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RCRA Box 321 

Prepped by Ryan Dugan 

Document Number: 

219)OGRC-S0016.D 

Docket Number: 

F-93-OGRC-FFFFF 

Printed 5/8/2007 3:36:32 PM Sheet 219 of 259 
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Request by Waste Crude Oil Reclaimers 

September 18, 1990 

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Appendix C. THE REGULATORY DETERMINATION 
P.3 

oGRC-sooi&rD 

Wednesday 

July 6, 1988 

Part VII 

Environmental 

Protection Agency 

Regulatory Determination for Oil and Gas 

and Geothermal Exploration, '•-„.-.••.•' 

Development and Production Wastes; . 

Regulatory Determination j 
P.4 

25446 Federal Register / Vol. 53, No. 129 / Wednesday. July 6. 1988 / Notices 

ENVIRONMENTAL PROTECTION 

AGENCY 

[FRL-3403-91 

f 

Regulatory Determination for Oil and 

Gas and Geothermal Exploration, 

Development and Production Wastes 

ACTION: Regulatory determination. 

SUMMARY: Section 3001(b)(2)(B) of the 

Resource Conservation and Recovery 

Act (RCRA) requires the Administrator 

to determine whether to promulgate 

regulations under RCRA Subtitle C for 

wastes from the exploration, 

development, and production of crude 

oil, natural gas, and geothermal energy. 

The Adminstrator must make this 

determination no later than six months 

after completing a Report to Congress on 

these wastes and after providing an 

opportunity for public comment The 

Agency has completed these activities 

and has decided that regulation under 

RCRA Subtitle C is not warranted. 

Rather. EPA will implement a threepronged strategy to address the diverse 

environmental and programmatic issues 

posed by these wastes by: (1) Improving 

Federal programs under existing 

authorities in Subtitle D of RCRA. the 

Clean Water Act. and Safe Drinking 

Water Act: (2) working with States to 

encourage changes in their regulations 

and enforcement to improve some 

programs: and (3) working with 

Congress to develop any additional 

statutory authorities that may be 

required. 

FOR FURTHER INFORMATION CONTACT: 

For further information on the regulatory 

determination, contact the RCRA/ 

Superfund hotline at (800) 424-9346 (toll 

free) or (202) 382-3000. 

SUPPLEMENTARY INFORMATION: 

Preamble Outline 

I. Summary 

II. Background 

A. Technical Summary of Report to 

Congress 

B. Legal Authority 

C Conclusions of the Report to Congress 

and Response to Comments 

D. Determination of the Scope of the 

Temporary RCRA Exemption 

III. Factors Considered in Regulatory 

Determination 

IV. Regulatory Determination for Crude Oil 

and Natural Gas Wastes 

A. Hazard Assessment 

B. Economic Impact Analysis 

C. Adequacy of State and Federal 

Regulatory Programs 

D. Conclusions 

V. Efforts to Improve State and Federal 

Programs 

A. Federal Program Improvements Within 

Existing Authorities 

B. Additional Federal Authorities 

C. Improvements in State Programs 

VI. Regulatory Determination for Geothermal 

Energy Wastes 

A. Hazard Assessment 

B. Adequacy of Slate and Federal 

Regulations 

C. Conclusions 

VII. Research. Development, and 

Demonstration Plan 

VIII. EPA RCRA Docket 

I. Summary 

This action presents the Agency's 

regulatory determination required by 

section 3001(b)(2)(B) of the Resource 

Conservation and Recovery Act (RCRA) 

for drilling fluids, produced waters, and 

other wastes associated with the -...••. 

exploration, development, or production 

of crude oil. natural gas, or geothermal 

energy. RCRA requires the •• 

Administrator to determine either to 

promulgate regulations under Subtitle C 

for wastes from oil, gas. and geothermal 

exploration, development, and 

production, or that such regulations are 

unwarranted. In making this 

determination, the Administrator is

 : ; 

required to utilize information • •"•, •-: 

developed and accumulated by the 

Agency pursuant to a study required 

under RCRA section 8002(m). The ..'... ._ 

Agency completed this study and • ~'-V 

published its results in December. 1987 

in a Report to Congress entitled 

"Management of Wastes from the 

Exploration, Development, and 

Production of Crude Oil. Natural Gas, ,.-•:; 

and Geothermal Energy." ' :>v. 

In completing the Report to Congress 

and this determination. EPA gathered 

and evaluated information on all of the 

issues raised in section 8002(m). 

including three key factors pertaining to 

wastes from the exploration, 

development, and production of oil. gas, 

and geothermal energy: (1) The 

: characteristics, management practices. •. 

and resulting impacts of these wastes on 

human health and the environment: (2) 

the adequacy of existing State and 

Federal regulatory programs: and (3) the 

economic impacts of any additional 

regulatory controls on industry. . * •• 

In considering the first factor. EPA 

found that a wide variety of 

management practices are utilized for 

these wastes, and that many 

alternatives to these current practices 

are not feasible or applicable at 

individual sites. EPA found that oil. gas. 

and geothermal wastes originate in very 

diverse ecologic settings and contain a 

wide variety of hazardous constituents. 

EPA rloci'.mented 62 damage cases 

resulting from the management of these 

wastes, but found that many of these 

were in violation of existing State and 

Federal requirements. 

As to the second factor, EPA found 

that existing State and Federal 

regulations are generally adequate to 

control the management of oil and gas

 7;§ 

wastes. Certain regulatory gaps do exist^j»£ 

however, and enforcement of existing /$fs~

t

' 

regulations in some States is inadequate " 

For example, some States have •:•%& 

insufficient controls on the use of ..^j=[ 

landfarming. roadspreadirg. pit . ^V*? 

.construction and surface water 

discharge practices. Some States lack ^ 

sufficient controls for central disposal 

and treatment facilities and for '•"*$* 

associated wastes.1 The existing --V^fS 

Federal standards under Subtitle D of 

RCRA provide general environmental 

performance standards for disposal of vj 

solid wastes, including oil. gas. and 

geothermal wastes, but these standards' 

do not fully address the specific .Sjjj 

concerns posed by oil and gas wastes. v$3 

Nevertheless. EPA has authority under ^ 

' Subtitle D to promulgate more tailored 4J? 

criteria. In addition, the authorities . 'jp 

•' available under the Clean Water Act :s* 

(CWA) or Safe Drinking Water Act :'J*,$5I 

; (SDWA) can be more broadly utilized, ^ 

and efforts are already underway to fill 

gaps under these programs. - -

;

'£s3 

;. .EPA's review of the third factor found v3 

• that imposition of Subtitle C regulations^} 

for all oil and gas wastes could subject- ~ 

. billions of barrels of waste to regulation* 

under Subtitle C as hazardous wastes 

. and would cause a severe economic 

.'impact on the industry and on oil and 

' gas production in the U.S. Additionally.-^ 

because a large part of these wastes is* ? 

• managed in off-site commercial 

facilities, removal of the exemption 

could cause severe short-term strains on^J 

the capacity of Subtitle C Treatment. 

Storage, and Disposal Facilities (TSDFs).^ 

and a significant increase in the Subtitle^ 

C permitting burden for State and fjjj 

Federal hazardous waste programs. *_•!&£ 

• As explained in more detail in Section^ / 

• IV of this notice. EPA found that '':''£*%i-' 

regulation under Subtitle C presents *ff&?>. 

several serious problems. First. Subtitle "H,' 

C contains an unusually large number of;,.£_" 

highly detailed statutory requirements. 11 jf 

offers little flexibility to take into ;-'?$•>• 

account the varying geological.

 :'">?*^r 

climatological. geographic, and other *".-.*2: 

differences characteristic of oil and gas ' • v 

drilling and production sites across the X\. 

country. At the same time, it does not 1~\ 

provide the Agency with the flexibility 

to consider costs when applying these 

requirements to oil and gas wastes. 

• Associated wastes are those wastes other than . 

produced water, drilling muds and cutting. and 

rigwtsh that are intrinsic lo exploration. 

development and production of crude oil and 

natural guv See Section II 0 below 
P.5 

Federal Register / Vol. 53. No. 129 / Wednesday. )uly 6, 1988 / Notices 25447 

•i 

Consequently. EPA would not be able to 

craft a regulatory program to reduce or 

eliminate the serious economic impacts 

that it has predicted. Furthermore, since 

existing State and Federal programs 

already control oil and gas wastes in 

many waste management scenarios. 

EPA needs to impose only a limited 

number of additional controls targeted 

to fill the gaps in the existing programs. 

Subtitle C. with its comprehensive 

"cradle to grave" management 

requirement, is not well suited to this 

type of gap-filling regulation. EPA 

concluded that it would be more 

efficient and appropriate to fill the gaps 

by strengthening under the Clean Water 

Act and UIC programs and promulgating 

the remaining rules needed under RCRA 

under the less prescriptive statutory 

authorities set out in Subtitle D. This 

narrower approach would also reduce 

disruption of existing State and Federal 

control programs. 

Thus, the Agency has decided not to 

promulgate regulations under Subtitle C 

for wastes generated by the exploration, 

development, and production of crude 

oil. natural gas, and geothermal energy 

for the following reasons: 

(1) Subtitle C does not provide 

sufficient flexibility to consider costs 

and avoid the serious economic impacts 

that regulation would create for the 

industry's exploration and production 

operations: 

(2) Existing State and Federal 

regulatory programs are generally 

adequate for controlling oil. gas, and 

geothermal wastes. Regulatory gaps in 

the Clean Water Act and UIC program 

are already being addressed, and the 

remaining gaps in State and Federal 

regulatory programs can be effectively 

addressed by formulating requirements 

under Subtitle D of RCRA and by 

working with the States; 

(3) Permitting delays would hinder 

new facilities, disrupting the search for 

new oil and gas deposits; 

(4) Subtitle C regulation of these 

wastes could severely strain existing 

Subtitle C facility capacity; 

(5) It is impractical and inefficient to 

implement Subtitle C for all or some of 

these wastes because of the disruption 

and. in some cases, duplication of State 

authorities that administer programs 

through organizational structures 

tailored to the oil and gas industry: and 

(6) It is impractical and inefficient to 

implement Subtitle C for all or some of 

these wastes because of the permitting 

burden that the regulatory agencies 

would incur if even a small-percentage 

of these sites were considered 

Treatment, Storage and Disposal 

Facilities (TSDFs). 

The Agency plans a three-pronged 

approach toward filling the gaps in 

existing State and Federal regulatorsprograms by: 

(1) Improving Federal programs under 

existing authorities in Subtitle D of 

RCRA. the Clean Water Act. and Safe 

Drinking Water Act; 

(2) Working with States to encourage 

changes in their regulations and 

enforcement to improve some programs; 

and 

(3) Working with the Congress to 

develop any additional statutory 

authority that may be required. 

EPA plans to revise its existing 

standards under Subtitle D of RCRA. 

tailoring these standards to address die 

special problems posed by oil gas. and 

geothermal wastes and filling the 

regulatory gaps. Also, the Agency is 

moving ahead with improvements in its 

NPDES and UIC programs under the 

Clean Water Act and the Safe Drinking 

Water Act EPA also plans to work with 

Congress to obtain any additional 

authorities that may be required. For 

example, Subtitle D of RCRA currently 

does not provide EPA with the authority 

to address treatment or transportation 

of wastes. Throughout the process of 

improving the Federal regulatory 

program, EPA will work closely with 

States to encourage improvements in 

their regulatory programs. 

