this proposed rule. The EPA has proposed a definition of unconventional operations, but solicits comment on whether the proposed definition of unconventional operations is sufficiently clear to enable oil and gas extraction operators an d/or pretreatment authorities to determine whether specific wastewaters are from conventional or unconventional sources. See Section X. To he lp inform any possible future rulemaking for pretreatment standards for conventional oil and gas operations, the EPA requests data on the volumes of and pollutants in wastewat er generated from conve ntional oil and gas extraction. The EPA also requests data on th e prevalence of conve ntional oil and gas wastewater discharges to POTWs, including in formation on any pretreatment that may be applied, geologic formations the gas or oil is extracted from, and locations within the United States. (See Section XI.).

B. Pollutants of Concern Since the effectiveness of the technology basis for the proposed standards results in zero discharge of all pollutants, it is not a ppropriate in this proposed rule to specify the pollutants of concern. Rather, as is the case for the existing BPT requirements, the proposed PSES/PSNS apply to the discharg e of all pollutants in UOG extraction

wastewater.

C. POTW Pass Through Analysis Sections 307(b) and (c) of the CW A authorize the EPA to promulgate pretreatment standards for pollutants that ar e not susceptible to treatment by POTWs or which would interfere with the operation of POTWs. The EPA looks at a number of factors in selecting the technology basis for pretreatment standards for existing and new*** E. O. 12866 Review

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Page 69 of 92 sources. These factors are generally the same as those considered in establishing the direct discharge technology basis. However, unlike direct dischargers whose wastewater will receive no further treatment once it leaves the facility, indirect dischargers send their wastewater to POTWs fo r further treatment.
Therefore, before establishing PSES/PSNS for a pollutant, the EPA examines whether the pollutant “passes th rough” a POTW to waters of the U.S. or interferes with the POTW operation or biosolids disposal pr actices. In determining whether a pollutant would pass through POTWs for these purposes, the EPA generally compares the percentage of a pollutant removed by well-operated POTWs performing secondary treatment to the percentage removed by a ca ndidate technology basis. A pollutant is determined to pass through POTWs when th e median percentage removed nationwide by well-operated POTWs is less than the medi an percentage removed by the candidate technology basis. Pretreatment standards are established for those pollutants regulated under the direct discharge leve l of control (typically BAT/ NSPS) that passes through. In addition, the EPA may regulate pollutants that do not pass through but otherwise interfere with POTW operations or biosolids disposal pr actices. This approach to the definition of pass through satisfies two competing objectives set by Congress: (1) that standards for indirect dischargers be equiva lent to standards for direct dischargers, and (2) that the treatment capability and perfor mance of POTWs be recognized and taken into account in regulating the discharge of pollutants from indirect dischargers.
In the case of the proposed rule, the ca ndidate technology basi s would prevent the discharge of all pollutants to POTWs completely. Historically, the EPA’s primary source of POTW removal data is its 1982 “Fate of Priority Pollutants in Publicly Owned*** E. O. 12866 Review

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Page 70 of 92 Treatment Works” (also known as the 50 POTW Study) (see DCN SGE00765). The 50 POTW study presents data on the perfor mance of 50 POTWs achieving secondary treatment in removing toxic pollutants. Wh ile the 50 POTW study demonstrates a wide variability in the effectiveness of POTWs in removing toxic polluta nts, it demonstrates that POTWs remove these toxic pollutant s by less than 100%. Although this study does not contain information on pollutant removals for TDS, as explained earlier, secondary treatment technologies are generally understood to be ineffective at removing TDS and as such little to no TDS rem ovals are likely to occur at POTWs (DCN SGE00011; DCN SGE00600). Therefore, based on the 50 POTW study of toxic pollutants and information about secondary treatment removal of TDS, th e EPA determined that all pollutants would “pass through” the POTW for the UOG extracti on wastewater as that term applies in the
CWA.

