by Jonathan Wills, M.A., Ph.D., M.Inst.Pet.,
for Ekologicheskaya Vahkta Sakhalina
(Sakhalin Environment Watch); 25th May 2000
The Law on Offshore Wastes Discharges in Different Jurisdictions
A recent court judgment on drilling waste discharges demonstrates this three-cornered struggle that has been going on for decades and shows no signs of ending. Late in 1999 the Journal of Commerce reported:
A federal appeals court has "rebuffed" a challenge to federal offshore discharge rules by both environmentalists and coastal oil and gas producers by upholding current federal rules.
The Fifth US Circuit Court of Appeals in New Orleans last week upheld current US EPA rules barring discharges of any polluted water or sand generated in the drilling process, as the agency interpreted the 1972 Clean Water Act.
Industry groups, including the American Petroleum Institute and Phillips Petroleum, challenged that the rules are "arbitrary and capricious way to interpret the act." Environmentalists, led by Greenpeace, objected to the EPA's decision to relax the rules
for producers in Cook Inlet, Alaska, because of a lack of "convenient disposal sites" near their offshore operations.
The panel of judges rejected both challenges, saying the agency's decision was a reasonable interpretation of the law. (Lucentini, J. 1999. Clean Water: Court Upholds Rules on Offshore Discharges. Journal of Commerce, 12 December 1999. A Louisiana State law of January 1997 required zero discharge of produced water to open bays.
1. United States Environmental Protection Agency (EPA). 1996a. Brower Stops Discharge of Billions of Pounds of Oil and Gas Well Pollutants into Gulf of Mexico, Alaska Coastal Waterways. EPA Environmental News R-152. Washington D.C.;
2. United States Environmental Protection Agency (EPA). 1993. Final Modification of the NPDES General Permit for the Western Portion of the Outer Continental Shelf (OCS) of the Gulf of Mexico (GMG290000). Federal Register Vol. 58, No. 231, 12/3/93, pp. 63964-63986. Washington, D.C.;
3. United States Environmental Protection Agency (EPA). 1998. Final NPDES General Permits for the Eastern Portion of Outer Continental Shelf of the Gulf of Mexico (GMG280000) and Record of Decision. Federal Register 63:200 (55717-55762) 10/16/98. Washington D.C.)
In theory, zero discharges are universal in US waters. As in Europe, operators require a licence to discharge any wastes but, once granted, such a licence makes legal what would otherwise be an illegal practice. With the exception of Alaska, the EPA does ban all discharges of drilling fluids and drill cuttings - whether WBM, SBM or OBM - within three miles of the shores of the United States, following a decision in Louisiana 10 years ago, after local authorities and citizens' environmental groups had voiced concern at acute and chronic pollution of river deltas, bayous and near shore waters. (World Oil. 1991. Louisiana Plans to Ban Produced Water and Cuttings Discharges in Twelve Coastal Parishes. World Oil 212:15. Gulf Publishing Company. Houston, Texas)
It is possible to argue an environmental case for allowing these near shore discharges in Cook Inlet, a bay that is flushed by huge tides and whose waters, at least in the northern part, are unusually turbid, with a very large burden of glacial silt, meltwater and muddy ice floes. In contrast to the Sakhalin Shelf, smothering of seabed fauna and flora by drilling discharges is unlikely to be a major factor in such an unstable, high energy environment as Cook Inlet, where any contaminants are likely to be dispersed and diluted very quickly indeed - or buried under the thick layers of glacial silt that are deposited every day. However, the exemption applies to Alaskan coastal waters of all kinds, whether turbid or clear, not to just Cook Inlet. The EPA decision is based on considerations of industry finance and logistical convenience rather than environmental factors, although both industry and regulators have recently advanced the argument that the air pollution caused by shipping such wastes hundreds of miles for reprocessing and disposal would outweigh the elimination of local water pollution around the installations.
EPA's account of the decision says:
In response to comments [from industry] disputing the feasibility of injecting drilling wastes into the geologic formations present in Cook Inlet, EPA reviewed information in the record and sought additional information on this issue from industry and State and Federal authorities. Based on the limited data available to date, EPA believes that the information in the record indicates that certain sites in Cook Inlet may not be able to inject sufficient volumes of drilling wastes to enable compliance with zero discharge as EPA has defined the technology... (United States Environmental Protection Agency (EPA). 1999b. Final NPDES General Permit for Oil and Gas Exploration, Development and Production Facilities in Cook Inlet, Alaska. Federal Register 64:46 (11885-11908). 3/10/99. Washington, D.C.)
A recent paper ( Veil, J.A., Daly, J.M., Johnson, N. 1999. EPA Speeds Regs for Offshore Synthetic-based Mud. Oil and Gas Journal, 97(37):78-85) by the EPA and US Department of Energy (DoE) explained that facilities in Cook Inlet are "subject to the same standards as offshore wells" more than three miles out:
Facilities located more than 3 miles from shore and all Alaskan facilities may discharge drilling fluids and drill cuttings but must meet the following restrictions:
- No discharge of free oil, diesel oil, or oil-based fluids and cuttings.
- The 96-hr LC-50, a toxicity measurement, must use at least 30,000 ppm (In other words, a waste discharge, at a concentration of 30,000 parts per million (3%) or more, should kill no more than half of a test population of selected marine creatures exposed to it for four days)) .
- Barite used to make the drilling fluid must not contain more than 1 mg/kg mercury and 3 mg/kg cadmium.
The Clean Water Act requires that all wastewater discharges be authorized through a National Pollutant Discharge Elimination System (NPDES) permit. The most recent NPDES permit for the Outer Continental Shelf (Nov. 2, 1998), recognizes that SBMs are distinct from OBMs, although it lacks specific permit language authorizing or prohibiting SBM-cutting discharge.