II. Background 

Section 3001(b)(2)(A) of the Solid 

Waste Disposal Act of 1980 (Pub. L 96-

480), which amended the Resource 

Conservation and Recovery Act of 1976 

(RCRA). prohibits EPA from regulating 

under RCRA Subtitle C "drilling fluids, 

produced waters, and other wastes 

associated with exploration, 

development, or production of crude oil 

or natural gas or geothermal energy" 

until at least 6 months after the Agency 

completes and submits to Congress a 

comprehensive study required by 

section 8O02(m) (also added by the 1980 

amendments). Section 8O02(m) directs 

EPA to conduct 

[A] detailed and comprehensive study and 

submit a report on the adverse effects, if any. 

of drilling fluids, produced waters, and other 

wastes associated with the exploration, 

development, or production of crude oil or 

natural gas or geothermal energy on human 

health and the environment, including, but 

not limited to. the effects of such wastes on 

humans, water, air. health, welfare, and 

natural resources and on the adequacy of 

means and measures currently employed by 

the oil and gas and geothermal energy drilling 

and production industry. Government 

agencies, and others to dispose of and utilize 

such wastes to prevent or substantially 

mitigate such adverse effects. 

The study way to include an analysis 

oft 

1. The sources and volumes of 

discarded material generated per year 

from such wastes; 

2. Present disposal practices; ' 

3. Potential danger to human health 

and the environment from surface runoff 

or leachate; 

4. Documented cases that prove or 

have caused danger to human health 

and, the environment from surface runoff 

or leachate; 

5. Alternatives to current disposal 

methods; 

6. The cost of such alternatives; and 

7. The impact of those alternatives on 

. the exploration for. and development 

and production of, crude oil and natural 

gas or geothermal energy. 

The 1980 amendments also added 

section 3001(b)(2)(B). which requires the 

Administrator to make a "regulatory 

determination" regarding the waste 

excluded from RCRA Subtitle C 

regulation. Specifically, within 8 months 

after submitting the Report to Congress, 

and after the opportunity for public 

. hearings and public comment on the 

report, the Administrator must 

"determine to promulgate regulations" 

under RCRA Subtitle C for oil. gas, and 

geothermal energy waste, "or that such 

regulations are unwarranted." Section 

3001(b)(2)(C) also specifies that any new 

regulations under RCRA Subtitle C for 

the crude oil. natural gas, or geothermal 

energy industry would not take effect 

until authorized by an Act of Congress 

EPA was required to complete the 

study and submit it to Congress by 

October 1982. In August 1985, the 

Alaska Center for the Environment sued 

the Agency for its failure to complete the 

study by the statutory deadline. EPA 

entered into a consent order obligating it 

to submit the final Report to Congress 

on or before August 31,1987, and to 

make its regulatory determination by 

February 29,1988. In April 1987. the 

court-ordered schedule was modified, 

extending the deadline or submittal of 

the final Report to Congress to 

December 31,1987, and requiring the 

regulatory determination to be made by 

June 30,1988. In accordance with this 

schedule, EPA completed the technical 

report on methodology in October 1986. 

the technical report on the waste 

sampling and analysis in January 1987. 

the interim report in April 1907. the draft 

report in August 1987. and the final 

report in December 1987. 

EPA's Report to Congress. 

"Management of Wastes from the 

Exploration. Development, and 

Production of Crude Oil. Natur.il C;ts. 

and Ceothermal Energy." was 
P.6 

25448 Federal Register / Vol. 53. No. 129 / Wednesday. July 6, 1988 / Notices 

El 

A 

IF 

R 

C 

c 

transmitted to Congress on December -

28,1987. A notice announcing the 

availability of the report, as well as the 

dates and locations of public hearings, 

was published on January 4.1988 (53 FR 

82). EPA held public hearings on the 

report in Washington, DC on February 

23.1988; Denver. Colorado, on February 

25,1988; San Francisco, California, on 

March 1.1988; Anchorage. Alaska, on. 

March 3,1988: and Dallas, Texas, on 

March 8,1988. The comment period on 

the report closed on March 15.1988. 

EPA's Report to Congress provides 

information on all of the study areas 

mandated by RCRA section 8002(m). 

The Agency received approximately 150 

written comments on the report and 

heard testimony at the hearings from 105 

individuals. All individual comments 

and transcripts from the public hearings 

are available for public inspection in the 

docket. The docket also contains a 

summary of all the comments presented 

at the hearings or submitted in writing, 

along with EPA'3 response to these 

comments. 

A. Technical Summary of Report to 

Congress 

1. Definition of Exempt Wastes 

Section 3001(b)(2)(A) exempts 

produced water, drilling fluids, and 

"other wastes associated" with the 

exploration, development, and. 

production activities. These are general 

terms that do not identify all of the 

specific waste streams to be exempted 

and studied. For study purposes, EPA 

broadly defined the scope of the 

exemption for oil. gas. and geothermal 

energy wastes to include not only 

produced waters and drilling fluids, but 

also related wastes (referred to herein 

as "associated wastes"), generated 

during the exploration, development, 

and production of crude oil. natural gas. 

and geothermal energy resources. The 

Agency excluded from its study those 

wastes not uniquely associated with 

exploration, development, and 

production of crude oil and natural gas 

which are not exempt from Subtitle C 

regulation (e.g., used batteries and 

waste solvents). 

For geothermal energy, the definition 

of drilling-related wastes was identical 

to that of crude oil and natural gas 

wastes. Exempt wastes unique to 

geothermal energy production 

operations included: Waste streams 

produced from materials passing 

through the turbine in dry-steam power 

generation; waste streams resulting from 

a geothermal energy fluid or gas that ' 

passed through the turbine in flashedstreum and binary power plant's: waste 

streams resulting from the geothermal 

energy products passing through only 

the heat exchanger in binary operations 

or through the flash separator in the 

flash process; and most direct use waste 

streams. A more detailed description of 

the scope of the exemption and study 

appears in section IV.D. below. 

2. Waste Quantities and 

Characterization 

In the Report to Congress, EPA 

estimated that 361 million barrels of 

drilling waste were generated in 1985 

from about 70,000 crude oil and natural 

gas wells, and that over 800.000 active ; 

production sites generated 20.9 billion -

barrels (including produced water ' " 

injected for enhanced oil recovery 

(EOR)) of produced water during that 

year. Associated waste, such as 

workover fluids and tank bottoms, are 

produced at the rate of 11 million barrels 

per year. For geothermal energy wastes. 

EPA estimated that approximately 

111,000 barrels of geothermal energyrelated drilling wastes were generated 

in 1985, along with 56 billion gallons of 

liquid wastes (geothermal fluid and 

condensed steam) from both binary and 

flash process plants, and 8 billion 

gallons of liquid waste from direct use of 

geothermal energy. 

For crude oil and natural gas wastes,. 

EPA sampled liquids and sludges from 

several locations. Drilling fluids were 

sampled at drilling operations while , 

, produced water and tank bottoms were 

sampled at production operations. 

Samples from central treatment and 

disposal facilities and central pits 

contained mixtures of all wastes 

including associated wastes. The 

Agency found that organic pollutants at 

levels of potential concern (levels that 

exceed 100 times EPA's health-based 

standards) included the hydrocarbons 

benzene and phenanthrene. Inorganic 

constituents at levels of potential 

concern included lead, arsenic, barium, 

antimony, fluoride, and uranium. 

Tank bottoms, an associated waste 

sampled and analyzed by the Agency, 

contained significant levels of 

. contaminants of concern, with some 

levels exceeding the reference doses 

(RfDs) for noncarcinogens or the risk-

. specific doses (RSDs) for carcinogens 

(health-based standards) for these 

contaminants.* 

Analysis of the constituents olsevcr.tl 

geothermal energy waste streams 

indicated that some of the production 

wastes exhibited the corrosivity"' 

characteristic and extraction procedure 

(EP) toxicity for certain metals..Factors 

such as management practices^dilulion 

and attenuation of the contaminant, am) 

hydrogeological characteristics,"airfe(:t 

the risk to human health and the } 

environment presented by theje'^ 

chemicals. . ••'•.'sJH&j' 

3. Current and Alternative Managemunt 

'Practices •'••'?•%*£' 

•' ;• >"-;5".- • • A wide range of management^ •/ 

practices are employed for crude oil and 

• natural gas wastes. The technological 

"diversity is the result of widely varying 

geological, climatological, ecological. 

topographic, economic, geographic and 

age differences among drilling and 

production sites across the country and 

partially account for varying State 

regulatory requirements. There are. 

however, variations from Slate to State 

in the stringency of management... 

practices which are not wholly -r.:': 

attributable to the varying physical 

settings of the operations. '.*&•>.;".• 

Current practices include the use of 

reserve pits for drilling wastes; •; 

landspreading of reserve pit contents: 

: disposal of produced waters through 

Class II underground injection wells: 

disposal of produced water in unliried 

-. pits; discharge of produced water to 

surface waters; roadspreading; use of 

. commercial facilities for treatment and 

' disposal of drilling wastes and produced 

water and some practices unique to the 

Alaska North Slope, such as the use of 

semipermanent production-related 

reserve pits, and discharges to the 

tundra. Less frequently used current 

* It is the Agency's policy to consider Maximum 

Contaminant levels (MCLs).(established by the 

Office of Drinking Water) when available. Where 

an MCL has not been developed. RfDs for 

noncarcinogens and RSDs for carcinogens will be 

used to set health-based limits. These terms are 

defined as follows: 

• Maximum Contaminant Level (MCL) is the 

enforceable drinking water standard, based on 

health and technical feasibility, attained at the tap. 

This measure is used when ground water is the 

main exposure pathway. 

. • Reference Dose (RID) is an estimate (with 

uncertainty spanning perhaps an order of 

. magnitude) of a daily exposure to the human 

population (including sensitive subgroups) that is 

likely lo be without ah appreciable risk of 

deleterious effects during a lifetime." (Integrated 

Risk Information System (IRIS) Vol. 1. 

Supplementary Documentation Appendix A. EPA/ 

' 600/8-86/032A.) 

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

carcinogen received over a lifetime that will result 

in an incidence of cancer equal lo the specific risk 

level. The risk level of A and B carcinogens is 10E'* 

(1 in 1 million) and for C carcinogens it is 10E >('

 in 

100.000). |5l FR 21667. June 13.1986.) The classes of 

carcinogens are: Class A - human carcinogen. 

Class 8 = probable human carcinogen. Class C => 

. possible human carcinogen. (Doth RfDs and RSDs 

are converted into medium specific concentrations 

using intake assumptions for selected routes of 

• exposure. They are expressed in mg/kg/d.iy. 

Surface and ground water (ingestion): 2 lilers/d»> 

for a 70-kg adult for a 70-year exposure. Air 

' (inhalation): 20 cubic meters air/day for a 70-!.^ 

adult for a 70-year exposure.! 

4 

r ' 

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P.7 

Federal Register / Vol. 53. No. 129 / Wednesday. July 6. 1988 / Notices 25449 

practices discussed in the report are 

closed-cycle drilling mud systems, 

annular disposal of produced water and 

drilling fluid, and trenching of reserve 

pits lo dispose of rescr\-e pit fluids. 

These practices vary substantially in 

the protection they provide to the 

environment. While changes in State 

regulatory requirements over the years 

have led generally to the use of more 

environmentally protective technologies 

and management practices, there is a 

need for increased movement to more 

protective approaches for discharge to 

ephemeral streams, surface water 

discharges in estuaries in the Gulf Coast 

region, road applications of reserve pit 

contents and discharge to tundra in the 

Arctic, and annular disposal of 

produced waters. 

For the major waste streams. EPA 

was unable to identify any new 

technologies in the research and 

development stage that offer promise for 

wide application in the near term. More 

widespread use of the best existing 

technologies, however, would provide 

substantial additional protection for the 

environment in many areas. 

Waste management practices unique 

to geothermal power generation wastes 

include closed-cycle ponding, reinjection 

into the producing zone or a 

nonproducing zone, and consumptive 

secondary use. In California, production 

wastes are tested for hazardousness. 

using the California tests for 

hazardousness, before disposal to 

determine the appropriate disposal 

method. After direct use of geothermal 

energy fluid for heating purposes, these 

fluids can be discharged to surface 

waters, injected into the producing zone 

or a nonproducing zone, and consumed 

by secondary uses. 

