According to EPA, polluted storm water runoff is a leading cause of impairment to the nearly 40 percent of surveyed U.S. water bodies that do not meet water quality standards. Pollutants in storm water can significantly impact the environmental quality of U.S. waters by destroying aquatic habitat and elevating pollutant concentrations and loadings. Storm water discharges from construction activities can increase pollutants and sediment amounts to levels above those found in undisturbed watersheds. The NPDES Program was created in 1972 under the Clean Water Act to control water pollution from point sources—any discernible, confined, and discrete conveyance. Though EPA has had authority since 1972 to regulate storm water discharges, it declined to require permits for most of these discharges for over 15 years. However, in 1987, Congress passed the Water Quality Act, which amended the Clean Water Act to require the regulation of storm water discharges. Accordingly, EPA established the NPDES Storm Water Program, which requires certain municipal, industrial, and construction sources to obtain permit coverage for storm water discharges. The storm water program was implemented in two phases: 1. Phase I, adopted in 1990, which applies to medium and large municipal separate storm sewer systems and 11 categories of industrial activity (including large construction activity disturbing 5 or more acres of land); and 2. Phase II, adopted in 1999, which applies to small municipal separate storm sewer systems and small construction activity disturbing between 1 and 5 acres of land. The Phase II final rule was published on December 8, 1999, and required storm water dischargers to obtain permit coverage by March 10, 2003. When promulgated, EPA assumed that few, if any, oil and gas sites would be impacted by the construction component of the Phase II rule. Subsequent to rule promulgation, EPA decided to reevaluate how many oil and gas construction sites would be subject to the rule and postponed the deadline for seeking coverage to March 10, 2005, for oil and gas construction activities disturbing between 1 and 5 acres of land. The postponement was designed to allow EPA enough time to analyze and better evaluate the impact of the permit requirements on the oil and gas industry and to reconsider how key elements of the Phase II regulations would apply to small oil and gas sites. Analyzing the impact of storm water permitting on oil and gas construction activities is important because this type of construction requires companies to undertake a number of earth disturbing activities. These activities include clearing, grading, and excavating, associated with oil and gas exploration and production; processing and treatment operations; and transmission facilities. For example, to prepare a site for drilling, operators must create a pad to support the drilling equipment, such as the derrick. Creating the pad generally requires clearing and grading—or leveling—an area and then placing rock, concrete, or other materials on it to stabilize the surface. If necessary, companies may also construct access roads to transport equipment and other materials to the site as well as additional pipelines to connect the site to existing pipelines. As with other construction activities, storm water runoff containing sediment from oil and gas construction can lead to the degradation of nearby waters if not properly managed. Figure 1 identifies activities, including oil and gas construction, covered under Phase I and II of the NPDES Storm Water Program. NPDES storm water programs are administered at both the federal and state level. Under the Clean Water Act, states whose programs EPA has approved may manage their state’s programs. Forty-five states, including Louisiana, are responsible for administering their own NPDES program, including its storm water component; and EPA is responsible for administering and enforcing the NPDES Storm Water Program in five states. In addition, EPA is the NPDES storm water permitting authority for oil and gas activities in Oklahoma and Texas. In many environmental programs, regulated entities obtain individual permits. In contrast, under the storm water program, regulated entities may seek coverage under a single document called a general permit. A general permit is issued by EPA or by the state environmental regulator and is available to all eligible operators in the EPA or state program. With respect to regulated discharges of storm water associated with construction activity, EPA’s general permit is called the Construction General Permit. Each general permit, whether it is issued by EPA or by a state program, sets forth many steps that regulated entities must take to ensure the minimization of storm water pollution. To obtain coverage under the EPA Construction General Permit, regulated entities must file a complete and accurate Notice of Intent to be covered under the general permit prior to initiating the construction activities. The Notice of Intent includes a signed certification statement from a company official acknowledging that the operator has met all eligibility conditions of the permit, including development and implementation of a plan to control the discharge of pollutants from the site. Examples of types of sediment and erosion controls that can be included in the plan consist of vegetative cover, rocks, and hay bales to filter storm water, or terracing slopes to divert and slow runoff. Figure 2 diagrams the steps that must be completed to obtain coverage under EPA’s Construction General Permit. One of the steps operators