Observations on a Montana Wate r Quality Proposal Page iii

TABLE OF CONTENTS

Executive Summary.............................................................................................................. . v

Introduction ................................................................................................................. ......... 1

Purpose of This Report ......................................................................................................... . 1

1. CBNG Produced Water: Undesirable Po llutant or Valued Resource? ............................ 2

2. Proper Consideration of CWA Au thority and Guidance Relating to Technology-Based Discharge Limits............................................................................... 4

A. Background ................................................................................................................ 4 B. Equivalence of Federal and Montana Regulations .................................................. 5 C. Technology-Based Limits ........................................................................................... 7 D. What Is BAT and How Is It Expressed? ..................................................................... 9

E. The Distinction between BAT and BPJ ...................................................................... 10 F. The Proposal’s Version of Technology-Based Limits ................................................ 10 G. Comparison of the Proposal to EPA Technology-Based Limits Procedures ............ 13

3. Does the Proposal Preclude the Use of Other Innovative or Beneficial Technologies? ............................................................................................ 18

4. Are the Proposed Discharge Sta ndards Stricter Than Needed to Meet Montana Water Quality Standards?.................................................................... 18

5. Summary of Key Observations........................................................................................ 20

Appendix A – Permit Limit Guidelines Used by Maryland Department

of Environment in Late 1980s................................................................................................ 21

TABLES

1 Steps and time line for Montana DEQ review of waiver application.............................. 15

2 Comparison of CBNG produced water management technologies

in relation to the CWA factor s for technology-based limits............................................ 17

3 Comparison of proposed effluent lim its to water quality standards ................................ 19Observations on a Montana Wate r Quality Proposal Page iv

FIGURES

1 Normal Distribution......................................................................................................... 25

2 Lognormal Distribution ................................................................................................... 25Observations on a Montana Wate r Quality Proposal Page v

Executive Summary

During the fall of 2005, the Montana Board of Environmental Review (BER) announced proposed changes to the Montana water quality regulations. The proposal, which was based on a petition from the Northern Plains Resource Counc il, was directed toward discharges of water from coal bed natural gas (CBNG) production. Th e proposed regulations, if adopted in their current form, are likely to substantially re duce the amount of CBNG pr oduction in Montana. The impact also extends to Wyoming CBNG pr oduction through much great er restrictions on water quality that must be met at the interstate border.

The U.S. Department of Energy (DOE) review ed the BER proposal and believed that the proposal could restrict CBNG production in Montana and Wyoming. To aid in the review of the proposal, DOE asked two of its national labo ratories — Argonne Na tional Laboratory and Sandia National Laboratories — to prepare writ ten evaluations on vari ous aspects of the proposal. This report contains Argonne’s review and observations on the proposal.

The proposal inconsistently characterizes the va lue of CBNG produced water. In some places, the proposal refers to it as “wastewater” and emphasizes that some of its constituents are “hazardous parameters.” In other places, the proposal acknowledges the water’s value in both quantity and quality and implements measures to ensure that the water is available for future

beneficial use. This in consistency is misleading.

The Clean Water Act (CWA) allows the U.S. Environmental Protection Agency (EPA) to delegate National Pollutant Discharge Elimination System (NPDES) authority to states. Montana applied for and received the authority to administer the federal NPDES program. To administer the NPDES program, the state uses re gulations that either adopt EPA’s regulations directly by reference or it has promulgated similar and consistent state regulations. The proposal does not follow the CWA guidelines for establis hing technology-based limits. The most notable excursion from the guidelines is the proposal’s attempt to force the use of just one or two specific technologies. The BER is within its rights to require zero discharge, assuming that it can show that appropriate water mana gement alternatives are available and affordable. However, the BER may not specify the type of technology that must be used to achieve zero discharge. In addition to the procedural issues raised by th e proposal, this strategy effectively blocks the opportunity for other benefi cial and innovative technol ogies to be used.

The proposal includes numerical t echnology-based effluent limits. They are very stringent, and no detailed rationale is provided to explain why they were sel ected. Traditional methods to evaluate best available technology economically achievable (BAT) and best professional judgment (BPJ) technology-based limits were not followed. BAT is not a specific technology but rather is the performance that can be produced by properly operated “BAT model technology.” BAT limits are not se t at the level of performance of one or a few particularly well-operated treatment facilities on a good day or at the theoretical level of performance claimed by an equipment manufacturer. Rather they reflect the performance of multiple facilities using proper technology in actual in dustrial circumstances over a l ong period of time. Typically,

statistical calculations are used to determine appropriate average and maximum limits. BPJ limits are expected to follow similar procedures to those that EPA uses to establish BAT.Observations on a Montana Wate r Quality Proposal Page vi

The proposal and the petition make various clai ms about the affordability of reinjection and treatment to achieve the proposed limit as they relate to the overall wellhead price of natural gas.

Some of these cost estimates were derived from a 2003 draft EPA study that has never been released. Relying on data from an unpublished re port is not a sound basis fo r setting new stricter regulations. Further, the BER a nd the petitioners appear to have overlooked the fact that the draft EPA study evaluates the cost of achieving a different, and much le ss stringent, set of discharge standards from those required by th e proposal. The cost for treating water or wastewater increases as the target treatment stan dards are made more stringent. Thus the costs estimated by the draft EPA report underestimates th e actual costs that would be associated with meeting the proposal’s strict limits, and theref ore are not fully releva nt as rationale for supporting new limits.

The proposed effluent limits are much stricter than necessary to meet water quality standards in Montana water bodies. If the proposal had prop erly demonstrated that these strict limits represented BAT, they could be employed. The proposal does not make such a demonstration, and therefore the limits appear to be unnecessarily stringent. For se veral of the parameters in the proposed effluent limits (calcium, magnesium, so dium, bicarbonate, and total dissolved solids or TDS), there are no water quality standards. For the other parameters that do have water quality standards, the proposed effluent limits are far strict er than water quality sta ndards in all cases. In other words, dischargers must treat to levels significantly cleaner than the receiving waters.

The proposal contains several appa rent logical inconsistencies. First, the proposal calls for

“ minimum technology-based effluent limitations” [em phasis added]. The proposed numerical limits are most likely intended to be maximum limits, not minimum limits. Second, for several parameters, the average concentrations must be kept within a range (e.g., the calcium average concentration must be between 0.1 mg/L and 0.2 mg/L. There is no apparent reason to set a “minimum” standard as a range, no r is there any reason to limit c oncentrations to a range. Under this provision, a calcium average of either 0.08 mg/L or 0.3 mg/L is out of compliance. Third, the proposed limits create an inte rnally inconsistent situation. The sodium adsorption ratio (SAR) is calculated by a formula that combin es sodium, calcium, and magnesium. If the proposed average effluent limits for each of these parameters are entered into the SAR equation, they result in SAR values of 2.5 to 5.3. The pr oposed SAR effluent limit is 0.5 maximum. Thus it appears that discharges complying with the three component parts of the SAR equation will

still be in violation of the SAR limit.Observations on a Montana Wate r Quality Proposal Page 1

Introduction

In May 2005, a group of petitioners led by the Northern Plains Resource Council (NPRC) submitted a petition to revise water quality requir ements to the Montana Board of Environmental Review (BER). Under Montana law, the BER had to consider the petition a nd either reject it or propose it as a new regulation. In Septembe r 2005, the BER announced proposed changes to the Montana water quality regulations. The proposal , which included almost the exact language found in the petition, was directed toward discharg es of water from coal bed natural gas (CBNG) production. The key elements of the proposal included:

1. No discharges of CBNG water are allowed to Montana surface wate rs unless operators can demonstrate that injection to aquifers with the potential for later recovery of the water

is not feasible.