4. Evidence of Damages 

To determine the types and severity of 

damages caused by crude oil and 

natural gas wastes. EPA assembled 

information on a substantial number of 

damage cases. 62 of which were fully 

documented and passed EPA's "tests of 

proof." These cases were based on 

recent information gathered from the 

Slates of Alaska. Arkansas. California. 

Kansas. Kentucky. Louisiana. Michigan. 

New Mexico. Ohio. Oklahoma. 

Pennsylvania. Texas. West Virginia, and 

Wyoming. These damage cases were 

extensively reviewed by the States, 

industry, and third parties. On the basis 

of all available information, the study 

found that wastes from crude oil and 

natural gas operations have endangered 

human health and caused environmental 

damage when managed in violation of 

Slate and Federal requirements. In sonic 

instances dnrrwgc occurred where 

wastes are managed in accordance with 

currently applicable State and Federal 

requirements. 

The major categories of wastes'1 

responsible for damages include reserve 

pit wastes, fracturing and acidizing 

fluids, stimulation chemicals, waste 

crude oil produced water, and other 

miscellaneous wastes generated by the 

exploration, development, and 

production of crude oil and natural gas. 

The various categories of damages to. or 

endangerment of. human health and the 

environment contained in the Report to 

Congress include: 

• Damage to agricultural land, crops, 

ephemeral streams, livestock, and 

threats to endangered species, fish, and 

other aquatic life in estuaries and bays 

from produced water and drilling fluids; 

• Degradation of soil and ground 

water from runoff and leachate from 

central treatment and disposal facilities, 

reserve pits, and unlined disposal pits; 

• Potential contamination of aquatic 

and bird life in estuaries and bays by 

metals and polycyclic aromatic 

hydrocarbons resulting from the 

discharge of drilling fluids and produced 

waters; 

• Potential for endangerment of 

human health from consumption of 

contaminated fish and shellfish and 

from ground water contaminated by 

seepage from storage and disposal pits; 

• Potential damage to tundra on the 

Alaska North Slope from roadspreading 

and seepage and discharges from 

reserve pits; 

• Damage to ground water, 

agricultural land, and domestic and 

irrigation water caused by seepage of 

native brines from improperly plugged 

and unplugged abandoned wells; and 

• Ground-water degradation from 

improper functioning of injection wells. 

5. Risk Modeling 

EPA used quantitative modeling and a 

review of the scientific literature to 

evaluate the health and environmental 

risks associated with management of oil. 

gas, and geothermal energy wastes in 

order to evaluate risks to human health 

and the environment under a variety of 

conditions. The Agency characterized 

selected major risk-influencing factors 

associated with current operations: 

Estimated the management of drilling 

waste in reserve pits, the underground 

injection of produced water, and the 

surface water discharge of produced 

water from stripper wells. The risk 

analysis did not consider annular 

disposal, storage of produced water in 

surface impoundments, migration of 

produced water contaminants through 

fractures, unplugged or improperly 

plugged and abandoned wells. 

landsprcading. roadspreading. or ; 

disposal of associated wastes. 

For the selected practices. EPA 

estimated distributions of these riskinfluencing factors across the population 

of crude oil and natural gas facilities: 

evaluated these factors in terms of their 

relative effect on risks: and developed 

initial quantitative estimates of the 

possible range of baseline health and 

environmental risks for the variety of 

conditions found. Risks were analyzed 

under assumptions that were broadly 

consistent with baseline requirements of 

existing Federal and State programs. 

For the specific subset of current 

practices, EPA modeled the potential 

effects of arsenic, benzene, boron. " . 

sodium, chloride, cadmium, chromium, 

and total mobile ions at concentrations 

observed in sampled produced water 

and drilling waste. The study focused 

heavily on ground water and indicated 

that, for the vast majority of the 

scenarios modeled, risks from the 

disposal of drilling waste in onsite 

reserve pits and the disposal of 

produced water by underground 

injection were small. Only a few 

chemicals from either source appear to 

be of major concern relative to health or 

environmental risk. The actual human 

health and environmental threats posed 

by any of these releases is largely 

dependent upon site-specific factors, 

including geophysical conditions and a 

site's proximity to human populations or 

sensitive ecosystems. Estimated impacts 

on human health varied widely, and "" 

there were typically a few combinations 

of environmental settings and high 

sample toxic constituent concentrations 

where moderate risks were projected. 

Quantitative risk modeling indicates the 

potential in some situations for 

carcinogenic risks in excess of 1 in 

10.000 and sodium levels in drinking 

water in excess of recommended levels 

for public drinking water supplies. 

Modeling of resource damages to ground 

and surface water generally did not 

show significant risks at low release' 

rates typical of individual stripper wells 

although multiple strippers discharging 

into common water courses were not 

modeled. 

6. Costs and Economic Impacts 

EPA developed three estimates of the 

compliance costs and economic impacts 

of implementing alternative waste 

management practices for the largevolume drilling wastes and produced 

waters in the crude oil and natural gas 

industries: (1) a "baseline" scenario 

reflecting current waste management 

practices: (2) an "intermediate" 

scenario, in which somewhat stricter 
P.8 

25450 Federal Register / Vol. 53. No. 129 / Wednesday. July 6, 1988 / Notices 

controls on waste disposal practices are 

assumed; and (3) a "Subtitle C" 

scenario, in which virtually full RCRA 

hazardous waste requirements would be 

met. EPA estimated total annual costs 

for each scenario and then evaluated the 

projected economic impacts of these 

costs on the oil industry as a whole. 

Assuming produced waters reinjected 

for enhanced production would not be 

regulated, total annual costs for 

additional management requirements 

ranged from approximately $50 million 

to over S6.7 billion, depending on the 

scenario and on assumptions regarding 

the fraction of wastes (10 to 70 percent) 

that would be handled as RCRAhazardous under each scenario. 

Estimated costs for the Subtitle C 

scenario ranged between $1 billion and 

$6.5 billion without including land-ban 

and corrective action costs. -

Production declines related to these 

increased waste management costs 

could range up to 12 percent in the year 

2000. Other impacts also varied greatly 

under different scenario assumptions. 

Net impacts on oil prices per barrel 

could range up to $0.76 per barrel, with 

projected maximum costs to consumers 

of $4.5 billion per year, and increases in 

the U.S. balance of payments deficit of 

up to $11 billion. 

A significant part of any overall 

economic impact of new requirements 

would be their effects on stripper wells. 

Stripper operations (generally, wells 

producing 10 or fewer barrels of oil per 

day during the declining phase of their 

production cycle) cumulatively 

contribute about 14 percent of total 

. domestic oil production. Generation of 

production wastes by strippers is more 

significant than would be expected, 

however, because many strippers 

produce very high ratios of water to oil. 

Many stripper operations are 

economically marginal and are thus 

highly sensitive to small fluctuations in 

market prices and cannot easily absorb 

additional costs for waste management. 

Stripper operations, therefore, constitute 

a special subcategory of the crude oil 

and natural gas industry and should be 

given special consideration when 

developing recommendations for 

improvements in the management of 

crude oil and natural gas wastes. At the 

same time, any additional regulations 

must recognize the great diversity that 

exists within the stripper industry. The 

nature of stripper operations is 

dependent on the volume of crude oil. 

natural gas and wastes generated, the 

age of the well, the technology in use, 

geological, environmental, and economic 

considerations, and types of ownership. 

For example, a family-owned stripper 

well in a century-old field in Appalachia 

bears little resemblance to a field of 

stripper wells owned by a single large 

petrochemical company in California. 

Regulations governing wastes generated 

by stripper wells must be tailored to 

meet this great diversity. 

B. Legal Authority 

Section 3001(b)(2)(B) of RCRA 

requires EPA to determine either to 

promulgate regulations under Subtitle C 

for oil gas, and geothermal energy 

wastes, or that such regulations are 

"unwarranted." This section thus gives 

EPA broad discretion both te identify 

what factors to consider and to 

determine what balance of factors 

permit the conclusion that Subtitle C 

regulations are unwarranted. 

EPA has concluded that its decision 

whether to regulate oil. gas and 

geothermal energy waste under Subtitle 

C should be based not just on whether 

that waste is hazardous (as currently 

defined by EPA regulations) but also on 

a consideration of the other factors 

section 8002(m) required EPA to study. 

The basis of this conclusion is the 

language of section 3001(b)(2)(B), which 

states that in making the regulatory 

determination "the Administrator shall 

utilize the information developed or 

accumulated pursuant to the study 

required under section 8002(m)." 

Clearly. Congress envisioned that the 

. determination would be based on all the 

considerations stated in section 8O02(m). 

In reviewing sections 3001(b) and 

8002(m). together with the legislative 

history of these provisions, EPA has 

concluded that Congress believed 

certain considerations to be particularly 

important to the regulatory 

determination. First, Congress instructed 

EPA to study the potential dangers to 

human health and the environment from 

'oil, gas and geothermal energy waste, 

indicating that any decision to regulate 

under Subtitle C must be based on a 

finding of such danger. Second, section 

8002(m) required EPA to study "the 

adequacy of means and measures 

currently employed by * * * 

Government agencies * * * to dispose 

of and utilize such wastes and to 

prevent or substantially mitigate such 

adverse effects." The section also 

permits EPA to review the actions of 

other Federal agencies, "with a view 

toward avoiding duplication of effort," 

and requires the Agency to include in its 

report of the study "recommendations 

for Federal and non-Federal actions -

concerning" the effects of oil. gas and 

geothermal energy wastes on health and 

environment. Thus. Congress wa3 

concerned that regulations under 

Subtitle C should not be promulgated 

"until further information is developed 

to determine whether a sufficient degree '? 

of hazard exists to warrant additional ~~y*2 

regulations and whether existing State ""w" 

or Federal programs adequately control :^X 

such hazards." S. Rep. No. 172.96th •••;*% 

Cong.. 1st Sess. (1979). at 8: Congress "^fc* 

apparently believed that EPA should noP^r. 

impose Subtitle C regulation unless 'Jrfi< 

other programs could not adequately y.-j^-J 

control any hazards identified. " V^aSii:' 

In addition. Congress instructed EPA.rsf: 

to analyze fully the disposal practices of ^ 

the industry, including present practices,^ 

alternatives, the cost of alternatives,"'" 

and the impact of alternatives on the j?_ 

exploration for, and development and ," 

production of. crude oil and natural gas' _. . 

and geothermal energy. Thus. EPA wasja^k" 

required to consider the impact of . j'j§3S"£-

Subtitle C regulations on existing V^rf*? 

hazardous waste facilities, and both theT_£ 

cost and impact of such regulations onT^ -

the oil, gas and geothermal industries, ^^s. 

Clearly. Congress believed that Subtitle. >£ 

C regulation would be unwarranted if it^. . 

had severe impacts on the nation's Ifjsjfe; 

future energy production capabilities. *gji£'. 

C. Conclusions of the Report to ''

 :?*r>i„iV 

Congress and Response to Comments '?fej*? 

Based on the study done by EPA, the \&$. • 

Report to Congress developed a number^ 

. of initial general conclusions. Extensive^!"-' 

comments were received on these •..: jjjsjj3jj"-

conclusions. A summary of the i^^g^i; • 

comments and EPA's response follows'^f;.. 

each conclusion (underlined statements) *£. 

below. - ....... »*•;$&£' 

1. Available waste management • i>zi-£ ' 

practices vary in their environmental ^-"f; 

performance. Some individuals argued •;£*. 

that since crude oil and natural gas ; *^f§ 

operations very significantly across the. v:--

country. Federal regulations could not ££y, 

be effectively enforced or applied, and J£v 

would therefore not be beneficial. Other' ? 

commenters focused on local issues and _ 

regional environmental problems. •*•*'."**;•?.'' 

calling for increased Federal regulations 

to solve them. Still others observed that^ • 

the crude oil and natural gas industry •'• *' 

does not manage its "hazardous" wastes 

in the same manner as other industries . 

manage similar hazardous wastes. '•':',' 

The Agency acknowledges that there 

are valid reasons for differences in '' * 

practices among areas. This points to a 

need for individual, tailored regulations 

at the State and local level for the "••''" 

management of these wastes, rather 

than a RCRA Subtitle C program. The 

Agency also agrees, however, that there 

may be a need for minimum Federal 

standards covering basic waste 

management practices. The Agency 

agrees that because of the large volumes 

of these wastes, along with the other 
P.9 

Federal Register / Vol. 53. No. 129 / Wednesday. July 6, 1988 / Notices 25451 

M*£r 

.****. 

factors discussed in the report, some 

crude oil and natural gas wastes require 

different disposal methods than may be 

used for management of wastes 

generated by other industries. 

