Opinion ID: 705105
Heading Depth: 2
Heading Rank: 1

Heading: produced water

Text: 23 The bulk of produced water is water trapped in underground reservoirs along with oil and gas that eventually rises to the surface with the produced oil and gas. Most of the oil and gas in the produced water is separated as part of the oil and gas extraction process. The remaining produced water, still containing some oil and grease, is then discharged overboard or otherwise disposed of. Produced water also includes the injection water used for secondary oil recovery and various well treatment chemicals added during production and oil and gas extraction. Produced water is the highest volume waste source in the offshore oil and gas industry. 24 Under the Final Rule, EPA determined that BAT and NSPS would be set to limit the discharge of oil and grease 9 in produced water to a daily maximum of 42 mg/l and a monthly average of 29 mg/l, based on the improved operating performance of gas flotation technology (otherwise referred to as improved gas flotation). BCT for produced water was set by the Final Rule to equal current BPT limitations (72 mg/l daily maximum, 48 mg/l 30-day average). 25 Gas flotation is a technology that forces small gas bubbles into the wastewater to be treated. As the bubbles rise through the produced water, they attach themselves to any oil droplets in their paths. As the gas and oil are separated from the wastewater, they rise to the surface, where they are skimmed away. EPA characterizes improved performance gas flotation as the gas flotation technology enhanced through improved operation and maintenance, more operator attention to treatment systems operations, chemical pretreatment to enhance system effectiveness, and possible resizing of certain treatment system components for increased treatment efficiency.
26 Industry petitioners contest the BAT and NSPS limits set by EPA for produced water. According to the Final Rule, BAT and NSPS limit the discharge of oil and grease to a 30-day average of 29 mg/l and a daily maximum of 42 mg/l by using improved performance gas flotation. Industry petitioners do not contest the use of improved gas flotation for obtaining BAT and NSPS; in fact, they approve of that technology and previously encouraged EPA to adopt gas flotation during the rulemaking process. However, Industry petitioners maintain that improved gas flotation removes only dispersed oil and grease from produced water; allegedly, the technology cannot remove dissolved oil from produced water. EPA has chosen to use a process known as EPA Method 413.1 to measure the levels of oil and grease in produced water, and therein lies the problem. According to Industry petitioners, Method 413.1 measures the content in the produced water of both the dispersed oil and grease, which the improved gas flotation technology can remove, and the dissolved oil, which the technology cannot remove, and it is not feasible to achieve the requisite BAT and NSPS levels using the total oil and grease content of the produced water as measured by Method 413.1. 27 When promulgating the Final Rule, EPA identified two methods of measuring oil and grease in produced water. EPA Method 413.1 mixes freon with a produced water sample. The freon and water then separate and the freon, which has attached to oil and grease in the water, is removed from the sample. The freon is then distilled out by heating, leaving a residue which, when weighed, indicates how much oil and grease was contained in the produced water sample. Standard Method 503E follows the same steps as Method 413.1; however, before the freon is distilled, a silica gel is added, which adsorbs water-soluble polar material. 10 The silica gel is then removed from the freon, the freon is distilled, and the residue is weighed to derive the level of oil and grease. Industry petitioners contend that because Method 503E does not measure dissolved oil, EPA should use Method 503E rather than Method 413.1 which does measure dissolved oil. EPA disputes that the silica gel used in Method 503E actually removes dissolved oil per se. EPA argues that the polar matter removed by the silica gel is made up of some of the soluble matter in produced water, but not necessarily all the dissolved oil in produced water. 28 EPA contends that the use of Method 413.1 provides more accurate and complete data to assess the treatment system. As EPA points out, it has consistently used Method 413.1 throughout the rulemaking process, including the calculation of all produced water levels that are set by the Final Rule. Furthermore, EPA also contends that improved gas flotation can be used to remove dissolved oil. 11 29 According to Industry petitioners, EPA's use of Method 413.1 violates both the CWA and the APA by ignoring relevant factors. The CWA requires BAT and NSPS to be based, in part, on approximately seven factors, including cost and nonwater quality environmental impacts. Industry petitioners contend that EPA has failed to demonstrate that improved gas flotation is available and achievable because the agency failed to consider the dissolved oil component of produced water. In another case challenging EPA effluent limitations, Association of Pacific Fisheries v. EPA, 615 F.2d 794 (9th Cir.1980), the Ninth Circuit remanded an EPA regulation to the agency for further findings because EPA had relied on a study that failed to demonstrate the effectiveness of the required technology. Id. at 819. The Ninth Circuit found that EPA had failed in its duty to articulate the reasons for its determination and had therefore failed to satisfy the requirements of the CWA in setting the effluent guidelines. Id. (citing Appalachian Power Co. v. EPA, 477 F.2d 495, 507 (4th Cir.1973)). 