[Federal Register Volume 65, Number 78 (Friday, April 21, 2000)]
[Proposed Rules]
[Pages 21548-21574]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-9655]



[[Page 21547]]

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Part III





Environmental Protection Agency





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40 CFR Part 435



Effluent Limitations Guidelines for the Oil and Gas Extraction Point 
Source Category; Proposed Rule

Federal Register / Vol. 65, No. 78 / Friday, April 21, 2000 / 
Proposed Rules

[[Page 21548]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 435

[FRL-6581-4]


Effluent Limitations Guidelines for the Oil and Gas Extraction 
Point Source Category

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed Rule; Supplemental information and notice of meeting.

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SUMMARY: On February 3, 1999 (64 FR 5488), EPA proposed technology-
based effluent limitations guidelines and standards under the Clean 
Water Act (CWA) for the discharge of pollutants from oil and gas 
drilling operations associated with the use of synthetic-based drilling 
fluids (SBFs) and other non-aqueous drilling fluids into waters of the 
United States. This proposed rule would apply to certain existing and 
new facilities in the offshore subcategory beyond three miles from 
shore and offshore of Alaska, and the Cook Inlet, Alaska, portion of 
the coastal subcategory of the oil and gas extraction point source 
category.
    This document presents a summary of all data received and collected 
by EPA since publication of the proposal; an assessment of the 
usefulness of the data in EPA's analyses; summary descriptions of 
revised engineering and economic models; and updated modeling results 
incorporating the new data. This notice also discusses ``best 
management practices'' (BMPs) as potential alternative requirements to 
reduce the discharges of toxic and hazardous pollutants.

DATES: Submit your comments by June 20, 2000. A public meeting will be 
held on Tuesday, April 25, 2000, from 1:00 p.m. to 5:30 p.m. Central 
Standard Time.

ADDRESSES: Submit comments by mail to Mr. Carey A. Johnston at the 
following address: U.S. Environmental Protection Agency; Engineering 
and Analysis Division (4303); 1200 Pennsylvania Avenue, NW; Washington, 
DC 20460. Please submit any references cited in your comments. EPA 
would appreciate an original and two copies of your comments and 
enclosures (including references). Hand delivered comments may be 
submitted at the EPA Headquarters Water Docket (address below). 
Comments may also be filed electronically to 
``<a href="/cdn-cgi/l/email-protection#b0dadfd8dec3c4dfde9ed3d1c2d5c9f0d5c0d19ed7dfc6"><span class="__cf_email__" data-cfemail="49232621273a3d2627672a283b2c30092c3928672e263f">[email protected]</span></a>.'' Electronic comments sent to the above e-
mail address will be treated like all other submitted comments.
    The data and analyses being announced today are available for 
review in the EPA Water Docket at EPA Headquarters at Waterside Mall, 
Room EB-57, 401 M. St. SW, Washington, DC 20460. For access to the 
docket materials, call (202) 260-3027 between 9:00 a.m. and 4:00 p.m. 
for an appointment. A reasonable fee may be charged for copying.
    The public meeting will be held at the Minerals Management Service 
(MMS), Gulf of Mexico OCS Region Office, Room 111, 1201 Elmwood Park 
Boulevard, New Orleans, LA, 70123-2394.

FOR FURTHER INFORMATION CONTACT: For additional technical information, 
contact Mr. Carey A. Johnston at (202) 260-7186 or at the following e-
mail address: <a href="/cdn-cgi/l/email-protection#771d181f190403181959141605120e3712071659101801"><span class="__cf_email__" data-cfemail="18727770766b6c7776367b796a7d61587d6879367f776e">[email protected]</span></a>. For additional economic 
information contact Mr. James Covington at (202) 260-5132 or at the 
following e-mail address: <a href="/cdn-cgi/l/email-protection#accfc3dac5c2cbd8c3c282c6cdc1c9dfecc9dccd82cbc3da"><span class="__cf_email__" data-cfemail="4e2d21382720293a212060242f232b3d0e2b3e2f60292138">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Visitors attending the New Orleans public 
meeting (see Addresses) will need to sign in at the MMS guard booth and 
obtain a visitors badge. If you wish to present formal comments at the 
public meeting you should have a written copy for submittal. No meeting 
materials will be distributed in advance of the public meeting; all 
materials will be distributed at the meeting. Limited teleconferencing 
capability will be available for the meeting. Persons wishing to 
participate via telephone or who have special audio-visual needs should 
contact Mr. Carey A. Johnston, (202) 260-7186.
    The Agency invites all parties to coordinate their data collection 
activities with EPA to facilitate mutually beneficial and cost-
effective data submissions. Please refer to the For Further Information 
Contact for technical contacts at EPA.
    To ensure that EPA can properly respond to comments, the Agency 
prefers that commenters cite, where possible, the paragraph(s) or 
sections in the notice or supporting documents to which each comment 
refers. Please submit an original and two copies of your comments and 
enclosures (including references).
    Commenters who want EPA to acknowledge receipt of their comments 
should enclose a self-addressed, stamped envelope. No facsimiles 
(faxes) will be accepted. Comments and data will also be accepted on 
disks in Wordperfect, ASCII, or Adobe Acrobat (*.pdf) format.
    All comments will be organized by EPA's Engineering and Analysis 
Division (EAD) and submitted by EAD to the record supporting this 
rulemaking (Docket No. W-98-26) in the EPA Water Docket. Electronic 
comments must be submitted as a Wordperfect, ASCII, or Adobe Acrobat 
(*.pdf) format file avoiding the use of any form of encryption. 
Electronic comments must be identified by the docket number W-98-26 and 
may be filed online at many Federal Depository Libraries. No 
confidential business information (CBI) should be sent via e-mail. 
EPA's information technology services (e.g., e-mail, website) were 
temporarily shut down, beginning Thursday, February 17, in order to 
review and improve security measures. EPA's e-mail services are now 
operational. However, EPA recommends that persons submitting comments 
electronically call Mr. Carey A. Johnston, (202) 260-7186, to confirm 
EPA receipt.

Contents of This Document

I. Purpose of this Notice
II. Overview of Proposal and Data Acquired Since the Proposal
III. Revised Models
IV. Revised Analyses
V. Best Management Practices (BMPs) Alternatives to Numeric 
Limitations and Standards

I. Purpose of This Notice

    On February 3, 1999 (64 FR 5488), EPA proposed technology-based 
effluent limitations guidelines and standards under the Clean Water Act 
(CWA) for the discharge of pollutants from oil and gas drilling 
operations associated with the use of synthetic-based drilling fluids 
(SBFs) and other non-aqueous drilling fluids into waters of the United 
States. This proposed rule would apply to certain existing and new 
facilities in the offshore subcategory (i.e., facilities seaward of the 
inner territorial boundary) and the Cook Inlet, Alaska, portion of the 
coastal subcategory of the oil and gas extraction point source 
category.
    In this notice, EPA is making new data submissions available for 
comment. Additionally, EPA is providing descriptions of revised 
economic and engineering models incorporating the new data. Summary 
descriptions of updated modeling results are also given in this notice. 
This notice also discusses ``best management practices'' (BMPs) as 
potential alternative requirements to reduce the discharges of toxic 
and hazardous pollutants. Finally, this notice announces that EPA has 
submitted an Information Collection Request (ICR) to the Office of 
Management and Budget (OMB) for these BMP alternatives to numeric 
effluent limitations and standards. EPA solicits public comment on any 
of the

[[Page 21549]]

issues or information presented in this notice of data availability and 
in the administrative record supporting this notice.

II. Overview of Proposal and Data Acquired Since the Proposal

    Since about 1990, the oil and gas extraction industry developed 
SBFs with synthetic and non-synthetic oleaginous (oil-like) materials 
as the base fluid to provide the drilling performance characteristics 
of traditional oil-based fluids (OBFs) based on diesel and mineral oil, 
but with lower environmental impact and greater worker safety through 
lower toxicity, elimination of polynuclear aromatic hydrocarbons 
(PAHs), faster biodegradability, lower bioaccumulation potential, and, 
in some drilling situations, less drilling waste volume.
    EPA's information to date, including limited seabed surveys in the 
Gulf of Mexico, indicate that the effect zone of the discharge of 
certain SBFs is within a few hundred meters of the discharge point. 
These surveys also indicate that the sea floor may significantly 
recover in one to two years. EPA believes that impacts are primarily 
due to smothering by the drill cuttings, changes in sediment grain size 
and composition (physical alteration of habitat), and anoxia (absence 
of oxygen) caused by the decomposition of the base fluid. The benthic 
smothering and changes in grain size and composition from the cuttings 
are effects that are also associated with the discharge of water-based 
drilling fluids (WBFs) and associated cuttings. Based on the record to 
date, EPA finds that these impacts, which are believed to be of limited 
duration, are less harmful to the environment than the non-water 
quality environmental impacts associated with the option of prohibiting 
the discharge of all SBF-wastes. Moreover, EPA prefers SBFs over OBFs 
as there are operational accidents that lead to spills and loss of 
drilling fluid to the environment.
    The proposed rule, published on February 3, 1999 (64 FR 5488), 
identified possible methods to control SBF discharges associated with 
cuttings (SBF-cuttings) in a way that reflects the appropriate level of 
technology. EPA proposed using stock limitations and standards on the 
base fluids from which the drilling fluids are formulated. This would 
ensure that substitution of synthetic and other oleaginous base fluids 
for traditional mineral oil and diesel oil reflects the appropriate 
level of technology. In other words, EPA wants to ensure that only the 
SBFs formulated from the ``best'' base fluids are allowed for 
discharge. Parameters that distinguish the various base fluids are the 
PAH content, sediment toxicity, rate of biodegradation, and potential 
for bioaccumulation.
    EPA also proposed that SBF-cuttings should be controlled with 
discharge limitations and standards, such as a limitation on the 
toxicity of the SBF at the point of discharge, and a limitation on the 
mass (as volume) or concentration of SBFs discharged. The latter type 
of limitation would take advantage of the solids separation 
efficiencies achievable with SBFs, and consequently minimize the 
discharge of organic and toxic components. Additionally, EPA proposed 
that SBF discharges not associated with cuttings (e.g., incidental 
spills, accumulated solids, deck drainage) should meet zero discharge 
requirements, as this is the current industry practice due to the value 
of these drilling fluids.
    Since proposal, EPA has obtained additional data and information 
from the industry and the Agency's continued data collection 
activities. The Agency has included these data, information, and the 
preliminary results of EPA's evaluation in sections III.A through III.H 
of the supporting record of this notice, available for review in the 
Water Docket (see Addresses section at the beginning of this notice).
    The industry data submittals are related to stock limitations and 
standards on base fluid (e.g., PAH content, sediment toxicity, 
biodegradation, bioaccumulation), discharge limitations and standards 
(e.g., free oil, formation oil contamination, retention of SBF on 
cuttings), technical performance of ester-based drilling fluids, subsea 
pumping systems, cuttings microencapsulation systems, best management 
practices (BMPs), and health and safety considerations. The specific 
data, information, and comments provided to EPA are discussed below in 
detail.
    The Agency's collected data are related to stock limitations and 
standards (e.g., sediment toxicity and biodegradation); non-water 
quality environmental impacts (NWQI) including on-shore disposal 
capacity of exploration and production wastes and monetization of air 
emissions; economic costs related to deepwater projects; discharge 
limitations and standards; and projected environmental outcomes such as 
sediment pore water quality.
    EPA will evaluate all analytical data in the rulemaking record to 
set limitations and standards that represent the appropriate level of 
technology using a combination of methods referenced below. 
Specifically, for sediment toxicity and biodegradation limitations and 
standards, EPA will evaluate each of the various sediment toxicity and 
biodegradation method test data for the various synthetic base fluids 
against known standards such as diesel. Moreover, EPA will use all 
sediment toxicity and biodegradation data to assess the ability of each 
sediment toxicity and biodegradation method identified below to 
discriminate between different types of synthetic base fluids and 
produce consistent results.
    In addition, a list of SBF rulemaking stakeholder meetings and the 
respective minutes can be found in section III.A.(c) of the rulemaking 
record.

A. Industry Data Submissions Since Proposal Publication

1. Sediment Toxicity Test Results and Revised Methods
    In the February 1999 proposal, EPA set the Best Available 
Technology Economically Achievable (BAT) and New Source Performance 
Standards (NSPS) stock limitation for sediment toxicity as: ``10-day 
LC<INF>50</INF> of stock base fluid minus 10-day LC<INF>50</INF> of 
C<INF>16</INF>-C<INF>18</INF> internal olefin shall not be less than 
zero.'' [The term ``LC<INF>50</INF>'' is used to identify how much of a 
substance is needed to kill half of a group of experimental organisms 
in a given time; a higher LC<INF>50</INF> value means the material is 
less toxic]. EPA also proposed a compliance method, American Society 
for Testing and Material (ASTM) method E1367-92, and sediment 
preparation procedures for this stock limitation (Appendix 3 to Subpart 
A of Part 435).
    In addition to sediment toxicity tests using ASTM method E1367-92, 
industry has recently conducted several studies using alternative 
sediment toxicity test methods including a method based on determining 
toxicity to the mysid shrimp, Mysidopsis bahia, in a sediment-water 
interface system. As a result of this effort, industry has supplied 
information on the use of formulated sediments and the shortening of 
the exposure period of synthetic base fluids to marine amphipods. EPA 
proposes to use one of these methods (i.e., ASTM method E1367-92 or 
alternative industry mysid shrimp sediment toxicity test method) for: 
(1) the establishment of an appropriate sediment toxicity rate stock 
limitation in the final rule; and (2) use as a compliance tool.
    Several papers published by M-I Drilling Fuids, L.L.C. (MIDF) 
provided data on the toxicity of the synthetic base fluid 
C<INF>16</INF>-C<INF>18</INF> internal olefin (IO) and

[[Page 21550]]

diesel in formulated sediments as well as data on the results of tests 
conducted with a 96-hour exposure period as compared to the standard 
10-day exposure as specified in ASTM E1367-92 (Rabke and Candler, 1998; 
Rabke and Candler, 1999; Still, et al., 1999).
    This work conducted by MIDF was done in an effort to increase the 
discriminatory power of the test between the toxicity of synthetic base 
fluids and diesel, as well as between the different synthetic base 
fluids. MIDF believes that the longer exposure time reduces 
discriminatory power because the test sediment toxicity becomes a 
greater factor relative to the test base fluid toxicity over time. 
Therefore, the test sediment's toxicity would tend to normalize and 
obscure the differences in toxicities of the test base fluids as test 
duration increases. Table II.A.1.1 summarizes the LC<INF>50</INF> 
industry sediment toxicity data with various drilling fluids [i.e., 
diesel, internal olefin (IO), linear alpha olefin (LAO), poly alpha 
olefin (PAO), and ester]. A more complete review of these procedures 
and data can be found in section III.B.(b) of the rulemaking record.

   Table II.A.1.1: Industry LC<INF>50</INF> Sediment Toxicity Data for Various Drilling Base Fluids at Two Different Time
                                                     Periods
----------------------------------------------------------------------------------------------------------------
                                                                                                 95% Confidence
                                                     Drilling base fluid         LC<INF>50</INF> (mg/Kg)       interval
----------------------------------------------------------------------------------------------------------------
                                        Baker Hughes INTEQ-Generated Data
----------------------------------------------------------------------------------------------------------------
96-Hour Test.................................  C14/16/18 IO...................            4020         2926-8219
                                               C14/16/18/20 IO................           >5111                NA
                                               C16/18 IO......................            3515         2726-5215
                                               C14/15/16/17/18 LAO/IO.........            1497         1299-1725
10-Day Test..................................  Diesel.........................             343           297-391
                                               C14/16/18 IO...................             646          625-1250
                                               C14/16/18/20 IO................            1218         1070-1453
                                               C16/18 IO......................            1464         1172-1681
                                               C14 LAO........................             205           187-223
                                               C16 LAO........................             407           353-473
                                               C14/15/16/17/18 LAO/IO.........             854          696-1018
                                               C30+PAO........................            2359         1478-5156
                                               Enhanced Mineral Oil...........              79            37-117
                                               Linear Paraffin................            1047          846-1257
                                               Paraffin.......................             111           101-122
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                                              Baroid-Generated Data
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96-Hour Test.................................  Diesel.........................             453           416-493
                                               IO.............................             876          442-1663
                                               LAO............................             490           291-924
                                               Ester..........................          >20000                NA
                                               Ester (Low viscosity)..........          >20000                NA
10-Day Test..................................  Diesel.........................             230           209-251
                                               IO.............................             564           447-639
                                               LAO............................             338           294-378
                                               Ester..........................          >10000                NA
                                               Ester (Low viscosity)..........            2447         2197-2701
----------------------------------------------------------------------------------------------------------------
                                          MIDF Drilling-Generated Data
----------------------------------------------------------------------------------------------------------------
96-Hour Test.................................  Diesel.........................             566           510-629
                                               IO.............................            3686        2890-4893
----------------------------------------------------------------------------------------------------------------
Method Reference: EPA February 1999 Proposal (64 FR 5488).

    Finally, one commenter on the February 1999 proposal, Baroid 
Drilling Fluids, provided preliminary sediment toxicity data for two of 
its ester-based drilling fluids. The data provided in the comments 
indicate that both esters may have lower toxicities than other base 
fluids (e.g., C<INF>16</INF>-C<INF>18</INF> IO, paraffin, mineral oil, 
diesel oil). However, EPA data presented in Table II.B.1.1 indicate 
that the sediment toxicity of IO and ester are significantly better 
than other alternative base fluids.
2. Biodegradation Test Results and Revised Methods
    In the February 1999 proposal, EPA set the BAT and NSPS stock 
limitation for biodegradation rate as: ``percent stock base fluid 
degraded at 120 days minus percent C<INF>16</INF>-C<INF>18</INF> 
internal olefin degraded at 120 days shall not be less than zero.'' EPA 
also proposed a compliance method for this stock limitation (Appendix 4 
to Subpart A of Part 435).
    Industry stakeholders conducted a series of biodegradation tests 
for determining biodegradation of SBFs and OBFs using the method 
proposed by EPA (Appendix 4). Industry stakeholders also identified 
alternative analytical biodegradation methods and used these 
alternative methods to generate data. EPA solicits comment in this 
notice on use of these alternative methods and corresponding data to 
set biodegradation limitations and standards and compliance methods. 
EPA proposes to use one of these methods for: (1) The establishment of 
an appropriate biodegradation rate stock limitation in the final rule; 
and (2) use as a compliance tool. The first analytical test method is 
the solid-phase degradation test as EPA proposed in February 1999 
(Appendix 4). This method consists of spiking ``clean'' marine or 
estuarine sediment with a base fluid and placing these test samples in 
exposure tanks filled with seawater. The concentration of base fluid is 
measured at regular intervals during the test to monitor the 
degradation of the base fluid.

[[Page 21551]]

    Industry-supplied data using the solid phase test are summarized in 
Table II.A.2.1.

                        Table II.A.2.1: Industry Solid Phase Biodegradation Test Results
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                                                             Percent loss relative to day 0
                                      --------------------------------------------------------------------------
         Elapsed time of test                             Finagreen                        C16-C18      Neodene
                                          Olive oil         ester          Diesel         Internal        1518
                                          (percent)       (percent)       (percent)        olefin      (percent)
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Day 10...............................              84              56               *               *      *
Day 20...............................              88              59               *               *      *
Day 45...............................              96              90              -2              39      2
Day 110..............................              99              95              22              73     58
Day 186..............................              99              99              55              93    83
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Method Reference: EPA February 1999 Proposal (64 FR 5488).
*Not tested.