must complete when filing a Notice of Intent involves determining whether the construction activity meets the permit’s eligibility conditions that address endangered species. The purpose of the Endangered Species Act is to conserve endangered and threatened species and the ecosystems upon which they depend. The act prohibits the “taking” of any endangered fish or wildlife. Under the act and implementing regulations, federal agencies, including EPA, must determine whether their activities might affect a listed species or habitat identified as critical. If effects are likely, the agencies, including EPA, must consult with the Fish and Wildlife Service (FWS) or the National Marine Fisheries Service (NMFS) to ensure that the activities, such as issuing permits, will not jeopardize a species’ continued existence or adversely modify its designated critical habitat. In an effort to satisfy its responsibilities under the Endangered Species Act, EPA consulted with FWS and NMFS to create language for its Construction General Permit that requires operators to self-certify that they have examined their project’s potential effects on endangered species. Specifically, language in appendix C of EPA’s Construction General Permit sets out the procedures operators are to follow in meeting permit conditions that address endangered species for coverage under the permit. Briefly, the procedures in the permit require companies to determine if federally listed threatened or endangered species or their critical habitats are present on or near the project area, determine if the construction activity’s storm water discharges or related activities are likely to affect any threatened or endangered species or designated critical habitat on or near the project area, determine if measures can be implemented to avoid adverse effects, and if adverse effects are likely, work with FWS or NMFS to modify the project and/or take other actions to gain authorization for the activity. A small fraction of total oil and gas construction activities have sought permit coverage under Phase I of EPA’s storm water program. Industry and state officials we spoke with confirmed that few of their sites obtained permit coverage under the Phase I rule, since their activities rarely exceeded Phase I’s 5-acre size threshold. However, EPA clarified that since industry decides whether to seek permit coverage for their oil and gas construction activities, the total number of activities for which permit coverage should have been obtained is unknown. EPA representatives told us they expect that pipeline projects are more likely to obtain permit coverage than individual drilling sites due to the higher visibility of pipelines, additional preconstruction approval processes under other laws, and the higher likelihood of pipeline construction being conducted by larger companies with more experienced legal and environmental staff. Although there is currently no centralized storm water permit database that tracks storm water permit coverage nationwide, our review of Phase I storm water permit data for three major oil and gas producing states— Louisiana, Oklahoma, and Texas—confirmed that permit coverage has been obtained for only a small number of oil and gas construction activities, compared with the thousands of drilling activities occurring in those states. Our review found 433 sites in Louisiana, Oklahoma, and Texas that have obtained construction storm water permit coverage for their oil and gas activities in the most recent 12-month period for which data were available. Table 1 shows the breakdown of permit coverage by state for the most recent 12 months that data were available. Further analysis of Phase I storm water permitting data showed that the principal activity for which oil and gas companies sought storm water permit coverage in these states was for pipeline construction. Three hundred four of the 433 activities for which permit coverage was obtained in the most recent 12-month period—about 70 percent—were for pipeline construction activities. Table 2 shows the breakdown of permit coverage by state and activity. Fifty-four percent of the 304 pipeline activities in these states disturbed more than 10 acres of land. Eighty-seven pipeline activities—almost 30 percent of all the pipeline permittees—exceeded 20 acres in size. Another key oil and gas construction activity in these states was oil and gas well drilling, with 72 of the 433 permits—about 17 percent—involving drilling activities. Fifty-six percent of these drilling activities disturbed between 5 and 8 acres of land. The drilling activities for which storm water permit coverage was sought represents a small portion of the total number of oil and gas drilling activities occurring in these three states. We reviewed onshore well completion data for Louisiana, Oklahoma, and Texas and found that between 2001 and 2003, an average of ten-thousand wells was completed each year. Table 3 provides data on the number of wells completed in these three states between 2001 and 2003 and the average number of wells completed each year over the 3-year period. Industry officials must decide whether or not they will apply for permit coverage, and some may have applied for storm water permit coverage on few occasions because they broke their construction activities—which taken together would exceed 5 acres—into what they believed were distinct projects that disturbed less than 5 acres each. During our site visit to a Texas gas construction location, we observed three drilling sites situated adjacent to each other with an attached pipeline.