2. When operators can demonstrate the injecti on is not feasible, the CBNG water to be discharged must meet very strict tec hnology-based limits for multiple parameters.

3. The Montana water quality standards for the sodium adsorption ratio (SAR) and electrical conductivity (EC) would be ev aluated using the 7Q10 flow (lowest 7-consecutive-day flow in a 10-year period) ra ther than a monthly flow th at is currently used.

4. SAR and EC would be reclassified as “harmf ul parameters,” thereby greatly restricting the ability for CBNG discharges to be allowed under Montana’s nondegradation regulations.

The proposed regulations, if adopted in their curr ent form, are likely to substantially reduce the amount of CBNG production in Montana. The impact also extends to Wyoming CBNG production through much greater rest rictions on water quality that mu st be met at the interstate

border.

Purpose of This Report

One of the U.S. Department of Energy’s (DOE’s ) missions is to ensure an abundant supply of affordable energy for the nation. One way in wh ich DOE supports that mission is to evaluate proposed federal and state regulato ry actions that would restrict or impede energy production to

assess whether the environmental or other benefi ts of those actions are commensurate with the energy impacts. DOE’s National Energy Tec hnology Laboratory (NETL) reviewed the BER proposal and believed that the proposal co uld restrict CBNG production in Montana and Wyoming. To aid in the review of the proposal, NETL asked two other DOE national laboratories — Argonne National Laboratory (Argonne) and Sandia National Laboratories (Sandia) — to prepare written evaluations on va rious aspects of the proposal. Argonne focused on regulatory and policy issues and their interre lationships with technology, and Sandia focused on water treatment and engineering and hydrol ogic and geologic technical issues.

This report represents Argonne’s review and obser vations. The main themes of these comments

include:Observations on a Montana Wate r Quality Proposal Page 2

- Does the proposal consider CBNG produced wa ter as an undesirable pollutant or as a

valued resource?

- Did the BER proposal adequately follow fede ral Clean Water Act (CWA) authority and guidance concerning technology- based effluent limits?

- Does the proposal preclude the use of ot her innovative or bene ficial technologies?

- Are the proposed discharge standards stricter than needed to meet Montana water quality

standards?

The rationale included with the proposal for maki ng the proposed changes is not very specific or detailed. The language in the pr oposal is taken nearly word-for-word from the petition, but the petition is longer and provides more details for the proposed actions. We therefore reviewed the petition as well, and much of the discussion in this report is based on statements and positions contained in the petition.

1. CBNG Produced Water: Undesirable Pollutant or Valued Resource?

The proposal is not consistent in how it views CBNG produced water. It characterizes the water in different ways to support di fferent portions of the proposed re visions. It s uggests that CBNG is wastewater and contains harmful properties when attempting to make the water quality standards and nondegradation requi rements more stringent. Ye t when the proposal pushes for reinjection of the CBNG produced water whenever practicable, it treats the water as a valuable commodity for current and future purposes.

Some of the revisions include d in the proposal are geared toward emphasizing that CBNG produced water is an undesirable substance with deleterious properties. Two examples are

shown below:

17.30.670 NUMERIC STANDARDS FOR ELECTR ICAL CONDUCTIVITY (EC) AND SODIUM ADSORPTION RATIO (SAR) (1) through (5) remain the same. (6) Changes in existing surface or ground water quality with respect to EC and SAR are nonsignificant according to the criteria in 75

- 5

- 301(5)(c), MCA, provided that the change will not have a measurable effect on any existing or anticipated use or cause measurable changes in aquatic life or ecological integrity. EC and SAR are harmful parameters for the purposes of the Montana Wa ter Quality Act, Title 75, chapter 5, MCA.

and

17.30.1202 DEFINITIONS For the purposes of this subc hapter, the following definitions apply:Observations on a Montana Wate r Quality Proposal Page 3

(8) "Methane wastewater" means water pr oduced from coal bed methane extraction during exploration or de velopment activities.

In the first example, the term “harmful parame ter” leads to stricter consideration under the Montana nondegradation regulations, but more di rectly, a “harmful parameter” sounds much more dangerous or sinister than a parameter w ithout the “harmful” designator. The parameters EC and SAR are not inherently harmful. EC is a measure of the level of dissolved materials or salinity in a water sample. It does not measure a specific or single chemical substance that could be construed as harmful. SAR is calculated by a ratio of sodium, calcium, and magnesium. The Montana Numeric Water Quality Standards, as listed in Circular WQB-7 , do not contain any standards for sodium, calcium, or magnesium. None of the three individual chemicals are individually listed as harmful parameters.

Neither EC nor SAR is harmful unde r all or even most situations. It is impossible to make a

determination of risk or harm w ithout establishing a specific contex t. Both parameters, like most other water quality parameters, have little or no eff ect at some level, but begin to pose a risk to aquatic life, humans, plants, and/or soils at a higher level. In other words, EC and SAR can be present at safe levels, intermediate levels, and undesirable levels. The magnitude of specific

values in relation to the threshold between low risk and high risk is the key in determining whether the parameters are harmful or not.

In the second example, the term “wastewater” carries a different connotation than “produced water” or “unaltered ground water from coal bed methane development. ” The latter term is used to describe the substance in question in the ex isting BER regulations. Clearly, the petition and likewise the proposal are trying to send a message that the wate r brought to the surface during CBNG production is a waste stream.

The previous examples indicate that the proposal seems to treat the CBNG produced water as an

undesirable substance that is “was tewater” and contains “harmful parameters.” However, the proposal is not consistent in that characteriz ation. The following excerpt from the proposal suggests that the water withdraw n during CBNG production represents a beneficial material that should not be discharged and lost from the state’s water resources.

REASON: Why Minimum Technology-Based Cont rols and Treatment Requirements are Necessary

3. The reason for requiring reinjection of all coal bed methane wast ewater into suitable geologic formations (unless re -injection is technically unfe asible) is to maximize the volume of water that will be put back into aquifers from which it was taken. This requirement will alleviate the draining of aquifers and the drying up of wells and springs that are used by petitioners. 4. The reason that water must be reinj ected into "suitable geologic formations" (i.e., aquifers with water of similar quality to coal bed methane wastewater) is to ensure that the water resource is available for be neficial use in the future. For this reason, reinjection into deep geologic formations that are considered Class II wells under the Safe Drinking Water Act's Underground Injec tion Control (UIC) progr am is not allowedObservations on a Montana Wate r Quality Proposal Page 4

under the rules because the water quality in those formations typically will not qualify as being "suitable geologic formations."

