Opinion ID: 705105
Heading Depth: 3
Heading Rank: 1

Heading: BCT Cost Test

Text: 49 The BCT cost test is made up of two parts, the POTW test and the industry cost-effectiveness test. The portion of the BCT cost test at issue here, the industry cost-effectiveness test, has been translated into the following mathematical formula: 50 BCT cost/lb. - BPT cost/lb. ------------------------------ < 1.29 BPT cost/lb. - preBPT cost/lb. 51 Based on this formula, EPA's first step was to calculate the existing cost of BPT under which some drilling muds were hauled to shore when they did not meet the no free oil test. EPA then calculated the BCT cost of hauling all drilling muds and cuttings within the Final Rule's three-mile limit. 52 Industry petitioners allege that EPA made two mistakes in calculating the cost of BPT. First, Industry petitioners contend that EPA mistakenly classified the costs of substituting mineral oil for diesel oil as a BPT cost. EPA candidly admits that it did commit this error. EPA contends, however, that this mistake was harmless error because, even with a substitution cost of zero (which EPA does not concede), the BCT level chosen still passes the BCT cost test once Industry petitioners' second contention is rejected. 53 Industry petitioners' second contention is that EPA exaggerated BPT onshore disposal costs for oil-based muds. According to Industry petitioners, no cost should be attributed to the onshore disposal of oil-based muds because dischargers actually sell the muds to mud companies who recondition the mud for reuse as drilling fluids. Industry petitioners assert that a correct calculation of the BPT cost should include only the transportation of oil-based muds to shore. As Industry petitioners view it, a recalculation of the industry cost-effectiveness test, omitting the cost attributed to product substitution and the cost attributed to the disposal of oil-based muds, causes EPA's zero discharge BCT level to fail the BCT cost test. 54 EPA counters that Industry petitioners are not permitted to raise their claim relating to the disposal cost of oil-based muds, because the issue was not raised during the rulemaking process. The requirement that a party raise its concerns to an agency prior to the publication of the final rule promotes agency autonomy and judicial efficiency. Ohio v. EPA, 997 F.2d 1520, 1528-29 (D.C.Cir.1993). Industry petitioners counter that they could not have raised this issue earlier because EPA's calculations were not available until the Rule was published. Industry petitioners' claim is not persuasive, however, because although the exact calculations may have been unavailable, we find ample record evidence that Industry petitioners had sufficient notice that disposal costs of oil-based muds were being considered by EPA as part of the BCT cost test. 55 Even if Industry petitioners had the right to raise this issue, EPA persuasively argues that some cost must be associated with disposal of oil-based muds. For example, EPA suggests that there will be some solids in the process that still require disposal because they will not pass the no free oil test; that reconditioning all of the drilling fluid may not be feasible; and that for those fluids that are reused, there is probably some limit to the number of times such reuse can occur. Logically, there must be some cost associated with the reconditioning operation itself. EPA claims that all of these factors make the Industry petitioners' argument for zero disposal cost an unreasonable one. 56 We are persuaded by EPA that its revised BPT calculation passes the BCT cost test. When EPA drops the mistaken amount included for product substitution, and leaves the rest of the numbers the same, the result of the equation is 1.239. This figure is still lower than the permissible threshold of 1.29.