XIV. Environmental Impacts UOG production generates significant volumes of wastewater that need to be managed. As described in Section XI.C.2, wells may produce flowback volumes ranging between 210,000 and 2,100,000 gallons. During the production phase, wells typically produce smaller volumes of water (median flow rates range from 200-800 gallons per day) and continue producing wastewater throughout the life of the well.
In general, evidence of environmental im pacts to surface waters from discharges of UOG extraction wastewater is sparsely documented. Some of the environmental impacts documented to date resulted from wa stewater pollutants that passed untreated through POTWs in Pennsylvania (TDD, Chapter D.5).*** E. O. 12866 Review

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Page 71 of 92 A. Pollutants As described in Section XI.D., high c oncentrations of TDS are common in UOG extraction wastewater. As shown in Table XI-2. (in Section XI.D .), major inorganic constituents leaching from geologic formati ons such as sodium, potassium, bromide, calcium, fluoride, nitrate, phosphate, chloride, sulfate, and magnesium represent most of the TDS in UOG extraction wastewater. TDS in produced water may also include barium, radium, and strontium. Based on available data, TDS cations (positively charged ions) in UOG extraction wastewater are gene rally dominated by sodium and calcium, and the anions (negatively charged ions) are dominated by chloride (DCN SGE00284). TDS concentrations vary among the UOG formations . Table VII-1 (in Sec tion XI.D.), presents the varying TDS concentrations in tight and shale oil and gas formations. The highest median TDS concentration (370,000 mg/L) is f ound in the Pearsall shale gas formation. For comparison, sea water contains approximately 35,000 mg/L TDS.

B. Impacts from the Discharge of Pollut ants Found in UOG Extraction Wastewater Conventional POTW treatment operations ar e designed primarily to treat organic waste and remove biochemical oxygen demand a nd total suspended solids, not to treat waters with high TDS. When discharges to POTWs were occurring in Pennsylvania, these POTWs, lacking adequate TDS re moval processes, diluted UOG extraction wastewaters with other sewage flows and di scharged TDS-laden effluent into local streams and rivers. POTWs not sufficiently treating TDS in UOG extraction wastewater were a suspected source of elevated TDS le vels in the Monongahela River in 2009 (DCN SGE00525). Also see TDD, Chapter D.5 for additional examples.*** E. O. 12866 Review

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Page 72 of 92 In addition to UOG wastewater pollu tants passing through POTWs, other industrial discharges of inad equately treated UOG extraction wastewater pollutants have also been associated with in-stream im pacts. One study reviewed by the EPA of discharges from a CWT facility in wester n Pennsylvania that treats UOG extraction wastewater examined the water quality and isot opic compositions of discharged effluents, surface waters, and stream sediments (DCN SGE00629). 22 The study found that the discharge of the effluent from the CWT facility increased downstream concentrations of chloride and bromide above background le vels. The chloride concentrations 1.7 kilometers downstream of the treatment f acility were two to ten times higher than chloride concentrations found in similar re ference streams in western Pennsylvania. Radium 226 levels in stream sedime nts at the point of discharge were approximately 200 times greater than upstream and background se diments. EPA intends to further study the frequency and magnitude of such impacts from CWTs.

C. Impact on Surface Water Designated Uses UOG extraction wastewater TDS levels ar e high enough, if discharged untreated to surface water, to adversel y affect a number of designated uses of surface water, including drinking water, aquatic life s upport, livestock watering, irrigation, and industrial use.

22 Discharges from CWT facilities are subject to ELGs in 40 CFR part 437 and would not be subject to the proposed rule. However, the effect of discharges of treated oil and gas wastewaters from CWT facilities that lack high level treatment is similarly representative of POTWs.*** E. O. 12866 Review