The rationale expressed in BER’s Item 3 is that the CBNG produced water has value for its volume. The proposal suggests that, wherever technically fe asible, the water should be reinjected into suitable geologic formations. Th e rationale also suggests that wells and springs currently in use by petitioners would be aff ected by withdrawing a nd discharging the CBNG produced water from the coal seams. This pa rticular point is not documented by specific examples; in fact, most of the potable and irri gation water supplies in th e region are taken from depths shallower than the depths at which the coal seams are located.

The rationale expressed in Item 4 goes even further, suggesting that the CBNG produced water

has value as a future beneficial resource. Althou gh not specifically stated in Item 4, if the water is anticipated to have a future beneficial us e, its current quality must be clean enough that it

could be used either “as is” or after treatment with some readily available and affordable technology. To further emphasize th is perspective, New Rule IX of the proposal permits some of the CBNG water to be reused for livestock watering.

2. Proper Consideration of CWA Authority and Guidance Relating to Technology-Based Discharge Limits

The proposal does not follow the CWA guidelines for establishing technology-based limits. The most notable excursion from the guidelines is the proposal’s attempt to force the use of just one or two specific technologies. The BER is within its rights to require ze ro discharge, assuming that it can show that appropriate water management alternatives are available and affordable. However, the BER may not specify the type of technology that must be used to achieve zero discharge. The proposal includes numerical technology-based efflue nt limits. They are very stringent, and no detailed rationa le is provided to explain why th ey were selected. Traditional

methods to evaluate best available technol ogy economically achievable (BAT) and best professional judgment (BPJ) technology- based limits were not followed.

The following sections describe the federal le gal requirements concerning technology-based limits, the relationship between federal and Montan a laws and regulations, the language used in the proposal to establish technology-based limits , and how the proposal differs from the federal requirements.

A. Background

The CWA established the framew ork for regulating wastewater discharges through the National Pollutant Discharge Elimination System (NPDES) program. The U.S. Environmental Protection Agency (EPA) was given authority to establish regulations for the program using the general guidelines in the CWA. States can be delegated as authorities to administer the NPDES program if they can demonstrate that they have adequate state laws and regulations to equal or exceed the NPDES requirements.

Some of the features of the CWA and the NPDES program that are relevant to the BER proposal

include:Observations on a Montana Wate r Quality Proposal Page 5

- All point source discharges of wastewater made to surface water bodies must be authorized by NPDES permits. Discharges ma de to other places (e.g., land surface via irrigation, underground injection, evaporation) are not subject to federal NPDES permits. Underground injection activities are regulated under a sepa rate federal program (the Underground Injection Control, or UIC, program) that can also be delegated to able and willing states. Some states have developed separate state groundwater discharge permit

programs.

- Irrigation return flows to surface water bodies are exempted from needing NPDES permits. Nevertheless, they can have a wa ter quality impact and may be controlled through water quality programs other than th rough NPDES where necessary. Irrigation

return flows are made to some of the rivers in the region.

- Permits must contain numeric limits for parameters of concern. The limits are calculated using both a technology basis and a water quality basis; whicheve r basis results in stricter limits for each pollutant is used in the permit.

- The CWA directs EPA to establish effluent limitations guidelines (ELGs) for most major

industrial sectors. Where these are availabl e, they are used as the national minimum technology-based limits. Although EPA has deve loped ELGs for the oil and gas industry and the coal mining industry, it has never developed ELGs specific to discharges of CBNG produced water.

- For industries or specific waste streams for which ELGs have not been developed by EPA, the permit writer is expected to esta blish appropriate tec hnology-based limits by using BPJ. The NPDES regulations describe the types of features that must be

considered in a BPJ determination. The BER proposal uses a BPJ pr ocess to establish a “state-equivalent ELG.”

Additional detail on several of these topics is provided in the following sections.

B. Equivalence of Federal and Montana Regulations

Federal NPDES provisions and requirements are iden tical to those in Montan a for most or all of the relevant sections. Montana applied for a nd received authority to administer the NPDES program in its state waters. The Montana Water Quality Regulations, Subchapter 13, cover the Montana Pollutant Discharge Elimination System (MPDES permits). Section 17.30.1303 (incorporations by reference) of those regulations describes th e strong equivalence between the federal NPDES and the state MPDES regulations. Many of the regulations are incorporated word-for-word through reference.Observations on a Montana Wate r Quality Proposal Page 6

(1) In accordance with the federal Clean Water Act, this subchapter of Title 17, chapter 30, establishes a permit system (MPDES ) which is essentially the equivalent of the federal permit system (NPDES) administered by the EPA. (2) In view of the federal Cl ean Water Act's requirement of equivalence with the federal permit system, and in order to simplify the rulemaking process and make the rules less cumbersome, the department has relied he avily upon incorporation and adoption by reference of federal requirements as set forth in Title 40 of the Code of Federal Regulations (CFR) and in the federal Clean Water Act, 33 USC 1251, et seq. (3) Where the department has adopted a federal regulation or statute by reference, the following shall apply: (a) References in the federal regula tions to "administrator", "regional administrator", or "US environmental prot ection agency", or the like, should be read to mean "department". (b) Where the department incorporates by reference a subpart of a federal regulation, both the subpart and its constitu ent sections and subsections are also incorporated by reference. (4) All of the incorporations by reference of federal agency regulations listed in the table in (7) of this rule shall refer to federal age ncy regulations as they have been codified in the July 1, 1991, edition of Title 33 and 40 of the Code of Federal Regulations (CFR).

Section 17.30.1344 (establishing limitations, standards, and other permit conditions) lists specific EPA regulations relevant to permit limits that are incorporated by reference.

(1) In addition to the conditions established under ARM 17.30.1342, 17.30.1343, 17.30.1346, 17.30.1350, and 17.30.1351, each MPDES permit must include conditions meeting the requirements stated in 40 CFR 122.43, 122.44, 124.56 and 124.57 (July 1, 1991).

(2) The board hereby adopts and incorporates herein by reference (see ARM 17.30.1303 for complete information about all mate rials incorporated by reference): (a) 40 CFR 122.43 (July 1, 1991), which is a federal rule that establishes applicable permit conditions in general; (b) 40 CFR 122.44 (July 1, 1991), which is a federal age ncy rule setting forth additional permit conditions which may be applicable to a point source. Such conditions include technology-based and water-quality-based standards, toxic and pretreatment standards, reopene r clause, reporting and monitoring requirements, permit duration and reiss uance, test methods, best management practices, conditions concerning sewage sludge, privately owned treatment works, and conditions imposed in EPA grants to POTW's; (c) 40 CFR 124.56 (July 1, 1991), which descri bes requirements fo r fact sheets; (d) 40 CFR 124.57 (July 1, 1991), which describes the public notice that must be provided for draft permits; (e) 40 CFR chapter 1, subchapter N, (Jul y 1, 1991), which sets forth federal effluent limitations and standards and new source performance standards; (f) 40 CFR Part 125 (July 1, 1991), which st ates standards and criteria for the national point discharge elimination system;Observations on a Montana Wate r Quality Proposal Page 7

(12) The board hereby adopts and incorporates herein by reference (see ARM 17.30.1303 for complete information about all mate rials incorporated by reference): (a) 40 CFR 122.44(j)(2), whic h is a federal agency rule setting forth a requirement for the submittal by a publicly owned treatment work (POTW) of a local pretreatment program; (b) 40 CFR 122.45(b)(2)(ii )(A), which is a federal agency rule setting forth the availability of alternate permit limitati ons, standards, or prohibitions based on varying production levels; (c) 40 CFR 136, which is a series of federa l agency rules setting forth guidelines for testing procedures for th e analysis of pollutants; (d) 40 CFR 125.3, which is a federal agency rule setting fort h technology-based treatment requirements for point source dischargers;

C. Technology-Based Limits

Having shown the similarity between the federa l and Montana laws and regulations regarding water quality and permitting, we now review the federal basis for requiring and establishing technology-based limits. The first citation of importance is CWA Section 301 (b)(2)(A):

(2)(A) for pollutants identifie d in subparagraphs (C), (D), and (F) of th is paragraph, 1
effluent limitations for categori es and classes of point source s, other than publicly owned treatment works, which (i) shall require a pplication of the best available technology economically achievable for such category or class...