    The second biodegradation method evaluated by industry is the 
marine anaerobic closed bottle test. This test procedure places a 
mixture of SBFs or OBFs, marine sediment, and sea water into a tightly 
capped clean serum bottle. The conditions within the closed bottle 
result in the anaerobic degradation of SBFs or OBFs. The anaerobic 
processes degrading the base fluids produce gas. This gas production is 
monitored as a measure of the degradation process. Industry-supplied 
data using the closed bottle test are summarized in Table II.A.2.2.

               Table II.A.2.2: Industry Marine Anaerobic Closed Bottle Biodegradation Test Results
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                                                      Cumulative gas production over time (ml)
                                   -----------------------------------------------------------------------------
                                                                C<INF>14</INF>-C<INF>16</INF>
       Elapsed time of test                        C<INF>16</INF>-C<INF>18</INF>       linear     Synthetic                   Blank
                                     Olive oil     internal      alpha       paraffin       C<INF>30</INF>        control
                                                    olefin       olefin
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Day 0.............................         0.00         0.00         0.00         0.00         0.00         0.00
Day 5.............................         9.29         2.77         3.67         3.32         3.32         3.88
Day 25............................        50.00         8.59        10.00         7.05         6.62         5.99
Day 33............................       103.50        12.50        15.00        10.00         8.00         8.30
Day 67............................       150.41        18.38        22.15        13.67        10.45        11.12
Day 77............................       152.50        22.21        26.46        15.83        12.42        12.28
Day 95............................       160.61        24.60        32.74        18.16        12.18        12.98
Day 113...........................       162.88        29.71        42.91        21.14        12.80        13.30
Day 132...........................       164.78        39.74        55.50        23.17        13.38        14.01
Day 155...........................       169.18        59.00        88.16        27.19        15.42        16.07
Day 194...........................       167.74        92.36       114.50        25.82        13.97        14.57
Day 231...........................       171.57       104.50       138.22        29.49        17.47        17.63
Day 271...........................       175.58       119.88       151.20        33.33        21.63       22.11
----------------------------------------------------------------------------------------------------------------
Method Reference: ISO 11734: ``Water quality--Evaluation of the `ultimate' anaerobic biodegradability of organic
  compounds in digested sludge--Method by measurement of the biogas production'' (1995 edition).

    The third biodegradation test method is the respirometry test. This 
analytical method determines biodegradation by measuring the carbon 
dioxide production and/or oxygen consumption due to microbial oxidation 
of the test fluid in sediment. Industry-supplied data using the 
respirometry test are summarized in Table II.A.2.3.

                        Table II.A.2.3: Industry Respirometry Biodegradation Test Results
----------------------------------------------------------------------------------------------------------------
                                                                   Cumulative oxygen consumption over time (mg)
                                                                 -----------------------------------------------
                      Elapsed time of test                                         Rapeseed oil    Amodrill 1000
                                                                   Blank control      control           SBF
----------------------------------------------------------------------------------------------------------------
Day 1...........................................................            3.38            4.57            4.46
Day 2...........................................................            6.26            8.26            6.62
Day 3...........................................................            6.52            9.03           10.49
Day 4...........................................................           12.68           22.29           14.13
Day 5...........................................................           16.42           34.29           18.43
Day 6...........................................................           18.50           41.33           21.02
Day 7...........................................................           21.40           50.02           24.67
Day 8...........................................................           24.02           58.42           27.96
Day 9...........................................................           26.66           66.12           31.19
Day 10..........................................................           29.10           72.88           34.36
Day 11..........................................................           31.48           78.86           37.25
Day 12..........................................................           33.88           84.26           39.96
Day 13..........................................................           36.27           89.00           42.67
Day 14..........................................................           38.80           93.33           45.48
Day 15..........................................................           41.28           97.26           48.24
Day 16..........................................................           43.31          100.76           50.96
Day 17..........................................................           45.19          103.86           53.47

[[Page 21552]]

 
Day 19..........................................................           49.29          110.34           58.86
Day 20..........................................................           50.80          112.69           60.76
Day 21..........................................................           52.53          115.34           62.78
Day 22..........................................................           54.23          117.98           64.83
Day 23..........................................................           55.73          120.38           66.57
Day 26..........................................................           60.94          127.73           72.97
Day 27..........................................................           62.32          129.64           74.76
Day 28..........................................................           64.00          131.77           76.66
Day 29..........................................................           65.60          133.81           78.81
Day 30..........................................................           67.14          135.75           81.04
Day 31..........................................................           68.59          137.53           82.97
Day 32..........................................................           70.10          139.32           84.96
Day 33..........................................................           71.66          141.13           86.98
Day 34..........................................................           73.09          143.45           88.84
Day 35..........................................................           74.82          144.51           91.08
Day 36..........................................................           76.29          146.15           93.17
Day 37..........................................................           77.47          147.59           94.68
Day 38..........................................................           79.11          149.22           96.82
Day 39..........................................................           80.64          150.80           98.87
Day 40..........................................................           82.31          152.51          101.26
Day 41..........................................................           83.44          153.83         102.68
----------------------------------------------------------------------------------------------------------------
 Note: data were not collected on Days 18, 24, and 25.
 Method Reference: Modification of OPPTS 835.3110: ``Fate, Transport and Transformation Test Guidelines: Ready
  Biodegradability,'' EPA 712-C-98-076, January 1998.

    A more complete review of these procedures and data can be found in 
section III.B.(b) of the rulemaking record.
    Finally, one commenter on the February 1999 proposal, American 
Petroleum Institute/National Ocean Industries Association (API/NOIA), 
stated, without any supporting data, that esters biodegrade more 
quickly than the alternative non-aqueous fluid systems. EPA agrees with 
this statement based on recent EPA biodegradation test results (see 
section II.B.2).
3. Formation Oil Contamination (Offshore and On-shore Tests)
    In the February 1999 proposal, EPA proposed the BAT limitation and 
NSPS for formation oil as zero discharge. EPA also proposed a screening 
method [Reverse Phase Extraction (RPE) method given in Appendix 6 to 
Subpart A of Part 435] and an assurance method [Gas Chromatograph/Mass 
Spectrometer (GC/MS) method given in Appendix 5 to Subpart A of Part 
435] for determining compliance. These methods continue to be EPA's 
preferred option for the final rule.
    Industry has sponsored research regarding both of these analytical 
methods for determining formation oil contamination. The RPE procedure 
is to be used offshore. It measures ultraviolet (UV) fluorescence to 
detect the presence of aromatic compounds. Since proposal, refinements 
have been made in the test to minimize interference from emulsifiers. A 
more complete review of this procedure can be found in section 
III.B.(b) of the rulemaking record.
    The GC/MS method is expected to be performed in a land-based 
laboratory. This procedure, which measures the area under GC peaks and 
target aromatics, is a dependable laboratory technique proposed by EPA 
to supplement the RPE test for verification purposes. A more complete 
review of this procedure can be found in section III.B.(b) of the 
rulemaking record.
4. SBF on Cuttings Retention Data
    In this section, EPA summarizes the relationship of the industry 
supplied data to EPA's proposal, the relationship of these data to 
reductions in discharges to the environment, and the SBF on cuttings 
data submitted by industry.
    a. SBF on Cuttings Data in Relation to EPA's Proposal. In February 
1999, EPA proposed a BAT limitation and NSPS for base fluid retained on 
cuttings as a maximum value of 10.2 percent, not to be exceeded by the 
weighted average for retention over the course of drilling a well. EPA 
also proposed a method for demonstrating compliance with this discharge 
limitation (Appendix 7 to Subpart A of Part 435). In today's notice 
EPA, with input from industry, presents the proposed option along with 
several alternatives utilizing Best Management Practices (BMPs). EPA is 
considering three options for the final rule for the BAT limitation and 
NSPS controlling SBF retained on discharged cuttings: (1) a single 
numeric discharge limitation with an accompanying compliance test 
method; (2) allowing operators to choose either a single numeric 
discharge limitation with an accompanying compliance test method, or as 
an alternative, a set of BMPs that employs limited cuttings monitoring; 
or (3) allowing operators to choose either a single numeric discharge 
limitation with an accompanying compliance test method or an 
alternative set of BMPs that employ no cuttings monitoring.
    Further EPA corrected technical errors in the proposed rule based 
on the statistical analysis of the SBF on cuttings data obtained from 
the Gulf of Mexico (GOM). The average percent SBF on cuttings was 
corrected from 11.5 to 11.4 for current practice and from 7.11 to 7.09 
for the BAT/NSPS technology. The proposed well averaged maximum 
limitation and standard were corrected from 10.2 to 9.42. Cost and 
loading calculations presented in the February 1999 SBF technical 
support documents were not affected by these changes because these 
calculations were based on the rounded values of 11 for current 
practice and 7 for the BAT/NSPS technology. The technical errors 
requiring these changes were related to EPA's calculation of drilling 
intervals.
    EPA calculates drilling intervals as the depth drilled since the 
last measurement for retention on cuttings.

[[Page 21553]]

EPA uses this measurement in conjunction with pipe diameter to estimate 
the volume of cuttings associated with a particular retention on 
cuttings measurement. EPA then uses this volume in the weighted summary 
statistics for the retention on cuttings data. Some data used at 
proposal were submitted with drilling intervals already calculated and 
other data were submitted with depth measurements calculated from the 
ocean floor. In the proposed rule as published in the Federal Register, 
EPA used both sets of measurements as if they all represented drilling 
intervals. However, in the record for the proposed rule, EPA calculated 
and used drilling intervals for those data submitted with depth 
measurements calculated from the ocean floor. More information on these 
errors and the corrections is given in section I.C(d)(59) of the 
rulemaking record.
    Several comments received on the February 1999 proposal related to 
the use of cuttings retention data from the North Sea to set the GOM 
numeric guidelines and standards for percent retention. As discussed 
below, EPA has subsequently obtained sufficient data from the GOM to 
set limitations and standards without use of the North Sea data.
    b. Relationship of SBF on Cuttings Retention Data to Protection of 
the Environment. Cuttings retention data measure the amount of residual 
drilling fluid retained on cuttings. A higher cuttings retention value 
indicates that more drilling fluid is adhering to the cuttings. EPA is 
interested in the cuttings retention measurement not only as an 
indicator of the amount drilling fluid discharged into the ocean but 
also as an indicator of the ability of cuttings to biodegrade and 
disperse and not form deleterious cuttings piles and mats. Moreover, 
understanding the fate and transport of discharged cuttings is an 
important step in modeling and monitoring potential environmental and 
human health impacts.
    SBFs are a subcategory of non-aqueous drilling fluids (NAFs) which 
do not easily disperse in the water column. The effects of NAF-cuttings 
on benthic fauna may be categorized as being caused by: (1) physical 
smothering; (2) the presence of potential toxic and hazardous 
pollutants and biodegradation by-products (e.g., heavy metals, 
aromatics, hydrocarbons, sulfides); and (3) the organic enrichment of 
sediment which may produce anoxic conditions (Limia and Peresich, 
1992). Field studies indicate that the responses shown by benthic 
communities to cuttings discharges are the result of a combination of 
these effects. Numerous field studies show that the most harmful 
benthic effects are generally within 500 meters of development drilling 
operations and within 250 meters of single well sites (Davies et al., 
1989).
    Reducing the amount of initial base fluid on cuttings is beneficial 
in promoting biodegradation of SBFs in the benthic environment. 
Literature data make clear that the biodegradation of SBFs in the 
environment is not simply an exponential decay (Getliff et al., 1997). 
The half-life of the base fluid decreases as the initial concentration 
of base fluid on cuttings decreases. Therefore, it is vital to minimize 
the initial concentration of base fluid on cuttings discharged to 
maximize the rates of biodegradation and seabed recovery.
    Reducing the amount of initial base fluid on cuttings is also 
beneficial in preventing the build-up of deleterious cuttings piles and 
mats. A decrease in benthic individuals within the zone of maximum 
cuttings deposition (i.e., cuttings piles and mats) is a result of 
physical smothering and organic enrichment which produces anoxic 
conditions and toxic sulfide biodegradation by-products (Daan et al., 
1996; Limia, 1996). A reduction of benthic individuals beyond the 
immediate area of physical impact may be indicative of a toxic effect 
(Davies and Kingston, 1992). The build-up of these harmful cuttings 
piles and mats is controlled by several factors including the 
conditions of the receiving waters (e.g., currents, distance from 
discharge to seabed) and the retention of SBF on cuttings. A study of 
cuttings piles in the North Sea found that piles of cuttings are found 
predominantly at particular sites in the central and northern North 
Sea, where water depths are greater, and currents less than, the 
southern North Sea (Bell et al., 1998).
    Results from laboratory experiments modeling typical ocean 
conditions show that high NAF content on cuttings (i.e., high cuttings 
retention values) lead to ``lumps'' of material, rather than separate 
particles, which rapidly settle out (i.e., have high fall velocities) 
to the benthic environment (Delvigne, 1996). Moreover, field results 
show that cuttings are dispersed during transit to the seabed and no 
cuttings piles are formed when SBF concentrations on cuttings are held 
below 5% (Getliff et al., 1997; Hanni et al., 1998). Additionally, 
cuttings discharged from cuttings dryers (with SBF retention values 
under 5%) in combination with a sea water flush, hydrate very quickly 
and disperse like water-based cuttings (Hanni et al., 1998).
    Overall, lowering the percentage of residual drilling fluid 
retained on cuttings increases the recovery rate of the seabed 
receiving the cuttings (Getliff et al., 1997; Vik et al., 1996). 
Therefore, limiting the amount of NAF content in discharged cuttings 
controls: (1) The amount of NAF discharged to the ocean; (2) the 
biodegradation rate of discharged NAF; and (3) the potential for NAF-
cuttings to develop cuttings piles and mats which are detrimental to 
the benthic environment.
    c. SBF on Cuttings Data Submitted by Industry. Subsequent to 
proposal, SBF on cuttings data from various formations within the GOM 
have been submitted by an industry workgroup, individual operators, and 
by equipment vendors. These data characterize performance for a variety 
of cuttings treatment technologies, including existing shaker 
technologies and add-on equipment. Several comments on the February 
1999 proposal also provided cursory information and data related to the 
performance of new and existing solids control equipment and drilling 
fluids. For example, one comment by Derrick Equipment Company described 
SBF cuttings retention values in the range of 8 to 9% by weight for a 
GOM well using a new shale shaker design. A comment by Baroid Drilling 
Fluids stated that the lower viscosity of its new ester-based drilling 
fluid will lead to greater recovery of its ester-based fluid from 
cuttings.
    Based on these data and other GOM data presented at proposal, EPA 
has modeled and analyzed the cuttings retention performance of several 
technologies. A summary of the revised models is presented in section 
III.D. A summary of the analyses developed by EPA, including the 
development of numeric guidelines and standards, is presented in 
section IV.D. Detailed descriptions of the statistical methods, summary 
statistics, overall averages, and percentiles associated with each 
technology can be found in section III.C.(a) of the rulemaking record.
5. Industry Seabed Survey
    Permits authorizing the discharge of SBF-cuttings are required to 
meet (a) technology-based requirements, and (b) CWA section 403(c) 
Ocean Discharge Criteria, or, in State waters of Cook Inlet, Alaska, 
State water quality criteria. The February 1999 proposal described the 
CWA 403(c) requirements and the seabed surveys EPA thinks would be 
occurring, based on information available at that time to satisfy these 
permit requirements. Today's notice updates the description

[[Page 21554]]

of the seabed survey efforts that industry is currently planning.
    EPA understands that the industry is planning a cooperative effort 
to address the CWA section 403(c) requirements in the GOM. Industry 
representatives have told EPA that their cooperative seafloor study 
would include a review of historical data on SBF usage on the shelf and 
slope, and these data would be analyzed to select a representative 
series of platforms.
    The overall objective of the study is to assess the fate and 
effects (physical, chemical, and biological) of discharged SBF-cuttings 
at continental shelf (40 m to 300 m water depth) and deepwater (>300 m 
water depth) GOM sites. Specific sub-objectives include determining the 
thickness and areal extent of cuttings accumulations, determining the 
temporal behavior of SBF concentrations in sediments, documenting the 
physical-chemical sediment conditions, and determining whether a zone 
of biological effect exists.
    The study will include four cruises: a scouting cruise, a screening 
cruise, and two sampling cruises. The purpose of the scouting cruise, 
which is intended to take place in late spring of 2000, is to conduct a 
preliminary physical survey of ten continental shelf sites to: (1) 
assess the extent of cuttings accumulations; (2) assess the suitability 
of each site for further sampling; and (3) guide further sampling 
operations. The results of this cruise will be used to select five 
continental shelf sites where the subsequent screening cruise will be 
conducted.
    During the screening cruise, five continental shelf sites and three 
deepwater sites will be surveyed. The purpose of this cruise is to: (1) 
Assess SBF concentrations and other sediment physical-chemical 
conditions (e.g., oxidation-reduction profile, grain size, mineralogy, 
metals, total organic carbon) at all eight sites; (2) test and refine 
the proposed field and laboratory methods; and (3) make preliminary 
benthic infaunal and sediment toxicity assessments at the five 
continental shelf sites. Based on data acquired during this cruise, 
sampling strata will be designated and platform sites will be 
designated as primary or secondary. The three deepwater sites and three 
of the five continental shelf sites will be primary sites, and the 
remaining two continental shelf platforms will be secondary sites.
    The sampling cruise will be similar to the screening cruise in 
terms of physical-chemical analyses, but will include an increased 
number of samples. Infaunal and sediment toxicity analyses will be 
included at the three primary continental shelf sites. Sampling at the 
two secondary continental shelf sites will be similar to that at the 
primary sites, but the suite of analyses will not be as extensive 
(e.g., it will not include metals, infaunal, or sediment toxicity 
analyses).
    EPA plans on using the data from the first survey to identify any 
negative environmental effects from SBF discharges. If this data 
becomes available in time, EPA might use that information in its 
assessment of a controlled discharge option as compared to the NWQIs of 
a zero discharge option. The current work plan for the seabed survey 
can be found in section III.F.(a) of the rulemaking record.
6. Bioaccumulation
    Several comments related to bioaccumulation were submitted to EPA 
in response to the February 1999 proposal. In particular, one industry 
commenter stated, without supporting data, that there is currently 
sufficient data available amongst the various companies to show that 
synthetic base fluids are not believed to bioaccumulate; further, that 
most members of the industry groups maintain operations in the European 
sector where bioaccumulation testing of base fluids has already been 
conducted in compliance with the Harmonized Offshore Chemical 
Notification Format (HOCNF) requirements. However, another commenter 
stated, also without supporting data, that marine organisms higher in 
the food chain are at significant risk due to bioaccumulation of SBF. 
EPA is again requesting any data related to the potential of SBF to 
bioaccumulate and the related chronic or toxic effects on higher level 
organisms.
7. Technical Performance of Ester-based Drilling Fluids
    In the proposed rule, EPA proposed its sediment toxicity and 
biodegradation BAT limitations and NSPS based on product substitution 
with C<INF>16</INF>-C<INF>18</INF> Internal Olefins. Several commenters 
on the February 1999 proposal and other industry stakeholders offered 
data related to the technical and environmental performance of SBFs 
(e.g., Limia and Peresich, 1992). Specifically, three commenters 
provided data on the dynamic or kinematic viscosity of several SBFs 
(e.g., isomerized olefins, esters). Baroid Drilling Fluids provided 
data on its ``new ester'' with a dynamic viscosity comparable to a 
C<INF>16</INF>-C<INF>18</INF> IO. This drilling fluid manufacturer 
claims that the new ester allows formulation of fluids which have cold 
water performance comparable to, if not better than, some IOs (e.g., 
C<INF>16</INF>-C<INF>18</INF> IO). Moreover, Baroid Drilling Fluids 
noted that the price of esters-based drilling fluids in the GOM have 
been reduced in half since their introduction and use in the GOM. EPA 
has also received information that indicates that esters still remain 
40-90% more expensive than IOs (Johnston, 2000a). EPA has also received 
information that original and new ester technology continues to exhibit 
higher viscosity that could result in higher downhole losses of whole 
drilling fluids and higher cutting retention values (Friedheim and 
Conn, 1996; Johnston, 2000a). Finally, EPA has received information on 
the technical limitations (e.g., stability, elastomer swelling, 
sediment toxicity, lack of field experience) of original and new esters 
(Daan et al., 1996; Johnston, 2000a; Patel, 1998; Schaanning et al., 
1996).
    Due to the potential for better environmental performance of ester-
based drilling fluids, EPA is considering basing the sediment toxicity 
and biodegradation stock limitations and standards on original esters 
instead of the proposed C<INF>16</INF>-C<INF>18</INF> IO. EPA is also 
considering sub-categorizing the regulation, based on the use of 
esters. The different sub-categorization options under consideration by 
EPA include: (1) limiting SBF discharges by setting numeric limitations 
and standards based on ester-based drilling fluids when water 
temperatures are above the practical limitations of esters; and (2) 
limiting SBF discharges by setting numeric limitations and standards 
based on C<INF>16</INF>-C<INF>18</INF> IOs, thus allowing the discharge 
of SBFs other than ester-based drilling fluids, when water temperatures 
are below the practical limitations of esters.
    EPA solicits comment on this subcategory approach, and again is 
requesting any information and data related to the cost, technical 
performance, potential environmental impacts (e.g., sediment and 
aquatic toxicity, biodegradation), and frequency of industry use of 
ester-based drilling fluids.
8. Subsea Pumping Systems
    In the February 1999 proposal (64 FR 5495), EPA outlined an 
innovative technology, generally referred to as ``subsea pumping,'' 
that may potentially outperform conventional drilling techniques in 
very deepwater conditions (generally greater than 3,000 feet of water). 
Subsea pumping is claimed by the developer to contribute