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Page 73 of 92 1. Drinking Water Uses Available data indicate the levels of TDS in UOG extraction wastewaters can often significantly exceed recommended drin king water concentrations. Because TDS concentrations in drinking water sources are typically well below the recommended drinking water levels, few drinki ng water treatment facilities ha ve technologies to remove TDS. Two published standards for TDS in dri nking water include the U.S. Public Health Service recommendation and the EPA's s econdary maximum contaminant level recommendation that TDS in drinking water should not exceed 500 mg/L. High concentrations of TDS in drinking water prim arily degrade its taste rather than posing a public health risk. Typically water with less than 300 mg/L TDS is considered excellent, and water with TDS above 1,100 mg/L is unacceptable (DCN SGE00939). The World Health Organization dropped its health-based recommendations for TDS in 1993, instead retaining 1,000 mg/L as a secondary standard for taste (DCN SGE00947).
The EPA also reviewed a study concer ning unintentional creation of harmful disinfection by-products (DBPs) during POTW blending and discharge of UOG extraction wastewaters (DCN SGE00535; DC N SGE00587). DBPs have been shown to have both adverse human health and ecol ogical affects. The study found that UOG extraction wastewaters contain various inor ganic and organic DBP precursors that can react with disinfectants used by POTWs to form DBPs, par ticularly brominated-DBPs, which are suspected to be among the mo re toxic DBPs (DCN SGE00535). These precursors are a concern for drinking water ma nagers wherever they may enter raw water intakes. See TDD, Chapter D.5 for further di scussion of DBP forma tion associated with UOG extraction wastewaters.*** E. O. 12866 Review

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Page 74 of 92 2. Aquatic Life Support Uses TDS and its accompanying salinity play a primary role in the distribution and abundance of aquatic animal and plant comm unities. High levels of TDS can impact aquatic biota through incr eases in salinity, loss of osmotic balance in tissues, and toxicity of individual ions. Increases in salinity ha ve been shown to cause shifts in biotic communities, limit biodiversity, exclude less-tol erant species and cause acute or chronic effects at specific life stages (DCN SG E00946). A detailed study of plant communities associated with irrigation drains, reported substantial changes in marsh communities (DCN SGE00941). When TDS increased from 270 to 1170 mg/L both coontail ( Ceratophyllus demersum ) and cattail ( Typha sp.) were nearly eliminated. A related study found that in lakes aquatic biodiversity wa s lowered when salinity was high. (DCN SGE00940).
It is often a specific ion concentration in TDS that is responsible for adverse effects to aquatic ecosystems. For exampl e, a TDS concentration of 2,000 mg/L with chloride as the primary anionic constituent is acutely toxic to aquatic life, but the same TDS concentration composed primarily of su lfate is nontoxic. Sodi um choride accounts for about 50 percent of the TDS typically found in UOG extraction wastewater. As reported in Table XI-2 (in Sect ion XI.D.), chloride has been measured at concentrations up to 230,000 mg/L. Macroinvertebrates, such as fresh water shrimp and aquatic insects that are a primary prey of many fish speci es, have open circulatory systems that are especially sensitive to pollutants like chloride . Based on laboratory toxicity data from the EPA's 1988 chloride criteria document and more recent studies, invertebrate sensitivity to chloride acute effect concentrations ranged from 953 mg/L to 13,691 mg/L. Chronic*** E. O. 12866 Review

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Page 75 of 92 effect concentrations of chlo ride ranged from 489 mg/L to 556 mg/L. In addition to the laboratory data, the EPA also reviewed da ta from a 2009 Pennsylvania Department of Environmental Protection violation report documenting a fishkill attributed to a spill of diluted produced water in Hopewell Townshi p, PA. TDS at the location of the fishkill was as high as 7,000 mg/L. While not relate d to UOG extraction wa stewater, negative impacts of high TDS, including fish kills , were documented during 2009 at Dunkard Creek located in Monongalia County, Pennsylvania. (DCN SGE00001 and DCN SGE00001.A01)
The EPA has published chemical-specifi c national recommended water quality criteria for some of the TDS constituents in UOG extraction wastewater, such as barium, chloride, manganese, and iron, based on a va riety of human hea lth or ecological benchmarks. A review of state and tribal wa ter quality standards in 2012 indicated that 26 states had adopted a numeric or narrative criter ion for TDS, either for state-wide or sitespecific application (DCN SGE00945). The TDS criteria levels and the designated uses they are intended to protect vary greatly from state to state. For example, Alaska has a criterion of 1,500 mg/L TDS to protect aqua tic life; Mississippi has a criterion of 750 mg/L monthly average for protection of fis h, wildlife and recreation criteria, and Illinois has a statewide 1,000 mg/L TDS criterion for aquatic life and a 1,500 mg/L TDS criterion for secondary contact recreation and indi genous aquatic life. TDS criteria adopted specifically for the protection of aquatic life ha ve been developed for at least 16 of the 26 states, some of which only apply to specifi c waterbodies. Oregon has the most stringent TDS criterion using a standard of 100 mg/L fo r all freshwater streams and tributaries in order to protect aquatic life, public wa ter use, agriculture, and recreation.*** E. O. 12866 Review