Best available technology economically achievable is often abbreviated as BAT; consequently, the “economically achievable” modifier may be overlooked. It is important to understand that EPA

must select as the basis for BA T a technology that is already in use in a particular industry (or sometimes in a related industry ) with a proven long-term track record of performance under the

conditions associated with the type of discharg e in question. Furthermore, the technology has to be

affordable.

EPA’s NPDES regulations include the mandate for technology-based limitations at Section 122.44 (establishing limitations, standards, and other permit conditions):

In addition to the conditions established under Sec. 122.43(a), each NPDES permit shall include conditions meeting the follo wing requirements when applicable. (a)(1) Technology-based effluent limitations and standards based on: effluent limitations and standards promulgated under section 301 of the CWA, or new source performance standards promulgated under section 306 of CWA, or case-by-case effluent limitations determined under section 402(a )(1) of CWA, or a combination of the three, in

accordance with Sec. 125.3 of this chapter.

1 These are all pollutants other than biological oxygen dema nd, suspended solids, fecal coliform, and pH, which are classified as conventional pollutants and are s ubject to best conventional technology standards.Observations on a Montana Wate r Quality Proposal Page 8

EPA explains the ways in which technology-base d limits can be developed in 40 CFR 125.3 (c):

(c) Methods of imposing technology-based treatment requirements in permits. Technology-based treatment requirements ma y be imposed through one of the following

three methods: (1) Application of EPA-promulgated efflue nt limitations developed under section 304 of the Act to dischargers by category or subcategory.... (2) On a case-by-case basis under section 402(a)(1) of the Act, to the extent that EPApromulgated effluent limita tions are inapplicable. The permit writer shall apply the appropriate factors lis ted in Sec. 125. 3 (d) and shall consider: (i) The appropriate technology for the categor y or class of point sources of which the applicant is a member, based upo n all available information; and (ii) Any unique factors relating to the applicant. [Comment: These factors must be considered in all cases, regardless of whether the permit is being issued by EPA or an approved state.] ( 3

) Through a combination of the methods in par agraphs (d) (1) and (2) of this section.

The CWA does not specifically mention BPJ lim its, but EPA uses the general provisions of CWA Section 402 (a)(1)(B) as its justification to require BPJ:

(a)(1) Except as provided in sections 318 and 404 of this Ac t, the Administrator may, after opportunity for public hearing, issue a permit for the disc harge of any pollutant, or combination of pollutants, notwithstanding section 301(a), upon condition that such discharge will meet either (A) all applicable requirements under sections 301, 302, 306, 307, 308 and 403 of this Act, or (B) prior to the taking of necessary implementing actions relating to all such requireme nts, such conditions as the Administrator determines are necessary to carry out the provisions of this Act.

CWA Section 304(b)(2)(B) outlines the factors th at EPA must consider when developing BAT

standards in formal ELGs:

(B) specify factors to be taken into account in dete rmining the best meas ures and practices available to comply with subsect ion (b)(2) of section 301 of th is Act to be applicable to any point source (other than publicly owned treatm ent works) within such categories of classes. Factors relating to the assessment of best av ailable technology shall take into account the age of equipment and facilities involved, the process em ployed, the engine ering aspects of the application of various types of control tec hniques, process changes, the cost of achieving such effluent reduc tion, non-water quality environm ental impact (inc luding energy requirements), and such other factors as the Administrator deems appropriate ;

These are echoed in EPA’s NPDES regulations at 40 CFR 125.3 (d), which explain the procedures that must be used by permit writers to establish BPJ limits:

(d) In setting case-by-case limitations pursuant to Sec. 125. 3 (c), the permit writer must consider the following factors:Observations on a Montana Wate r Quality Proposal Page 9

( 3

) For BAT requirements: (i) The age of equipment and facilities involved; (ii) The process employed; (iii) The engineering aspects of the application of various types of control techniques; (iv) Process changes; (v) The cost of achieving such effluent reduction; and (vi) Non-water quality environmental im pact (including energy requirements).

D. What Is BAT and How Is It Expressed?

Section C describes what factors should be considered when es tablishing BAT requirements. It does not describe how BAT is actually expressed. This section provides some discussion on what BAT is and how it should be expressed. BAT limits are not set at th e level of performance of one or a few particularly we ll-operated treatment facilities on a good day or at the theoretical level of performance claimed by an equipmen t manufacturer. Rather they reflect the performance of multiple facili ties using proper technology in act ual industrial circumstances over a long period of time.

EPA develops ELGs by reviewing en tire industrial categories and processes. EPA determines which technology or group of treatment processes most closely reflects the criteria for BAT. This technology is considered to be the “BAT model technology.” EPA th en evaluates the longterm performance of that technology and uses a statistical method to estimate the level of performance that a well-operated facility em ploying the BAT model technology could achieve under actual industrial conditions. EPA recognize s that even well-operated facilities do not perform at exactly the same level day after da y and seasonally. Thus the statistical method considers the degree of va riability inherent in th e production and treatment processes. The key point here is that BAT is the level of performance achievable by the model technology, not the specific treatment process, equipment, or step s that make up the model technology. In other words, BAT is expressed in te rms of a performance (e.g., 20 mg/L ) rather than as a process (e.g., reverse osmosis).

EPA’s ELG program has collected data from thou sands of different facilities for more than 30 years. Within a particular industry, it may revi ew data from a few to hundreds of facilities. Often the data from each facility contain long-t erm records over months to years. EPA has found that many sets of effluent data constitute a lognormal distribution. This looks much like the typical normal distribution (i.e., the bell curve — see Figure 1 in Appendix A), but the lognormal distribution has a much longer and fl atter tail on the high end (see Figure 2 in Appendix A). This pattern is reflective of tr eatment systems that pe rform within reasonable boundaries most of the time but which experience occasional high values that cause the upper edge of the distribution to exte nd outward and flatten out.

In many of its ELG evaluations, EPA has chosen to use the 95th percent ile of the lognormal distribution as the average BAT limit and the 99 th percentile as the maximum BAT limit. EPA has used some sophisticated statistics to descri be key values of the lognormal distribution. An

abbreviated version of this method is shown in Appendix A. This was developed by the leadObservations on a Montana Wate r Quality Proposal Page 10

author of this paper while managing the State of Maryland’s industria l NPDES permit program

in 1987. 2 That procedure was used by Maryland NP DES permit writers from 1987 until at least 1990, when he left the agency.