30 In the present case, however, EPA has pointed to empirical data in the rulemaking record showing that so-called dissolved oil is treated and removed by improved gas flotation. EPA points to a study entitled Oil Content in Produced Brine on Ten Louisiana Production Platforms (the Ten Platform Study), which documented oil and grease measurements under both Method 413.1 and Method 503E. Using the Ten Platform Study, EPA estimated the percentage of oil and grease removed by the gas flotation technique. According to EPA's estimates, gas flotation was used to remove dissolved oil ranging from a low of 58 percent up to a high of 98 percent. Unlike the situation in Association of Pacific Fisheries, therefore, here, EPA has relied on studies demonstrating that improved gas flotation is effective. 31 Industry petitioners point to numerous other sources within the record providing evidence that dissolved oil is not removable by improved gas flotation. Despite this evidence, however, we cannot find that EPA has failed to produce scientific data to support the agency's counterargument that gas flotation does remove at least some dissolved oil from produced water. This Court must defer to EPA's discretionary judgment when EPA has made a reasonable decision based on reliable data. 32 We are also persuaded by the fact that Method 413.1 was the method used when setting the BAT and NSPS limits. In setting the limits, EPA used the median platform from the 83 Platform Composite Study. 12 In other words, 50 percent of the platforms in the study discharged higher levels of pollutant, and 50 percent of the platforms discharged lower levels of pollutant. The daily maximum limitation was set so that there would be a 99 percent likelihood that a physical composite sample taken from the median platform would have a total oil and grease measurement less than or equal to that limitation. The monthly average was set so that there would be a 95 percent probability that a monthly average taken from the median platform would also be less than or equal to that limitation. EPA estimates that 60 percent of the platforms in the composite of 83 platforms already meet the new BAT limitations. For those platforms that do not already meet the new BAT standard, chemical coagulants can be used to improve the removal of dissolved or soluble oil. 13 33 In light of the deference due the EPA, especially concerning scientific and technical data, Industry petitioners have not proven their claim that improved gas flotation does not remove dissolved oil or that EPA violated either the CWA or the APA by using Method 413.1 to measure oil and grease in produced water.
34 Also in relation to produced water, petitioner NRDC argues that EPA illegally refused to regulate radioactive pollutants in produced water, despite NRDC's contention that ample record evidence proves the presence and negative impacts of radionuclides. In contrast, EPA maintains that the agency was justified in its decision not to regulate radionuclides in produced water because inadequate information existed to issue rules regarding the radionuclides, Radium 226 and Radium 228 (referred to as NORM). According to the EPA, the CWA does not require the promulgation or implementation of regulations if there is not sufficient evidence on which to base those regulations. As EPA argues, the agency is continuing to gather information on radionuclides and could issue regulations in the future if the compiled information shows a need for such regulation. See Sec. 1314(e). In fact, EPA has stated its intent to require radium monitoring as part of the permitting process for offshore oil and gas producers. 35 NRDC claims that EPA already has adequate data to formulate regulations on radionuclides in produced water, pointing to the fact that EPA regulated produced sand based in part on the radionuclides present in that sand. As EPA counters, however, the only reason the agency considered the presence of radionuclides in produced sand was to accommodate fully the higher cost of disposing of produced sand containing NORM. The occasional presence of radionuclides in produced sand was not an important element of the Final Rule. However, once EPA set an effluent limitation for produced sand, it was required by the CWA to calculate the cost of disposing of such pollutant, and the high cost of radionuclides disposal required EPA's attention with regard to produced sand. 36 Finally, NRDC also points out that fewer wells were tested for the presence of oil and gas in produced water than were tested for the presence of NORM in produced water. Consequently, the NRDC argues, EPA must have enough data to formulate regulations of radionuclides in produced water because regulations were promulgated for oil and grease in produced water. The error in NRDC's argument, however, is that unlike the pollutants oil and grease, radionuclides are not linked to the production and development of oil and gas. Oil and grease will always be present in produced water. Consequently, EPA can determine on the basis of fewer samples what concentration of oil and grease will be present in produced water. However, the data available on radionuclides shows wide variation in the concentration of radionuclides in produced water. 37 The present case is unlike NRDC v. EPA, in which the Ninth Circuit concluded that EPA should not delay requiring such technologically feasible limitations as BAT in order to wait for precise cost figures. NRDC v. EPA, 863 F.2d at 1426. In this case, EPA has legitimately declined to regulate radionuclides in produced water due to the lack of data on radionuclides in produced water--particularly information on the environmental and health harms presented by NORM. In light of EPA's discretion to promulgate this Final Rule, we agree that EPA reasonably decided that insufficient evidence existed to regulate this pollutant in produced water at this time.