2. Any program to improve 

management of oil and gas wastes in the 

near term will be based largely on 

technologies and practices in current 

use. Commenters agreeing with this 

conclusion asserted that existing 

technologies are adequate and that new 

technologies would be economically 

infeasible and would serve no valid 

purpose. Others, especially those 

concerned with issues in Alaska, believe 

that many new technologies are 

available but seldom used and called for 

their increased use. A few State 

regulatory agencies called for increased 

technical assistance and guidance from 

EPA. 

The Agency continues to believe that 

there are very few techniques that are 

not in use under some conditions. There 

is. however, a need to disseminate 

knowledge and encourage or perhaps 

require adoption of improved methods 

nationwide. States and the industry 

should continue to develop, refine, and 

encourage the implementation of new 

and improved waste management 

techniques. 

3. IrtcreasedtK8tegatforiofwa$temay^ 

help imprwetnanagementoy oil emdgoa) 

wastes. Many commenters strongly 

opposed the proposal for segregation of 

wastes and believed that the scope of 

the exemption in RCRA section 3001 

should be construed to include, and 

should be maintained for, all associated 

wastes in addition to the currently 

exempt large-volume wastes. Many 

commenters asserted that mixing 

various wastes with produced water 

prior to injection is environmentally safe 

and economically beneficial Other 

commenters argued that each waste 

stream generated by the crude oil and 

natural gas industry should be tested 

separately to determine its RCRA 

characteristics and that wastes 

determined to be hazardous according 

to RCRA definitions should remain 

segregated and be disposed of according 

to RCRA regulations. aHB-ttti^uair 

claimed that iMB-pKji..,-.^-. ..„„._ , 

generated by Uwoud^oUand natural 

gas industry are commingled with* 

nonhazardous wastes prior to 

landspreading or.injection. causing^ 

significant environmental damage.. 

The Agency believes that under 

certain circumstances waste segregation 

is technically and economically feasible 

and environmentally desirable. 

4. Stripper operations constitute a 

special subcategory of the oil and gas 

industry. Many commenters strongly 

agreed with this conclusion, stating that 

new or additional Federal regulations 

would be financially harmful to already 

economically ailing stripper well 

operators. Other commenters were of . 

the opinion that some stripper wells can 

cause significant environmental damage, 

which must ultimately be paid for 

through general taxes. Some 

commenters urged that stripper 

operations should be treated in the same 

manner as the rest of the crude oil and 

natural gas industry. 

As previously described, the agency 

recognizes that many, though not all, 

stripper operations are economically 

vulnerable to any new regulatory 

burdens. Stripper wells in many parts of 

the country are also associated with 

smaller, independent oil and gas 

companies that do not have flexibility in 

pricing and may suffer disproportionate 

economic impacts from any additional 

regulation. The Agency is required 

under the Regulatory Flexibility Act to 

evaluate impacts of any new regulations 

on small business enterprises. -

5. Documented damage cases and 

quantitative modeling results indicate 

that, when managed in accordance with 

State and Federal requirements, exempt 

oil and gas wastes rarely pose 

significant threats to human health and 

the environment. Opinion on this 

conclusion was sharply divided. Some 

commenters strongly agreed, saying that 

State regulations are fully adequate to 

control crude oil and natural gas 

operations and challenged the validity 

of a few selected damage cases. Others 

strongly opposed this conclusion, saying 

that State and Federal regulations are 

inadequate and seldom enforced. A 

number of commenters stated that many 

documented damage cases were omitted 

from the final Report to Congress. Some 

commenters provided studies and . 

analytical data alleging environmental 

damage from crude oil and natural gas 

wastes; others claimed that the risk 

modeling conducted for the Report 

underestimated damage to the 

environment and did not adequately 

characterize the significance of human 

health risks from crude oil and natural 

gas wastes. 

A number of comments were received 

on the quantitative risk modeling on 

which this conclusion is partly based. 

Criticisms included: 

• The quantitative risk modeling 

should not have been performed at all 

because of the severe lack of suitable 

data. 

• The risk analysis is fatally flawed 

because it used nonconscrvative 

assumptions. 

• Values for input parameters used in 

the liner location model (LLM) have 

been developed on the basis of limited 

data, worst-case assumptions, or 

modeling limitations. 

• The study underestimates toxicity 

because too much of the sampling was 

performed on diluted and weathered 

crude oil and natural gas wastes. 

• Very few of the contaminants at the 

waste sites were analyzed. 

• EPA made no effort to correlate its 

quantitative risk model with the actual 

damage cases. 

• The health-based standards 

incorporated in the model are 

insufficiently documented. 

• TCLP extractions used in risk 

modeling for reserve pits misrepresent 

conditions at pits. 

• Risk is overestimated in the risk 

analysis. 

The Agency believes the damage 

cases in die Report to Congress 

demonstrate that violations of existing 

State and Federal requirements lead to 

most observed damages, although some 

damages have been shown to result 

from practices currently allowable in 

some States. The risk assessment also 

showed little risk at most locations from 

the management practices that were 

analyzed. The Agency believes from the 

available evidence that State 

regulations are generally but not entirely 

adequate for management of crude oil 

and natural gas wastes. Additionally, 

enforcement of and compliance with 

State regulations vary widely from State 

.to State. . 

With respect to the specific criticisms 

of the risk modeling, the Agency 

disagrees that the modeling should not 

have been performed because of a 

severe lack of suitable data. Extensive 

data were gathered from a variety of 

sources, including EPA field 

investigation and waste sampling study, 

numerous Federal and State agencies, 

an industry survey conducted by /*vPI, 

comments submitted on interim reports 

and given during peer review meetings. 

over 300 topographic maps, automated 

data bases, and a general literature 

review. The Agency believes these data 

are the best available and that they 

adequately support a risk assessment. 

As with any detailed modeling study, 

a number of assumptions in the risk 

assessment had to be made, sometimes 

with respect to. values used for model 

inputs. The Agency rejects the notion, 

however, that the assumptions made 

were generally worst-case, significantly 

nonconservative, or driven only by 

modeling limitations. For most variables, 

several realistic representative values 

were selected to evaluate a variety of 

circumstances. Whenever assumptions 

were made, best available data and 
P.10 

25452 Federal Register / Vol. 53, No. 129 / Wednesday. July 6. 1988 / Notices 

•Xprofessional judgment were used and 

proposed approaches were subjected to 

peer review, and often outside public 

review. As noted in the above 

comments, some of the assumptions 

tended to result in either overestimates 

or underestimates of risk. While overand underestimates are inevitable in 

any predictive modeling, the Agency 

believes their impacts on this study 

have been minimized by (1) analyzing 

risks under a wide range of conditions 

across the industry as a whole, in an 

attempt to even out over- and 

underestimates of risk for any single 

scenario; and (2) fully documenting each 

assumption and its likely effect on risk 

estimates. 

The Agency disagrees that the waste 

characterization used in the risk 

assessment was inappropriate. Many of 

EPA's samples of drilling waste were 

taken from open reserve pits where the 

waste could have been "weathered", but 

these samples were not purposefully 

diluted and are believed to be 

representative of drilling waste as it 

exists in a reserve pit. Contrary to the 

above comment, all of the contaminants 

detected in drilling pit waste and 

produced water were reviewed and 

considered as candidates for the risk 

assessment The eight constituents 

selected for quantitative modeling were 

the constituents judged most likely to 

contribute most significandy to risk to 

health or the environment. The selection 

of contaminants for quantitative 

modeling was based on their frequency 

of detection, concentration, inherent 

toxicity, and mobility and persistence in 

the environment. Finally, the Agency 

used TCLP extraction results only to 

model leachate from closed reserve pits 

(not from operating pits). While 

uncertainties concerning the 

applicability of TCLP tests to 

teachability of reserve pit wastes are 

acknowledged, the Agency believes the 

TCLP results were the best data 

available for modeling this leachate. 

The Agency did not attempt to 

correlate the risk modeling with the 

damage cases because the risk 

assessment was intended to 

complement the damage cases by 

focusing on different issues. Specifically, 

the risk assessment analyzed potential 

current and future effects assuming 

compliance with a limited subset of 

typical existing regulations, whereas the 

damage cases covered past and current 

effects, many of which were for 

incidents involving regulatory 

.violations. The risk assessment also 

focused on more subtle or very longterm impacts, some of which possibly 

would not be evidenced in the 

contemporary damage case file. In 

addition, several of the damage cases 

represented situations (e.g.. releases 

through abandoned boreholes) that 

could not be modeled adequately given 

existing data and modeling techniques. 

Other scenarios not modeled include 

annular deposits, storage of produced 

water in surface impoundments, 

migration of produced water 

contaminants through fractures, and 

landspreading. (Use of impoundments 

for produced waters and landspreading 

are both still frequently practiced.) 

The Agency believes that the healthbased standards incorporated in the risk 

model incorporated the best available 

scientific knowledge at die time of the 

study. These standards and the studies 

that support them were summarized 

only briefly in the Report to Congress; 

readers are referred to the two-volume 

technical background report on risk 

assessment for more detail.3 

8. Damages may occur in some 

instances even where wastes are 

managed in accordance with currently 

applicable State and Federal 

requirements. No comments specifically 

addressed mis conclusion, but 

comments on the previous conclusion 

relate in part to the substance of this 

one. 

The quantitative risk modeling 

showed that for the specific 

management practices and scenarios 

modeled, a few crude oil and natural gas 

sites (less than five percent) could pose 

significant risks even if drilling waste 

and produced water were managed in 

accordance with existing regulations. In 

addition, the damage case results 

indicate that some waste management 

practices permitted in some States can 

have undesirable environmental 

impacts. These practices include 

landspreading of high chloride drilling 

mud, annular disposal of produced 

water, discharge of produced water and 

drilling fluids to tidally affected 

wetlands, discharge of produced water 

to live streams, and discharge of reserve 

pit contents to tundra. 

7. Unplugged and improperly plugged 

abandoned wells can pose significant 

environmental problems. Opinion on 

this conclusion was divided. Many of 

the commenters asserted that there is no 

evidence to support this conclusion, and 

that State regulations adequately 

address the potential problems 

associated with unplugged and 

improperly plugged and abandoned 

wells. Others felt that it is economically 

• S*?io»4»* 

1

 U.S. EPA. December 1987. Office of Solid Waste. 

Onshore Oil and Cas Exploration. Development and 

Production: Human Health and Environmental Risk 

Assessment. 

infeasible to plug or re-plug abandoned 'Ai. 

wells properly. Conversely, commenters ,

:

i|S. 

agreeing with this conclusion mentioned ^&: 

specific instances in which unplugged H^ : 

wells have caused significant 'A&-& 

contamination of ground-water supplies. "'£$£• 

Some State regulatory agencies : ^r^^i 

commented that inadequate funds are "Va*-^. 

available to properly plug all abandoned "*"A" 

wells. 