E. The Distinction between BAT and BPJ

Section D describes BAT. While the term BAT is often used generically to describe any sort of technology-based limits, BAT as an acronym for best available technology economically

achievable is correctly used only in the context of EPA’s national ELGs. Any other effort to develop technology-based limits or standards, whil e comparable, should be called BPJ. A permit writer or, in this case, a state regulatory agency, can develop tec hnology-based limits that reflect the criteria for BAT limits, but the limits themselv es are correctly charac terized as BPJ limits. This is not a critical issue for the BER propos al, but this section is added for additional

clarification.

F. The Proposal’s Version of Technology-Based Limits

Having reviewed and described the federal requirements for esta blishing BAT and BPJ technology-based limits in Sections C, D, and E, we now examine how the proposal establishes technology-based limits. The treatment-based effluent limitations (i.e., technology-based limits) contained in the BER proposal are shown below. New Rule II requires zero discharge of CBNG produced water and directs that the water be reinjected to a suitable geologic formation.

NEW RULE II ZERO DISCHARGE REQUIREMENT (1) Except as provided in [New Rules III through IX], point sources of methane wastewater shall achieve zero discharge of pollutants, which represents the mi nimum technology-based requirement. Zero discharge shall be accomplished by reinjec tion of methane wastewater into suitable geologic formations in the project area in compliance with all other applicable federal and state laws and regulations.

New Rule III recognizes that there may not be suitable geologic formations available to receive some or all of the water to be reinjected. It allows operators to apply for a waiver under those

circumstances.

NEW RULE III WAIVER FROM ZERO DISCHARGE REQUIREMENT (1) The department may grant a waiver from the zero discharge requirement if the owner or operator of a point source di scharge of coal bed methane wastewater demonstrates by clear and convincing evidence to the department through site specific studies that the requirement is not technically feasible b ecause estimated wastew ater production rates exceed the estimated cumulative reinjection rates of all suitable geologic formations in the project area.

2 Lead author John Veil worked for the State of Ma ryland Department of Natural Resources, Office of Environmental Programs, and then the Department of the Environment from 1980 to 1990. During those 10 years, he wrote about 200 industrial NPDES permits. For most of that time, he managed Maryland’s industrial NPDES program and reviewed more than 1,000 NPDES permits. He wrote and revised some of Maryland’s water pollution control and NPDES regulations. From 1988 to 1990, he also managed Maryland’s UIC and oil control programs.Observations on a Montana Wate r Quality Proposal Page 11

(2) The department shall limit th e waiver to the volume of methane wastewater for which the owner or operator shows that zero dischar ge is not technically feasible. The volume of methane wastewater for which the departmen t grants a waiver from the zero discharge requirement shall be limited to the differe nce between estimated wastewater production

rates and the estimated cumulativ e reinjection rates for all suitable geol ogic formation in the project area. (3) The department may limit the waiver to the initial phases of development when the volume of methane wastewater produced by wells is highest, which may make reinjection of all such water technically unfeasible. (4) The department may also grant a waiver from the zero discharge requirement if the EPA will not authorize the reinjection pursuant to a permit under the Safe Drinking Water Act (SDWA), 42 USC 300f to 300j-26(5). The operator shall attain zero discharge for the volume of methane wastewater for wh ich the department does not grant a waiver.

New Rule IV outlines the information that must be provided in the waiver application.

NEW RULE IV INFORMATIONAL REQUI REMENTS FOR WAIVER DETERMINATION (1) An owner or operator requesting a waiver from the zero discharge requirement for

coal bed methane wastewater shall subm it an application to the department for the department to make a determination on whether to grant the waiver. (2) The application shall include, but is not limited to, the following: (a) a description and map of the coal bed methane project and project area showing the location of wells, pipeli nes, roads, compressors, and related infrastructure; (b) a description of the surfa ce owners in the project area; (c) an estimate of pumping rates for coal bed methane wells in the target coal seams and an estimate of the volume of wa stewater likely to be produced per well

per year; (d) for each targeted coal seam, dat a showing areas characterized by high concentrations of vertical fractures where wastewater production wells may be higher; (e) an inventory and map of geologic fo rmations, aquifers, and confining layers including significant fractures, fissures, and faults within the project area. The following information is required for each geologic formation and aquifer in the
project area: (i) lateral extent, thickne ss, and depth. Maps and cro ss sections indicating the

vertical and lateral limits of each formation; (ii) hydraulic properties including, but not limited to, transmissivity, storage coefficient, effective porosity, and hydrau lic conductivity. The results of pump tests, analysis of core sample s, and other geophysical studies; (iii) water quality characterization includi ng the geochemical compatibility of the receiving aquifer minerals with methane wastewater; (f) an inventory and map of the locations of natural recharge in the project area and near the reinjection location; (g) an inventory of the wells, springs, and seeps in the project area including pumping rates for wells. A tabulation of dat a on all wells within the project areaObservations on a Montana Wate r Quality Proposal Page 12

including a description of each well’s type, construction, date drilled, location, depth, record of plugging and/or comp letion, and any additional information known about the well; (h) the results of ground water modeling showing the relationship and hydrologic connectivity of the identified geologic formations and aquifers, the effects of fractures, fissures, faults, and other sign ificant geologic features on ground water movement in the project area; (i) the results of pump tests of con fining layers quantifying potential leakage through such layers; (j) a description of all potentially suitable geologic formatio ns for reinjection within the project area. Fo r each such suitable geologi c formation, the operator shall submit the following information: (i) the results of reinjection well testing; (ii) based upon the results of testing and other studies, an estimate of the short-term and long-term reinjectio n rates that each suitable geologic formation is capable of receiving; (iii) the results of ground water modeling showing the effects of reinjection into suitable geologic fo rmations on other aquifers, surface waters, and regional flow systems; and (k) all other information required by the EPA as part of the Class V UIC Program. (3) The department shall notify the applicant in writing, within 60 day s after receipt of an application for a waiver, that the application does or does not contain all the information necessary for the department to make a dete rmination. If the in formation from the supplemental submittal or any subsequent supplemental submittal is inadequate, the department shall notify the applicant in writ ing, within 30 days of receipt of the supplemental submittal, what additional info rmation must be submitted. The department shall notify the applicant in writing when the application is deemed complete.

New Rules V and VI (not reprin ted here) describe the administ rative steps that the Montana Department of Environmental Quality (DEQ) must follow in reviewing and deciding upon a waiver application. The length of time needed to go through the steps can be in excess of one year before a final decision is reached, and can be even longer if an interested party requests a hearing on the application.

New Rule VIII establishes numerical discharge standards (BPJ limits comparable to BAT limits) for that portion of the CBNG produ ced water that cannot be reinje cted and is granted a waiver.

