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 STATE OP NEW MEXICO '• 

ENERGY, MINERALS ANO NATURAL RESOURCES DEPARTMENT 

OIL CONSERVATION DIVISION • 

QARREY CABRUTHERS 

(JOvERNgfl MEMORANDU M 

POST OFFICE BOX JQ88 

STATE (.Asp grrice flUILDii*J 

SANTA f 6. NEW MEXICO 87 JO* 

(608)887-5600 I 

TO: GOVERNOR GARREY CARRUTHERS, Governor 

State of New Mexico 

ANITA LOCKWOOD, Secretary 

Energy, Minerals and Natural Resources Department 

THRU: WILLIAM J. LEMAY, Director 

Oil Conservation Division 

FROM: DAVID G. BOYER, Environmental Bureau Chief 

Ofl Conservation Division 

SUBJECT: IMPLEMENTATION OF "BENZENE STANDARD" BY EPA WITH 

RESULTING LOSS OF DOMESTIC CRUDE OIL 

DATE: SEPTEMBER 12, 1990 

We are deeply concerned about a new Environmental Protection Agency (EPA) rule that 

will decrease the amount of crude oil and refined petroleum product available domestically. 

We hope that the rule be reconsidered for the activities listed below, or that its 

Implementation at least be delayed during the current Persian Gulf energy crises and 

reexamined at a later date. 

On September 25th, the EPA rule directing use of the Toxicity Characteristic Leaching 

Procedure (TCLP) and adding toxicity constituent regulatory levels becomes effective. On 

that date materials containing benzene, a natural component of crude oil and refined 

gasoline, will be regulated as RCRA hazardous wastes if benzene levels exceed the 

promulgated level. Certain waste materials are excluded from this regulation including 

crude oil exploration and production wastes, and wastes from clean*up of spilled petroleum 

products from underground storage tanks at gasoline service stations. However, two 

activities closely associated with the above exclusions were not so exempted and will be 

required to comply with burdensome and costly hazardous waste regulations that will have 

a negative impact on both petroleum availability and on environmental cleanups taking 

place under other laws and regulations. 
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MEMORANDUM 

September 12, 1990 

Page -2-

In New Mexico and other oil producing states crude oil may become contaminated with 

sediment and water that makes it unmarketable without treatment. For example, pipelines 

commonly will not accept crude oil with greater than 1 to 2% sediment and water. Tank 

bottom sediments also contain crude oil that can be reclaimed. Facilities that treat or 

reclaim oil to make it marketable are generally located on the same sites as facilities 

disposing of exempted exploration and production waste. However, beginning September 

25th waste from oil reclamation activities must be kept separate, and be permitted and 

disposed of as hazardous waste even though it is identical chemically to other waste 

disposed of at the site. After that date is must be shipped off-site and out of New Mexico 

to be Incinerated. The regulatory burden, expense and time of hazardous waste permitting 

and cost of alternative disposal will almost certainly cause reclaimers to shut facilities 

causing an estimated crude oil production loss in excess of 10,000 barrels per month in 

New Mexico alone. Facilities treating or reclaiming oil should continue to remain exempt 

from hazardous waste regulations. 

New Mexico also has a number of oil refineries, some of which closed prior to 1980. 

Older refineries operated prior to today's ground water and environmental protection rules, 

and operating practices and spills often caused loss of refined product and ground water 

contamination. New Mexico currently has an extensive product recoveiy and ground water 

cleanup program operating for both active and inactive refinery sites under state rules. 

Recovery techniques and waste product treatment are almost identical to those utilized at 

gasoline station cleanups. Refined product recovered from cleanups is recycled and waste 

water is treated to remove dissolved hydrocarbons. One New Mexico refinery has 

recovered 31,000 barrels of product since 1982 and its value has paid for the cost of 

recovery. This petroleum recovery is jeopardized if water recovered concurrently with the 

petroleum is classified as a hazardous waste because of the dissolved benzene content. 

Equally important, ground water and environmental cleanups at these locations will be 

hindered, if not postponed. Again, this is because of the expense and burden of obtaining 

federal permits, including the cost of additional extensive hydrogeologic investigations that 

were already required as part of the state cleanup process. Facilities required by state law 

to perform these specialized product recovery and cleanup operations should be allowed 

flexibility of operation and not have rules imposed that are counterproductive to both 

petroleum product recovery and environmental cleanup. 

cc: William J. Riley, EPA Administrator 

James D. Watkins, Secretary of Energy 

N.M. Congressional Delegation