The effect of this is to allow almost all discharges of WBM more than three miles from shore (with the Alaskan exception). This is very similar to the situation in European waters.
The lesson of the American experience of regulating drilling waste discharges seems to be that, in its desire to reach workable compromises with industry, the EPA has strayed from easily-understood bans on certain types of discharges into thickets of almost impenetrable technical verbiage that make it hard, even for experts, to understand what is allowed and what is not.
The US has now developed a complicated (and, to an outsider, bewildering) array of different regulatory criteria designed to reflect the pollution-prevention capabilities of various offshore platforms, depending on whether they are old ones with outdated technology, refurbished with enhanced equipment, or brand new installations with the latest 21st century systems. The intent was to take a realistic view of what was possible and practicable in the field. This approach is mandated by the Clean Water Act, which insists that measures to protect the environment must be "cost-reasonable" and take into account the effect of environmental regulations on "the overall industry financial health" (United States Environmental Protection Agency (EPA). 1996b. Oil and Gas Extraction Point Source Category; Final Effluent Limitations Guidelines and Standards for the Coastal Subcategory; Final Rule. 40 CFR Part 435. Federal Register 61:242. (66085-66130). 12/16/96. Washington D.C.) .
The extraordinarily detailed, prescriptive regulations create reams of paperwork, vastly exceeding even the OSPAR system. The effluent limitations guidelines are based on a plethora of acronyms, such as:
...new source performance standards (NSPS) for direct dischargers based on ``best practicable control technology currently available'' (BPT), ``best conventional pollutant control technology'' (BCT), ``best available technology economically achievable'' (BAT), and ``best available demonstrated control technology'' (BADCT)...(Ibid)
Some brief extracts from a recent EPA rulemaking proposal may give an idea of the Byzantine complexities of a system which appears to put the interests of business on at least an equal footing with those of the environment the Government is charged to defend:
B. Summary of the Final Coastal Guidelines
This rule establishes regulations based on ``best practicable control technology currently available'' (BPT) for one waste stream where BPT did not previously exist, ``best conventional pollutant control technology'' (BCT), ``new source performance standards'' (NSPS), ``best available technology economically achievable'' (BAT), ``pretreatment standards for existing sources'' (PSES), and ``pretreatment standards for new sources'' (PSNS). Drilling fluids, drill cuttings, and dewatering effluent are limited under BCT, BAT, NSPS, PSES, and PSNS. BCT limitations are zero discharge, except for Cook Inlet, Alaska... For both PSES and PSNS, EPA is establishing zero discharge limitations in all coastal subcategory locations.
Produced water and treatment, workover, and completion fluids are limited under BCT, BAT, NSPS, PSES, and PSNS. For BCT, EPA is establishing limitations on the concentration of oil and grease in produced water and treatment, workover, and completion fluids equal to current BPT limits. The Daily Maximum limitation for oil and grease is 72 mg/l and the Monthly Average limitation is 48 mg/l. For BAT and NSPS, EPA is establishing zero discharge limitations, except for Cook Inlet, Alaska.
The EPA's definition of Best Practicable Control Technology Currently Available (BPT) may be of particular interest to regulators in other countries when dealing with discharge applications from American companies used to working under the EPA rules:
BPT effluent limitations guidelines apply to discharges of conventional, toxic, and non-conventional pollutants from existing sources. BPT guidelines are generally based on the average of the best existing performance by plants in a category or subcategory. In establishing BPT, EPA considers the cost of achieving effluent reductions in relation to the effluent reduction benefits, the age of equipment and facilities, the processes employed, process changes required, engineering aspects of the control technologies, non-water quality environmental impacts (including energy requirements), and other factors as the Administrator deems appropriate. .. Where existing performance is uniformly inadequate, BPT may be transferred from a different subcategory or category.
Similarly, with Best Conventional Pollutant Control Technology (BCT) and Best Available Technology Economically Achievable (BAT), there is a very strong financial factor in the equation:
The 1977 amendments to the CWA established BCT as an additional level of control for discharges of conventional pollutants from existing industrial point sources. In addition to other factors... the CWA requires that BCT limitations be established in light of a two part ``cost reasonableness'' test...
In general, BAT effluent limitations guidelines represent the best existing economically achievable performance of facilities in the industrial subcategory or category. The CWA establishes BAT as a principal national means of controlling the direct discharge of toxic and nonconventional pollutants. The factors considered in assessing BAT include the age of equipment and facilities involved, the process employed, potential process changes, non-water quality environmental impacts, including energy requirements, and such factors as the Administrator deems appropriate. The Agency retains considerable discretion in assigning the weight to be accorded these factors. An additional statutory factor considered in setting BAT is economic achievability across the subcategory. Generally, the achievability is determined on the basis of total costs to the industrial subcategory and their effect on the overall industry financial health. As with BPT, BAT may be transferred from a different subcategory or category. BAT may be based upon process changes or internal controls, even when these technologies are not common industry practice.
Even when it comes to Best Available Demonstrated Control Technology For New Sources (BADCT), economics take precedence:
New facilities have the opportunity to install the best and most efficient production processes and wastewater treatment technologies. Under NSPS [New Source Performance Standards], EPA is to consider the best demonstrated process changes, in-plant controls, and end-of-process control and treatment technologies that reduce pollution to the maximum extent feasible. In establishing NSPS, EPA is directed to take into consideration the cost of achieving the effluent reduction and any non-water quality environmental impacts and energy requirements...(United States Environmental Protection Agency (EPA). 1996b. op. cit)
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