NEW RULE VIII TREATMENT-B ASED EFFLUENT LIMITATIONS (1) If the department grants a waiver from th e zero discharge requirement for all or a portion of the wastewater pursuant to [New Rules II and III], the amount of wastewater

that obtains the waiver shall achieve the following minimum technology-based effluent limitations at the end of the pipe prior to discharge: (a) calcium average concentrati on between 0.1 mg/L and 0.2 mg/L; (b) magnesium average concentratio n between 0.1 mg/L and 0.6 mg/L; (c) sodium average concentration of 10 mg/L;Observations on a Montana Wate r Quality Proposal Page 13

(d) bicarbonate average c oncentration of 30 mg/L and instantaneous maximum concentration of 115 mg/L; (e) sodium adsorption ratio instantaneous maximum of 0.5; (f) electrical conductivity a verage concentration of 233 μ mhos/cm; (g) total dissolved solids average concentration of 170 mg/L; (h) ammonia average concentration of 0.1 mg/L and instantaneous maximum concentration of 0.3 mg/L; and (i) arsenic concentration of <0.0001 mg/L.

The rationale provided in the proposal is not very ex tensive. Even the rationale in the petition is not particularly detailed. It appe ars that the requirement to reinject is based on the desire to keep water in the aquifers from which it came or at least in other ne arby aquifers from which it could be recovered later. BER acknowledges that the geologic formations in reasonable proximity to the coal seams may not be able to accept a ll of the CBNG produced water that has been withdrawn, and therefore has allowed the waiver process, albeit through a lengthy and complicated application procedure. When a waiver is granted, the discharge limits are intended to represent a minimum level of treatment.

One other portion of the proposal offers some degree of flexibility and relief, where applicable. New Rule IX allows some of the CBNG produced water to be used for livestock watering.

NEW RULE IX STOCK WATERING EXEMPTION (1) The requirements of [New Rules I through VIII] shall not apply to any quantity of wastewater used for stock watering purposes if all the following conditions are satisfied: (a) the surface owner and operator sign a written agreement to use the wastewater for stock watering purposes; (b) the wastewater is stor ed in a stock tank; and (c) the surface owner has obtained a benefi cial use permit from the department of natural resources and conservation purs uant to Title 85, chapter 2, MCA. (2) The stock watering exemption shall be limit ed to the quantity of water for which the department of natural resources and conserva tion issues a beneficial use permit.

G. Comparison of the Proposal to EP A Technology-Based Limits Procedures

As previously noted at the start of the discus sion of Item 2, the proposal does not follow the CWA guidelines for establishing technology-based lim its. In this secti on, the technology-based requirements contained in the proposal are co mpared with the federal requirements for establishing BAT and BPJ technology-based limits. Discrepancies from the federal requirements are noted in several key portions of the proposal. The economic ju stification for the limits is based on a draft report that estimates costs for a much less stringent set of discharge standards than those required in the proposal. Furthermore, the proposal contains se veral apparent logical inconsistencies and drafting errors that would make the proposal difficult to administer and

enforce.

As a first step, the proposal imposes zero discha rge. EPA has previously established BAT as zero discharge for some waste streams in its ELGs when it can make a compelling case that zeroObservations on a Montana Wate r Quality Proposal Page 14

discharge is affordable and available to an industry. When EPA makes a zero discharge decision, it identifies at least one affordable and available alte rnative method for managing the effluent. However, in lead author Veil’s ex tensive NPDES experience (see footnote 2), neither EPA nor a delegated state tells di schargers exactly what technology or management must be used to achieve zero discharge. As explained in S ection D above, BAT is a level of performance not a treatment technology.

In contrast, the proposal not only requires zero discharge without a compelling justification but goes further to direct generators of CBNG produced water to reinj ect whenever possible. We are not aware of any justification for the injection mandate in the CWA, the NPDES regulations, or in the Montana regulations. We believe that th is requirement oversteps the BER’s authority. The injection requirements go even farther ou t-of-bounds by specifying the type of geologic formations into which the water must be injected.

The requirement to inject into a suitable geologi c formation could introdu ce a shift in regulatory resources. If the CBNG produced water is discha rged into Montana surface waters, the Montana DEQ will issue the permit and in cur the administrative burden. On the other hand, if water generators are forced to inject into what pres umably are shallow aquifers, the regulatory burden will shift to the EPA’s Region 8 office because Montana does not have delegated authority for the UIC Class V program.

The second step of the proposal a llows potential dischargers to a pply for a waiver to the extent they can demonstrate that the su itable geologic formations either are not available nearby or do not have the porosity or other capacity-related properties to receive th e water. Osborne and Adams (2005) recently reported that many of the shallow aquifers in the Powder River Basin do not readily accept injected water. 3 Earlier attempts to reinject CBNG produced water have had only limited success to date. It might be possible to enhance injection by injecting at very high pressures. However, EPA prohibits injection pr essures that exceed the fracture pressure when injecting into Class I and Class V wells.

The rationale in the proposal uses the exampl e of CBNG production in the San Juan Basin of New Mexico. In that basin, most of the CBNG produced water is reinjected. However, the

water is much saltier than that found in most of the Powder River Basin. It is not amenable to beneficial reuse without expensiv e treatment. In the San Juan Ba sin, the CBNG is injected into deep formations where it cannot be readily retrie ved. The San Juan Basin example is not similar

to the Powder River Basin and should not be us ed to justify a dissimilar water management approach.

If a CBNG produced water generator wants to appl y for a waiver, the application informational requirements outlined in New Rule IV are very complicated and rigorous. Assuming that the operator can cost-effectively compile appropriate information to justify a waiver, the review process is quite lengthy, possibly lasting for more than one year . The individual steps are shown

3 Osborne, T.J., and J.E. Adams, 2005, “Opportunities and Limitations of CBNG Produced Water Management Alternatives in the Powder River Basin,” presented at the 12 th International Petroleum Environmental Conference, Houston, TX, November 7–11.Observations on a Montana Wate r Quality Proposal Page 15

in Table 1. Three steps, identified by A, B, and C in the table, have undetermined length and could extend the waiver approval process even longer.

Table 1 – Steps and time line for Mont ana DEQ review of waiver application

Step Maximum Days for this Step Cumulative Days Application submitted 0 0 DEQ notifies applicant of completeness or incompleteness 60 60

If incomplete, applicant provides supplemental
information A (time needed to prepare and resubmit material) 60+A

DEQ notifies applicant of completeness 30 90+A DEQ prepares preliminary decision 180 270+A

If EIS is needed B (time needed to conduct EIS) 270+A+B Public comment period 60 330+A+B If hearing is requested, hearing is scheduled

and held C (time needed to schedule and hold hearing) 330+A+B+C

DEQ issues final decision 60 390+A+B+C

Final decision becomes effective 30 420+A+B+C

The Montana DEQ staff may not have the necessar y resources to review and make decisions on numerous waiver applications in a timely manner, thereby addi ng to the length of the review schedule. Operators are likely to be reluctant to undertake projects when the regulatory outcomes are uncertain and will not be known for a year or more.

In the third step of the proposal , operators that have made a su ccessful waiver application may discharge if they can meet the effluent limits outlined in New Rule VIII. This part of the proposal contains several appa rent drafting errors. Firs t, the proposal calls for “ minimum technology-based effluent limitations” [emphasis a dded]. The numerical limits in (1) (a) – (i) are most likely intended to be maximum limits, not mi nimum limits. Second, for several parameters, the average concentrations must be kept within a range (e.g., th e calcium average concentration must be between 0.1 mg/L and 0.2 mg/L. Ther e is no apparent reason to set a “minimum” standard as a range, nor is ther e any reason to limit concentra tions to a range. Under this provision, a calcium average of either 0.08 mg /L or 0.3 mg/L is out of compliance.