[[Page 21555]]

to a number of environmental, technical, and economic benefits.
    The technology involves pumping the drilling fluid up a separate 
riser by means of pumps at or near the seafloor. Rotary drilling 
methods in a system using subsea pumping are generally similar to 
conventional drilling methods, with the exception that the drilling 
fluid and small cuttings (i.e.,  one-quarter inch) are boosted by one 
or more pumps near the seafloor. By boosting the drilling fluid, the 
adverse effects on the wellbore caused by the drilling fluid pressure 
from the seafloor to the surface are eliminated, thereby allowing wells 
to be drilled with as much as 50 percent reduction in the number of 
casing strings generally required to line the well wall. Wells are 
drilled in less time, including less trouble time.
    The developer of this technology claims that subsea pumping can 
significantly improve drilling efficiencies and thereby reduce the 
volume of drilling fluid discharged, as well as reduce the non-water 
quality effects of fuel use and air emissions. Because fewer casing 
strings are needed, the hole diameter in the upper sections of the well 
can be smaller, which reduces the amount of cuttings produced. Also, 
the well bore will require fewer casing strings of smaller diameter, 
resulting in a reduction in steel consumption. An additional benefit of 
subsea pumping systems is the potential to extend the use of ester-
based fluids in the cooler, deeper waters of the GOM. Finally, subsea 
system drilling may double or triple the reach of horizontal or 
directional deepwater delineation sidetrack wells. Accordingly, this 
may reduce the number of delineation wells needed to characterize a oil 
and gas formation.
    To enable the pumping of drilling fluids and cuttings to the 
surface, about half of the drill cuttings, comprising the cuttings 
larger than approximately one-quarter inch, are separated from the 
drilling fluid and discharged at the seafloor since these cuttings 
cannot reliably be pumped to the surface. With a currently reported 
design, the drill cuttings that are separated at the seafloor are 
discharged through an eductor hose at the seafloor within a 150-foot 
radius of the well site. The drilling fluid, which is boosted at the 
seafloor and transports the remainder of the drill cuttings back to the 
surface, is conventionally processed.
    Since the February 1999 proposal, the subsea pumping system 
developer has reviewed the technology with staff from Minerals 
Management Service (MMS) GOM Office, EPA Region 6, and EPA 
Headquarters. In a letter dated May 24, 1999, MMS provided conditional 
approval to the developer for using its subsea system for exploratory 
and development wells in Outer Continental Shelf (OCS) waters. In a 
letter dated July 30, 1999, EPA Region 6 concluded that discharges from 
the developers subsea system are generally authorized by the general 
permit for the western GOM (Permit No. GMG290000) provided that the 
subsea discharges are monitored.
    EPA Headquarters staff met with the developers of the subsea 
pumping system on January 18, 2000, to discuss the technical and 
environmental performance of the new technology. As part of the 
meeting, the technology developers submitted a technical basis for 
supporting their improved environmental, technical, and economic 
performance. The developers also discussed with EPA Headquarters staff 
their current plans to field test their subsea pump system solids 
removal equipment offshore under atmospheric, not subsea, conditions. 
The tests are scheduled to begin in May 2000 with data becoming 
available in July 2000. The developers are planning to collect SBF 
retention data as well as other data to determine the fractions and 
concentrations of SBF discharged subsea. Notes from the January 18, 
2000, meeting (including the technology developer technical report), 
anticipated subsea pumping field test plans, and the two previously 
mentioned letters are given in section III.B.(b) of the rulemaking 
record.
    The subsea system developer commented on the February 1999 proposal 
and suggested that a definition for ``subsea pumping'' and a 
clarification of subsea pumping discharge sampling and monitoring 
requirements be added to this notice. In the supporting documentation 
for the proposed rule, Development Document for Proposed Effluent 
Limitations Guidelines and Standards for Synthetic-Based Drilling 
Fluids and other Non-Aqueous Drilling Fluids in the Oil and Gas 
Extraction Point Source Category (EPA-821-B-98-021), EPA stated that 
for purposes of monitoring, samples of the subsea discharge can be 
transported to the surface for analysis.
    Based on the potential for reducing discharges to the environment 
and as previously stated in the SBF Development Document, EPA is 
considering different technology options for this subsea discharge. 
These options include limiting the type of drilling fluids available 
for use in subsea pumping systems; different monitoring and sampling 
requirements for subsea discharges; subsea cuttings discharge dispersal 
techniques; and cuttings retention requirements that are different from 
surface discharges. EPA is requesting comments on the most appropriate 
limitations and combination of limitations for these subsea discharges. 
EPA is also requesting more information about the anticipated 
percentage of future deepwater drilling operations that will employ 
subsea pumping systems.
9. Cuttings Micro-encapsulation Systems
    EPA Headquarters staff met with the developers of a new cuttings 
management system, silica micro-encapsulation, on September 23, 1999, 
to discuss the technical and environmental performance of the new 
technology. Silica micro-encapsulation is a process by which the NAF 
attached to the cuttings is physically encapsulated in an insoluble 
matrix of amorphous silicate. More information on this technology is 
given in section III.B.(b) of the rulemaking record.
    The technology developer claims that the encapsulated oils do not 
leach and do not biodegrade. The stated benefit of the micro-
encapsulation process is the ability to convert non-aqueous fluid 
cuttings into water wet particles. Consequently, the non-aqueous fluid 
cuttings behave in the water column similarly to water-based fluid 
cuttings. The developer claims that this allows for maximum dispersion 
of non-aqueous fluid cuttings. Finally, the developer claims that the 
dispersion of the cuttings into a much greater area substantially 
reduces the potential for benthic smothering and other toxic and 
chronic environmental effects.
    One issue related to this technology is the incompatibility of the 
micro-encapsulation technology with the February 1999 proposal method 
for determining the amount of drilling fluid that adheres to drill 
cuttings. This method, Appendix 7 to Subpart A of Part 435-API 
Recommended Practice 13B-2 (64 FR 5547), is designed to measure the 
relative weights of liquid and solid components in a sample of wet 
drill cuttings. The method uses a known weight of wet cuttings that is 
heated in a retort chamber to vaporize the liquids contained in the 
sample. The high heat of the retort analysis (approximately 930  deg.F) 
can break down the micro-encapsulation coating and release the 
previously sequestered oil droplet. Therefore EPA's proposed 
requirements for minimizing oil on cuttings and use of the retort 
method may eliminate the incentive to use the micro-encapsulation 
technology.

[[Page 21556]]

    EPA may consider different technology options for these micro-
encapsulated cuttings discharges. These options include product 
substitution of only certain types of drilling fluids available for use 
in micro-encapsulating systems; different monitoring and sampling 
requirements for micro-encapsulated discharges; different toxicity 
tests; and different cuttings retention requirements. Specifically, EPA 
is proposing that this technology may be more beneficial in combination 
with other technologies (e.g., product substitution, add-on solids 
removal equipment) to assist operators in meeting site specific CWA 
section 403 NPDES permit requirements. As stated previously, switching 
to less toxic and more biodegradable drilling fluids, reducing the oil 
on cuttings, and increasing the dispersion of the cuttings is 
instrumental in preventing build-up of cuttings piles and reducing 
impacts to the benthic environment. Use of this micro-encapsulation 
technology to promote cuttings dispersion and further sequester the oil 
on cuttings, after use of new solids control equipment, may provide 
addition environmental protection. EPA is requesting comments and 
information related to the environmental, technical, and economic 
performance of this and similar micro-encapsulation technologies and 
the incentive/disincentive issue with respect to the proposed retention 
limitation and standard using the retort method as the compliance test 
method.

B. EPA Data Collection Since Proposal Publication

1. Sediment Toxicity Test Results
    Because of the limited data available for the proposal on the 
sediment toxicity of both the base fluids and whole drilling fluid 
systems, EPA has begun a study using sediment toxicity test methods to: 
(1) determine the toxicity of various base fluids and whole synthetic 
fluid drilling systems on amphipods for purposes of selecting fluids 
that represent the appropriate level of technology; and (2) evaluate 
possible sediment toxicity compliance method options. The initial tests 
conducted in December 1999 at the EPA Gulf Breeze Laboratory evaluated 
the sediment toxicity of three synthetic base fluids compared to diesel 
and have consisted of 96-hour and 10-day exposure tests with an IO, a 
LAO, and an ester as the base fluids as compared to No. 2 diesel oil. 
At the same time, EPA's contract laboratory, Battelle, also conducted 
initial sediment toxicity tests on mineral oil and paraffin in addition 
to the same three synthetic base fluids evaluated by the EPA Gulf 
Breeze Laboratory.
    EPA is currently conducting tests to determine influences of whole 
fluid compositions and crude oil contamination on the sediment toxicity 
of an internal olefin (IO), linear alpha olefin (LAO), and ester. 
Current and previous sediment toxicity tests conducted by EPA have used 
the ASTM E1367-92 sediment toxicity method supplemented with a sediment 
preparation procedure (see 64 FR 5536: Appendix 3 to Subpart A of Part 
435). Table II.B.1.1 summarizes the sediment toxicity data that EPA has 
collected since proposal.

  Table II.B.1.1: EPA-Collected LC<INF>50</INF> Sediment Toxicity Data With Various Drilling Base Fluids for Two Different
                                                  Time Periods
----------------------------------------------------------------------------------------------------------------
                                                                                                 95% Confidence
                                                     Drilling base fluid         LC50 (mg/Kg)       interval
----------------------------------------------------------------------------------------------------------------
                                   EPA Gulf Breeze Laboratory--Generated Data
----------------------------------------------------------------------------------------------------------------
96-Hour Test.................................  Internal Olefin................              ND                NA
                                               Linear Alpha Olefin............             750           677-930
                                               Ester..........................           10812        9138-12793
                                               Diesel.........................             463           426-505
10-Day Test..................................  Internal Olefin................             660          423-1029
                                               Linear Alpha Olefin............             419           350-502
                                               Ester..........................              ND                NA
                                               Diesel.........................             199           171-232
----------------------------------------------------------------------------------------------------------------
                               EPA Contract Laboratory (Battelle)--Generated Data
----------------------------------------------------------------------------------------------------------------
96-Hour Test.................................  Internal Olefin................           >8000                NA
                                               Linear Alpha Olefin............            2921        2260--3775
                                               Ester..........................            7686        7158--8253
                                               Mineral Oil....................             436          485--391
                                               Paraffin.......................            2263        1936--2644
10-Day Test..................................  Internal Olefin................            2530        2225--2876
                                               Linear Alpha Olefin............            1208        1089--1339
                                               Ester..........................            4275        3921--4662
                                               Mineral Oil....................             176          163--190
                                               Paraffin.......................            1151       1038--1276
----------------------------------------------------------------------------------------------------------------
Method Reference: EPA February 1999 Proposal (64 FR 5488).
ND--Not determined; NA--Not applicable.

    In addition, EPA is assessing the toxicity potential for 
degradation by-products. EPA has some information related to SBF by-
products (Candler et al., 1995; Getliff et al., 1997; Johnston, 2000a). 
These data show that aerobic and anaerobic degradation mechanisms for 
many SBFs (especially linear hydrocarbons) produce by-products that 
include biodegradable alcohols and fatty acids. Some SBFs, such as 
linear paraffins, are still the subject of some debate as to their 
exact mode of biodegradation and associated by-products under anaerobic 
conditions. In addition, ester-based drilling fluids by-products (e.g., 
alcohols) may exhibit toxic effects in the water column (Johnston, 
2000a). EPA solicits comments and data on whether there are any known 
persistent or toxic by-products created by the biodegradation of 
synthetic base fluids. This information will allow EPA to assess the

[[Page 21557]]

overall environmental impact of using synthetic base fluids.
    Finally, as originally stated in the February 1999 proposal (64 FR 
5491), EPA may require additional or alternative controls as part of 
the BAT/NSPS discharge options based on method development and data 
gathering subsequent to today's notice: (1) Maximum sediment toxicity 
of drilling fluid at point of discharge (minimum LC<INF>50</INF>, mL 
drilling fluid/kg dry sediment by 10-day sediment toxicity test or 
amended test); (2) maximum aqueous phase toxicity of drilling fluid at 
point of discharge (minimum LC<INF>50</INF> by Suspended Particulate 
Phase (SPP) test (see Appendix 2 of Subpart A of Part 435) or amended 
SPP test); and (3) maximum potential for bioaccumulation of stock base 
fluid (maximum concentration in sediment-eating organisms). In 
particular, EPA is interested in controlling the toxicity of SBFs in 
the sediment and the water column and may require both a sediment 
toxicity test and an aqueous phase toxicity test to assess overall 
toxicity.
    A more complete review of the sediment toxicity procedures and data 
can be found in section III.B.(a) of the rulemaking record.
2. Biodegradation Test Results
    Because of the limited data available for the proposal on the 
biodegradation of SBFs, EPA has begun a study using the solid phase 
biodegradation test, proposed in February 1999, to: (1) determine the 
biodegradation of various synthetic base fluids for purposes of 
selecting fluids that represent the appropriate level of technology; 
and (2) evaluate possible biodegradation compliance options. This 
project began in January 2000 and results are anticipated to be 
finalized in March 2000. Table II.B.2.1 summarizes the data collected 
to date. A more complete review of these procedures and data can be 
found in section III.B.(a) of the rulemaking record.

                               Table II.B.2.1: EPA Solid Phase Biodegradation Test
----------------------------------------------------------------------------------------------------------------
                                                           Percent loss relative to day 0
                                   -----------------------------------------------------------------------------
                                                                  Poly                                  Linear
                                       Ester       Paraffin     (alpha)    Mineral oil    Internal      alpha
                                     (percent)    (percent)      olefin      (percent)     olefin       olefin
                                                               (percent)                 (percent)    (percent)
----------------------------------------------------------------------------------------------------------------
Day 0.............................            0            0            0            0            0            0
Day 14............................           53           21           22           20            9            8
Day 28............................           60           19           25           21           18          16
----------------------------------------------------------------------------------------------------------------
Method Reference: EPA February 1999 Proposal (64 FR 5488).

3. EPA Engineering Data Collection Activities
    During the week of October 25, 1999, EPA staff traveled to Texas 
and Louisiana to observe onshore and offshore equipment used for 
treating and disposing of SBF and SBF-cuttings. Highlights of the 
onshore portion of the field trip include visits to an operating 
cuttings dryer unit, a fracture slurry injection facility, and a barge 
facility on the GOM intercoastal waterway.
    Offshore highlights included visits to two oil and gas drilling 
operations to observe waste management and pollution prevention 
practices. EPA staff also observed working solids control equipment 
including cuttings dryers. These cuttings dryers are designed to 
recover more SBF from cuttings generated by primary and secondary shale 
shakers. This field trip also included an all day meeting with cuttings 
dryer equipment vendor representatives and members of industry. Field 
notes from the site visit and minutes of the all day meeting can be 
found in section III.B.(a) of the rulemaking record.
    EPA also obtained information from the industry primarily related 
to the per-well aspects of drilling with SBF in three subject areas: 
(1) Drilling operations; (2) solids control equipment and systems; and 
(3) costs, in order to better understand current and emerging SBF and 
SBF-waste management practices.
    Finally, EPA collected information from MMS regarding accidental 
spills of OBFs and SBFs. Spills can release small and large quantities 
of drilling fluid. In particular, undetected leaking lines can release 
several hundred barrels of drilling fluid while accidental riser 
disconnects can release several thousand barrels of whole drilling 
fluid into the environment. Specifically, EPA is interested in: (1) the 
occurrences of accidents and events that can cause the release of OBF 
and SBF whole drilling fluid (e.g., riser disconnects, blow-outs, 
shallow water flow problems); (2) the number of these accidents and 
events over the past five years for each MMS region (Alaska, 
California, GOM); (3) the location of these events (i.e., shallow or 
deepwater); and (4) the volumes associated with these accidents and 
events. Preliminary information is that there have been several spills 
of OBFs over the past five years, but most were small volumes. In 
addition, MMS data identifies three events, including two riser 
disconnects, that resulted in significant releases of SBFs into the 
environment for the months of January and February 2000. Under the zero 
discharge option EPA assumes that all operators requiring NAF will 
switch to OBFs. As the toxicity of OBFs is greater than SBFs, EPA will 
use this spill data as a factor in supporting the selection of a 
controlled discharge option in the final rule.
    A more complete review of the EPA collected engineering data can be 
found in section III.B.(a) of the rulemaking record.
4. Non-Water Quality Environmental Impacts (NWQI)
    The additional cuttings retention data submitted to EPA (see 
section II.A.4) were used in the revision of the engineering models 
that form the basis for all per-well numeric compliance analyses. Based 
on changes in the engineering models described below in section III.A, 
EPA revised the numeric NWQIs of fuel usage, air emissions, and solid 
waste generation.
    The U.S. Department of Energy (DOE) collected information about 
currently operating onshore commercial disposal facilities that are 
permitted to receive offshore drilling wastes. The Argonne National 
Laboratory (DOE) contacted State officials in Louisiana, Texas, 
California, and Alaska to obtain this information. EPA also identified 
a list of Louisiana commercial non-hazardous oilfield wastes (NOW) 
facilities from the Louisiana Department of Natural Resources.
    EPA also contacted Alaska, Texas, and Louisiana regulatory agencies 
to obtain current information concerning