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Page 76 of 92 3. Livestock Watering Uses POTW discharges to surface waters cont aining high concentrations of TDS may impact downstream uses for livestock wate ring. High TDS concentrations in water sources for livestock watering may adversely affect animal health by disrupting cellular osmotic and metabolic processes. Domestic lives tock, such as cattle, sheep, goats, horses, and pigs have varying degrees of sensitivity to TDS in drinking water as shown in Table XIV-1. Sheep seem to be more tolerant of saline water than most domestic species but will only drink it if introduced to the saline water over a period of several weeks (DCN SGE00944).

Table XIV-1. Tolerances of Livest ock to TDS in Drinking Water

Livestock Total Dissolved Solids (mg/L) No adverse effects on

animals expected Animals may have initial reluctance to drink or there may be some scouring, but stock should adapt without loss of production Loss of production and a decline in animal condition and health would be expected. Stock may tolerate these levels for short periods if introduced gradually Beef cattle 0–4,000 4,000–5,000 5,000–10,000 Dairy cattle 0–2,400 2,400–4,000 4,000–7,000 Sheep 0–4,000 4,000–10,000 10,000–13,000 Horses 0–4,000 4,000–6,000 6,000–7,000 Pigs 0–4,000 4,000–6,000 6,000–8,000 Poultry 0–2,000 2,000–3,000 3,000–4,000 Source: Australia and New Zealand Wate r Quality Guidelines 2000. Chapter 3 Primary Industries- 9.3 Livestock drinking water guidelines (DCN SGE00944).

4. Irrigation Uses If UOG extraction wastewater discharges to POTWs increase TDS concentrations in receiving streams, downstream irrigation uses of that surface water may be negatively affected. Elevated TDS levels can limit the usefulness of water for irrigation. Excessive salts affect crop yield in the short term, and the soil struct ure in the long term. Primary*** E. O. 12866 Review

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Page 77 of 92 direct impacts of high salinity water on plant crops include physiological drought, increased osmotic potential of soil, specific ion toxicity, leaf bur n, and nutrient uptake interferences (DCN SGE00938). In general, for various cl asses of crops the salinity tolerance decreases in the following order: fo rage crops, field crops, vegetables, fruits.
The suitability of water for irrigation is classified using several different measurements, including TDS and electrica l conductivity (EC). Table XIV-2. shows a classification of TDS concentrations for irrigation suitability.

Table XIV-2. Permissible Limits for Classes of Irrigation Water

Class of Water Concentrations of TDS Electrical Conductivity a (dS/m) TDS by gravimetric (mg/L) Class 1. Excellent 0.250 175 Class 2. Good 0.250-0.750 175-275 Class 3. Permissible b 0.750-2.0 525-1,400 Class 4. Doubtful c 2.0-3.0 1.400-2,100 Class 5. Unsuitable c 3.0 >2,100 a = TDS (mg/L) ≈ EC (dS/m) x 640 for EC < 5 dS/m; b = leaching needed if used c = good drainage needed and sensitive plants will have difficulty obtaining stands. Source: AgriLife Extension (undated) (DCN SGE00936).

In addition to short-term impacts to cr op plants, irrigating with high TDS water can result in long-term gradual accumulation of salts or sodium in soil layers and eventual decrease in soil productivity. The susceptibility of soils to degradation is dependent on the soil type and structure. Sa ndy soils are less likely than finely textured soils to accumulate salts or sodium. Soils w ith a high water table or poor drainage are more susceptible to salt or sodium accumulation. The most common method of estimating the suitability of a soil for crop pr oduction is thro ugh calculation of its sodicity*** E. O. 12866 Review

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Page 78 of 92 as estimated by the soil’s sodium absorption ratio (SAR). The SAR value is calculated by the equation: ሾே஺ శ ሿ ට ൣ ಴ಲ మశ ൧ ൅ሾಾ೒ మశ ሿ 2 .