38 The NRDC also contends that EPA illegally refused to require zero discharge of produced waters through reinjection because record evidence shows that reinjection is technologically and economically feasible. The NRDC further contends that EPA's decision not to require reinjection of produced waters is based on energy impacts that are not supported by the requisite statutory findings, and the agency's decision is therefore illegal. The NRDC mistakenly asserts that BAT must be based on the best single performer in an industry. To the contrary, the CWA's requirement that EPA choose the best technology does not mean that the chosen technology must be the best pollutant removal. Obviously, BAT and NSPS must be acceptable on the basis of numerous factors, only one of which is pollution control. 39 NRDC ignores the statutory language, which sets up a  'limited' balancing test. Weyerhaeuser, 590 F.2d at 1045 (citing Senator Muskie's remarks during debate on the CWA). In enacting the CWA, Congress did not mandate any particular structure or weight for the many consideration factors. Rather, it left EPA with discretion to decide how to account for the consideration factors, and how much weight to give each factor. Id. Consequently, NRDC is wrong to contend that EPA is not permitted to balance factors such as cost against effluent reduction benefits. 40 Finally, NRDC again misstates EPA's burden in promulgating the Final Rule by claiming that EPA is required to select reinjection as its BAT technology unless the costs of achieving that technology are wholly disproportionate to effluent reduction benefits. EPA is governed by a standard of reasonableness in considering the factors to be balanced. American Iron & Steel Inst. v. EPA, 526 F.2d at 1051. As EPA elucidates, Chevron requires that agencies are given significant discretion, on a case-by-case basis, in weighing factors, provided the agency's regulations are not manifestly contrary to the statute. Chevron, 467 U.S. at 844, 104 S.Ct. at 2782. 41 EPA admits that reinjection may be technologically feasible. 14 The only evidence that reinjection may not be feasible is the possibility that geographic formations in some areas may preclude reinjection. However, EPA's rejection of reinjection as a BAT, while based in part on concerns regarding feasibility, was, more importantly, based on several relevant factors, such as unacceptably high economic and nonwater quality environmental impacts. 42 EPA estimates the cost of implementing reinjection as BAT and NSPS would exceed several billion dollars. 15 The extraordinary cost was one basis for rejecting reinjection, although NRDC is correct that EPA did not conclusively determine that reinjection was not economically attainable. 16 In addition to the high expense of reinjection, the negative impact reinjection would have on air emissions and the loss of production resulting from reinjection combined to cause EPA to reject reinjection for BAT and NSPS. 43 EPA estimates that the implementation of reinjection at existing platforms in the Gulf and Alaska alone would increase the emission of air pollutants by 1,041 tons/year for BAT and 849 tons/year for NSPS. The existing air quality of Southern California is so bad that reinjection was not considered an option at all. Reinjection was also rejected based on the increased energy required to run the reinjection pumps. According to EPA, reinjection would result in additional energy requirements of 977,000 barrels of oil equivalent (BOE)/year for BAT and 785,000 BOE/year for NSPS. Finally, EPA projected that reinjection would result in a one percent loss in production. (It is worth noting that one percent of oil and gas production from the Gulf of Mexico amounts to several million BOE/year.) The accumulation of these factors led EPA to reject reinjection as BAT and NSPS for produced water. 44 We think that EPA acted within its statutory authority in rejecting zero discharge based on reinjection. As EPA correctly points out, NRDC's contention that economic, energy, and nonwater quality environmental impacts are less important than achieving zero discharge merely reflects NRDC's disagreement on a policy level. This Court may not substitute NRDC's judgment, any more than our own, for that of the EPA.