[[Page 21558]]

management of offshore and coastal exploration and production wastes. 
The Texas Natural Resource Conservation Commission (TNRCC) provided 
permit information and waste disposal limitations for the Texas 
fracture slurry injection facility visited by EPA staff (see section 
II.B.3). The Alaska Oil and Gas Conservation Commission (AOGCC) 
provided information related to Cook Inlet formation disposal of 
drilling fluids and cuttings.
    EPA also reviewed two papers that detail operations of a large 
Louisiana onshore fracture slurry injection facility operated by 
Chevron for Naturally Occurring Radioactive Materials/Non-Hazardous 
Oilfield Wastes (NORM/NOW) (Baker et al., 1999a; Baker et al., 1999b). 
Currently, this Chevron facility is limited by its permit to only 
handle exploration and production wastes from Chevron GOM operations.
    EPA also contacted Cook Inlet, Alaska, operators to identify the 
current and projected use of SBF and the most current waste management 
options for drill cuttings and fluids. Operators noted that few wells 
were being drilled with SBF due to NPDES general permit prohibition of 
SBF discharges. Furthermore, Cook Inlet operators noted that the only 
drill cuttings and fluid management options available to them are land 
disposal of cuttings or grinding and injection of the cuttings back 
into the formation. Land disposal of OBF-and SBF-cuttings was 
identified as cost prohibitive.
    In considering all options for management of non-aqueous fluids 
(NAF) and NAF-cuttings, EPA is also identifying possible scenarios for 
cross-media contamination. In particular, EPA is trying to identify 
former NOW treatment, storage, or disposal facilities that are now 
CERCLA (or ``Superfund''), RCRA Corrective Action, or State lead 
cleanup sites. An initial search by EPA identified several such sites 
including several sites around Abbeville, Louisiana. Accordingly, EPA 
is requesting additional information related to other sites (Superfund, 
RCRA Corrective Action, or State lead) that have been contaminated with 
NOW from offshore operations.
    The findings of current onshore waste management options and former 
NOW facilities that are now cleanup sites outlined in this section are 
presented in section III.B.(a) of the rulemaking record.
    Also subsequent to the proposal, EPA has monetized the human health 
benefits associated with volatile organic compound (VOC), particulate 
matter (PM), and sulfur dioxide (SO<INF>2</INF>) emission reductions 
for the two controlled discharge options. The valuation methodology is 
presented in section III. The results of these revisions are presented 
in section IV below.
5. Economic Data (including Deep Water Model Wells)
    EPA collected information from industry regarding model deepwater 
project costs for the Gulf of Mexico, produced water treatment costs, 
wellhead oil and gas prices, and drilling activity forecasts. A summary 
of the data is provided in section III.G of the rulemaking record.
    EPA is developing a methodology to examine the economic and 
financial impacts of the SBF guidelines on both existing and new 
deepwater oil and gas projects in response to comments from industry 
that these projects are vastly different from the projects analyzed as 
part of the Offshore Oil and Gas Effluent Guidelines economic analysis. 
At proposal, EPA relied on the results of that latter analysis showing 
Gulf of Mexico projects to be only minimally affected by even the most 
stringent drilling waste option (the zero discharge option). Because of 
the unique nature of deepwater projects and because of their greater 
distance from shore, industry believes deepwater projects need to be 
evaluated for economic impacts resulting from options considered for 
the rule.
    EPA is thus developing a computer model similar to the one used for 
the Offshore rule, and also nearly identical to the one developed for 
the Main Pass operations in the Gulf of Mexico investigated during the 
Coastal Oil and Gas Effluent Guidelines rule. The general structure of 
the model is based on the Main Pass Model with a few minor variations 
[for example, severance tax is not an issue, so this line item is not 
used (see Economic Impact Analysis of Final Effluent Limitations 
Guidelines and Standards for the Coastal Subcategory of the Oil and Gas 
Extraction Point Source Category, Appendices A and B, EPA-821-R-96-
022)].
    The major differences of this model compared to the Main Pass model 
are the inputs. EPA investigated a number of deepwater projects for use 
as model projects. These projects included all currently operating 
projects, as well as a number that should come on line shortly. Over 30 
projects fit this description. From these initial projects, EPA 
selected as many as possible to use in modeling deepwater projects. 
Data availability was the primary criterion used in selecting the model 
projects. EPA selected all deepwater projects for analysis that 
operated in 1998 and that had original proved reserves data available 
in public documents. The most recent publicly available documents on 
proved reserves are those provided by MMS on its website and these 
documents are current through December 31, 1996. Proved reserves are 
used to distinguish the relative size of projects, since the indication 
of the ultimate size of a project is reserves, not necessarily the 
current production (new projects that have not completed the maximum 
number of wells that would be productive at any one time would end up 
classified as smaller than they will eventually become). Size of 
project is important, since results will be reported over a group of 
projects (i.e, results for small, medium, and large projects) rather 
than project-by-project. Size of reserves also allows EPA to determine 
how many wells might be drilled at a project over time.
    Using the data availability criterion, EPA reduced the number of 
projects that can be modeled to twenty. One project did not operate in 
1998, and the others either have not yet started producing, or are so 
new that original proved reserves had not been calculated for them in 
December 1996. The twenty projects include four small projects 
(original proved reserves of 10 million barrels of oil equivalent (BOE) 
or less, eight medium-size projects (original proved reserves 
approximately between 10 million and 100 million BOE), and eight large 
projects (original proved reserves over 100 million BOE). BOE for each 
project is the sum of the oil (42 gal. oil = 1 BOE) and natural gas 
(1,000 scf = 0.178 BOE). To model new projects, however, five of the 
twenty projects were dropped from the analysis as being too old or as 
using construction technologies unlikely to be used in the future. The 
remaining 15 projects generally had been producing less than 5 years in 
1998.
    Other information was obtained either from industry contacts or was 
based on data developed by EPA and used either in analyzing the 
economic impacts of the Offshore or Coastal Subcategory Oil and Gas 
Effluent Guidelines. Section III.G of the rulemaking record provides 
data on projects used to model deepwater projects as well as 
assumptions and sources of data for the oil and gas financial model.
6. Environmental Assessment Data
    a. Water and Sediment Quality Criteria. Subsequent to conducting 
water quality analyses for the Environmental Assessment (EA) for the 
proposed rule, EPA published its revised recommended water quality 
criteria for arsenic (deletion of human

[[Page 21559]]

health criterion); copper (increased from 2.4 <greek-m>g/l to 4.8 
<greek-m>g/l and 3.1 <greek-m>g/l for acute and chronic aquatic 
community criteria, respectively); mercury (increased from 0.025 
<greek-m>g/l to 0.94 <greek-m>g/l for chronic aquatic community 
criterion), and phenol (deletion of human health criterion) in the 
Federal Register (December 10, 1998; 63 FR 68354). In addition Alaska 
promulgated new State water quality standards for toxic pollutants on 
May 27, 1999 (see Alaska Administrative Code, Title 18, Chapter 70 or 
section III.F.(a).2 of the rulemaking record). These deletions and 
corrections are incorporated in revisions to the analyses of water 
column, pore water, and sediment guidelines quality outlined in the 
February 1999 Environmental Assessment Document (EPA-821-B-98-019).
    b. Dilution Data. The same model used in the February 1999 
proposal, Brandsma (1996), was used in this notice to estimate the 
concentration of synthetic fluids within the water column for 
assessment of attainment with recommended water quality criteria. These 
revised dilution calculations are used for the water column water 
quality analyses and for the calculations of exposure concentrations 
for the health benefits analyses.
    c. Review of the Seabed Surveys. In response to comments and new 
data received, EPA revised the Seabed Survey portion of the 
Environmental Assessment. All of the studies presented in the original 
EA were re-analyzed to correct omissions and errors identified by 
commenters. One additional study was submitted by a commenter, BP 
Amoco, entitled Deepwater Sampling at a Synthetic Drilling Mud 
Discharge Site on the Outer Continental Shelf, Northern Gulf of Mexico 
(Fechhelm et al., 1999). EPA reviewed this study which investigated the 
deepwater benthic effects of a SBF (90% linear-alpha olefins and 10% 
esters) discharge and added relevant data to the EPA EA analyses.
    EPA EA models use a mean of SBF sediment concentrations from 
various seabed surveys found in the literature. EPA updated the mean 
SBF sediment concentration (at 100m from the modeled discharge) from 
13,892 mg/kg to 14,741 mg/kg to incorporate new data identified in the 
BP Amoco benthic study.
    d. Receipt of the United Kingdom Offshore Operators Association 
(UKOOA) Research Reports. In June 1998, UKOOA, supported by the Oil 
Industry International Exploration and Production Forum (E & P Forum) 
and in co-operation with the Norwegian oil association (OLF), launched 
an initiative to tackle the historical legacy of accumulated drill 
cuttings beneath offshore installations in the North Sea. Many of these 
North Sea cuttings piles were generated from the practice of 
discharging cuttings from multiple wells into a single deposition 
point. These drilling operations also used OBFs which contain a high 
PAH content. The ultimate goal of the UKOOA research is to identify the 
best environmental practice and the best techniques available for 
managing these accumulations.
    Immediately prior to publication of this notice, EPA acquired 
several reports related to the UKOOA industry research activities in 
the North Sea. These UKOOA reports are based on literature review and 
field studies. Specifically, EPA received UKOOA reports related to 
cuttings pile toxicity, faunal colonization of cuttings piles, 
contaminant leaching from drill cuttings piles, and natural degradation 
and estimated recovery time-scale.
    EPA plans to incorporate the relevant major findings and 
conclusions into the final EPA SBF Environmental Assessment document 
and analyses. Specifically, EPA plans on using relevant North Sea data 
in assessing its method alternatives for determining sediment toxicity, 
biodegradation, and bioaccumulation. Moreover, EPA plans to incorporate 
relevant data from North Sea field studies into assessing the various 
discharge and zero discharge options for SBF-wastes. Section III.B.(a) 
of the rulemaking record gives summary of the data collected to support 
the EPA SBF Environmental Assessment.

III. Revised Models

A. Revised Engineering Models

1. Large Volume Discharges
    Through discussions with stakeholders and the October 1999 site 
visits to offshore drilling operations, EPA has obtained more 
information about current and emerging solids control practices. 
Regarding current practices, EPA has re-evaluated its model of the 
``standard'' or ``baseline'' solids control system. The baseline model 
presented in the February 1999 proposal consisted of a primary shale 
shaker that discharges cuttings and a secondary shale shaker that 
discharges fine-particle cuttings (referred to as ``fines'').
    Since proposal, EPA learned that cuttings are discharged from both 
primary and secondary shale shakers, and that fines are generated from 
additional equipment such as high-speed shale shakers (called ``mud 
cleaners'') and centrifuges whose purpose is to treat the drilling 
fluid by removing undesirable fine solids. These fines were reported by 
one industry commenter on the February 1999 proposal to have SBF 
cuttings retention values as high as 20 percent by weight.
    Therefore, the revised baseline model consists of primary and 
secondary shale shakers, plus a ``fines removal unit'' that may be 
either a mud cleaner or a centrifuge. Discharges from the baseline 
model system consist of cuttings from the primary shale shaker, 
cuttings from the secondary shale shaker, and fines from the fines 
removal unit. Based on data provided in the spreadsheets submitted by 
industry representatives, the baseline model volume fractions of the 
three discharges, expressed as percentages of the total volume of all 
cuttings discharged from the baseline model well, are 78.5% for the 
primary shakers, 18.5% for the secondary shakers, and 3% for the fines 
removal unit.
    EPA received sufficient additional cuttings retention data from GOM 
sources to re-evaluate the discharges of these three units and to 
calculate a revised baseline long-term average retention value of 11.4% 
by weight of SBF on cuttings. Despite the revision of the retention 
data and the model baseline system, the revised long-term average 
retention value is only slightly higher than the 11% originally 
calculated for the proposal, providing further confidence in the 
accuracy of the baseline model and associated data.
    Since the February 1999 proposal, the GOM offshore drilling 
industry has increased its use of ``add-on'' cuttings drying equipment, 
``cuttings dryers,'' to reduce the amount of SBF adhering to the 
cuttings prior to discharge. Specifically, over twenty GOM SBF well 
projects utilized these cuttings dryers in the recent past to reduce 
the amount of SBF discharged (Johnston, 2000a). Current data available 
to EPA indicates that these cuttings dryers can operate consistently 
and efficiently when properly installed and maintained. Specifically, 
vendor supplied data associated with these cuttings dryer deployments 
suggest that the overall cuttings dryer downtime (i.e., time when 
cuttings dryer equipment is not operable) is approximately one percent 
of the overall operating time (Johnston, 2000a).
    At the time of the February 1999 proposal, EPA had obtained 
retention data from only one such add-on technology, namely the Mud-10 
vibrating centrifugal dryer. Since then, EPA has observed the operation 
of another drying technology, generally

[[Page 21560]]

referred to as a vertical centrifuge dryer. The vertical centrifuge 
dryer unit serves the same purpose and occupies the same location in 
the treatment train as the Mud-10 unit. EPA generically refers to the 
Mud-10 unit and the vertical centrifuge dryer as the ``cuttings 
dryer.''
    Immediately prior to publication of this notice, EPA also received 
limited cuttings retention data from a third type of add-on equipment 
referred to as a ``squeeze press'' mud recovery unit. When installed, 
the squeeze press mud recovery unit occupies the same location as the 
above-mentioned cuttings dryers and serves to reduce the amount of SBF 
adhering to the cuttings prior to discharge. The specific data for the 
squeeze press were received too late to include in the statistical 
determination of retention values for today's notice. However, these 
data are included in the public record for the rule and EPA solicits 
comments on them (Johnston, 2000b). These data, along with additional 
retention data received from other industry sources, will be evaluated 
and included in the appropriate engineering and statistical analyses 
used to support the cuttings retention limitation in the final rule.
    Most cuttings dryer applications include a centrifuge or mud 
cleaner in the treatment train, to serve the same purpose as the fines 
removal unit in the baseline system (i.e., to remove undesirable fine 
solids from the drilling fluid recovered by the cuttings dryer). 
Therefore, EPA's revised model of BAT/NSPS-level solids control 
includes primary and secondary shale shakers that send all their 
cuttings to a cuttings dryer, followed by a fines removal unit. There 
are two discharges from the BAT/NSPS-level model solids control system: 
one from the cuttings dryer and one from the fines removal unit. The 
BAT/NSPS-model volume fractions of the two discharges, expressed as 
percentages of the total volume of all cuttings discharged from the 
BAT/NSPS-model well, are 97% for the cuttings dryer and 3% from the 
fines removal unit. EPA, however, solicits more volume fraction data to 
further refine its baseline and BAT/NSPS discharge models.
    For today's notice, EPA evaluated two different scenarios based on 
the above BAT/NSPS-model solids control system. The first scenario 
assumes that both the cuttings from the cuttings dryer and the fines 
from the fines removal unit are discharged. This first BAT/NSPS-model 
scenario is essentially unchanged from the BAT/NSPS-model presented at 
the February 1999 proposal. The long-term average SBF cuttings 
retention value for this first BAT/NSPS-model scenario is 2.68% by 
weight. This new long-term average cuttings retention value is lower 
than the February 1999 proposal BAT/NSPS-model long-term average 
cuttings retention value of 7% by weight. The difference is 
attributable to the replacement of the North Sea data with data from 
recent GOM drilling projects. The second BAT/NSPS-model scenario 
assumes that only the cuttings are discharged, and the fines, which 
represent a comparably smaller volume of waste, are retained for zero 
discharge via hauling to shore for land-based disposal. Therefore, the 
long-term average cuttings retention value for this second BAT/NSPS-
model scenario is equal to the retention value for the cuttings dryer, 
2.45% by weight.
    At this time, EPA thinks that data from the GOM are adequate to 
represent field conditions throughout the United States. These data 
include variations in geological formations, drilling conditions, and 
rates of penetration. However, EPA is still requesting cuttings 
retention data from offshore and coastal drilling operations that use 
SBFs. In particular, EPA is requesting SBF cuttings retention data from 
United States offshore or coastal oil and gas exploration and 
production facilities operating outside of the GOM. If EPA does not 
receive additional non-GOM data, EPA is comfortable with applying the 
GOM data to other offshore and coastal regions in the United States.
    The analyses for compliance costs, pollutant loadings, and numeric 
non-water quality environmental impacts are based on the volumes of 
waste solids and adhering drilling fluid estimated to be discharged 
from each of four model wells. The model wells are defined in terms of 
four categories: deep water (i.e., <gr-thn-eq>1000 ft) development, 
deep water exploratory, shallow water (i.e., 1000 ft) development and 
shallow water exploratory. While the model well sizes are unchanged, 
the volumes of adhering drilling fluid were revised based on the 
revised retention values. Based on further communication since the 
February 1999 proposal with industry about current and future drilling 
plans in the GOM, California, Alaska, and North Carolina, the numbers 
of each type of model well drilled annually are also unchanged. EPA is, 
however, requesting more data detailing the annual number of shallow 
water and deep water SBF-wells. EPA is also requesting data on the 
conditions and frequency when SBFs are chosen over water-based drilling 
fluids, when both drilling fluids are technically acceptable for 
drilling (i.e., some shallow water wells).
    EPA also re-evaluated the zero-discharge option using the updated 
baseline retention data. The only notable change in the approach to the 
zero-discharge analysis is the distribution of wells using land-based 
disposal versus wells using onsite injection. The original analysis 
assumed that 80% of the affected wells would use land-based disposal 
and 20% would use onsite injection. While this assumption remains 
applicable to shallow water wells, EPA learned from industry sources 
that onsite injection is currently less applicable to deep water wells, 
due to limitations of mechanical equipment, geology, and well 
placement. Therefore, the zero discharge analysis now assumes that all 
deep water wells will haul cuttings to shore for land-based disposal. 
As zero discharge remains a proposed management option, EPA is 
requesting additional data and information related to what drilling 
fluids and waste management practices operators will likely use and the 
overall impact on the annual number of drilling projects if EPA selects 
the zero discharge management option for SBFs.
    The current engineering cost analysis also assigns the installation 
and downtime costs to every well. However, EPA recognizes that it is 
likely that multiple wells would be drilled from a single installation, 
thereby reducing the effect of the installation cost on each well's 
total compliance cost. It is also likely that some drilling rigs will 
purchase and permanently install cuttings dryers and fines removal 
units, further reducing the effect of installation costs on any one 
well. The data EPA has gathered to date are limited in this regard. 
Therefore, EPA requests additional information pertaining to the 
average number of wells drilled annually with SBF per platform, and the 
number of platforms capable of permanently installing cuttings dryers 
and fines removal units.
    Details of the revised engineering models are provided in a 
technical support document in section III.C.(b) of the rulemaking 
record.
2. Small Volume Discharges
    In its study of current solids control practices, EPA learned that 
SBF is controlled with zero discharge practices at the drill floor, in 
the form of vacuums and sumps to retrieve spilled fluid. EPA also 
learned that approximately 75 barrels of solids coated with SBF can 
accumulate in the dead spaces of the mud pit, sand trap, and other 
equipment in the drilling fluid circulation system. Current practice is 
to either wash these solids out with water for overboard

[[Page 21561]]

discharge, or to retain the waste solids for disposal.
    Since zero discharge practices at the drill floor during drilling 
are the current practice, no additional costs were considered for 
controlling spills of SBF at this location. However, EPA did 
investigate options for controlling the discharges of accumulated 
solids generated by equipment cleaning procedures at the end of a 
drilling project. Assuming that every drilling project generates 
approximately 75 barrels of these small-volume waste accumulated 
solids, the costs vary only by: (1) geographic region; and (2) the 
numbers of wells in each regulatory scenario. EPA used the line-item 
costs developed for the zero discharge compliance cost analysis to 
calculate per-well and total costs for existing and new sources to 
dispose of accumulated solids via hauling to land based disposal 
facilities. The industry-wide costs resulting from this analysis are 
given below in section IV, Table IV.A.2.1.