Table XIV-3. shows a general irrigation water cla ssification system based on SAR values. The actual field-observed impacts, however, are very site -specific depending on soil and crop system (DCN SGE00938).

Table XIV-3. General Sodium I rrigation Water Classifications

SAR Values Sodium Hazard of Water Comments 1-9 Low Use of sodium sensitive crops must be cautioned 10-17 Medium Amendments (such as gypsum) and leaching needed. 18-25 High Generally unsuitable for continuous use 26 or Greater Very High Generally unsuitable for use
5. Industrial Uses POTW discharges to surface wa ters are often upstream of industrial facilities that withdraw surface waters for various cooling and process uses. High levels of TDS can adversely affect industrial applications re quiring the use of water in cooling tower operations, boiler feed water, food pr ocessing, and electronics manufacturing. Concentrations of TDS above 500 mg/L resu lt in excessive corrosivity, scaling, and sedimentation in water pipes, water heaters, boilers and household appliances. Depending on the industry, TDS in intake water may inte rfere with chemical processes within the plant. Some industries requiring ultrapure wa ter, such as semi-c onductor manufacturing facilities, are particularly se nsitive to high TDS levels due to the treatment cost for the removal of TDS.*** E. O. 12866 Review

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Page 79 of 92 XV. Non-Water Quality Environmental Impact s Associated with the Proposed
Rule Because the elimination or reduction of one form of pollution may create or aggravate other environmental problems, the EPA considers non-water quality environmental impacts (including energy impacts) that may result from the implementation of proposed regulations. The EPA evaluated the potential impact of the proposed pretreatment standards on air emissi ons, solid waste generation, and energy consumption.
The proposed PSES/PSNS prohibit the di scharge to POTWs of wastewater pollutants associated with UOG extraction. Because EPA knows of no POTWs that are currently accepting UOG extraction wastew ater, the proposed PSES will require no changes in current industry wastewater management practices and, consequently, will have no incremental impacts on air emi ssions, solid waste generation, or energy consumption. Based on the reasoning that new sources will follow current industry practice, the EPA projects no incremental non-water quality environmental impacts associated with PSNS.

XVI. Implementation
A. Implementation Deadline Because the requirements of the proposed rule are based on current practice, the EPA proposes that the PSES/NSPS standard s based on the regulatory options being proposed apply on the effective date of the final rule.*** E. O. 12866 Review

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Page 80 of 92 B. Upset and Bypass Provisions A “bypass” is an intentional diversion of waste streams from any portion of a treatment facility. An “upset” is an exceptional incident in which there is unintentional and temporary noncompliance with technology- based permit effluent limitations because of factors beyond the reasonable control of the permittee. The EPA’s regulations for indirect dischargers concerning bypasses a nd upsets are set forth at 40 CFR 403.16 and
403.17.

C. Variances and Modifications The CWA requires application of efflue nt limitations established pursuant to section 304 for direct discharg ers and section 307 for all indi rect dischargers. However, the statute provides for the modification of these national requirements in a limited number of circumstances. Moreover, the Agency has established administrative mechanisms to provide an opportunity for re lief from the applicat ion of the national pretreatment standards for cat egories of existing sources.
The EPA may develop pretreatment sta ndards different fr om the otherwise applicable requirements for an individual ex isting discharger if it is fundamentally different with respect to factors considered in establishing the standards applicable to the individual discharger. Such a modificati on is known as a “fundamentally different factors” (FDF) variance. See 40 CFR 403.13. The EPA, in its initial implementation of the effluent guidelines program , provided for the FDF modifications in regulations. These were variances from the BCT effluent lim itations, BAT limitations for toxic and nonconventional pollutants, and BPT limitations for conventional pollutants for direct dischargers. FDF variances for toxic pollutants were challenged judicially and ultimately*** E. O. 12866 Review