The Agency believes there is 

adequate evidence to indicate a 

potential threat to ground water from 

unplugged and improperly plugged 

abandoned wells based on the large 

number of unplugged or improperly 

plugged abandoned wells, the difficulty _ _ 

in observing plugging of abandoned 4j*£p$ 

wells, and the difficulty in enforcing [x ''' **"' 

State regulations on plugging of i~.!Jt: 

abandoned wells. The damage cases *•*•$.. 

collected and the information presented '$£$ 

to the /Vgency support this conclusion. .;;V«r^ 

The Agency recognizes that the full .yi/sK 

extent of the problem is not well ••• •.yV^SgJ.Tdefined. The Agency also recognizes i^&fithat high costs could be incurred if all <^~ 

unplugged or improperly plugged ^ 

abandoned wells were required to be 

plugged, and that such a requirement 

may not be necessary, as not all LCHS&IJ 

unplugged or Improperly plugged ^'i^teg? 

abandoned wells pose a problem. .s.bisjgfe. 

8. Discharges of drilling muds and :i$g?b 

produced waters to surface waters have.j£jg 

caused locally significant - -v'T^sSs 

environmental damage where —sW5? 

discharges are not in compliance with :t*2>&;-

State and Federal statutes and " '^ ^ 

regulations or where NPDES permits [•? \& 

have not been issued. Comments were '~j§~. 

divided on this issue even among those •'ry—j 

who were critical of similar conclusions; ^ 

some agreed, while others stated that fftythere is no evidence that drilling muds ''SCrX 

or produced water cause environmental ^j . 

damage. Some stated that both drilling '•&% 

muds and produced water are relatively ~£.,A 

nonhazardous and nontoxic. Several Vtjicomments specific to Alaska stated that "vT; 

the Clean Water Act adequately

 ;"?;f 

regulates the management of large- •'•'}? \• 

volume wastes in Alaska. •' •' *•'•» >•* 

Thos e agreeing with this conclusion •. '•'.:: 

'often argued that current State and 

Federal regulations are not adequate or -

are not enforced properly. The y also 

asserted that drilling muds and "• 

produced water s contain RCRA 

hazardous constituents and hav e caused 

significant environmental damage . 

Documented damage case s indicate 

that disposal of drilling muds and 

produced waters in violation of State 

regulations and wher e NPDES permits 

have not been issued, has clearly caused 

damage s to the environment and 

endangered human health, particularly 
P.11 

Federal Register / Vol. 53. No. 129 / Wednesday. July 6. 1988 / Notices 25453 

««; 

IP's 

'£"• 

in Alaska, the Gulf Coast and die 

Appalachian States. Also, discharges of 

produced water from stripper well to 

surface waters were estimated to cause 

cancer risks greater than one in one 

hundred thousand in roughly 17 percent 

of the conservative cases studied in the 

quantitative risk modeling for90lh 

percentile produced water constituent 

concentrations. 

9. For the nation as a whole. 

Kg u la Hon of allot'} and gas field wastes 

under unmodified Subtitle C of RCRA 

would have a substantial impact on the 

U.S. economy. Those agreeing with this 

conclusion did so strongly, stating that 

RCRA regulations applied to the crude 

oil and natural gas industry would cause 

the loss of a significant number of jobs. 

Some said that RCRA regulation would 

increase oil imports and pose a threat to 

national security. Others claimed that 

the potential costs lo industry have been 

underestimated. 

Those in favor of regulating wastes 

determined to be RCRA-hazardous 

generally recognized the potential 

economic impacts of regulation, but 

nevertheless believed that such wastes 

should be disposed of consistent with 

RCRA Subtitle C requirements. 

In specific comments on the 

methodologies used to analyze these 

issues, some commenters believed that 

the lower 48 State model masks or 

understates costs and impacts in some 

regions, and that data limitations and 

exclusions of some costs lead to 

understated economic impacts in all 

scenarios. Some commenters stated that 

the number of economically marginal 

wells that would be forced to shut down 

if RCRA Subtitle C regulations were 

imposed has been underestimated, and 

that certain assumptions in the model 

are unrealistic Some commented that 

the analysis ignores impacts on 

undiscovered energy reserves and gas 

production. 

Taking the opposite point of view, 

other commenters argued that the cost 

analysis ignores public health costs 

associated with continued improper 

disposal of crude oil and natural gas 

wastes, and that the report does not 

take into account the financial 

consequences of contamination of 

ground water and other natural 

resources. Some claimed that long-term 

financial burdens to taxpayers to 

mitigate environmental damage, to 

provide health care, and to sustainfinancial burden from lost productivity, 

will be greater than the cost to the crude 

oil and natural gas industry to prevent 

that damage. 

The Agency believes that its estimates 

of impacts to the industry of full 

regulation under RCRA Subtitle Core 

reasonable and that such impacts would 

be substantial The Agency 

acknowledges thai costs related to 

public health effects and contamination 

of ground water and other natural 

resources because of improper disposal 

of crude oil and natural gas wastes have 

not been determined. 

10. Regulation of all exempt wastes 

under full, unmodified RCRA Subtitle C 

appears unnecessary and impractical at 

this time. Opinion was divided on this 

conclusion. Those agreeing did so 

strongly, while those opposed generally 

stated that if a waste is RCRA 

hazardous, it should be treated under 

RCRA regulations regardless of itorigin. Many of those in disagreement 

with this conclusion argued that the 

crude oil and natural gas industry can 

afford the financial burden of RCRA 

regulation. 

For reasons described in Section IV of 

this regulatory determination, the 

Agency continues to believe that 

regulation of all crude oil and natural 

gas wastes under RCRA Subtitle C is 

unnecessary and impractical The 

Agency believes that these wastes can 

be managed in a manner so as to protect 

human health and the environment 

without regulating them under RCRA 

SubtideC 

11. States have adopted variable 

approaches to waste management. Most 

commenters agreed with this conclusion, 

bat there was considerable 

disagreement over whether current State 

regulations are adequately designed and 

enforced. 

Variable approaches to waste 

management are partly the result of 

varying environmental conditions, 

geology, and economics among the 

producing States. EPA believes, 

however, that there are many cases 

where more stringent requirements are 

both feasible and desirable, and that 

many States have recognized this in 

changes made to their regulations in the 

last few years. Some States have taken 

significant leadership roles in the 

development of more environmentally 

protective requirements. 

12. Implementation of existing State 

and Federal requirements is a central 

issue in formulating recommendations 

in response to section 8002(m). Opinion 

was divided on this conclusion. Some 

commenters urged that existing State 

and Federal regulations are adequate 

and that additional State or Federal 

regulations are unnecessary and 

impractical. Others argued that existing 

State and Federal regulations have not 

been adequately enforced and that 

additional Federal regulations are 

necessary. 

The Agency believes that the desi-grt, 

enforcement, and implementation of 

existing State and Federal regulations 

can clearly be improved. 

Public comments on the Geothermol 

Energy Portion of Report to Congress.-

Only two comments specifically 

addressed geothermal energy wastes. 

One commenter presented additional 

Information relating to damages 

resulting from the offsite disposal of 

geothermal energy production wastes 

(such as hydrogen sulfide abatement 

wastes which test nonhazardbus by 

California standards) in commercial ' 

facilities: The information alleged 

potential damages and for risk by 

contamination of surface and ground 

water from the disposal of hydrogen 

sulfide abatement wastes In centralized 

or commercial disposal facilities hi 

California. These facilities are 

designated strictly for the disposal of 

geothermal energy production wastes 

determined to be nonhazardous by 

California standards. 

The other commenter specifically 

addressing geothermal energy, fully 

supported the conclusions of the report 

and stated that the California statutes 

regarding the management of 

geothermal energy wastes are 

comprehensive and effective. 

The Agency continues to belreve that 

geothermal energy wastes are generally 

well regulated under existing State and 

Federal programs. However, the Agency 

acknowledges that at least one 

significant undesirable disposal practice 

is Occurring and has taken this into 

consideration in making this final 

reguratory determination. 

RB^rn.inatkmoft1iatScopettfthe , 

Tavmp^JfaayRCJjfc'&aaptkut 

Based on the language of RCRA 

section 3001(b)(2)(A) of the 19KT 

amendments to RCRA, review of the 

statute, and supporting legislative 

history. tl_r Agency beheves that the 

foDbwinf wastes were fincfuded in the 

Kinpofsr*** *fBWHpWfrr set forth in the 

statute. 

• Produced water. 

• Drilling fluids; 

• Drill cuttings; 

• Rigwash; 

• Drilling fluids and cuttings from 

offshore operations disposed of onshore; 

• Geothermal production fluids; and 

• Hydrogen sulfide abatement wastes 

from geothermal energy production. 

• Well completion, treatment and 

stimulation Quids; 

• Basic sediment and water and other 

tank bottoms from storage facilities that 

hold product and exempt waste: 
25454 Federal Register / Vol. 53. No. 129 / Wednesday. July 6. 1988 / Notices 

•- Accumulitt«d^Mterials»uch. 

hydrbca^boaa^McS^imWQiitnd^- . 

emulsion from producliim^ptuatbrsj 

fluid treating vessels, an^goductioiv 

Impoundments; 

• Pit sludges and contaminated 

bottoms from storage or disposal of 

exempt wastes; 

• Workover wastes; 

• Gas plant dehydration wastes, 

including glycol-based compounds, 

glycol filters, filter media, backwash, 

and molecular sieves; 

• Gas plant sweetening wastes for 

sulfur removal, including amines, amine 

filters, amine filter media, backwash, 

precipitated amine sludge, iron sponge, 

and hydrogen sulfide scrubber liquid 

and sludge; 

• Cooling tower blowdown; 

• Spent filters, filter media, and 

backwash (assuming the filter itself is 

not hazardous and the residue in it is 

from an exempt waste stream); 

• Packing fluids; 

• Produced sand: 

• Pipe scale, hydrocarbon solids, 

hydrates, and other deposits removed 

from piping and equipment prior to 

transportation: - ' 

• Hydrocarbon-bearing soil; 

• Pigging wastes from gathering lines; 

• Wastes from subsurface gas storage 

and retrieval except for the nonexempt 

wastes listed below; 

- • Constituents removed from 

produced water before it is injected or 

otherwise disposed of: 

• Liquid hydrocarbons removed from 

the production stream but not from oil 

refining; 

• Gases from the production stream, 

such as hydrogen sulfide and carbon 

dioxide, and volatilized hydrocarbons; 

• Materials ejected from a producing 

well during the process known as 

blowdown; 

• Waste crude oil from primary field 

operations and production; and 

• Light organics volatilized from 

exempt wastes in reserve pits or 

impoundments or production equipment 

The Agency/ 

following i 

die original exeihp 

• Unused fracturing fluids or acids; 

• Cas plant cooling tower cleaning 

wastes: 

• Painting wastes: 

• Oil and gas service company 

wastes, such as empty drums, drum 

rinsate. vacuum truck rinsate, sandblast 

media, painting wastes, spent solvents, 

spilled chemicals, and waste acids: 

• Vacuum truck and drum rinsate 

from trucks and drums transporting or 

containing non-exempt waste: 

• Refinery wastes; 

• Liquid and solid wastes generated 

by crude oil and tank bottom reclaimers^ 

• Used equipment lubrication oils: 

• Waste compressor oil, filters, and 

blowdown: 

• Used hydraulic fluids: 

• Waste solvents; 

• Waste in transportation pipelinerelated pits: 

;

 •. Caustic or acid cleaners; 

• Boiler cleaning wastes: 

. • Boiler refractory bricks: 

•• Boiler scrubber fluids, sludges, and 

• ash: . .. .. _ _. . _ ' 

; • Incinerator ash; 

• Laboratory wastes; 

• Sanitary wastes; 

• Pesticide wastes: 

• Radioactive tracer wastes; 

. * Drums,' insulation, and 

miscellaneous solids. 