B. Revised Economic Models

    EPA plans to use the same methodologies in analyzing firm-level 
impacts used at proposal, but will update information to include at a 
minimum 1998 financial data as well as 1997 financial data. The year 
1998 was not a good year for the oil and gas industry, whereas 1997 was 
a good year, so these two years should provide some sense of the 
volatility of the industry. EPA still expects that the impact on firms 
will be minimal, even given the difficult year the industry had in 
1998. Additionally, EPA will use the same methodology for the small 
business analysis that was used at proposal. EPA does not expect the 
analysis to change significantly from proposal because: (1) Costs have 
not changed substantially; (2) only a few small operators are believed 
to be using SBFs; and (3) very few wells are drilled by small operators 
in a year.
    Instead of relying on the Offshore Oil and Gas Effluent Guidelines 
EIA to provide a sense of financial impact at the facility level, 
however, EPA is changing the approach to allow deepwater projects to be 
modeled financially, as discussed in section II.
    At the time of this notice, EPA believes that economic impacts from 
even the most stringent option (i.e., zero discharge of SBFs) will have 
only minimal influence on most deepwater projects. However, as zero 
discharge remains a proposed management option, EPA is requesting 
additional data and information related to whether or not the selection 
of the zero discharge management option for SBFs will affect the 
overall annual number of drilling projects in deep and shallow waters 
in the United States. Further technical details are presented in 
supporting documentation in section III.G of the rulemaking record, 
which discusses potential impacts on typical, or average, deepwater 
projects.
    However, because averages can obscure the effects at the most 
vulnerable projects, EPA will be looking closely at the potential for 
option costs to cause any measurable impacts at projects that do not 
conform to the parameters of the average project using the financial 
model. Although model outputs will be reported in the aggregate by 
project size, each individual project will be represented in the model 
inputs to allow EPA to identify impacts more precisely.
    The projects likeliest to show some potential for impact are the 
smallest projects (both existing and new, if the existing projects 
continue to drill), the oldest existing projects (such as Lena and 
Cognac, which have produced over 80 percent of their original proved 
reserves as of 1996), or very marginal projects. Because any project 
could be marginal when all the factors are accounted for, even the 
relatively small cost of the SBF rule could have an impact on one or 
more projects, although, at this time, EPA believes this possibility is 
small.

C. Revised Environmental Assessment (EA) Models

    Revisions to the regulatory options such as the revised retention 
on cuttings values and the addition of another controlled discharge 
option has resulted in changes in the SBF environmental assessment. The 
retention on cuttings affects both the pollutant loadings and the 
volume of waste discharged, thereby affecting the water quality, 
sediment quality and human health impacts. EPA has therefore re-
iterated the various EA analyses and the results are presented in 
section IV below. There are, however, no changes in the EA models as 
outlined in the February 1999 proposal and the Environmental Assessment 
Document (EPA-821-B-98-019).
    The models developed to calculate the NWQIs of air emissions, fuel 
usage, and solid waste generation have been revised parallel to the 
revisions in the engineering models described in section III.A. The 
revised waste volumes that resulted from new retention data required 
adjustments of such NWQI model elements as numbers of boat trips, 
cuttings boxes, and crane lifts. An additional NWQI model was developed 
for the BAT/NSPS discharge scenario based on 2.45% retention on 
cuttings. For both of the discharge scenarios, the energy requirements 
for the cuttings dryer and fines removal units were revised to reflect 
the newer technologies now accounted for in the engineering models. 
Finally, the zero discharge model was changed according to the new 
finding that deep water wells cannot readily utilize onsite injection 
and, rather, haul cuttings to shore-based disposal facilities.
    Also subsequent to the February 1999 proposal, EPA monetized the 
human health benefits for the two controlled discharge options 
associated with reducing volatile organic compound (VOC), particulate 
matter (PM), and sulfur dioxide (SO<INF>2</INF>) emissions. The 
valuation methodology used to conduct the monetized benefits analysis 
is presented in Environmental Assessment of the Final Effluent 
Limitations Guidelines and Standards for the Pharmaceutical 
Manufacturing Industry (EPA-821-B-98-008). The results of these 
revisions are presented in section IV below.

D. Revised Models for the Performance of Cuttings Treatment 
Technologies

    As stated in the February 1999 proposal, EPA is considering setting 
limitations and standards for the percent retention of synthetic-based 
drilling fluids on cuttings that may be discharged from the cuttings 
dryer and fines removal technologies. EPA received cuttings retention 
data after the February 1999 proposal (see section II.A.4). This 
section of the notice outlines the revisions made to the statistical 
models for the performance of cuttings treatment technologies. A 
summary of the output of these revised models with new data is given in 
section IV.D.
    EPA analyzed cuttings treatment data presented at proposal using 
well averages where each cuttings retention value is weighted by an 
associated hole volume. Since publication of the proposed statistical 
support document in February 1999, EPA incorporated four changes into 
the statistical methods used to estimate summary statistics which 
support the development of numeric limitations and standards for the 
retention of synthetic-based drilling fluids on cuttings. These changes 
are: (1) Imputation of volume-weighted factors for zero and negative 
drilling intervals; (2) correction to the estimator for volume-weighted 
variances; (3) the addition of uniformly-weighted summary statistics; 
and (4) consideration of the 99th percentile rather than the 95th 
percentile for the development of numeric limitations and standards for 
the maximum well

[[Page 21562]]

averaged percent retention of SBF on cuttings.
    EPA generally estimated the volume of cuttings using the drilling 
interval and the pipe diameter immediately preceding a retention 
measurement. However, at times, the drilling intervals are reported as 
zero or negative. A negative drilling interval indicates that the drill 
pipe has been pulled up to facilitate drilling in a new direction. EPA 
excluded negative interval data from the proposal. In this report, 
negative drilling intervals are treated in the same fashion as zero 
drilling intervals.
    At proposal, EPA estimated weighted variances as if the weights 
could only take on a small number of possible values. However, those 
weights are based on the volume of cuttings associated with a 
particular drilling interval and that volume may take on infinitely 
many values. In this report, EPA estimated weighted variances as if the 
weights could only take on infinitely many values.
    Under the assumption that the retention on cuttings increased with 
the depth drilled, EPA proposed numeric guidelines and standards using 
retention values weighted by the volume drilled. However, the graphics 
showing percent retention versus depth drilled do not indicate that 
this is true (EPA, 2000). Therefore, EPA has added the use of 
uniformly-weighted summary statistics as part of EPA's statistical 
models. With no apparent relationship between depth drilled and percent 
retention, the uniformly-weighted summary statistics are more 
appropriate. Basing numeric guidelines and standards on a single type 
of measurement, as opposed to a combination of multiple types of 
measurements, will reduce the measurement variability associated with 
the guidelines and standards. Additional benefits of setting numeric 
guidelines and standards based on uniformly-weighted summary statistics 
include eliminating the need to: (1) Calculate the length of interval 
drilled; (2) impute volumes where zero or negative intervals exist; and 
(3) use unusual variance estimation procedures. EPA prefers to set 
numeric guidelines and standards for percent retention based on 
uniformly-weighted summary statistics as opposed to volume weighted 
summary statistics.
    EPA proposed numeric limitations and standards under the assumption 
that, on a long-term average basis, good engineering practice would 
allow appropriately designed and well operated solids control equipment 
systems to perform at least as well as approximately 95% of the systems 
whose data were used to develop the limitations and standards. 
Operationally, cuttings retention values are averaged over the course 
of drilling an individual well and EPA's candidate BAT limitation or 
NSPS is the estimated 95th percentile for the available well averages.
    The CWA confers considerable discretion in determining what 
constitutes best available technology and best available demonstrated 
technology. In exercising this discretion, the Agency has proposed and 
promulgated limitations and standards that provide for the variability 
observed in application of these technologies. This allowance provides 
for variation in the performance of the recommended treatment 
technologies and establishes a standard that EPA expects well operated 
treatment systems to be capable of achieving at all times.
    Given that there is less experience to date with the application of 
the cuttings dryer technology than many other candidate BAT and NSPS 
technologies generally, the Agency is also considering setting numeric 
limitations and standards based on the 99th percentile. This would 
provide a larger allowance for treatment variability than is provided 
by the proposed limitations and standards based on the 95th percentile.
    Detailed descriptions of the statistical methods, summary 
statistics, overall averages, and percentiles associated with each 
technology can be found in section III.C.(a) of the rulemaking record.

IV. Revised Analyses

A. Revised Compliance Costs Results

1. Large Volume Discharges
    Based on the revised engineering models described in section III.A 
above, EPA revised its calculations of baseline, compliance option, and 
incremental compliance costs. The industry profile and the methodology 
for estimating costs that were presented with the proposed rule have 
not changed for today's notice. The results of the revised compliance 
cost analyses are presented in Table IV.A.1.1 for existing sources and 
in Table IV.A.1.2 for new sources.

                                       Table IV.A.1.1: Summary Annual Cost/Savings, Existing Sources (1998$/year)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         Costs (savings) in 1998$/year [wells/year]
                                   ---------------------------------------------------------------------------------------------------------------------
         Technology basis                                         Offshore  California [wells/   Cook Inlet, Alaska [wells/
                                     Gulf of  Mexico [wells/yr]                yr]                          yr]                    Total [wells/yr]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline/Current Practice
 Technology Costs:
    Discharge with 11.4% retention  20,032,850..................  NA <SUP>a</SUP>........................  NA <SUP>a</SUP>.......................  20,032,850
     of SBF on cuttings.            [94 wells/yr]...............                                                             [94 wells/yr]
    Zero Discharge via land         3,494,062...................  2,287,281...................  214,237....................  5,995,580
     disposal or onsite injection   [23 wells/yr]...............  [12 wells/yr]...............  [1 well/yr]................  [36 wells/yr]
     (current OBF-drilled wells
     only).
        Total Baseline Costs per    23,526,912..................  2,287,281...................  214,237....................  26,028,430
         Area.                      [117 wells/yr]..............  [12 wells/yr]...............  [1 well/yr]................  [130 wells/yr]
Technology Option Costs:
    Discharge with 2.68% retention  20,257,350..................  2,463,440...................  211,350....................  22,932,140
     of SBF on cuttings.            [117 wells/yr]..............  [12 wells/yr]...............  [1 well/yr]................  [130 wells/yr]
    Discharge with 2.45% retention  20,365,837..................  2,472,517...................  214,672....................  23,053,026
     of SBF on cuttings.            [117 wells/yr]..............  [12 wells/yr]...............  [1 well/yr]................  [130 wells/yr]
    Zero Discharge of SBF-wastes    31,666,153<SUP>b</SUP>.................  NA <SUP>a</SUP>........................  NA <SUP>a</SUP>.......................  31,666,153
     via land disposal or onsite    [94 wells/yr]...............                                                             [94 wells/yr]
     injection.
Incremental Tech. Option Costs
 (Savings):
    Discharge with 2.68% retention  (3,269,562).................  176,159.....................  (2,887)....................  (3,096,290)
     of SBF on cuttings.            [117 wells/yr]..............  [12 wells/yr]...............  [1 well/yr]................  [130 wells/yr]
    Discharge with 2.45% retention  (3,161,075).................  185,236.....................  435........................  (2,975,404)
     of SBF on cuttings.            [117 wells/yr]..............  [12 wells/yr]...............  [1 well/yr]................  [130 wells/yr]

[[Page 21563]]

 
    Zero Discharge of SBF-wastes    11,633,303<SUP>c</SUP>.................  NA <SUP>a</SUP>........................  NA <SUP>a</SUP>.......................  11,633,303
     via land disposal or onsite    [94 wells/yr]...............                                                             [94 wells/yr]
     injection.
--------------------------------------------------------------------------------------------------------------------------------------------------------
<SUP>a</SUP> NA: Not applicable since currently there are no discharges of SBF-cuttings in these waters.
<SUP>b</SUP> This technology option cost estimates zero discharge costs associated with the 94 GOM wells that are currently allowed to discharge SBF.
<SUP>c</SUP> This incremental technology option cost only covers the 94 GOM wells that are currently allowed to discharge SBF and does not include baseline
  compliance costs of zero discharge for the 23 GOM OBF wells (i.e., $3,494,062).


  Table IV.A.1.2: Summary Annual Cost/Savings, New Sources (1998$/year)
------------------------------------------------------------------------
                   Technology basis                      Gulf of Mexico
------------------------------------------------------------------------
Baseline/Current Practice Technology Costs:
    Discharge with 11.4% retention of SBF on cuttings.         2,306,325
Technology Option Costs:
    Discharge with 2.68% retention of SBF on cuttings.         1,388,250
    Discharge with 2.45% retention of SBF on cuttings.         1,395,913
    Zero Discharge of SBF-wastes via land disposal or          4,581,838
     onsite injection.................................
Incremental Technology Option Costs (Savings):
    Discharge with 2.68% retention of SBF on cuttings.         (918,075)
    Discharge with 2.45% retention of SBF on cuttings.         (910,412)
    Zero Discharge of SBF-wastes via land disposal or         2,275,513
     onsite injection.................................
------------------------------------------------------------------------
 Note: All cost estimates in this table are based on an assumption of 19
  new source wells per year.

    Details of the revised compliance cost data and analyses are 
available in a technical support document in section III.C.(b) of the 
rulemaking record.
2. Small Volume Discharges
    As stated in section III.A.2 of this notice, EPA learned that SBF 
is controlled with zero discharge practices at the drill floor, in the 
form of vacuums and sumps to retrieve spilled fluid. Industry estimated 
that essentially all of the SBF that spills on the rig floor is 
recovered using the controls described above. The amount of SBF spilled 
on the rig floor that is not captured by current practices is estimated 
at less than 1 gallon SBF per 100 feet drilled.
    Industry representatives have stated that industry is split on the 
practice of discharging accumulated solids with some discharging 
accumulated solids provided permit limitations and standards are met 
and others opting to haul this material to shore for disposal (see 
section II.B.3). Approximately 75 barrels per well of fine solids and 
barite, of which up to 25% is SBF, accumulate in the rig mud pits, sand 
traps, and other equipment. Several hundred barrels (approximately 200 
to 400 barrels) of water are used to wash out the mud pits. Industry 
representatives also indicated to EPA that those oil and gas extraction 
operations that discharge wash water and accumulated solids first 
recover free SBF.
    EPA used the line-item costs developed for the zero discharge 
compliance cost analysis to calculate per-well and total costs for 
existing and new sources to dispose of accumulated solids via hauling 
to land based disposal facilities. Section III.A.2 outlines the 
assumptions used to calculate the annual zero discharge costs for small 
volume wastes given below in Table IV.A.2.1. Overall, the estimated 
per-well costs (1998$) were $1,221 for GOM wells, $2,186 for Offshore 
California wells, and $10,638 for Cook Inlet wells.

              Table IV.A.2.1: Annual Zero Discharge Costs for Small-Volume SBF Wastes (1998$/year)
----------------------------------------------------------------------------------------------------------------
                Technology Basis                  Gulf of Mexico    California    Cook Inlet, AK       Total
----------------------------------------------------------------------------------------------------------------
Existing Sources:
    Baseline and BAT/NSPS Discharge Scenarios <SUP>a</SUP>.        $142,857         $26,235         $10,638        $179,730
    Zero Discharge <SUP>b</SUP>............................         114,774            <SUP>d</SUP> NA            <SUP>d</SUP> NA         114,774
New Sources:
    All Scenarios (Baseline, BAT/NSPS Discharge,          23,199            <SUP>d</SUP> NA            <SUP>d</SUP> NA         23,199
     and Zero Discharge) <SUP>c</SUP>......................
----------------------------------------------------------------------------------------------------------------
<SUP>a</SUP> Costs are the same for baseline and two discharge scenarios because each analysis is based on 117 wells.
<SUP>b</SUP> Zero discharge costs for existing sources are based on 94 wells.
<SUP>c</SUP> Costs are the same for all new-source scenarios because each analysis is based on 19 wells.
<SUP>d</SUP> NA: Not Applicable.

B. Revised Pollutant Loadings Results

    EPA reviewed additional information regarding drilling fluid 
additives provided by the industry representatives in response and 
subsequent to the February 1999 proposal, and found no information 
prompting changes to the concentrations or list of pollutants presented 
at the time of proposal. EPA revised the pollutant loadings analysis 
according to the changes in the engineering and statistical models 
described in section III.A and III.D of this notice.

[[Page 21564]]

    The loadings analysis depends on the estimated volumes of cuttings 
and SBF discharged per model well for each discharge scenario. Other 
than adjusting the loadings to the revised waste volumes and revised 
discharge scenarios, the analysis remains unchanged from the February 
1999 analyses. Tables IV.B.1 and IV.B.2 present the revised loadings 
for existing and new sources, respectively. EPA assumes that operators 
will switch from OBFs in the current baseline model to SBFs under both 
SBF controlled discharge options. These tables present the loadings 
associated with discharges of SBF and entrained fines [e.g., 5 microns 
(10<SUP>-6</SUP> meters)]. EPA also calculated the loadings associated 
with SBF solids that can be removed by solids control equipment (e.g., 
>5 microns).

                                  Table IV.B.1: Summary Annual SBF Pollutant Loadings for Existing Sources (lbs/year) <SUP>a</SUP>
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              SBF pollutant loadings (reductions) in pounds/year <SUP>a</SUP> [wells/year]
         Technology basis          ---------------------------------------------------------------------------------------------------------------------
                                           Gulf of Mexico             Offshore  California           Cook Inlet, Alaska                 Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline/Current Practice Tech.
 Loadings:
    Discharge with 11.4% retention  34,364,661..................  <SUP>b</SUP> NA........................  <SUP>b</SUP> NA.......................  34,364,661
     of SBF on cuttings.            [94 wells/yr]...............                                                             [94 wells/yr]
    Zero Discharge via land         0...........................  0...........................  0..........................  0
     disposal or onsite injection   [23 wells/yr]...............  [12 wells/yr]...............  [1 well/yr]................  [36 wells/yr]
     (current OBF-drilled wells
     only).
        Total Baseline Loadings     34,364,661..................  0...........................  0..........................  34,364,661
         per Area.                  [117 wells/yr]..............  [12 wells/yr]...............  [1 well/yr]................  [130 wells/yr]
Technology Option Loadings:
    Discharge with 2.68% retention  7,328,175...................  466,072.....................  26,413.....................  7,820,660
     of base fluid on cuttings.     [117 wells/yr]..............  [12 wells/yr]...............  [1 well/yr]................  [130 wells/yr]
    Discharge with 2.45% retention  6,464,827...................  411,167.....................  23,302.....................  6,889,295
     of base fluid on cuttings.     [117 wells/yr]..............  [12 wells/yr]...............  [1 well/yr]................  [130 wells/yr]
    Zero Discharge of SBF-wastes    0...........................  <SUP>b</SUP> NA........................  <SUP>b</SUP> NA.......................  0
     via land disposal or onsite    [94 wells/yr]...............                                                             [94 wells/yr]
     injection.
Increm. Tech. Opt. Loadings
 (Reductions):
    Discharge with 2.68% retention  (27,036,486)................  466,072.....................  26,413.....................  (26,544,001)
     of base fluid on cuttings.     [117 wells/yr]..............  [12 wells/yr]...............  [1 well/yr]................  [130 wells/yr]
    Discharge with 2.45% retention  (27,899,834)................  411,167.....................  23,302.....................  (27,465,365)
     of base fluid on cuttings.     [117 wells/yr]..............  [12 wells/yr]...............   [1 well/yr]...............  [130 wells/yr]
    Zero Discharge of SBF-wastes    (34,364,661)................  <SUP>b</SUP> NA........................  <SUP>b</SUP> NA.......................  (34,364,661)
     via land disposal or onsite    [94 wells/yr]...............                                                             [94 wells/yr]
     injection.
--------------------------------------------------------------------------------------------------------------------------------------------------------
<SUP>a</SUP> SBF pollutant loadings only includes loadings associated with discharges of SBF and entrained fines (e.g.,  5 microns)
<SUP>b</SUP> NA Not Applicable


  Table IV.B.2: Summary Annual Pollutant Loadings for New Sources (lbs/
                                 year) <SUP>a</SUP>
------------------------------------------------------------------------
                   Technology basis                      Gulf of Mexico
------------------------------------------------------------------------
Baseline/Current Practice Technology Loadings:
    Discharge with 11.4% retention of SBF on cuttings.         3,949,786
Technology Option Loadings:
    Discharge with 2.68% retention of SBF on cuttings.           745,855
    Discharge with 2.45% retention of SBF on cuttings.           657,981
    Zero Discharge of SBF-wastes via land disposal or                  0
     onsite injection.................................
Incremental Technology Option Loadings (Reductions):
    Discharge with 2.68% retention of SBF on cuttings.       (3,203,931)
    Discharge with 2.45% retention of SBF on cuttings.       (3,291,805)
    Zero Discharge of SBF-wastes via land disposal or       (3,949,786)
     onsite injection.................................
------------------------------------------------------------------------
Note: All loading (reduction) estimates in this table are based on an
  assumption of 19 new source wells/yr.
<SUP>a</SUP> Only includes loadings associated with discharges of SBF and entrained
  fines (e.g., 5 microns)

    The zero discharge option also reduces the amount of SBF-solids 
[i.e., solids that can be removed by solids control equipment (e.g., >5 
microns)] from the current baseline. The estimated annual baseline 
discharges of SBF-solids from existing sources is 126,321,650 lbs./
year. The estimated annual loadings (in lbs./year) of SBF-solids for 
existing sources are: 152,240,270 (2.68% retention controlled discharge 
option); 147,673,062 (2.45% retention controlled discharge option); and 
0 (zero discharge option). The estimated annual baseline discharge of 
SBF-solids from new sources is 14,519,050 lbs./year. The estimated 
annual loadings (in lbs./year) of SBF-solids for new sources are: 
14,519,050 (2.68% retention controlled discharge option); 14,083,488 
(2.45% retention controlled discharge option); and 0 (zero discharge 
option). Complete details of the loadings analysis are available in a 
technical support document in the rulemaking record for this notice.