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Page 81 of 92 sustained by the Supreme Court in Chem ical Manufacturers Association v. Natural Resources Defense Council, 479 U.S. 116, 124 ( 1985). FDF variances, however, are not available for new sources. E.I. Dupont v. Train , 430 U.S. 112, 138 (1977)
Subsequently, in the Water Quality Act of 1987, Congress added new CWA section 301(n). This provision explicitly au thorizes modifications of the otherwise applicable BAT effluent limitations or categori cal pretreatment standards if a discharger is fundamentally different with respect to the factors specified in CWA section 304 or 403 (other than costs) from those consider ed by the EPA in establishing the effluent limitations or pretreatment standards. CWA section 301(n) also defined the conditions under which the EPA may estab lish alternative requirements. Under section 301(n), an application for approval of a FDF variance must be based solely on (1) information submitted during rulemaking raising the factors that are fundamentally different or (2) information the applicant did not have an oppor tunity to submit. Th e alternate limitation must be no less stringent than justified by th e difference and must not result in markedly more adverse non-water quality environmental impacts than the national limitation or standard.
The EPA regulations at 40 CFR part 403, au thorize the Regional Administrators to adjust the limits in categorical pretreatment standards and to establish alternative standards. The regulations further detail the substantive criteria used to evaluate FDF variance requests for existing discharges to POTWs. Thus, 40 CFR 403.13(d) identifies six factors (nature or qualit y of pollutants in raw wastew ater, volume of wastewater, nonwater quality environmental impacts, energy requ irements, age and size of a discharger’s facility, and cost of compliance) that may be considered in de termining if a discharger is*** E. O. 12866 Review

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Page 82 of 92 fundamentally different. The Agency must de termine whether, based on one or more of these factors, the discharger in question is fundamentally different from the dischargers and factors considered by the EPA in developi ng the nationally applicable pretreatment standards. The regulation at 40 CFR 403.13(e) also lists four other f actors (inability to install equipment within the time allowed, assertion that standards cannot be achieved, based on other than those listed in 40 CFR 403.13 (d), a discharger’s ability to pay, and impact of a discharge on the quality of the POTWs receiving waters) that may not provide a basis for an FDF variance. In addition, under 40 CFR 403.13 (c)(2), a request for standards less stringent than the nati onal standard may be approved only if compliance with the national pretreatment sta ndards would result in either (a) a removal cost wholly out of proportion to the removal cost considered during development of the national pretreatment standards, or (b ) a non-water quality environmental impact (including energy requirements) fundamentally more adverse than the impact considered during development of the national pretreatme nt standards. The le gislative history of section 301(n) underscores the necessity for the FDF varian ce applicant to establish eligibility for the variance. The EPA’s regulations at 40 CFR 403.13 are explicit in imposing this burden upon the applicant. Th e applicant must show that the factors relating to the discha rge controlled by the applicant’s permit that are claimed to be fundamentally different are, in fact, f undamentally different from those factors considered by the EPA in establishing the appl icable pretreatment standards. In practice, very few FDF variances have been granted for past ELGs. An FDF variance is not available to a new source that would be subject to PSNS.

XVII. Statutory and Executive Order Reviews*** E. O. 12866 Review

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Page 83 of 92 A. Executive Order 12866: Regulatory Planni ng and Review and Executive Order 13563: Improving Regulation and Regulatory Review This action is a “significant regulato ry action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993). A ccordingly, the EPA submitted this action to the Office of Management a nd Budget (OMB) for review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in response to OMB recommendations have been do cumented in the docket for this action.

B. Paperwork Reduction Act This action does not impose an info rmation collection burden under the provisions of the Paperwork Reduction Act, 44 U. S.C. 3501 et seq. Burden is defined at 5 CFR 1320.3(b). This proposal would codify current indus try practice and would not impose any additional reporting requirements .

C. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) gene rally requires an agency to prepare a regulatory flexibility analysis of any proposed rule that would be subject to notice and comment rulemaking requirements under the Ad ministrative Procedure Act or any other statute unless the agency certi fies that the rule will not have a significant economic impact on a substantial number of small entitie s. Small entities include small businesses, small organizations, and sma ll governmental jurisdictions.
For purposes of assessing the impacts of th e proposed rule on small entities, small entity is defined as: (1) a small business that is primarily engaged in Crude Petroleum and Natural Gas Extraction and Natural Gas Liquid Extraction by NAICS code 211111 and*** E. O. 12866 Review

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Page 84 of 92 211112 with fewer than 500 employees (based on Small Business Administration size standards). After considering the economic impacts of the proposed rule on small entities, I certify that this action will not have a significant economic imp act on a substantial number of small entities. The small entities th at would be subject to the requirements of this proposed rule are small businesses that engage in UOG extraction as defined in Section X. No small businesses will e xperience an impact because the proposed rulemaking does not impose any new requirement that is not alre ady being met by the industry.

D. Unfunded Mandates Reform Act This proposed rule does not contain a Federal mandate that may result in expenditures of $100 million or more for stat e, local, and tribal governments, in the aggregate, or the private sector in any one year. As explained in Section VI.C., this proposed rule has no costs. Thus, this proposed rule w ould not be subject to the requirements of sections 202 or 205 of the Unfunded Mandates Reform Act (UMRA).
This proposed rule also would not be subj ect to the requirements of section 203 of UMRA because it contains no regulatory requ irements that might significantly or uniquely affect small governments. The EPA has not identified any oil and gas facilities that are owned by small governments.

E. Executive Order 13132: Federalism This action does not have federalism impli cations. It will not have substantial direct effects on the states, on the relations hip between the national government and the*** E. O. 12866 Review

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Page 85 of 92 states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132

. The proposed rule would not alter the basic state-federal scheme established in the CWA under which the EPA authorizes states to carry out the NPDES permit progr am. The EPA expects the proposed rule would have little effect on the relationship between, or the distribution of power and responsibilities among, the federal and stat e governments. Thus, Executive Order 13132 does not apply to this action. Although this order does not apply to this action, as explained in Section VIII., the EPA coordinated closely with states through a workgroup, as well as outreach efforts to pretreatment coordinators and pretreatment authorities.

F. Executive Order 13175: Consultation and Coordination with Indian Tribal
Governments This action does not have tribal impli cations, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000)

. It will not have substa ntial direct effects on tribal governments, on the relationship be tween the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. The proposed ru le contains no Federal mandates for tribal governments and does not impose any enforceable duties on tribal governments. Thus, Executive Order 13175 does not apply to this action.
Although Executive Order 13175 does not apply to this action, the EPA coordinated with tribal offi cials in developing this acti on. The EPA coordinated with federally recognized tribal governments in May and June of 2014, sharing information about the UOG pretreatment standards propos ed rulemaking with the National Tribal Caucus and the National Tribal Water Council. As part of this outreach effort, the EPA*** E. O. 12866 Review

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Page 86 of 92 collected data about UOG operations on trib al reservations, UOG operators that are affiliated with Indian tribes, and POTWs owned or operated by tribes that may accept industrial wastewaters (see DCN SGE00785). Based on this information, there are no tribes operating UOG wells that discharge wast ewater to POTWs nor are there any tribes that own or operate POTWs that accept i ndustrial wastewater from UOG facilities; therefore, this proposed rule wi ll not impose any costs on tribes.

G. Executive Order 13045: Protection of Child ren from Environmental Health and Safety Risks EO 13045 (62 FR 19885, April 23, 1997) applie s to rules that are economically significant according to EO 12866 and involve a health or safety risk that may disproportionately affect ch ildren. This proposed action would not be subject to EO 13045 because it is estimated to cost less than $100 million and does not involve a safety or health risk that may have dispro portionately negative effects on children

.

H. Executive Order 13211: Energy Effects This proposed action is not subject to Executive Order 13211, because it not a “significant energy action” as defined in Executive Orde r 13211, “Actions Concerning Regulations That Significantly Affect En ergy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action will not have a significant adverse effect on the supply, distribution, or use of energy, as descri bed in Section XV. of the proposed rule.