In order to determine the scope of the 

exemption, the Agency reviewed the 

statute and legislative history. The 

Agency interprets the term "other*? 

waste* associated" to inchtd* rigwastt 

drill cuttings, and wastes created by ^ 

agents used to facilitating the extraction, 

development and production of the • 

resource, and wastes produced by f 

remmins amtaminants prior to the 

" transportation or refining of the i '•*•• 

resource.;Drill cuttings and rigwash are

 ; 

generally co-mingled with drilling muds, 

and the Agency therefore has grouped 

them with large-volume wastes for 

purposes of discussion in this 

. determination. The remaining wastes on 

the above list of exempt wastes are 

considered "associated wastes" for 

purposes of this determination. 

I ne Agency has determined that 

produced water injected for enhanced 

recovery is not a waste for purposes of 

RCRA regulation and therefore is not . 

subject to control under RCRA Subtitle 

C or RCRA Subtitle D. Produced water 

used in enhanced recovery is 

beneficially recycled and is an integral ' 

part of some crude oil and natural gas 

production processes. Produced water 

Injected in this manner is already 

regulated by the Underground Injection 

Control program under the Safe Drinking 

Water Act. The Agency notes, however, 

that if the produced water is stored in 

surface impoundments prior to injection, 

it may be subject to RCRA Subtitle D 

regulations. 

III. Factors Considered in Regulatory 

Determination 

Section 3001(b)(2)(B) of RCRA states 

that in making the regulatory 

determination, the Agency must "utilize 

the information developed or 

accumulated pursuant to the study 

required under section 8002(m)." 

Clearly, Congress envisioned that the 

?::'•" 

determination would be based on all j ..*..;'* 

factors specifically enumerated in ...';••£"•. 

section 8002(m). as well as general .. rr <-C;.;:; 

issues raised by the text of section ••-, £.•;•>•*" 

8002(m) as a whole. Therefore, in .•.;.; ~.;: *-''y: 

making today's determination. EPA "£$•*•;. 

considered not just the impact of these Jv^^jSw;.. 

wastes on human health and the .„• .•>':»_:!"2£?. _ 

environment, but also the other factors • ;'£$,£ 

that RCRA section 8002(m) required ^^JJ . 

EPA to study. • • >'.\.Xi%i:-. 

' Specifically. EPA considered three -;<-ii^fcV; 

major factors in developing this *,.

:

'

,

»:'.-tt;*»i»r3'.-T 

determination: (1) The characteristics; rw^T^Vi} 

management practices, and impacts of ---.T^yijl. 

oil. gas. arid geothermal wastes on '.:•">['/&£'• 

human health and the environment: (2) >, i""^ ' 

the adequacy of existing State and '•:'-*'ii2£t "• 

Federal regulatory programs for ••.••T.^ifr; 

controlling these wastes: and (3)-the '•*>•»*;«?»£ 

economic impacts of any additional . --"'•••:>^*. 

regulations on the exploration for, and \^{J&1> 

development and production of. crude •_".• l^V 

o il natural gas. andgeothermat energy. . '.,~j*$m, ' 

Section 8002(m) required EPA to study /':.*&" , 

each of these factors. •'. ••'-••*,-.$£. 

TV. Regulatory Determination for Crude ..'«j£f !•-'* 

Oil and Natural Gas Wastes '.-• ".-> M -iffir. 

. The following discussion summarizes,^*^,,^. 

information on the three major factors '^££«?•*.'< 

(discussed above) used in making this -;;• vjj;^_-

regulatory determination and then :^;r?r,^*,&j: 

presents EPA's conclusions and v V&L^ii&'i^'.; 

rationale for the regulatory ••• •'*"'• *^\v#»f;. 

determination for crude oil and national •.'Ht^.'-

gas wastes. The information \.:..^;\'5>.*Uv 

summarized here incorporates •''•;••-'•-v^»-' 

information received during the public : ?•'>'[•.% 

comment period and additional • !.'•;-;,:\.^i' -

refinement of the data presented in .';'.. .'.v; .* 

EPA's December 1987 Report to . ,^*;?i|; rrr.v> 

Congress. '-.'• • •'**'•. ^-M-vA . Hazard Assessment 

For the Report to Congress, EPA .•'•vf'_. >'.-*•*; 

conducted a limited analysis which ;.';-::. '• 

modeled the potential effects of disposal . -

of drilling waste in reserve pits and the H: 

disposal of produced water by MT" *v: 

underground injection and found that 

the potential risks to human health and . . 

the environment were small. Only a few 

constituents appeared to be of major .] -/\ 

concern when these wastes are :'•'•>. -

managed in accordance with existing 

State and Federal regulations. The 

actual threats posed were largely 

dependent upon site-specific factors 

such as populations or sensitive 

ecosystems. Other management 

practices such as storage of produced 

water in unlined pits were not modeled 

and may pose higher risks. 

Analysis of field data collected by 

EPA and presented in the January 198" 

technical report shows that a portion of 

oil and gas wastes contain constituents 

'• ••=•4'.'"*"?. 
P.13 

Federal Register / Vol. 53. No. 129 / Wednesday. Jufy 8, 1988 / Notices 25453 

of concern above EPA health- or 

environmental-based standards. For 

example, wastes at 7 percent of the sites 

generating drilling fluids and 23 percent 

of the statistically weighted sample sites 

generating produced water contain one 

or more of the toxic constituents of 

concern at levels greater than 100 times 

the health-based standards. The 

constituents typically exceeding the 

standards in drilling fluids are fluoride, 

lead, cadmium, and chromium. The 

constituents exceeding the standards in 

produced water are benzene! arsenic, 

barium, and boron. In addition, wastes 

at 78 percent of the sample sites 

generating drilling fluids, and 75 percent 

of the sample sites generating produced 

water, contain chlorides at levels 

greater than 1.000 times the EPA 

secondary maximum contaminant level 

for chloride. Like large-volume wastes, 

assodated wastes contain a wide • 

variety of hazardous constituents. Many 

associated wastes contain constituents 

that are similar m chemical composition* 

and/or toxicity to other wastes currently 

regulated under RCRA Subtitle C. 

The presence of constituents in 

concentrations exceeding health- or 

environmental-based standards does 

not necessarily mean that these wastes 

pose significant risks to human health 

and the environment. In evaluating the 

risks to human health and the 

environment, several factors beyond the 

toxicity of the waste should be 

considered. These factors include the 

rate of release of contaminants from 

different management practices, the fate 

and transport of these contaminants in 

the environment, and the potential for 

human health or ecological exposure to 

the contaminants. 

On the basis of available data. EPA 

can only roughly estimate how much 

currently exempt oil and gas waste 

would be considered hazardous under 

current or proposed RCRA Subtitle C 

standards. It is clear that some portions 

of both the large-volume and associated 

waste would have to be treated as 

hazardous if the Subtitle C exemption 

were lifted. EPA estimates that 

approximately 10 to 70 percent of largevolume wastes and 40" to 60 percent of 

associated wastes could potentially 

exhibit RCRA hazardous waste 

characteristics under EPA's regulatory 

tests. 

EPA has documented 62 damage cases 

caused by crude oil and natural gas 

wastes. Because large-volume wastes 

and associated wastes are- often 

managed and disposed of together, it is 

often difficult to isolate the specific 

waste stream that contributed greatest 

to the-damage. However, available data 

does not indicate that significant 

damage can occur from mismanagement 

of both farge-vofume wastes and 

associated wastes. EPA believes that 

most of these damages could have been 

prevented if the wastes had been 

managed in accordance with existing 

State and Federal requirements. 

However, because of certain regulatory 

gaps, damages have occurred even 

where wastes are managed in 

compliance with existing requirements. 

B. Economic Impact Analysis. 

Application of RCRA Subtitle C to 

exploration, development, and 

production wastes could be extremely 

costly if large portions of these wastes 

were hazardous. The Agency estimates 

that implementation of RCRA Subtitle C 

on 10 to 70 percent of the large-volume 

drilling waste and non-EOR produced 

water would cost the industry and 

consumers Si billion to S&7 billion per 

year in compliance costs (not including 

costs for land ban or corrective action; 

regulations mandated by Congress). 

This would red_ce domestic production 

by as much as 12 percent. 

in response to questions raised 

subsequent to the Report of Congress, 

the Agency also conducted a 

preliminary evaluation of the likely 

range of potential compliance costs and 

industry impacts that could result from 

removal of the RCRA Subtitle C 

exemption for associated wastes. The 

Agency's preliminary estimate is that 

the cost to die crude oil and natural gas 

industry of RCRA Subtitle C 

management for associated wastes 

would range between S200 million and 

S550 million per year. These cost 

estimates are based on American 

Petroleum Institute survey estimates on 

the quantities of associated wastes 

produced and their current management 

practices, together with the Agency 

assumption that 40 to 60 percent of these 

wastes might require management under 

RCRA Subtitle C, and Agency estimates 

of the probable range of unit costs for 

managing these various waste types. 

However, it is important to note that 

these estimates do not include the cost 

of corrective action. The application of 

corrective action requirements to 

facilities that manage associated wastes 

on-site would impose substantial costs 

on the units managing the associated 

wastes as well as any other solid waste 

management units that exist within the 

facility boundaries to the extent that the 

wastes continue to be managed on-site. 

Since nearly half of the associated 

wastes are currently managed on-site, 

this could result in significant costs to 

the industry. The cost estimates also 

assume that "land-ban" treatment of 

hazardous solids and sludges consists of 

recycling and resource recovery. It is . 

likely that some fraction of these wastes 

would need to be incinerated in 

compliance with, the treatment 

standards established by the "landban.'* implying higher costs of regulating 

. the associated wastes under Subtitle C 

C. Adequacy of State and Federal 

Regulatory Programs 

. EPA evaluated State regulations 

pertaining to large-volume wastes and 

associated wastes. Often, some of these 

wastes are co-mingled and disposed of 

together. Consequently, they are usually 

managed together under one regulatory 

program at the State level. 

With regard to large-volume wastes. 

EPA found most existing State 

regulations are generally adequate for 

protecting human health and the 

environment. Most States have 

requirements specifically controlling the 

management of drilling muds and 

produced waters. However, certain gaps 

do exist in State regulations for largevolume wastes. For example, some -

States do not have adequate 

requirements controlling roadspreading 

or landspreading of large-volume 

wastes, design or maintenance rules for 

reserve, pits, orhave insufficient 

management specifications for 

centralized and commercial disposal 

facilities. As noted previously. EPA also 

found damages which occurred due to 

surface discharges not prohibited by 

State regulation. • -

Another regulatory gap for some 

States are controls for associated 

wastes. Most State regulations do not 

include specific controls for the 

management of these wastes. Genera) 

standards are often difficult to enforce 

unless a specific pollution incident is 

discovered and can be attributed to a 

particular waste disposal event. 

However, a few States such as Texas do 

specifically address assodated wastes 

and other States have general standards 

that provide partial control of these 

wastes. 

The Agency has examined changes inState regulatory programs over the past 

two years. Some States have improved 

their regulations, white other States 

have relaxed specific waste 

management requirements. For example, 

while reserve pit management has been 

strengthened in some States, other 

States have relaxed controls pertaining; 

' to land application of large-volume 

wastes. Problems also remain regarding 

adequate State implementation and 

enforcement of existing regulations. 

The Agency also evaluated the 

Federaf Underground Injection Control 
P.14 

25456 Federal Register / Vol. 53. No. 129 / Wednesday. July 6. 1988 / Notices 

(UIC) program under the Safe Drinking 

Water Act and regulatory programs 

under the Clean Water Act. The UIC 

program effectively controls 

underground injection from the point of 

the wellhead, while the NPDES program 

addresses point source discharges to 

surface water bodies. These programs 

are particularly important in controlling 

management of large-volume wastes. 

However, EPA has identified certain 

gaps in these programs. For example. 