C. Revised Non-Water Quality Environmental Impacts (NWQI) Results

1. Air Emissions and Fuel Usage
    EPA revised the analysis of the numeric NWQIs of air emissions and 
fuel usage pursuant to the changes in the engineering models described 
in section III.A of today's notice. Changes to the numeric NWQI 
analysis derive from the revised waste volumes, as well as changes in 
the BAT/NSPS discharge scenarios.
    In both the first and second BAT/NSPS discharge scenarios, 
additional air

[[Page 21565]]

emissions and fuel usage result from the addition of the fines removal 
unit. Both scenarios also incorporate the average energy and fuel 
requirements of the two types of cuttings dryer that EPA observed in 
October 1999 (see section II.B.3). In the second BAT/NSPS discharge 
scenario in which the fines waste stream is retained for shipping to 
land-based disposal, additional air emissions and fuel usage are 
incurred for a portion of the supply boat trip, and for trucks and 
other equipment involved in the land disposal zero discharge scenario.
    As described in section III.A, EPA learned from industry 
representatives that onsite injection is not generally technologically 
practicable for deep water drilling projects. Therefore, NWQIs 
attributable to hauling and land disposing drilling wastes were 
assigned to all deep water wells in the zero discharge analysis. Tables 
IV.C.1 and IV.C.2 present the revised air emissions (tons/yr) and fuel 
(BOE/yr) usage for existing and new sources, respectively.
    Other than the specific changes described above, the methodology 
for the numeric NWQI analysis is unchanged since the February 1999 
proposal. Details of this analysis are available in a technical support 
document located in the rulemaking record for this notice.

                                 Table IV.C.1: Summary Annual Non-Water Quality Environmental Impacts, Existing Sources
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   Non-water quality environmental impacts reductions (increases)  [wells/year--wpr]
                              --------------------------------------------------------------------------------------------------------------------------
                                       Gulf of Mexico               Offshore California              Cook Inlet, AK                     Total
       Technology basis       --------------------------------------------------------------------------------------------------------------------------
                                                                                                   Air                           Air
                               Air  emissions    Fuel  usage   Air  emissions   Fuel  usage     emissions     Fuel  usage     emissions     Fuel  usage
                                  (tons/yr)       (BOE/yr)        (tons/yr)       (BOE/yr)      (tons/yr)       (BOE/yr)      (tons/yr)       (BOE/yr)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Baseline/Current Practice
 NWQIs:
    Discharge with 11.4%       42............  4,512.........  <SUP>a</SUP>NA...........  <SUP>a</SUP>NA..........  <SUP>a</SUP>NA..........  <SUP>a</SUP>NA..........  42...........  4,512
     retention of base fluid   [94 wpy]......  [94 wpy]......                                                               [94 wpy].....  [94 wpy]
     on cuttings.
    Zero Discharge (current    65............  4,811.........  47............  2,940........  2.5..........  338..........  115..........  8,089
     OBF-wells only).          [23 wpy]......  [23 wpy]......  [12 wpy]......  [12 wpy].....  [1 wpy]......  [1 wpy]......  [36 wpy].....  [36 wpy]
        Total Baseline NWQIs   107...........  9,323.........  47............  2,940........  2.5..........  338..........  157..........  12,601
         per Area.             [117 wpy].....  [117 wpy].....  [12 wpy]......  [12 wpy].....  [1 wpy]......  [1 wpy]......  [130 wpy]....  [36 wpy]
Technology Option NWQIs:
    Discharge with 2.68%       127...........  10,422........  7.6...........  673..........  0.06.........  40...........  135..........  11,135
     retention of SBF on       [117 wpy].....  [117 wpy].....  [12 wpy]......  [12 wpy].....  [1 wpy]......  [1 wpy]......  [130 wpy]....  [130 wpy]
     cuttings.
    Discharge with 2.45%       191...........  15,685........  52............  853..........  0.20.........  67...........  243..........  16,605
     retention of SBF on       [117 wpy].....  [117 wpy].....  [12 wpy]......  [12 wpy].....  [1 wpy]......  [1 wpy]......  [130 wpy]....  [130 wpy]
     cuttings.
    Zero Discharge of SBF-     561...........  39,702........  <SUP>a</SUP>NA...........  <SUP>a</SUP>NA..........  <SUP>a</SUP>NA..........  <SUP>a</SUP>NA..........  561..........  39,702
     wastes via land disposal  [94 wpy]......  [94 wpy]......                                                                              [94 wpy]
     or onsite injection.
Incr. Tech. Opt. NWQI Red.
 (Incr.):
    Discharge with 2.68%       20............  (1,099).......  40............  2,267........  2.45.........  298..........  22...........  1,466
     retention of SBF on       [117 wpy].....  [117 wpy].....  [12 wpy]......  [12 wpy].....  [1 wpy]......  [1 wpy]......  [130 wpy]....  [130 wpy]
     cuttings.
    Discharge with 2.45%       (84)..........  (6,362).......  (4.8).........  2,087........  2.31.........  271..........  (87).........  (4,004)
     retention of SBF on       [117 wpy].....  [117 wpy].....  [12 wpy]......  [12 wpy].....  [1 wpy]......  [1 wpy]......  [130 wpy]....  [130 wpy]
     cuttings.
    Zero Discharge of SBF-     (519).........  (35,191)......  <SUP>a</SUP>NA...........  <SUP>a</SUP>NA..........  <SUP>a</SUP>NA..........  <SUP>a</SUP>NA..........  (519)........  (35,191)
     wastes via land disposal  [94 wpy]......  [94 wpy]......                                                               [94 wpy].....  [94 wpy]
     or onsite injection.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: 1 ton = 2000 lbs; BOE = barrels of oil equivalent
<SUP>a</SUP> NA: Not Applicable


  Table IV.C.2: Summary Annual Non-Water Quality Environmental Impacts,
                               New Sources
------------------------------------------------------------------------
                                                  Gulf of Mexico
                                         -------------------------------
            Technology basis               Air emissions    Fuel usage
                                             (tons/yr)       (BOE/yr)
------------------------------------------------------------------------
Baseline/Current Practice Technology
 NWQIs:
    Discharge with 11.4% retention of               4.8           515
     SBF on cuttings....................
Technology Option NWQIs:
    Discharge with 2.68% retention of              13           1,073
     SBF on cuttings....................
    Discharge with 2.45% retention of              23           1,923
     SBF on cuttings....................
    Zero Discharge of SBF-wastes via               68           4,784
     land disposal or onsite injection..
Incremental Technology Option NWQIs
 Reductions (Increases):
    Discharge with 2.68% retention of              (8.2)        (558)
     SBF on cuttings....................
    Discharge with 2.45% retention of            (18)         (1,408)
     SBF on cuttings....................
    Zero Discharge of SBF-wastes via             (63)        (4,269)
     land disposal or onsite injection..
------------------------------------------------------------------------
Note: All NWQI reductions (increases) in this table are based on an
  assumption of 19 new source wells/yr
Note: 1 ton = 2000 lbs; BOE = barrels of oil equivalent


[[Page 21566]]

2. Solid Waste Generation and Management
    EPA assumes that based on the relative cheaper cost of OBF 
(approximately 5 times less expensive per barrel than SBFs), operators 
will use OBFs rather than SBFs if EPA selects the zero discharge option 
for all SBF-wastes. Consequently, operators will be land disposing or 
injecting OBFs if EPA selects the zero discharge option for all SBF-
wastes.
    As stated in the February 1999 proposal, the regulatory options 
considered for this rule will not cause generation of additional 
solids. However, EPA calculated the amount of waste cuttings that would 
be land disposed and injected onsite in each regulatory scenario, and 
determined that there would be a considerable reduction in the amount 
of mineral-oil or diesel oil-contaminated cuttings land disposed and 
injected with the implementation of either of the controlled discharge 
options.
    Applying the revised waste volumes and discharge scenarios 
described above, the accounting of disposed waste is revised as 
follows. In the baseline analysis, wells that currently drill using 
OBFs generate 27 million (MM) pounds of waste cuttings that are land 
disposed, and 6.8 MM pounds that are injected onsite, for a total of 34 
MM pounds of waste cuttings disposed. This amount of disposed waste 
would be reduced to zero under the BAT/NSPS options allowing discharge 
at 2.68% retention, and would be reduced to 6.4 MM pounds under the 
BAT/NSPS option allowing discharge at 2.45%. The 6.4 MM pounds disposed 
in the second discharge scenario is the fine particle waste retained 
for hauling to land based disposal. Under the zero discharge option, 
the baseline amount of waste disposed is increased to 152 MM pounds.
3. Safety Issues
    The impact of the effluent limitation guidelines (ELG) on safety is 
one factor considered in the non-water quality environmental impact 
analysis. EPA has identified two safety issues related to drilling 
fluids: (1) deleterious vapors generated by organic materials in 
drilling fluids; and (2) waste hauling activities that increase the 
risk of injury to workers. EPA is requesting comments and data related 
to these two safety issues as well as other safety issues related to 
drilling fluid selection and waste management.
    a. Vapors Generated by Organic Materials in Drilling Fluids. One of 
the key concerns in exploration and production projects is the exposure 
of wellsite personnel to vapors generated by organic materials in 
drilling fluids (Candler et al., 1995). Areas on the drilling location 
with the highest exposure potentials are sites near solids control and 
open pits. These areas are often enclosed in rooms and ventilated to 
prevent unhealthy levels of vapors from accumulating. If the total 
volume of organic vapors can be reduced then any potential health 
effects will also be reduced regardless of the nature of the vapors.
    Generally speaking the aromatic fraction of the vapors is the most 
toxic to the mammalian system. The high volatility and absorbability 
through the lungs combined with their high lipid solubility serve to 
increase their toxicity. OBFs have a high aromatic content and vapors 
generated from using these drilling fluids include aromatics (e.g., 
alkybenzenes, naphthalenes, and alkyl-naphthalenes), alkanes (e.g., 
C<INF>7</INF>-C<INF>18</INF> straight chained and branched), and 
alkenes. Some minerals oils also generate vapors that contain the same 
types of chemical compounds, but generally at lower concentrations, as 
those found in the diesel vapors (e.g, aromatics, alkanes, cyclic 
alkanes, and alkenes). Because SBF are manufactured from compounds with 
specifically defined compositions, the subsequent compound can exclude 
toxic aromatics. Consequently, toxic aromatics can be excluded from the 
vapors generated by using SBFs.
    In general, SBFs (e.g., esters, LAOs, PAOs, IOs) generate much 
lower concentrations of vapors than do OBFs (Candler et al., 1995). 
Moreover, the vapors generated by these SBFs are less toxic than 
traditional OBFs because they do not contain aromatics.
    b. Waste Hauling Activities. Industry has commented in previous 
effluent guidelines, such as the Coastal Subcategory Oil and Gas 
Extraction and Development ELG, that a zero discharge requirement would 
increase the risk of injury to workers due to increased waste hauling 
activities. These activities include vessel trips to and from the 
drilling platform to haul waste, transfer of waste from the platform 
onto a service vessel, and transfer in port onto a barge or dock.
    EPA has identified and reviewed additional data sources to 
determine the likelihood that imposition of a zero discharge limitation 
on cuttings contaminated with SBF could increase risk of injury due to 
additional waste hauling demands. The sources of safety data are the 
U.S. Coast Guard (USCG), the Minerals Management Service (MMS), the 
American Petroleum Institute (API), and the Offshore Marine Service 
Association (OMSA). The following is a summary of the findings from 
this review.
    The data indicate that there are reported incidents that are 
associated with the collection, hauling, and onshore disposal of wastes 
from offshore. However, the data do not distinguish whether any of 
these incidents can be attributed to specific waste management 
activities.
    Most offshore incidents are due to human error or equipment 
failure. The rate at which these incidents occur will not be changed 
significantly by increased waste management activities. However, if the 
number of man hours and/or equipment hours are increased, there will be 
more reportable incidents given an unchanged incident rate. These 
potential increases may be offset by reduced incident rates through 
increased training or equipment maintenance and inspection; but these 
changes cannot be predicted. One indication that training and 
maintenance can reduce incident rates is a 1998 API report entitled 
``1997 Summary of U.S. Occupational Injuries, Illnesses, and Fatalities 
in the Petroleum Industry,'' which established that injury incident 
rates have been decreasing over the last 14 years. If this decrease 
continues, there should be no increase in the number of safety 
incidents due to a requirement to haul SBF-contaminated cuttings to 
shore for disposal. The details of this analysis are available in a 
technical support document in the rulemaking record for today's notice.
4. Monetized Health Benefits
    EPA estimated emissions associated with each of the regulatory 
options as part of the NWQI analyses. The pollutants considered in the 
NWQI analyses are nitrogen oxides (NO<INF>X</INF>), volatile organic 
carbon (VOC), particulate matter (PM), sulfur dioxide (SO<INF>2</INF>), 
and carbon monoxide (CO). Of these pollutants, EPA has monetized the 
human health benefits or impacts associated with VOC, PM, and 
SO<INF>2</INF> emissions using the methodology presented in the 
Environmental Assessment of the Final Effluent Limitations Guidelines 
and Standards for the Pharmaceutical Manufacturing Industry (EPA-821-B-
98-008). Each of these pollutants have human health impacts and 
reducing these emissions can reduce these impacts.
    Several VOCs exhibit carcinogenic and systemic effects and VOCs, in 
general, are precursors to ground-level ozone, which negatively affects 
human health and the environment. PM impacts include aggravation of

[[Page 21567]]

respiratory and cardiovascular disease and altered respiratory tract 
defense mechanisms. SO<INF>2</INF> impacts include nasal irritation and 
breathing difficulties in humans and acid deposition in aquatic and 
terrestrial ecosystems.
    The unit values (in 1990 dollars) are $489 to $2,212 per megagram 
(Mg) of VOC; $10,823 per Mg of PM; and $3,516 to $4,194 per Mg of 
SO<INF>2</INF>. Using the Engineering News Record Construction Cost 
Index (see www.enr.com/cost/costcci.asp) these conversion factors are 
scaled up using the ratio of 5920:4732 (1998$:1990$). EPA currently 
does not have unit values for CO and NO<INF>X</INF> and is soliciting 
information regarding their valuation. Following is a summary of the 
monetized benefits for each of the regulatory options for both existing 
and new sources.

 Table IV.C.3: Summary of Monetized Human Health Benefits or Impacts Associated With VOC, PM, and SO<INF>2</INF> Emissions,
                                           Existing Sources (1998$/yr)
----------------------------------------------------------------------------------------------------------------
                                                                Criteria air pollutant
                                     ---------------------------------------------------------------------------
                                                 VOC                       PM                      SO<INF>2</INF>
----------------------------------------------------------------------------------------------------------------
Baseline/Current Practice Air
 Emissions, Mg/yr:
    Discharge with 11.4% retention    2.15....................  1.87...................  1.74
     of SBF on cuttings.
    Zero Discharge (current OBF       9.57....................  1.93...................  1.68
     wells only).
        Total Baseline Air            11.72...................  3.80...................  3.42
         Emissions, Mg/yr.
Compliance Air Emissions, Mg/yr:
    (1) Discharge with 2.68%          6.90....................  5.98...................  5.57
     retention of SBF on cuttings.
    (2) Discharge with 2.45%          25.68...................  9.65...................  8.45
     retention of SBF on cuttings.
    (3) Zero Discharge <SUP>a</SUP>............  113.84..................  20.96..................  18.42
Incremental Compliance Emission
 Reductions (Increases), Mg/yr:
    (1) Discharge with 2.68%          4.82....................  (2.18).................  (2.15)
     retention of SBF on cuttings.
    (2) Discharge with 2.45%          (13.96).................  (5.85).................  (5.03)
     retention of SBF on cuttings.
    (3) Zero Discharge <SUP>a</SUP>............  (11.69).................  (19.09)................  (16.68)
Unit Value of Poll. Reductions,       489 to 2,212............  10,823.................  3,516 to 4,194
 1990$/Mg: <SUP>b</SUP>.
Unit Value of Poll. Reductions,       612 to 2,767............  13, 540................  4,399 to 5,247
 1998$/Mg: <SUP>c</SUP>.
Incremental Compliance Benefits
 (Costs), 1998$/yr:
    (1) Discharge with 2.68%          2,950 to 13,337.........  (29,517)...............  (9,458) to (11,281)
     retention of SBF on cuttings.
    (2) Discharge with 2.45%          (8,544) to (38,627).....  (79,209)...............  (22,127) to (26,392)
     retention of SBF on cuttings.
    (3) Zero Discharge <SUP>a</SUP>............  (68,354) to (309,046)...  (258,479)..............  73,375) to (87,520)
----------------------------------------------------------------------------------------------------------------
<SUP>a</SUP> Via land disposal or on-site offshore injection
<SUP>b</SUP> Conversion factors from Environmental Assessment of the Final Effluent Limitations Guidelines and Standards
  for the Pharmaceutical Manufacturing Industry cents (EPA-821-B-98-008).
<SUP>c</SUP> Scaled from 1990$ using the Engineering News Record Construction Cost Index.