I. National Technology Transfer Advancement Act Section 12(d) of the Nati onal Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs the EPA to use*** E. O. 12866 Review

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Page 87 of 92 voluntary consensus standards in its regulat ory activities unless to do so would be inconsistent with applicable law or otherw ise impractical. Voluntary consensus standards are technical standards ( e.g. , materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs the EPA to provide C ongress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.
This proposed rulemaking does not involve technical standards. Therefore, the EPA is not considering the use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. It s main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressi ng, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.
The EPA determined that this proposed ru le will not have disproportionately high and adverse human health or environmen tal effects on minority or low-income populations because it does not affect the leve l of protection provided to human health or the environment. The proposed rule change s the control technol ogy required but will neither increase nor decrease environmental protection (as describe d in Section VI.C.).*** E. O. 12866 Review

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Page 88 of 92 The EPA welcomes comments on this as pect of the proposed rulemaking and, specifically, invites the public to identify pot ential environmental justice considerations associated with this proposed regulation.*** E. O. 12866 Review

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Page 89 of 92*** E. O. 12866 Review

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Page 90 of 92 List of Subjects in 40 CFR Part 435 Environmental protection, Pretreatment, Wast e treatment and disposal, Water pollution control, Unconventional oil and gas extraction.

Dated:

____________________________ Gina McCarthy, Administrator.*** E. O. 12866 Review

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Page 91 of 92 Therefore, it is proposed that 40 CF R part 435 be amended as follows: PART 435—OIL AND GAS EXTRAC TION POINT SOURCE CATEGORY 1. The authority citation for part 435 continues to read as follows: Authority: The Clean Water Act, 33 U.S.C. 1251, 1311, 1314, 1316, 1317, 1318, 1342 and 1361. 2. Add §435.33 to read as follows: §435.33 Pretreatment standards of performa nce for existing sources (PSES). (a) PSES for Wastewater from Con ventional Oil and Gas Extraction . [Reserved] (b) PSES for Wastewater from Unc onventional Oil and Gas Extraction . Except as provided in 40 CFR 403.7 and 403.13, any existing source subject to this section, must achieve the following pretreatment sta ndards for existing sources (PSES). (1) There shall be no discharge of wa stewater pollutants associated with production, field exploration, drilling, well completion, or well treatment for unconventional oil and gas extraction (e.g. , drilling muds, drill cuttings, produced sand, produced water) into publicly owned treatment works. (2) For the purposes of this section, (i) Unconventional oil and gas means crude oil and natural gas produced by a well drilled into a low porosity, low permeab ility formation (including, but not limited to, shale gas, shale oil, tight gas, tight oil). (ii) Drill cuttings means the particles generated by drilling into subsurface geologic formations and carried out from the wellbore with the drilling fluid. (iii) Drilling muds means the circulating fluid (mud) used in the rotary drilling of wells to clean and condition the hole and to counterbalance formation pressure.*** E. O. 12866 Review

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Page 92 of 92 (iv) Produced sand means the slurried particles used in hydraulic fracturing, the accumulated formation sands, and scales part icles generated during production. Produced sand also includes desander discharge from the produced water waste stream, and blowdown of the water phase from th e produced water treating system. (v) Produced water means the water (brine) br ought up from the hydrocarbonbearing strata during the extraction of oil and gas, and can include formation water, injection water, and any chemicals added downhole or during the oi l/water separation
process. 3. Add §435.34 to read as follows: §435.34 Pretreatment standards of performance for new sources (PSNS). (a) PSNS for Wastewater from Con ventional Oil and Gas Extraction . [Reserved] (b) PSNS for Wastewater from Unc onventional Oil and Gas Extraction . Except as provided in 40 CFR 403.7 and 403.13, any new source with disc harges subject to this section must achieve the following pretreat ment standards for new sources (PSNS). (1) There shall be no discharge of wa stewater pollutants associated with production, field exploration, drilling, well completion, or well treatment for unconventional oil and gas extraction (e.g. dril ling muds, drill cuttings, produced sand, produced water) into public ly owned treatment works. (2) For the purposes of this section, the definitions of unconven tional oil and gas, drill cuttings drilling muds, produced sand, and produced water ar e as specified in §435.33(b)(2)(i) through (b)(2)(v).
4. Add subpart H to read as follows:
Subpart H—Coalbed Methane Subcategory [Reserved]