UIC regulations currently allow the 

practice of annular disposal and lack 

uniform mechanical integrity testing 

standards. The Clean Water Act 

regulatory program gaps include the lack 

of national effluent limitations at the 

Best Available Technology 

Economically Achievable (BAT) and 

Best Conventional Pollutant Control 

Technology (BCT) levels. These national 

limitations are needed to more 

effectively deal with discharges from 

facilities in the onshore and coastal 

subcategories of the industry. EPA also 

found that improvements arc needed 

regarding implementation and 

enforcement of existing regulations. The 

Agency has already undertaken steps to 

address these deficiencies: these are 

discussed in Section V of today's notice. 

Finally, EPA evaluated the existing 

Federal criteria under Subtitle D of \ '. 

RCRA. These criteria (40 CFR Part 257) 

include general environmental 

performance standards applicable to the 

disposal of any solid waste, including 

oil gas. and geothermal wastes. These 

criteria include among other tilings, 

standards related to surface water 

discharges, ground-water .-.... ' 

contamination, and endangered species. 

Because the programs' criteria are aimed 

principally at municipal solid waste, 

EPA believes they do not now fully 

address oil and gas waste concerns. In 

addition, many of these criteria, such as 

control of disease vectors and aviation 

hazards, are not appropriate for oil and 

gas waste. Nevertheless. EPA has 

authority under Subtitle D to tailor 

requirements appropriate for the 

disposal of oil and gas wastes. 

D. Conclusions 

The Agency has decided not to 

promulgate regulations under Subtitle C 

for large-volume and associated wastes 

generated by the exploration, 

development and production of crude oil 

and natural gas. The Agency decision is 

bused on the following reasons: 

(1) Subtitle C contains an unusually 

large number of highly detailed statutory 

requirements, some of which are not 

only extremely costly, but also are 

unnecessary for the safe management of 

oil and gas wastes. Subtitle C does not. 

however, allow the Agency to consider 

costs where applying these requirements 

to oil and gas wastes. Consequently. 

EPA would not be able to craft a 

regulatory program to reduce or 

eliminate the serious economic impacts 

that it has predicted. Thus, in light of 

Congress' concern for the protection of 

the nation's future energy supply, 

Subtitle C regulations must be 

considered unwarranted. A tailored 

Subtitle D program, by contrast, will 

enable the Agency to apply all 

necessary requirements to the ' l 

management of these wastes, while 

ensuring that economic impacts are 

minimized. 

(2) As discussed in Section II. B.. 

Congress has indicated that Subtitle C 

regulations are unwarranted where 

existing programs can be employed to 

protect human health and the 

. environment from the problems created 

by oil and gas wastes. EPA has 

concluded that, in fact, existing State 

and Federal programs are generally 

adequate, and that remaining gaps can 

be filled by modifying these programs. 

Subtitle C regulation is. therefore, 

unwarranted. Moreover, Subtitle C, with 

its comprehensive "cradle to grave" 

management requirement, simply is not 

well suited to this type of gap-filling 

regulation. It is thus both more efficient 

and appropriate to fill the gaps by 

strengthening regulations under the 

Clean Water Act and UIC program and 

promulgating the remaining rules needed 

under RCRA under the less prescriptive 

statutory authorities set out in Subtitle 

D. 

(3) Since the States and EPA have 

consistently required long periods of 

time to process Subtitle C permits, 

regulation under Subtitle C could delay 

: the start of operations at new facilities. 

• These delays would be particularly 

disruptive to the exploration phase of oil 

and gas development. 

(4) Subtitle C regulation of these 

wastes would subject them to all of the 

land disposal restriction requirements, 

including BDAT. and thus could 

severely strain existing Subtitle C 

facility capacity. 

(5) The Agency believes that it is 

impractical and inefficient to implement 

Subtitle C for all or some of these 

wastes because of the disruption and. in 

some cases, duplication of State 

authorities that administer programs 

through organizational structures 

tailored to the oil and gas industry. 

(6) It is impractical and inefficient to 

implement Subtitle C for all or some of 

these wastes because of the permitting 

burden that the regulatory agencies 

would incur if even a small percentage 

of these sites were considered 

Treatment. Storage and Disposal 

Facilities (TSDFs). 

V. Efforts to Improve State and Federal 

Programs 

The Agency plans a three-pronged 

approach toward filling the gaps in 

existing State and Federal programs that '-_)? 

regulate the management of wastes from % 

the crude oil. and natural gas, industries.

 J^ 

This effort will include: 

1. Improving Federal programs using

 ,; 

existing authorities under Subtitle D of "• 

RCRA and the Clean Water and Safe ••*: 

Drinking Water Acts: 

2. Working with the States to '• t •'•• 

encourage changes in their regulations " 

and enforcement programs to achieve £ 

more uniformity in the administration of' 

their programs; and - '•."•-

3. Working with Congress to develop "'-*•. 

any additional statutory authority that 

may be required. '-* ^"Kjjrfcr 

A. Federal Program improvements . •;.;sr;^v'^? 

Within Existing Authorities . - . .'U^SS T 

•• • . •—.*-f>Vi*s""st. 

1. Clean Water and Safe Drinking Water ^/j^g*^ 

Act Programs . -. ,„,, ..; ; .^ J~Jj$i£*jj£ 

The Agency believes certain • •'<.-*^\£&yf*8k!r: 

improvements in the Safe Drinking -ix\<i'^x ' 

Water and Clean Water Acts are ;• .-> ' *-

desirable with respect to their • -v _^ 

application to crude oil and natural gas. r^,-

• wastes. In the case of the UIC program, :CA ' 

the Agency had previously determined • .">. 

that a critical examination of the overall -fj^t\". 

program was in order. The program has fr-ftiiV; 

now been in effect for approximately 5.; <-J5ji-V 

years or more, depending on when a v';*?;kvr<rK»-

State program was approved or a , >4-'>.-.'-!?3if&*Ji 

Federal program was promulgated in a ..:f"^54' 

State. This examination, currently ;;:'.?•'$j'*;p»^V 

underway, includes a review of the <'£i'£*Ji£i£y* 

adequacy of the regulations and policies ^^' ^ 

governing the program and of the way in •'fc*^'K^ 

which States and EPA Regions are. .•'£?£{£%&!'-

implementing and enforcing the •:*•.:***"«s*'^iVr: 

program. The review of the adequacy of >/ ' "~ 

State implementation is complex •-• &V-*h 

because approval of State programs ; *<>• 

was. by statute, governed by a •-' 

determination of their effectiveness in ,-.;' 

protecting underground sources of r -.-" 

drinking water, rather than by their ...'. • 

conformity with minimum Federal ; '-

regulations, : '"! 

Implementation of the UIC program by 

the EPA Regions is undergoing a peer 

review process, which will be completed 

by the fall of 1988. Implementation of Ihe 

Slate programs is reviewed routinely by 

the EPA Regions. In addition, the EPA's 

Office of Drinking Water has 

undertaken a cycle of in-depth reviews 

of the UIC program. The California. 

Texas, and Kansas programs were 

J 
P.15 

Federal Register / Vol. 53, No. 129 / Wednesday. July 6. 1988 / Notices 25457 

reviewed in 1987. A review of Wyoming 

and at least one other State, not yet 

selected, will be conducted in 1988. The 

States have also undertaken a peer 

review project directed by the 

Underground Injection Practices -

Council. 

The Agency has formed a workgroup, 

which will include participation by the 

States and other Federal agencies, to 

review issues pertinent to the UIC 

regulations. The stategy for this review 

is available in the RCRA docket. A final 

report and the recommendations of the 

workgroup are expected to be available 

in the winter of 1988-89. ... . . 

In conjunction with the Clean Water 

Act. the Agency is currently developing 

national discharge regulations for the 

offshore crude oil and natural gas .. 

industry and is planning for the 

development of national discharge 

regulations for the coastal oil and gas 

industry. The coastal segment generally 

includes exploration, development and 

production facilities that are located in 

or adjacent to tidal wetlands. These 

regulations will cover the discharges of 

produced water, drilling fluids, drill 

cuttings and various low-income waste 

streams to surface waters of the U.S. 

The regulations will address the best 

available technology (BAT), best 

conventional technology (BCT) and new 

source performance standards (NSPS) 

levels of control. These regulations may 

result in a prohibition on the discharge 

of a significant portion of high volume 

drilling wastes (drilling fluids and 

cuttings) into U.S. offshore waters. As 

such, these wastes will be transported 

to shore by the offshore operators for 

land disposal. These wastes would then 

be subject to regulation under RCRA 

Subtitle D. 

The Agency is also planning to begin 

development of national effluent 

regulations for onshore stripper oil and 

gas production. The onshore stripper 

well regulations will cover the 

discharges of produced water and well 

treatment wastes to surface waters of 

the U.S. These regulations will be 

established at increasing levels of 

stringency compared to the best 

practicable technology (BPT) level of 

control. Non-stripper wells located 

onshore are already subject to a "zerodischarge" requirement under NPDES. 

22. RCRA Subtitle D Approach 

(a) General Approach. EPA believes it 

can design and implement a program 

specific to crude oil and natural gas 

wastes under Subtitle D of RCRA that 

effectively addresses the risks 

associated with these wastes. EPA is 

already in the process of developing 

revised Subtitle D criteria for facilities 

that may receive hazardous household 

waste or small quantity generator 

hazardous wastes as well as for mining 

waste disposal facilities. The Agency 

intends to augment the Subtitle D 

program by developing appropriate 

standards and taking other actions as 

appropriate for crude oil and natural gas 

wastes. 

In developing these tailored Subtitle D 

standards for crude oil and natural gas 

wastes. EPA will focus on gaps in 

existing State and Federal regulations 

and develop appropriate standards that. 

are protective of human health and the 

environment Gaps in existing programs -. 

include adequate controls specific to 

associated wastes and certain - ... 

management practices and facilities for . .. 

large-volume wastes, including 

roadspreading. landspreading, and 

impoundments. EPA is particularly 

concerned about centralized and . -.---

commercial facilities that treat, store, or 

dispose of oil field wastes in ..;.:• 

concentrated form. Pits or-...-.. 

impoundments at these facilities often 

contain hazardous constituents in high j 

concentrations. In addition, centralized 

facilities are responsible for some of the 

most significant damages the Agency 

documented. • ;.-'-~ •••.-'• 

To ensure proper control over oil and 

gas disposal facilities and practices, 

EPA will consider requirements under 

Subtitle D such as: (1) Engineering and 

operating practices, including run-off 

controls, to minimize releases to surface 

water and groundwater: (2) proper 

procedures for closing facilities; (3) 

monitoring that accommodates sitespecific variability; and (4) clean-up 

provisions. EPA will tailor these 

standards to the special problems posed 

by oil and gas waste disposal facilities, 

as well as incorporate appropriate 

flexibility to address site-specific 

variability. • " ' 

In developing a tailored Subtitle D 

program for oil and gas wastes, EPA will 

use its RCRA section 3007 authority to 

collect any additional information 

needed on the characteristics and 

management practices of oil and gas 

wastes. EPA believes this authority does 

not limit information collection to 

"hazardous" waste identified under 

Subtitle C, but also authorizes the 

collection of information on any solid 

waste that the Agency reasonably 

believes may pose a hazard when 

improperly managed. (EPA may also use 

this authority in preparing enforcement 

actions.) 

In specifying the appropriate 

standards. EPA also will further analyze 

existing Federal and State authorities 

and programs and determine future 

plans for administering their oil and gas 

waste programs. Additionally. EPA will . 

perform analyses of costs, impacts, and 

benefits and will comply fully with 

Executive Orders 12291 and 12498. the 

Regulatory Flexibility Act. and the 

Paperwork Reduction Act. < 

The Agency will specifically consider 

the impact of future regulations on small 

business operations in the process of 

regulatory development under the - ' v 

Agency guidelines with respect to the

 : f 

Regulatory Flexibility Act. The Agency '•• 

believes that the tailored RCRA Subtitle 

D regulations can provide the flexibility -

necessary to reflect the marginal •'-•-•"•-

economic nature of certain segments of -

the industry, while at the same time • -. 

affording improved environmental - v»-

protection. For example, the Agency ••'•-. 

recognizes that many stripper :..'.;• 

operations are, by their nature, more 

vulnerable to regulatory burdens -

imposed by any new controls over crude 

oil and natural gas wastes, and that 

• many stripper wells are associated with -

small, non-integrated producers. This is 

particularly significant in certain . • • • 

'•* producing regions such as Appalachia. • "' 

(b) Alaska's North Slope. Tailored 

: standards under Subtitle D will 

• specifically address controls necessary ' 

. to protect fragile or sensitive 

environments; one such sensitive 

" environment is the Arctic North Slope. 