 Table IV.C.4: Summary of Monetized Human Health Benefits or Impacts Associated with VOC, PM, and SO<INF>2</INF> Emissions,
                                             New Sources (1998$/yr)
----------------------------------------------------------------------------------------------------------------
                                                                Criteria air pollutant
                                     ---------------------------------------------------------------------------
                                                 VOC                       PM                      SO2
----------------------------------------------------------------------------------------------------------------
Baseline/Current Industry Practice
 Air Emissions, Mg/yr:
    Discharge with 11.4% retention    0.25....................  0.21...................  0.20
     of SBF on cuttings..
Compliance Air Emissions, Mg/yr:
    (1) Discharge with 2.68%          0.66....................  0.57...................  0.53
     retention of SBF on cuttings.
    (2) Discharge with 2.45%          2.73....................  0.91...................  0.88
     retention of SBF on cuttings.
    (3) Zero Discharge <SUP>a</SUP>............  14.62...................  2.67...................  2.32
Incremental Compliance Emission
 Reductions (Increases), Mg/yr:
    (1) Discharge with 2.68%          (0.41)..................  (0.36).................  (0.33)
     retention of SBF on cuttings.
    (2) Discharge with 2.45%          (2.48)..................  (0.70).................  (0.68)
     retention of SBF on cuttings.
    (3) Zero Discharge <SUP>a</SUP>............  (14.37).................  (2.45).................  (2.13)
Unit Value of Poll. Reductions,       489 to 2,212............  10,823.................  3,516 to 4,194
 1990$/Mg: <SUP>b</SUP>.
Unit Value of Poll. Reductions,       612 to 2,767............  13,540.................  4,399 to 5,247
 1998$/Mg: <SUP>c</SUP>.
    Incremental Compliance Benefits
     (Costs), 1998$/yr:
    (1) Discharge with 2.68%          (251) to (1,134)          (4,874)................  (1,452) to (1,731)
     retention of SBF on cuttings.
    (2) Discharge with 2.45%          (1,518) to (6,862)        (9,478)................  (2,991) to (3,568)
     retention of SBF on cuttings.
    (3) Zero Discharge <SUP>a</SUP>............  (8,794) to (39,762)       (33,173)...............  (9,370) to (11,176)
----------------------------------------------------------------------------------------------------------------
\a\ Via land disposal or on-site offshore injection.

[[Page 21568]]

 
\b\ Conversion factors from Environmental Assessment of the Final Effluent Limitations Guidelines and Standards
  for the Pharmaceutical Manufacturing Industry (EPA-821-B-98-008).
\c\ Scaled from 1990$ using the Engineering News Record Construction Cost Index.

D. Revised Cuttings Retention Limitations and Standards

    As stated in the February 1999 proposal, EPA is considering setting 
limitations and standards for the percent retention of synthetic-based 
drilling fluids on cuttings that may be discharged from the cuttings 
dryer and fines removal technologies. EPA received cuttings retention 
data after the February 1999 proposal (see section II.A.4) and revised 
its statistical models (see section III.D).
    As demonstrated by oil drilling operations in various geologic 
formations within the Gulf of Mexico (see section II.A.4), the average 
of the individual well averages for percent SBF retention on cuttings 
from the cuttings dryer is 2.45, the estimated 95th percentile is 3.11, 
and the estimated 99th percentile is 3.38. The observed individual well 
averaged SBF cuttings retention values are all less than the 95th 
percentile. For fines removal equipment, the average of the individual 
well averages for percent SBF retention on cuttings is 10.0, the 
estimated 95th percentile is 13.1, and the estimated 99th percentile is 
14.4. Only one of the observed individual well SBF cuttings retention 
values for fines removal equipment exceeds the 95th percentile and none 
exceed the 99th percentile.
    Based on these summary statistics, EPA has revised the proposed 
limitations and standards for percent retention of drilling fluids on 
cuttings. Assuming that: (a) 97% of the volume of cuttings discharged 
come from the cuttings dryer and 3% from fines removal; and (b) the 
limit will be based on a 95th percentile; the new discharge limitation 
of base fluid retained on cuttings is 3.41% [i.e., (0.97)(3.11%) + 
(0.03)(13.1%) = 3.41%]. Assuming that: (a) 97% of the volume of 
cuttings discharged come from the cuttings dryer and 3% from fines 
removal; and (b) the limit will be based on a 99th percentile; the new 
discharge limitation of base fluid retained on cuttings is 3.71% [i.e., 
(0.97)(3.38%) + (0.03)(14.4%) = 3.71%].
    EPA is also considering basing percent retention limitations and 
standards on the cuttings dryer alone, in conjunction with zero 
discharge for all other cuttings. In that case, the discharge 
limitation of base fluid retained on cuttings would be 3.11% when using 
the 95th percentile or 3.38% when established using the 99th 
percentile.
    If EPA selects numeric maximum well averaged cuttings retention 
discharge limitations and standards as the only method for controlling 
SBF discharges associated with cuttings in the final rule, then all 
operators would be expected to either: (1) meet the numeric maximum 
well averaged cuttings retention limitations and standards; or (2) 
dispose of their waste through on-site formation injection or ship 
their cuttings to shore for land disposal. In addition, EPA may elect 
in the final rule to allow operators the flexibility of choosing either 
numeric limitations and standards or BMPs to control SBF discharges 
associated with cuttings (see section V). A detailed description of the 
statistical analyses used to develop the proposed limitations and 
standards for percent retention of drilling fluids on cuttings is given 
in section III.C.(a) of the rulemaking record.

E. Revised Environmental Assessment Results

    The complete results of the revised EA analyses are given in 
section III.F.(b) of the rulemaking record.
1. Water Column Water Quality Analyses
    In the February 1999 proposal EA analyses, there were no 
exceedances of water quality criteria in the water column. Based on the 
revised EA analyses using updated dilution values and Federal water 
quality criteria, there are still no water quality criteria exceedances 
in the water column for any of the regulatory options being considered.
2. Pore Water Quality Analyses
    The revised EA analyses estimate that baseline-model (or BPT) pore 
water pollutant concentrations at 100 m from the discharge exceed 
water-quality criteria for: (1) three pollutants (Cr, Pb, Ni) for the 
deep water exploratory well; (2) one pollutant (Cr) for the shallow 
exploratory well; and one pollutant (Cr) for the deepwater development 
well. Barite is used as a weighting agent in the drilling fluid and is 
also the primary source of heavy metals (e.g., Cr, Pb, Ni) in SBF. 
Therefore, the baseline-model pore water exceedances are not due to the 
synthetic material in the SBF but rather the SBF weighting agents.
    The revised EA analyses estimate that both BAT/NSPS-model 
controlled discharge options result in no pore water pollutant 
concentrations that exceed water-quality criterion.
3. Sediment Guidelines Analyses
    In the February 1999 proposal, the BAT/NSPS-model controlled 
discharge option resulted in sediment guidelines exceedances for the 
deep water and shallow water exploratory wells. EPA proposed sediment 
guidelines can be found in section I.D.(a).13 of the rulemaking record. 
The revised EA sediment guidelines analyses, based on updated water 
quality criteria, loadings, and dilution data, result in exceedances 
under the baseline model (or BPT) scenario only. There are no sediment 
guidelines exceedances for any of the BAT/NSPS-models.

V. Best Management Practices (BMPs) Alternatives to Numeric 
Limitations and Standards

A. General

    EPA is considering three options for the final rule for the BAT 
limitation and NSPS controlling SBF retained on discharged cuttings: 
(1) a single numeric discharge limitation with an accompanying 
compliance test method; (2) allowing operators to choose either a 
single numeric discharge limitation with an accompanying compliance 
test method, or as an alternative, a set of BMPs that employs limited 
cuttings monitoring; or (3) allowing operators to choose either a 
single numeric discharge limitation with an accompanying compliance 
test method or an alternative set of BMPs that employ no cuttings 
monitoring. Additionally, EPA is considering two options in the final 
rule for BAT limitation and NSPS for controlling SBFs not associated 
with SBF drill cuttings: (1) zero discharge; or (2) allowing operators 
to choose either zero discharge or an alternative set of BMPs with an 
accompanying compliance method.
    EPA has initial data on the effectiveness of BMPs for controlling 
SBF-discharges (Farmer, 2000; Hanni et al, 1998). The initial data on 
BMP effectiveness was generated from over 12 deepwater projects in the 
North Sea and 11 deepwater projects in the GOM. Data from Farmer (2000) 
was received by EPA just before publication of this notice and was 
unable to be fully analyzed. This data set represented North Sea and 
GOM wells that did not employ a cuttings dryer, however, certain 
drilling projects in the data set did use an extra technician (``mud 
cop'') to assist in improving the efficiency of the existing solids 
control equipment through use of BMPs.

[[Page 21569]]

    EPA is requesting additional data on the use of BMPs to reduce or 
prevent SBF-discharges. In particular, EPA would like to see BMP 
documentation associated with cuttings retention spreadsheets similar 
to those submitted to support the development of the numeric guidelines 
and standards for the retention of SBF on cuttings. EPA will be using 
these data sets to determine the effectiveness of BMPs and their use as 
alternatives to numeric limitations and standards. EPA may select any 
of these BMP alternative options or any combination of these BMP 
alternative options in the final rule.
    Sections 304(e), 308(a), 402(a), and 501(a) of the Clean Water Act 
authorize the Administrator to prescribe BMPs as part of effluent 
limitations guidelines and standards or as part of a permit. EPA's BMP 
regulations are found at 40 CFR 122.44(k). Section 304(e) of the CWA 
authorizes EPA to include BMPs in effluent limitation guidelines for 
certain toxic or hazardous pollutants for the purpose of controlling 
``plant site runoff, spillage or leaks, sludge or waste disposal, and 
drainage from raw material storage.'' Section 402(a)(1) and NPDES 
regulations [40 CFR 122.44(k)] also provide for best management 
practices to control or abate the discharge of pollutants when numeric 
limitations and standards are infeasible. In addition, section 
402(a)(2), read in concert with section 501(a), authorizes EPA to 
prescribe as wide a range of permit conditions as the Administrator 
deems appropriate in order to ensure compliance with applicable 
effluent limitations and standards and such other requirements as the 
Administrator deems appropriate.
    SBFs adhered to discharged cuttings may contain barite (used as a 
weighting agent in the drilling fluid system), and can also be 
contaminated with formation crude oil. Barite is a mineral principally 
composed of barium sulfate, however, barite ore is generally known to 
have trace contaminants of several heavy metals such as mercury, 
cadmium, arsenic, chromium, copper, lead, nickel, and zinc. Formation 
oil is an ``indicator'' pollutant for the many toxic and hazardous 
pollutant components present in the formation (crude) oil, such as 
aromatic and polynuclear aromatic hydrocarbons. These formation oil 
pollutants include benzene, toluene, ethylbenzene, naphthalene, 
phenanthrene, and phenol. For a complete listing of pollutants 
associated with SBF readers should turn to Table VII-1 in the EPA 
February 1999 proposal SBF Development Document (EPA-821-B-98-021). 
Many of these SBF pollutants are designated as hazardous pollutants 
under CWA section 307(a)(1), see 40 CFR. 410.15, and oil is a hazardous 
substance under section 311 of the CWA.
    It should also be noted that many of these same pollutants can also 
be found in SBF discharges not associated with cuttings (e.g., 
incidental spills, accumulated solids, deck drainage). Also, the 
drilling fluid (SBF based) can contain barite and trace contaminants of 
several heavy metals. Incidental spills of SBF can release these toxic 
and hazardous pollutants into the environment. In addition, 
approximately 75 barrels per well of solids, of which up to 25% is SBF, 
accumulate in the rig mud pits, sand traps, and other equipment. These 
accumulated solids may be discharged during equipment cleaning 
operations.
    SBF discharges such as spills and leaks and accumulated solids may 
also be co-mingled with deck drainage which may also contain other 
toxic and hazardous pollutants. Deck drainage includes all water 
resulting from spills, platform washings, deck washings, tank cleaning 
operations and run-off from curbs, gutters, and drains including drip 
pans and work areas. Lists of pollutants and pollutant concentrations, 
including toxic and hazardous pollutants, in untreated deck drainage 
are contained in Tables X-17, X-18, and X-19 of the Final Offshore 
Development Document (EPA-821-R-93-003).
    Therefore, the BMP alternatives to numeric limitations and 
standards in this notice are directed, among other things, at 
preventing or otherwise controlling leaks, spills, and discharges of 
toxic and hazardous pollutants in SBF cuttings and non-cuttings wastes.

B. BMP Alternatives for SBF Discharges Associated with Cuttings

    As previously stated, EPA is considering three options for the 
final rule for the BAT limitation and NSPS controlling SBF retained on 
discharged cuttings: (1) A single numeric discharge limitation with an 
accompanying compliance test method; (2) allowing operators to choose 
either a single numeric discharge limitation with an accompanying 
compliance test method, or as an alternative, a set of BMPs that 
employs limited cuttings monitoring; or (3) allowing operators to 
choose either a single numeric discharge limitation with an 
accompanying compliance test method or an alternative set of BMPs that 
employ no cuttings monitoring. The BMP alternatives were developed with 
input from EPA Regional permit writers and industry. Under the third 
alternative cuttings discharge, BMPs option (i.e., cuttings not 
monitored), EPA is also considering whether to require as a BMP the use 
of a cuttings dryer discussed above as representative of BAT/NSPS or to 
make the use of a cuttings dryer optional.
    Some industry representatives have expressed an interest in using 
BMPs that are not demonstrated through limited cuttings monitoring as 
equivalent to a numeric cuttings retention limit to control discharges 
of SBF associated with cuttings. Two issues were identified by the 
industry representatives as a basis for their support of using BMPs as 
an alternative discharge limitation: (1) Low gravity solids (or 
``fines'') build-up in an active mud system; and (2) engineering 
limitations in the installation of cuttings dryers and supporting 
equipment on certain rigs. If operators are correct in their assertion 
that setting a numeric cuttings retention limit is infeasible, EPA may 
use BMPs to control SBF-wastes.
    As discussed in the Development Document for the February 1999 
Proposal (EPA-821-B-98-021), solids control equipment generally 
increases the mechanical degradation of drill solids (i.e., larger 
particles are broken into smaller particles). An undesirable increase 
in drilling fluid weight and viscosity can occur when drill solids 
degrade into fines that cannot be removed by solids control equipment 
[i.e., generally classified as  5 microns (10-\6\ meters) in length]. 
An unacceptable high fines content (i.e., generally > 5% of total 
drilling fluid weight) may consequently lead to drilling problems 
(e.g., undesirable rheological properties, stuck pipe). Therefore, it 
is possible that the increased recovery of SBF from cuttings for re-use 
in the active mud system, often achieved through use of the cuttings 
dryer in solids control systems, may lead to a build-up in fines for 
certain formation characteristics (e.g., high reactivity of formation 
cuttings, limited loss of drilling fluid into the formation).
    In order to meet EPA's proposed numeric cuttings retention value 
where there are unfavorable formation characteristics, operators may be 
limited to: (1) Diluting the fines in the active mud system through the 
addition of ``fresh'' SBF; and/or (2) capturing a portion of the fines 
in a container and sending the fines to shore for disposal. One SBF 
manufacturer stated in a verbal conversation with EPA that over the 
course of the past year (1999), a Canadian operator generated 12,000 
barrels of SBF which had a fines content

[[Page 21570]]

that rendered it unusable and untreatable for future drilling 
applications.
    Currently, however, EPA does not have documentation that the build-
up of fines in SBF drilling is a widespread problem in the United 
States or one that cannot be handled by operators in the United States. 
The absence of documented fines build-up problems in the GOM may be due 
to a sufficient loss of SBF drilling fluid with fines down-hole. This 
loss of fluid into the formation would require the addition of fresh 
SBF drilling fluid and minimize the build-up of fines. In addition, 
drilling rigs are now being designed and constructed to incorporate 
cuttings dryer and fines removal equipment into the solids control 
system. EPA is requesting data and comments on the expected frequency 
and conditions where operators are not able to meet EPA's new proposed 
SBF numeric cuttings retention numbers (see section IV.C.5) based on 
fines build-up in the active mud system.
    Some industry representatives have also suggested that some rigs 
are incapable of installing the equipment needed to meet EPA's proposed 
numeric cuttings retention limit (e.g., cuttings dryers, fines removal 
equipment). EPA staff visited two offshore GOM rigs where cuttings 
dryer and fines removal equipment was and was not able to be installed 
successfully into the existing solids control equipment system. The 
cuttings dryer that was able to be installed into the existing solids 
control system was smaller than the other cuttings dryer system on the 
other visited rig. Moreover, the successful installation also relied on 
an auger transport system for moving cuttings from the existing solids 
control system to the new cuttings dryer and fines removal equipment. 
The key cuttings dryer and fines removal equipment installation 
limitations appear to be whether rigs can install cuttings dryers and 
fines removal equipment near the existing solids control units and 
whether an auger cuttings transport system can be used to move cuttings 
from the existing solids control units to the new equipment. EPA's site 
visit and statements by industry representatives give differing 
viewpoints on how many rigs cannot incorporate new equipment to meet 
EPA's proposed cuttings retention number. Therefore, EPA requests 
further information and data to identify the name and number of rigs 
that cannot incorporate new equipment to meet EPA's cuttings retention 
number.

C. BMP Alternatives for SBF Discharges Not Associated with Cuttings

    As previously stated, EPA is considering two options in the final 
rule for BAT limitation and NSPS for controlling SBFs not associated 
with SBF drill cuttings: (1) zero discharge; or (2) allowing operators 
to choose either zero discharge or an alternative set of BMPs with an 
accompanying compliance method. The follow sections describe several 
types of SBF discharges not associated with cuttings that can be 
controlled through either zero discharge or a set of BMPs. At this 
time, EPA's preferred option for these SBF non-cuttings wastes is to 
give operators the choice of selecting either zero discharge or using a 
set of BMPs to control these discharges (Option 2 identified above). 
This approach would give operators the flexibility of selecting a 
single numeric effluent limitation or a set of BMPs designed for their 
respective facility.
1. Accumulated Solids
    Accumulated solids is one example of a non-cuttings SBF discharge. 
Industry representatives have stated that industry is split on the 
practice of discharging accumulated solids with some discharging 
accumulated solids provided permit limitations and standards are met 
and others opting to haul this material to shore for disposal (see 
section II.B.3). Approximately 75 barrels per well of fine solids and 
barite, of which up to 25% is SBF, accumulate in the rig mud pits, sand 
traps, and other equipment. Several hundred barrels (approximately 200 
to 400 barrels) of water are used to wash out the mud pits. Industry 
representatives also indicated that those oil and gas extraction 
operations that discharge wash water and accumulated solids first 
recover free SBF.
    Industry has submitted to EPA Region 6 and EPA Headquarters a list 
of BMPs that can minimize these discharges. Accordingly, Industry may 
wish to select BMPs as the method for controlling these discharges 
instead of zero discharge.
2. SBF Spills During Drilling Operations
    Industry also noted that BMPs are already in place on most rigs to 
prevent spills during connections and disconnections of the drill 
string. Typical waste minimizing techniques include slugging the pipe 
(a small volume of heavy mud is pumped into the drill pipe to create a 
hydrostatic differential inside the drill pipe) with heavy mud. Rubber 
wipers may also be used on the inside and outside of the drill pipe to 
remove any residual mud before racking the pipe in the derrick (i.e., 
storing the pipe on the rig). In some cases, the mud is captured with 
mud buckets and returned to the active mud system. Any spills on the 
rig floor can also be squeegeed back through the rotary into the mud 
system. A mud vacuum is also sometimes used. Pipe racks and the rig 
floor may also be designed with drip pans underneath to capture any 
remaining spillage. Captured fluid may go to the rig's oil/water sump 
for treatment and possible recovery. Industry estimated that 
essentially all of the SBF that spills on the rig floor is recovered 
using the controls described above. The amount of SBF spilled on the 
rig floor that is not captured by current practices is estimated by 
industry to be less than 1 gallon SBF per 100 feet drilled.
    Industry may wish to select BMPs as the method for controlling 
these discharges instead of zero discharge.

