The Nickel Report

The US Environmental Protection Agency (EPA) has recently determined that no revisions to existing RCRA Subtitle D regulations for the management of oil and gas wastes are necessary. This conclusion follows EPA’s completion of an extensive review to fulfill the requirements of a Consent Decree entered by the US District Court for the District of Columbia that settled litigation filed by certain environmental organizations over EPA’s alleged failure to update its rules for management of oil and gas wastes. EPA’s findings, released on April 23, 2019, are set forth in a report titled, Management of Oil and Gas Exploration, Development and Production Wastes: Factors Informing a Decision on the Need for Regulatory Action (Report). This means that, at least for now, EPA’s longstanding position on regulation of oil and gas wastes remains unchanged.

As background, in 1980, under the Bentsen Amendment, Congress exempted drilling fluids, produced waters and other wastes associated with the exploration, development and production of crude oil, natural gas or geothermal energy from regulation under RCRA Subtitle C, which regulates management of hazardous wastes. 42 U.S.C. § 6921(b)(2). Under this provision, EPA was required to determine whether regulation of these exempted wastes was warranted under the RCRA Subtitle C program and submit its findings to Congress for consideration. In 1987, EPA reported to Congress that it had concluded that RCRA Subtitle C hazardous waste cradle-to-grave regulation for oil and gas wastes was unwarranted.[1] EPA noted that, among other things, enforcement of existing state and federal programs (including those under RCRA Subtitle D, the Clean Water Act and Safe Drinking Water Act) would be generally adequate to control these wastes. The highly prescriptive RCRA Subtitle C program requirements were deemed insufficiently flexible to take into account the various differences in oil and gas sites across the country. In 1988, EPA issued its Regulatory Determination of Oil and Gas and Geothermal Exploration, Development and Production Wastes, setting forth its decision not to promulgate regulations under RCRA Subtitle C for oil and gas wastes. See 53 Fed. Reg. 25,446 (July 6, 1988).

As part of the reconsideration of its prior determination, EPA reviewed the content and elements of existing state regulatory frameworks for oil and gas wastes and, in particular, those 28 states accounting for the vast majority of oil and gas production in the US. EPA found that while current state programs are diverse, they include the key components of waste management programs such as requirements for secondary containment, liners for pits and groundwater monitoring. In addition, 24 of the states reviewed by EPA had recently revised their regulations for oil and gas wastes with some having done so within the last year, an indication that states are actively updating waste management programs to address emerging issues such as the adoption of hydraulic fracturing and directional drilling techniques associated with increased oil and gas operations. EPA also reviewed recently identified release incidents and found that such releases were relatively infrequent, addressed on site in most cases and largely the result of human error and noncompliance with state regulations. In view of the foregoing, EPA concluded that inspection and enforcement improvements at the state level would likely be more effective in addressing oil and gas waste incidents rather than the imposition of new federal requirements. However, EPA made clear that it would continue to work to identify areas for improvement in collaboration with states and other organizations. Developments are likely to continue to unfold with regard to this subject as environmental organizations have reportedly expressed their dissatisfaction with EPA’s conclusion and will likely continue to press for different results, whether at the federal or state levels.

[1] See Management of Wastes from the Exploration, Development, and Production of Crude Oil, Natural Gas, and Geothermal Energy (December 28, 1987).