EPA is particularly concerned about the 

• management of crude oil and natural gas 

wastes in this area, where oil extraction 

• is performed on a very large scale. 

- accounting for roughly 20 percent of 

total U.S. production. There also exists • ~ 

the likelihood for future development of 

potentially significant crude oil and 

natural gas reserves on the North Slope 

in areas surrounding Prudhoe Bay and 

areas in the Arctic National Wildlife 

Refuge.

 ; 

The Arctic North Slope is particularly 

sensitive and fragile, with unique 

geographic and climatic conditions that 

make its environment fundamentally 

different from the lower 48 States. The 

area is primarily an arctic desert, frozen 

• for about 9 months out of the year and 

underlain by up to 2,000 feet of 

permafrost. During the summer months. 

- surface water exists in the form of 

interconnected tundra ponds, which 

exhibit little or nO flow during the 

summer season. This, in addition to the 

severity of the climate and the shortness 

of the growing season, makes the area 

particularly vulnerable to ecological 

impacts, or impacts from less than 

rigorous waste management practices. 

There is a lack of long-term historical 

data on impacts of crude oil and natural 

gas industry activities on the North 

Slope. Based on preliminary studies. 
P.16 

23458 Federal Register / Vol. 53, No. 129 / Wednesday, July 6. 1988 / Notices 

current waste management practices 

sed on the North Slope pose the 

potential for environmental degradation. 

( ' } stated in the Report to Congress, a 

^ 8 3 U.S. Fish and Wildlife Service 

study found chromium, arsenic 

cadmium, nickel, and barium to be 

present in tundra ponds adjacent to 

reserve pits at levels significantly 

greater than in control ponds. Levels of 

chromium in adjacent ponds were also 

found to exceed EPA chronic toxicity 

criteria, and affected distant ponds were 

found to contain chromium levels 

significantly higher than background 

levels. The authors of this study caution, 

however, that these findings cannot be 

extrapolated to present-day oil field 

practices on the North Slope because 

some industry practices have changed 

and the State's regulations have become 

increasingly more stringent since 1983. 

Historically, enforcement of 

environmental controls on the North 

Slope has been inadequate. EPA 

believes this inadequacy has • 

contributed to die use of undesirable 

waste management practices in some 

cases. For example, as discussed in the 

Report to Congress, an incident 

developed involving an oil field service 

company that was disposing of drums 

and waste chemicals in an inappropriate 

nner. The Agency believes tiiat a 

^ater enforcement presence in 

tion to improved regulations could 

. ent such incidents from recurring. 

Recently, the State of Alaska has 

improved waste management 

regulations pertaining to the North 

Slope. In addition, some operators plan 

to implement more desirable waste 

management practices, including the 

possibility of phasing out reserve pits 

through the use of closed drilling 

systems and injection for waste drilling 

muds and cuttings. If implemented, these 

changes would be major .improvements 

in waste management practices on the 

North Slope. 

B. Additional Federal Authorities 

EPA is.concerned over the lack of 

Federal authority under Subtitle D of 

RCRA to address treatment and 

transportation of oil and gas wastes. 

The Administrator therefore will work 

with Congress to develop any additional 

legislative authorities that may be 

needed to address these issues. In the 

interim. EPA will use section 7003 of 

RCRA and sections 104 and 106 of 

CERCLA to seek relief in those cases 

where wastes from oil and gas sites 

pose substantial threats or imminent 

h -rds to human health and the 

onment. Oil and gas waste 

pi- 'rns can also be addressed under 

R

1

. section 7002 which authorizes 

citizen lawsuits for violations of Subtitle 

D requirements in 40 CFR Part 257. 

C. Improvement in State Programs 

While in the process of completing 

improvements in the Federal programs, 

EPA plans to work with the States to 

improve the content, implementation, 

and enforcement of existing State 

regulations. This will be a cooperative 

effort with voluntary State participation. 

For example, the Interstate Oil Compact 

Commission has already begun work in 

this area and has expressed an interest 

in cooperating with EPA in this regard. 

Specifically, the Agency plans to 

encourage States to take steps to fill the 

following gaps (where present) in their 

existing regulatory programs: 

(1) Controls for roadspreading and 

landspreading; 

(2) Surface impoundment (i.e.. pit) 

location, design, and maintenance; 

(3) Controls for associated wastes; 

and 

(4) Plugging abandoned oil and gas 

wells. 

According to State officials, many 

States have tens of thousands of 

unplugged or improperly plugged 

abandoned wells. EPA's December 1987 

Report to Congress documented groundwater contamination with chlorides 

from unplugged or improperly plugged 

abandoned crude oil and natural gas 

wells and indicated that State 

requirements for plugging and 

abandoning crude oil and natural gas 

wells vary, with inadequacies apparent 

in some State programs. For example, 

many States do not require a plugging 

bond from operators who drill crude oil 

and natural gas wells. Where bonding is 

required, the amount is often not 

adequate to provide for proper plugging 

once a well is abandoned. 

EPA encourages States to develop 

programs to address abandoned wells. 

However, the Agency recognizes that 

locating and identifying these wells is 

difficult, and sometimes impossible, 

because of poor record keeping or the 

absence of records. Because many 

unplugged wells are several decades 

old, the owner or operator often cannot 

be identified. Some States have plugging 

funds to use in such circumstances, 

some do not 

The Agency will also work with 

States to improve implementation and 

enforcement of existing State 

regulations. EPA believes that 

improvements in enforcement of existing 

regulations will significantly increase 

protection uf human health and the 

environment. 

EPA will also work closely with the 

State of Alaska on addressing problems 

associated with management of crude 

oil and natural gas wastes on the Arctic - ';' . 

North Slope. Because of the remoteness •-•.£._• . 

and severe climatic conditions. • %-'-.-' 

enforcement is particularly difficult in '•'-'• .••,-.. 

this area. The Agency will explore with ••':-...«. 

the State of Alaska and the Department ;•' .•'" 

of the Interior ways to improve ''.'.•? ••-*.'.5-".-

enforcement in this area. The Agency .., *'- • 

believes operators should continue .'

 :^\ •>_;• 

research into impacts on the ; • '- >>,.'•'.'•. 

environment of their waste management • y>/£-£ . 

practices. The Agency will develop a list ? ^-c£» 

of recommended areas for research in

 a::

:-'".'':'•] 

the research, demonstration, and " ;.*•'"'"''/'.'?.**?-

development plan required by RCRA .'^:.-- "?-". 

section 8002(m)(2). ;''*'* :"£fi:y 

VL Regulatory Determination for ; „* .>A.'.; ~^~•:; 

Geothermal Energy Wastes ..:.:>»•:.-in. .-••*.* -•"• 

-. .....-iVjJfi- •:..-." 

A . Hazard Assessment - ' •*•' •„'-. w.'iS 

• ••.-' .•il'ji.r'i'fV **'• 

There is only a limited record of .: -4.yl<'."-f ' 

damages or danger to human health or \sV-V>*£V 

the environment resulting from the -;0>:u,vjvy 

exploration, development, and • M.r -in .^:" '"• 

production of geothermal energy. Based [' ~'~!> 

on the limited information available, the .' '£&•"' 

Agency has determined that the risk to .<>'-; ;rf. 

human health and the environment ::J>—<{M•%-

resulting from the exploration. ••; r.y^M'^J^-'-jdevelopment and production of - c-r.V'u.'r •*£•?•';: 

geothermal energy is relatively low. The .'^.'-.j;- 1. 

geothermal energy industry is MK-'..r. '^y£l.•". 

comparatively small, with a^otal of 395 .±£%i±\ 

wildcat, production, and injection wells .\;=,,';; M . 

drilled between 1981 and 1985. Most J ^^_*V;: 

geothermal energy production is in ,'o-. JT -Z-<. 

California (321 out of 395 wells) and i l-J-,.-r 

Nevada. It is unlikely that there will be * J ..«•;> 

further large-scale development of -

:

:JJ»£J 

geothermal energy resources outside of *,V : 

the State of California because the ^ f <"|' . 

occurrence of accessible geothermal ••" ' 

energy is extremely limited. 

B. Adequacy of State and Federal ,..xri- •«_> 

Regulations .-.-..,: •.> •?•>'&.$• Jr~4£S. 

As indicated in the Report to '*?;*<;I. ;'". 

Congress, the Agency believes that -"I ?:•'-'.. 

existing State and Federal regulations •••".'•/ 

are generally adequate for controlling *^ 

wastes from geothermal energy ;;,'.'! 

production. However, one public •'••'! *\ 

comment on the Report to Congress ^ ' ^ 

suggests a possible gap in California's ' 

regulatory program addressing these 

wastes. The commenter documented

 v^"' 

potential endangerment of human health 

and damage to the environment because 

of the disposal of geothermal energy 

hydrogen sulfide abatement wastes in 

commercial facilities in California. 

C. Conclusions 

EPA has decided not to regulate 

wastes generated by the exploration snd 

development of geothermal energy 

resources under RCRA Subtitle C EPA 

believes that Subtitle C control for these 

•sa •*!• 

*« *'.'iu!i " 
P.17 

Federal Register / Vol. 53. No. 129 / Wednesday. July 6. 1988 / Notices 25459 

wastes is unwarranted because of the 

relatively low risk of these wastes and 

the presence of generally effective State 

and Federal regulatory programs. 

Because these wastes are largely 

confined to California and Nevada. EPA 

will work closely with these States to . 

address any gaps in their regulatory 

programs for the management of 

hydrogen sulfide abatement wastes. 

VII. Research, Development, and 

Demonstration Plan 

The Agency will develop a research, 

development, and demonstration plan 

based on the findings of the Report to 

Congress and subsequent public 

comments on the report. This plan will 

outline various topics that the Federal 

and State governments and/or industry 

could pursue. This plan will include the 

following topics: 

• Alternative waste management 

technologies; 

• Waste minimization techniques; 

• Materials substitution: 

• Recycling and reuse: 

• Reserve pit construction 

(percolation, leaching, and erosion 

control issues); 

• Plugging and abandonment of crude 

oil and natural gas wells; 

• Better characterization of produced 

waters and associated wastes generated 

by stripper crude oil and natural gas 

wells: and 

• Field monitoring to evaluate the 

adequacy of waste containment 

practices. 

VIII. EPA RCRA Docket 

The EPA RCRA docket is located at: 

United States Environmental 

Protection Agency, EPA RCRA Docket 

(Sub-basement). 401 M Street. SW., 

Washington. DC 20460.. ' ' ' • 

The docket is open from 9:30 a.m. to 

3:30 p.m.. Monday through Friday. 

except for Federal holidays. The public 

must make an appointment to review 

docket materials. Call the docket clerk 

at (202) 475-9327 for appointments. 

The following documents related to 

this regulatory determination are 

available for inspection in the docket: :. 

• Report to Congress on Management 

of Wastes from the Exploration. 

Development, and Production of Crude 

Oil. Natural Gas, and Geothermal 

Energy: 

• All supporting documentation for 

: the regulatory determination, including 

public comments on the Report to . 

Congress and EPA response to 

comments; and 

• Transcripts from the public hearings 

on die Report to Congress. 

Dated: June 29.19843. '•••.'• 

A. )ames Barnes. 

Acting Administrator. 

|FR Doc 843-15097 Filed 7-5-88: 8:45 am) 

. BILLING COOt M4JO-S0-*!