Of greater concern are the actual numerical values th at have been established for each parameter. Neither the proposal nor the peti tion explains how the numerical values were selected. The proposal does not identify any one model BAT technology but suggests that the limits can be

achieved cost-effectivel y by both reverse osmosis and ion ex change. Either technology can achieve a wide range of results depending on the concentrations in the in fluent stream and how the system is operated and mainta ined. For example, different types of ion exchange resins are available that will yield different performance. The frequency of backwashing, replacement of resins, and the nature of pretreatment steps a ll contribute to how well the system will perform and how costly the treatment process will be. Th is is not reviewed in the proposal or in the petition.

Another consideration is the c onditions under which the system mu st operate over the long term. Most systems will perform more effectively and consistently when they are situated in anObservations on a Montana Wate r Quality Proposal Page 16

environment that is sheltered from temperature and other climatic swings. A reverse osmosis system in a heated factory building is likely to perform better than a comparable system left outside at an exposed field site . In Section D above, the im portance of long-term treatment performance and its inherent va riability were discussed in relation to establishing valid BAT limits. The proposal offers no evidence that it considered either long-term performance variability at one facili ty or the variability fr om one facility to anot her when setting technologybased limits.

Section C above outlined the factors that EPA n eeded to consider when developing BAT limits. The same factors apply to BPJ limits that are set either by permit writers for individual permits or for this proposal as it sets BPJ limits for an en tire category of efflue nt. The proposal offers

limited discussion of these factors. Table 2 show s the factors and how they relate to several types of possible technology. There are many other approaches for managing CBNG produced water that have pros and cons. They are not show n in Table 2, but may be useful in certain sitespecific cases. Examples of approaches that have been used can be found in ALL Consulting (2003) 4 and Veil et al. (2004). 5

The proposal and the petition make various clai ms about the affordability of reinjection and treatment to achieve the proposed limit as they relate to the overall wellhead price of natural gas. Some of these cost estimates were derived from a 2003 draft EPA study 6 that was clearly marked “InterAgency Draft Report — DO NOT QUOT E OR CITE” on each page. EPA has never released that report; therefore, it is inappropriate to use the cost figures contained therein as the basis for supporting new regulations. There are at least two more recen t reports that provide better-justified cost esti mates. One was prepared by CDM in December 2004, 7 and the other report, prepared by Advanced Resources In ternational, was released in January 2006. 8

A related economic issue that appears to have been overlooked is that the draft EPA study as

well as the CDM and DOE studies evaluate the cost of achieving a different, and much less stringent, set of discharge standards from thos e required by the proposal. The cost for treating water or wastewater increases as the target treat ment standards are made more stringent. Thus the costs estimated by the cited reports underestim ate the actual costs that would be associated with meeting the proposal’s strict limits, and th erefore are not fully relevant as rationale for supporting new limits.

4 ALL Consulting, 2003, “Handbook on Coal Bed Meth ane Produced Water: Management and Beneficial Use Alternatives,” prepared by ALL Consulting for the Ground Water Protection Research Foundation, U.S. Department of Energy, and U.S. Bureau of Land Management, July.

5 Veil, J.A., M.G. Puder, D. Elcock, and R.J. Redweik, Jr., 2004, “A White Paper Describing Produced Water from
Production of Crude Oil, Natural Gas, and Coal Bed Meth ane,” prepared by Argonne National Laboratory for the U.S. Department of Energy, National Energy Technology Laboratory, January, 87 pp.

6 U.S. Environmental Protection Agency, 2003, “Guidance for Developing Technology-Based Limits for Coalbed Methane Operations: Economic Analysis of the Powder River Basin,” draft, February.

7 CDM, 2004, “Technical Review and Analysis of Kuipers’/NPRC Documents Related to the Management of CBNG Produced Water in the Powder River Basin,” prepared for the Petroleum Association of Wyoming,

December 21.

8 Bank, G.C., and V.A. Kuuskraa, 2006, “The Economics of Powder River Basin Coalbed Methane Development,” prepared for U.S. Department of Energy by Advanced Resources International, January.Observations on a Montana Wate r Quality Proposal Page 17

Table 2 – Comparison of CBNG produced wat er management technologi es in relation to the CWA factors for technology-based limits

BAT/BPJ

Factor Shallow Reinjection Discharge after Treatment per Proposal Deep Reinjection Discharge after Less Stringent

Treatment Managed Irrigation Age of equipment and
facilities New – not an

issue New – not an

issue New – not an

issue New – not an issue New – not an

issue

Process employed Not technically possible in many locations; waiver provision is complicated and lengthy May not be technically possible to meet

the limits Not technically possible in

some locations Process is possible
if limits are based on actual long-term performance Process is technically
feasible

Engineering aspects of

control technologies Not technically possible in many

locations May not be technically possible to meet

the limits Not technically possible in all

locations Possible if limits are

based on actual long-term performance Requires
careful oversight

and management

Process changes Need to look for suitable geologic
formations to inject water; need

to avoid
formations that would impede CBNG recovery Would not be able to produce CBNG

if the water cannot

be treated Need to find
formations to inject water Need to construct and operate treatment system Need to

manage irrigation and provide

chemical supplements

Cost Cost of drilling and operating injection wells is medium to high, but may not be
able to find

suitable
formations If the technology is even possible, it is likely to have a high cost Cost of drilling and operating injection wells is medium to high Medium to high – depends on limits Medium, but

landowners
see a benefit through

enhanced crop yield

Non-water quality
environmental impacts (including energy) Injection may require fracturing of rocks; may require pretreatment before injection; some energy cost for injection Loss of part of the
water for future

use unless it is subsequently
taken out of the river; some will infiltrate; need to manage disposal
of blowdown/

concentrate

stream Loss of water
for future

recovery; may require pretreatment before injection;

some energy cost for injection Loss of part of the
water for future use

unless it is subsequently taken out of the river; some will infiltrate; need to manage disposal of
blowdown/

concentrate stream Water is beneficially reused;

some energy costs for irrigation;

need to haul large
amounts of

chemical supplements

The proposed limits create an in ternally inconsistent situation. The SAR is calculated by a formula that combines the milliequivale nts of sodium, calcium, and magnesium. 9 If the proposed average effluent limits for each of these parameters are entered into the SAR equation,

9 The formula for calculating SAR, an explanation of milliequivalents vs. mg/L, and a handy SAR calculation tool are provided at: http://www.coopext.colostate.edu/TRA/PLANTS/index.html#http://www.colostate.edu/ Depts/CoopExt/TRA/PLANTS/sar.html.Observations on a Montana Wate r Quality Proposal Page 18

they result in SAR values of 2.5 to 5.3. (The SAR is expressed here as a range because the calcium and magnesium limits are both expressed as a range.) The proposed SAR effluent limit is 0.5 maximum. Thus it appears that discharges complying with the three component parts of the SAR equation will still be in violation of the SAR limit. This presents an unreasonable regulatory burden.