D. Implementation of BMP Alternative (the BMP Plan)

    BMPs are inherently pollution prevention practices. BMPs may 
include the universe of pollution prevention encompassing production 
modifications, operational changes, material substitution, materials 
and water conservation, and other such measures. BMPs include methods 
to prevent toxic and hazardous pollutants from reaching receiving 
waters. Because BMPs are most effective when organized into a 
comprehensive facility BMP Plan, EPA solicits comments on a BMP Plan 
requirement as a component of BMPs as an alternative to a numeric 
limitation or standard.
    A BMP Plan would not be required if operators did not use BMPs to 
control SBF discharges. Moreover, EPA is proposing that operators be 
allowed to choose whether one or both of the two SBF wastestream (i.e., 
SBF discharges associated with cuttings, SBF discharges not associated 
with cuttings) be managed through the BMP alternatives.
    Accordingly, EPA is also proposing that operators only be required 
to develop and implement a BMP Plan for those SBF wastestreams it 
elects to manage through the BMP alternatives. Moreover, EPA is 
proposing that operators only be required to develop one BMP Plan if it 
elects to manage both SBF wastestreams (e.g., discharges associated 
with cuttings and SBF discharges not associated with cuttings) through 
use of the BMP alternatives. As there are common elements in BMP Plans 
that cover both SBF wastestreams, EPA has grouped common elements 
together and identified specific elements for specific SBF wastestreams

[[Page 21571]]

in separate sections. Table V.D.1 is a guide on what BMP Plan elements 
are required for the different BMP alternatives.
    The SBF BMP common elements were compiled from several Regional 
permits, an EPA guidance document [i.e., Guidance Document for 
Developing Best Management Practices (BMP)'' (EPA 833-B-93-004, U.S. 
EPA, 1993)], and draft industry BMPs. EPA feels that these common 
elements represent the appropriate mix of broad directions needed to 
complete a BMP Plan along with specific tasks common to all drilling 
operations.

 Table V.D.1: BMP Plan Elements Required for the Different BMP Alternatives to SBF Numeric Effluent Limitations
                                            Guidelines and Standards
----------------------------------------------------------------------------------------------------------------
                                   SBF wastestreams operator elects to manage with BMP
                                                       alternatives
                               -----------------------------------------------------------  BMP plan elements <SUP>e</SUP>
    BMP plan alternatives <SUP>a</SUP>                           SBF discharges      SBF discharges   (listed by section of
                                SBF discharges not    associated with    associated with        this notice)
                                  associated with      cuttings (no          cuttings
                                    cuttings <SUP>b</SUP>         monitoring) <SUP>c</SUP>      (monitoring) <SUP>d</SUP>
----------------------------------------------------------------------------------------------------------------
1.............................  X                   ..................  .................  Sec. V.D.1 to 5,6.
2.............................  X                   X                   .................  Sec. V.D.1 to 5,6,7.
3.............................  X                   ..................  X                  Sec. V.D.1 to 5,6,8.
4.............................  ..................  X                   .................  Sec. V.D.1 to 5,7.
5.............................  ..................  ..................  X                  Sec. V.D.1 to 5,8.
----------------------------------------------------------------------------------------------------------------
<SUP>a</SUP> Operators that elect to meet numeric limitations and standards are not required to develop BMPs or a BMP Plan.
 
<SUP>b</SUP> This includes incidental SBF spills, accumulated solids, and deck drainage (see section V.C).
<SUP>c</SUP> This includes SBF discharges associated with cuttings with no equivalency determination through monitoring
  (see section V.B).
<SUP>d</SUP> This includes SBF discharges associated with cuttings with an equivalency determination through monitoring
  (see section V.B).
<SUP>e</SUP> Operators are only required to develop one BMP Plan if the operator elects to manage both SBF wastestreams
  (e.g., discharges associated with cuttings and SBF discharges not associated with cuttings) through use of the
  BMP alternatives.

1. SBF BMP Plan Purpose and Objectives
    The BMP Plan must be designed to prevent or minimize the generation 
and the potential for the discharge of SBF from the facility to the 
waters of the United States through normal operations and ancillary 
activities. The Permittee must establish specific objectives for the 
control of SBF by conducting the following evaluations:
    a. The Permittee should identify which SBF wastestreams (i.e., 
cuttings related or non-cuttings related) are to be controlled through 
use of the BMP alternatives and which SBF wastestreams are to be 
controlled through use of numeric effluent limitation guidelines and 
standards.
    b. Each facility component or system controlled through use of BMP 
alternatives must be examined for its SBF-waste minimization 
opportunities and its potential for causing a discharge of SBF to 
waters of the United States due to equipment failure, improper 
operation, natural phenomena (e.g., rain, snowfall).
    c. For each SBF wastestream controlled through BMP alternatives 
where experience indicates a reasonable potential for equipment failure 
(e.g., a tank overflow or leakage), natural condition (e.g., 
precipitation), or other circumstances to result in SBF reaching 
surface waters, the BMP Plan should include a prediction of the 
direction, rate of flow and total quantity of SBF which could be 
discharged from the facility as a result of each condition or 
circumstance.
2. Requirements
    The BMP Plan must be consistent with the objectives in section 
V.D.1. The BMP Plan may reflect requirements within spill response 
plans required by the Minerals Management Service (see 30 CFR 254) or 
other Federal or State requirements and incorporate any part of such 
plans into the BMP Plan by reference.
    The Permittee must certify that its BMP Plan is complete, on-site, 
and available upon request to EPA or the NPDES Permit controlling 
authority. This certification should identify the NPDES permit number 
and be signed by an authorized representative of the Permittee. For new 
exploratory operations, the certification should be submitted no later 
than the written notice of intent to commence discharge. For existing 
dischargers, the certification should be submitted within one year of 
permit issuance. The BMP Plan must:
    a. Be documented in narrative form, and must include any necessary 
plot plans, drawings or maps, and must be developed in accordance with 
good engineering practices. At a minimum, the BMP Plan must contain the 
planning, development and implementation, and evaluation/reevaluation 
components. Examples of these components are contained in ``Guidance 
Document for Developing Best Management Practices (BMP)'' (EPA 833-B-
93-004, U.S. EPA, 1993).
    b. Include the following provisions concerning BMP Plan review:
    (i) Be reviewed by plant engineering staff and the plant manager as 
warranted by changes in the operation or at the facility which are 
covered by the BMP.
    (ii) Be reviewed and endorsed by the individuals responsible for 
development and implementation of the BMP Plan. Such review and 
endorsement may be performed by the establishment of a program of 
documented initial and annual refresher training of drilling equipment 
operators, maintenance personnel, and other technical and supervisory 
personnel who have responsibility for operating, maintaining, or 
supervising the operation and maintenance of drilling equipment.
    (iii) Include a statement that the above reviews have been 
completed and that the BMP Plan fulfills the requirements set forth in 
this section of the notice. The statement must be certified by the 
dated signatures of the individuals responsible for development and 
implementation of the BMP Plan.
    c. Establish specific best management practices to meet the 
objectives identified in section V.D.1, addressing each component or 
system capable of generating or causing a release of significant 
amounts of SBF, and identifying specific preventative or remedial 
measures to be implemented.
3. Documentation
    The Permittee must maintain a copy of the BMP Plan and related 
documentation (e.g., training certifications, summary of the monitoring 
results, records of SBF-equipment spills, repairs, and maintenance) at 
the facility and must make the BMP Plan and related

[[Page 21572]]

documentation available to EPA or the NPDES Permit controlling 
authority upon request. Submission of the BMP Plan and related 
documentation shall be at the frequency established by the NPDES permit 
control authority (i.e., Permit monitoring reports), but in no case 
less than once per five years.
4. BMP Plan Modification
    For those SBF wastestreams controlled through BMP alternatives, the 
Permittee must amend the BMP Plan whenever there is a change in the 
facility or in the operation of the facility which materially increases 
the generation of those SBF-wastes or their release or potential 
release to the receiving waters. At a minimum the BMP Plan must be 
reviewed once every five years and amended within three months if 
warranted. Any such changes to the BMP Plan must be consistent with the 
objectives and specific requirements listed above. All changes in the 
BMP Plan must be reviewed by the plant engineering staff and plant 
manager.
5. Modification for Ineffectiveness
    At any time, if the BMP Plan proves to be ineffective in achieving 
the general objective of preventing and minimizing the generation of 
SBF-wastes and their release and potential release to the receiving 
waters and/or the specific requirements above, the permit and/or the 
BMP Plan must be subject to modification to incorporate revised BMP 
requirements.
6. Specific Pollution Prevention Activities for SBF Discharges Not 
Associated With Cuttings
    An approved BMP Plan may include the following examples of specific 
pollution prevention activities for controlling SBF discharges not 
associated with cuttings.
    a. Establishing programs for identifying, documenting, and 
repairing leaking SBF equipment, tracking SBF equipment repairs, and 
training personnel to report and evaluate SBF spills, as detailed in 
section V.E.2.c and V.E.2.d below.
    b. Establishing programs for identifying, documenting, and 
repairing malfunctioning SBF equipment, tracking SBF equipment repairs, 
and training personnel to report and evaluate malfunctioning SBF 
equipment.
    c. Recovering and returning to the process or an appropriate 
storage container to the maximum extent practicable spilled or leaked 
drilling fluids to prevent their discharge.
    d. Immediately recovering spills of drilling fluid on the drill 
floor using a vacuum, grated trough, or comparable system.
    e. Providing adequate containment for SBF spills on the drill deck 
to minimize potential spills.
    f. Establishing mud pit and equipment cleaning methods in such a 
way as to minimize the potential for drilling fluids discharges, 
including but not limited to the following:
    (i) Ensuring proper operation and efficiency of mud pit agitation 
equipment.
    (ii) Using mud gun lines during mixing to provide agitation in dead 
spaces to minimize solids accumulation.
    (iii) Pumping drilling fluids off for use, recycle, or disposal 
before using wash water to dislodge solids.
    (iv) Limiting the volume of wash water used to the minimum needed 
to dislodge and slurry solids for overboard discharge.
    (v) Using water-minimizing techniques (e.g., steam or compressed 
air) where possible to clean the sides of the mud pit.
    g. The Permittee must also include the number and dates of non-
cuttings SBF-discharges managed by BMPs in their NPDES permit reports. 
The description of these discharges must also include estimated volume 
of SBF discharged and any corrective actions taken to respond to such 
non-cuttings SBF-discharges.
7. Specific Pollution Prevention Activities for SBF Discharges 
Associated With Cuttings (No-Verification Cuttings Monitoring)
    The following specific pollution prevention activities are required 
in a BMP Plan when operators elect to control SBF discharges associated 
with cuttings by a set of BMPs where no equivalency determination is 
made through limited cuttings monitoring.
    a. Establishing programs for identifying, documenting, and 
repairing malfunctioning SBF equipment, tracking SBF equipment repairs, 
and training personnel to report and evaluate malfunctioning SBF 
equipment.
    b. Establishing operating and maintenance procedures for each 
component in the solids control system in a manner consistent with the 
manufacturer's design criteria for flow, fluid type, density, and 
rheological properties, which may include, but are not limited to, the 
following:
    (i) Maintaining shale shakers such that units have adequate 
capacity for circulating the active drilling fluid volume, have screens 
of such mesh size that no more than 75% of screen area is wet, and 
maintain the manufacturer's design screen tension, maximum ``G'' force, 
maximum positive screen deck angle, and maximum vibrator assembly angle 
to screen deck;
    (ii) Maintaining centrifuges such that units have sufficient 
capacity for active drilling fluid volume (note: for most situations 
where 8.5" or larger hole sizes are drilled, multiple units may be 
required), have bowl revolutions per minute (RPM) adjusted as high as 
practical to maximize ``G'' force, have bowl/conveyor RPM differential 
minimized to subject cuttings to ``G'' Force for the maximum time 
period before leaving the unit, have feed tube adjusted to introduce 
cuttings to the maximum bowl diameter as they enter the unit, and have 
processing rates closely monitored to maximize cuttings discharge with 
minimum SBF retention.
    c. Using gel pills or other applicable measures in order to 
minimize contamination of drilling fluids when changing from water-
based to non-aqueous based drilling fluids and vice versa.
    d. Sending interface muds through the mud recovery system prior to 
discharge or disposal.
8. Specific Pollution Prevention Activities for SBF Discharges 
Associated With Cuttings (Verification Cuttings Monitoring)
    The following specific pollution prevention activities are required 
in a BMP Plan when operators elect to control SBF discharges associated 
with cuttings by a set of BMPs that are demonstrated, through limited 
cuttings monitoring, to meet the same level of control as the BAT/NSPS 
cuttings retention limit.
    a. All the specific pollution prevention activities in section 
V.D.7
    b. A daily retort analysis must be performed (in accordance with 
Appendix 7 to Subpart A of Part 435) during the first 0.33 X days where 
X is the anticipated total time (in days) to drill that particular 
well. The retorts analyses will be documented in the well retort log.
    (i) When the arithmetic average of the cuttings retort analyses is 
less than the numeric cuttings retention limitation and standard, 
monitoring of cuttings may cease for that individual well.
    (ii) When the arithmetic average of the cuttings retort analyses is 
greater than the numeric cuttings retention limitation and standard, 
monitoring will continue for the second 0.33X days where X is the 
anticipated total time (in days) to drill that particular well. If 
after the second 0.33X, the arithmetic average of the cuttings retort 
analyses is still greater than numeric cuttings retention

[[Page 21573]]

limitation and standard then monitoring will continue for the remainder 
of the well operation. Moreover, this incident will be reported within 
one week to EPA or the NPDES Permit controlling authority for review 
and recommendations.
    c. The Permittee must also include the cuttings monitoring data and 
dates of monitored and non-monitored SBF-cuttings discharges managed by 
BMPs in their NPDES permit reports.

E. Paperwork Reduction Act Requirements Related to BMPs Alternatives

    The information collection requirements related to the BMP 
alternatives in this notice have been submitted for approval to the 
Office of Management and Budget (OMB) under the Paperwork Reduction 
Act, 44 U.S.C. 3501 et seq. An Information Collection Request (ICR) 
document has been prepared by EPA (ICR No. 1953.01) and a copy may be 
obtained from Sandy Farmer by mail at Collection Strategies Division, 
U.S. Environmental Protection Agency (2822), 1200 Pennsylvania Ave., 
NW, Washington, DC 20460; by e-mail at <a href="/cdn-cgi/l/email-protection#b0d6d1c2ddd5c29ec3d1ded4c9f0d5c0d19ed7dfc6"><span class="__cf_email__" data-cfemail="2c4a4d5e41495e025f4d4248556c495c4d024b435a">[email protected]</span></a>, or by 
calling (202) 260-2740. A copy may be downloaded from the Internet at 
http://www.epa.gov/icr.
    The BMP alternatives identified in this notice include information 
collection requirements that are intended to control the discharges of 
SBF in place of numeric effluent limitations and standards. These 
information collection requirements include, for example: (1) Training 
personnel; (2) analyzing spills that occur; (3) identifying equipment 
items that might need to be maintained, upgraded, or repaired; (4) 
identifying procedures for waste minimization; (4) performing 
monitoring (including the operation of monitoring systems) to establish 
equivalence with a numeric cuttings retention limitation and to detect 
leaks, spills, and intentional diversion; and (5) generally to 
periodically evaluate the effectiveness of the BMP alternatives.
    The BMP alternatives also require operators to develop and, when 
appropriate, amend plans specifying how operators will implement the 
specified BMP alternatives, and to certify to the permitting authority 
that they have done so in accordance with good engineering practices 
and the requirements of the regulation. The purpose of those provisions 
is, respectively, to facilitate the implementation of BMP alternatives 
on a site-specific basis and to help the regulating authorities to 
ensure compliance without requiring the submission of actual BMP Plans. 
Finally, the recordkeeping provisions are intended to facilitate 
training, to signal the need for different or more vigorously 
implemented BMP alternatives, and to facilitate compliance assessment.
    EPA has structured the BMP alternatives to provide maximum 
flexibility to the regulated community and to minimize administrative 
burdens on National Pollutant Discharge Elimination System (NPDES) 
permit authorities that regulate oil and gas extraction facilities. 
Although EPA does not anticipate that operators will be required to 
submit any confidential business information or trade secrets as part 
of this ICR, all data claimed as confidential business information will 
be handled by EPA pursuant to 40 CFR Part 2.
    For the five SBF BMP alternatives (see Table V.D.1), the public 
reporting burdens range from an estimated 515 hours per respondent per 
year [i.e., (12,500 initial hours/3 years + 21,604 annual hours/year)/
50 SBF well operators] to 1,363 hours per respondent per year [i.e., 
(17,500 initial hours/3 years + 62,334 annual hours/year)/50 SBF well 
operators]. EPA also estimated the annual burden for EPA Regions, the 
NPDES permit controlling authorities, to review BMPs and ensure 
compliance. EPA estimates that essentially all of the SBF discharges 
will occur in Federal offshore waters or in Cook Inlet, Alaska, where 
EPA Region X retains NPDES permit controlling authority. The EPA 
Regional burden for reviewing BMP Plans is estimated at 5.7 hours per 
year [i.e., (8 initial hours/3 years + 3 annual hours/year)/50 SBF well 
operators].
    For new exploratory operations, the certification of BMP Plan 
completion should be submitted to the permit control authority no later 
than the written notice of intent to commence discharge. For existing 
dischargers, the certification should be submitted within one year of 
permit issuance. In addition, a copy of the completed BMP Plan may be 
requested by the NPDES permit control authority at any time. Submission 
of records to the permit control authority demonstrating periodic 
review of the BMP Plan are due at a minimum once every five years. 
Monitoring reports demonstrating compliance with the BMP Plan are due 
to the permit control authority at the frequency set by the permit 
control authority (e.g., monthly or annually) and may be requested by 
the permit control authority on demand. Re-fresher training 
certifications demonstrating compliance with the BMP Plan are due to 
the permit control authority at the frequency set by the permit control 
authority (e.g., semi-annually) and may be requested by the permit 
control authority on demand.
    For the five SBF BMP alternatives (see Table V.D.1), the public 
reporting costs range from approximately $18,600 per respondent per 
year [i.e., ($921,875 initial costs/3 years + $623,625 annual costs/
year)/50 SBF well operators] to $38,000 hours per respondent per year 
[i.e., ($1,290,625 initial costs/3 years + $1,465,100 annual costs/
year)/50 SBF well operators]. The EPA Regional costs for reviewing BMP 
Plans is estimated at approximately $180 per year [i.e., ($12,800 
initial costs/3 years + $4,800 annual costs/year) / 50 SBF well 
operators].

[[Page 21574]]

    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes time 
needed to: review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information and 
disclosing and providing information; adjust the existing ways to 
comply with previously applicable instructions and requirements; train 
personnel to be able to respond to the collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR Part 9 and 48 CFR Chapter 15.
    Comments are requested on the Agency's need for this information, 
the accuracy of the provided burden estimates, and any suggested 
methods for minimizing respondent burden, including through the use of 
automated collection techniques. Send comments on the ICR to the 
Director, Collection Strategies Division; U.S. Environmental Protection 
Agency (2822); 1200 Pennsylvania Ave., NW, Washington, DC 20460; and to 
the Office of Information and Regulatory Affairs, Office of Management 
and Budget, 725 17th St., NW, Washington, DC 20503, marked ``Attention: 
Desk Officer for EPA.'' Include the ICR number in any correspondence. 
Since OMB is required to make a decision concerning the ICR between 30 
and 60 days after April 21, 2000, a comment to OMB is best assured of 
having its full effect if OMB receives it by May 22, 2000. The final 
rule will respond to any OMB or public comments on the information 
collection requirements contained in this notice.

    Dated: April 12, 2000.
J. Charles Fox,
Assistant Administrator for Water.
[FR Doc. 00-9655 Filed 4-20-00; 8:45 am]
BILLING CODE 6560-50-P


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