3. Does the Proposal Preclude the Use of Ot her Innovative or Beneficial Technologies?

The proposal precludes the use of water manageme nt options other than reinjection, discharge following treatment to very strict standards, or use for stock watering with special permission. The proposal would also restri ct the introduction of any futu re innovative technologies for managing CBNG produced water.

The proposal requires reinjection to suitable ge ologic formations wherever possible. When reinjection is not possible, and if the operator can make a successf ul waiver application, some or all of the CBNG produced water can be discharged as long as the effluent meets some very strict standards. With the exception of New Rule IX, which provides an exemption for CBNG water used for livestock watering, no other management options are permitted for CBNG water. This intentional restriction of regul atory and management options e ffectively precludes the use of CBNG water for many beneficial purposes. Some of the existing uses of CBNG produced water provide affordable management for operators whil e providing direct benefit to landowners. For example, managed irrigation has pr oven successful in some Powder River Basin applications. In a recent paper, Harvey et al. (2005) describe several case studies of managed irrigation to beneficially reuse CBNG produced water. 10 Operators may be interested in other uses such as off-channel impoundments that can provide livestock watering a nd recreational opportunities for landowners. The wording of the proposal would not allow these valid and beneficial uses of water nor would it encourage development of more cost-effective water management technologies.

4. Are the Proposed Discharge Standards St ricter Than Needed to Meet Montana Water Quality Standards?

The proposed effluent limits are much stricter than necessary to meet water quality standards in Montana water bodies. Dischargers must treat to levels significantly cleaner than the receiving

waters.

The proposal appears to blur th e distinction between technology- based limits and water-qualitybased limits. Technology-based limits ignore th e potential impact on water quality and are only concerned with the performance of one or more t echnologies. Thus, it is inappropriate to justify a technology-based limit by saying it is necessary to achieve water quality. Water-quality-based limits, on the other hand, ignore the availability and cost of technol ogy and rely solely on what is needed to protect water quality. In some situ ations, technology-based limits will be stricter, while in other situations water-quality -based limits will be stricter.

10 Harvey, K.C., D.E. Brown, and A.J. DeJoia, 2005, “M anaged Irrigation for the Beneficial Use of Coalbed Natural Gas Produced Water in the Powder River Basin,” presented at the 12 th International Petroleum Environmental Conference, Houston, TX, November 7–11.Observations on a Montana Wate r Quality Proposal Page 19

In the proposal, there is some question about the validity of the proposed technology-based effluent limits. Insufficient justification is pres ented about the achievability and affordability of the limits. The proposed effluent limits are co mpared with the existi ng Montana water quality standards in Table 3. For several of the paramete rs in the proposed effluent limits, there are no water quality standards. For those parameters in Table 3 that do have water quality standards, the water quality standards are in all cases more lenient than the pr oposed effluent standards. In other words, dischargers must treat to levels significantly cleaner than the receiving waters.

Table 3 – Comparison of proposed effl uent limits to water quality standards

Parameter Proposed Effluent
Limits Water Quality Standards a

Calcium 0.1 mg/L to 0.2 mg/L

average No standard

Magnesium 0.1 mg/L to 0.6 mg/L

average No standard

Sodium 10 mg/L average No standard

Bicarbonate 30 mg/L average 115 mg/L maximum No standard

SAR 0.5 maximum a) From 11/1 to 3/1: i) Rosebud Creek and Tongue River – 5.0 average, 7.5 maximum ii) Powder and Little Power Rivers – 6.5 average, 9.75 maximum b) from 3/2 to 10/31: i) Rosebud Creek and Tongue River - 3.0 average, 4.5 maximum ii) Powder and Little Power Rivers - 5.0 average, 7.5 maximum

EC 233 μ mhos/cm b

average a) From 11/1 to 3/1: i) Rosebud Creek and Tongue River – 1,500 μ S/cm b average, 2,500 μ S/cm maximum ii) Powder and Little Power Rivers– 2,500 μ S/cm average, 2,500 μS /cm

maximum b) from 3/2 to 10/31: i) Rosebud Creek and Tongue River – 1,000 μ S/cm average, 1,500 μ S/cm maximum ii) Powder and Little Power Rivers– 2,000 μ S/cm average, 2,500 μ S/cm

maximum

Total dissolved

solids 170 mg/L average No standard

Ammonia 0.1 mg/L average 0.3 mg/L maximum Expressed as a function of pH, temper ature, and whether early life stage of fish is present. Average values range from 0.179 mg/L to 10.8 mg/L. Maximum values range from 0.885 mg/L to 48.8 mg/L

Arsenic <0.0001 mg/L [presumed to be a maximum] 0.15 mg/L average 0.34 mg/L maximum

a Based on Montana Numeric Water Quality Standards Circular WQB-7.

b 1 μmho/cm = 1 uS/cm, although the units are written di fferently in the proposed effluent limits and the water quality standards.

If the proposed effluent limits truly repres ent BAT and encompass the necessary technologybased factors previously describe d, that situation is appropriate and acceptable, as noted above. However, until sufficient justification is provi ded, the proposed effluent limits should not be portrayed as BAT. It seems ina ppropriate to require treatment to levels far below water quality standards. Treatment to some less stringent e ffluent limits could be more available, moreObservations on a Montana Wate r Quality Proposal Page 20

affordable, and would still ensure protection of water quality standa rds downstream from discharges.

5. Summary of Key Observations

- The proposal inconsistently characterizes th e value of CBNG produced water. In some places, the proposal refers to it as “waste water” and emphasizes that some of its constituents are “hazardous parameters.” In other places, the proposal acknowledges the water’s value in both quantity and quality a nd implements measures to ensure that the

water is available for future beneficial use. This inconsistency is misleading.

- The proposal does not follow the CWA guide lines for establishing technology-based

limits. The most notable excursion from th e guidelines is the proposal’s attempt to mandate the use of just one or two specific tech nologies. The BER is within its rights to require zero discharge, assuming that it can show that other water management

alternatives are available and affordable. Ho wever, the BER may not specify the type of technology that must be used to achieve zero discharge. In addition to the procedural issues raised by the proposal , this strategy effectively blocks the opportunity for other

beneficial and innovative tec hnologies to be used.

- The proposal includes numerical technology-ba sed effluent limits. They are very stringent, and no detailed ra tionale is provided to explai n why they were selected.

Traditional methods to evaluate BAT and t echnology-based limits were not followed. The economic justification for the limits is ba sed on a draft report that estimates costs for a much less stringent set of discharge sta ndards than those required in the proposal.

- The effluent limits are much stricter than n ecessary to meet water quality standards in Montana water bodies. If the proposal had prop erly demonstrated that these strict limits represented BAT, they could be employe d. The proposal does not make such a demonstration, and therefore the limits appear to be unnecessarily stringent.Observations on a Montana Wate r Quality Proposal Page 21

Appendix A – Permit Limit Guidelines Used by Maryland Department of Environment in

Late 1980sObservations on a Montana Wate r Quality Proposal Page 22Observations on a Montana Wate r Quality Proposal Page 23Observations on a Montana Wate r Quality Proposal Page 24Observations on a Montana Wate r Quality Proposal Page 25Observations on a Montana Wate r Quality Proposal Page 26