Law360, New York (June 2, 2016, 11:52 AM ET) -- Last month, several environmental nongovernmental organizations (ENGOs) filed suit against the U.S. Environmental Protection Agency seeking to compel the EPA to promulgate regulations under the federal Resource Conservation and Recovery Act (RCRA) that would regulate the disposal, treatment, storage, transportation and handling of oil and gas wastes. The ENGOs’ complaint focuses primarily on wastes generated from the hydraulic fracturing sector of the oil and gas industry, but their suit can fairly be read to seek RCRA regulations for the entire oil and gas industry. The EPA has 60 days after being served to answer the ENGOs’ complaint and, as of the date of this article, has yet to reply.
In the meantime, here are five things you should know even at this early stage of the proceedings.
1. Wait, I Thought Oil and Gas Wastes are Exempt from RCRA?
That is true in part, as oil and gas wastes are exempt from RCRA’s regulation of “hazardous wastes,” but they can still be regulated as “solid waste,” which is what the ENGO suit seeks. In 1980, Congress amended the RCRA to exempt “drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil or natural gas or geothermal energy” from RCRA hazardous waste regulations (also known as RCRA Subtitle C), until the EPA studied these wastes’ human health and environmental effects. In 1988, the EPA issued its report and “decided not to promulgate regulations under Subtitle C for wastes generated by the exploration, development and production of crude oil, natural gas and geothermal energy,” but that it “plans to revise its existing standards under Subtitle D of the RCRA, tailoring these standards to address the special problems posed by oil, gas and geothermal wastes and filling the regulatory gaps.”
Nearly 30 years later, the ENGOs’ suit seeks to compel the EPA to fulfill its promise to revise the RCRA Subtitle D regulations to address oil and gas wastes and does not implicate oil and gas wastes’ exemption from RCRA Subtitle C. Under the RCRA, the concepts of hazardous waste and solid waste are related, but distinct. In short, all hazardous wastes are solid wastes, but not all solid wastes are hazardous wastes (i.e., a square is a rectangle, but a rectangle is not necessarily a square).
Solid wastes are broadly defined as any materials that have been discarded, including through: “the discharge, deposit, injection, dumping, spilling, leaking or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air …” Hazardous wastes, in turn, are those solid wastes that either meet criteria set forth in, or are listed in, RCRA Subtitle C.
In its 1988 report, the EPA found that regulation of oil and gas wastes was not necessary under Subtitle C in part because, although “[e]xisting state and federal regulatory programs are generally adequate for controlling oil, gas and geothermal wastes,” “the remaining gaps … can be effectively addressed by formulating requirements under Subtitle D of the RCRA and by working with the states.” “Under Subtitle D, states use federal financial and technical assistance to develop solid waste management plans in accordance with federal guidelines,” such as EPA regulations imposing minimum technical design and operating criteria for solid waste disposal facilities.
2. The Court Will Not Dictate the Outcome of the Review
The ENGOs’ claims arise under the RCRA’s citizen suit provision and seek to compel the EPA to fulfill its duty under the RCRA that “[e]ach regulation promulgated under this chapter shall be reviewed and, where necessary, revised not less frequently than every three years,” including as the EPA indicated it would in its 1988 report. Even if the ENGOs prevail, the court may only order the EPA to undertake this review and cannot dictate the outcome of the EPA’s review, such as what regulations the EPA must adopt.
This same issue was recently litigated in Appalachian Voices v. McCarthy, 989 F. Supp. 2d 30 (D.D.C. 2013), wherein ENGOs similarly asserted that the EPA failed to review Subtitle D regulations with respect to coal ash residue. Even though the EPA conceded that it had a nondiscretionary duty under the RCRA to undertake this review, the court explained that it “cannot dictate to the agency the outcome of its review and revision, but only that it must undertake a review and revision in accordance with its nondiscretionary duty to do so.”
3. Revised Subtitle D Regulations Could Take Years to Finalize
The EPA’s recent coal ash residue Subtitle D rulemaking suggests it could be several years before the EPA finalizes Subtitle D regulations for oil and gas wastes, even assuming the ENGOs prevail and the EPA concludes such regulations are necessary. The Appalachian Voices court held that the EPA had a nondiscretionary duty to review its Subtitle D regulations with respect to coal ash residue approximately 1.5 years after the ENGOs filed their complaint. The EPA subsequently issued its final rule revising its Subtitle D regulations to include national criteria for coal ash residue landfills and surface impoundments on April17, 2015 — nearly a year and a half after the court’s order and nearly three years after the ENGOs filed suit.
Conceivably, it could take the EPA even longer to promulgate Subtitle D regulations for oil and gas wastes. Among other reasons, even before the ENGOs filed suit in Appalachian Voices, the EPA issued a proposed rulemaking in 2010 regarding how to regulate coal ash residue under the RCRA, including possible regulation under RCRA Subtitle D. The EPA has not published a proposed rule for — and does not have the same head start with respect to — oil and gas wastes.
4. What Might RCRA Subtitle D Oil and Gas Wastes Look Like?
If the EPA determines that RCRA Subtitle D regulations are necessary for oil and gas wastes, the precise contours of the regulations are difficult to predict with any precision at this preliminary stage. That said, some general concepts seem more likely than others. For example, in its 1988 report, the EPA stated that the then-existing gaps in state and federal regulations of oil and gas wastes that it would consider filling through Subtitle D regulations: “include adequate controls specific to associated wastes and certain management practices and facilities for large-volume wastes, including roadspreading, landspreading and impoundments,” especially “centralized and commercial facilities that treat, store or dispose of oil field wastes in concentrated form” since “[p]its or impoundments at these facilities often contain hazardous constituents in high concentrations.”
The EPA listed the following requirements as among those it would consider imposing under Subtitle D: “(1) engineering and operating practices, including run-off controls, to minimize releases to surface water and groundwater; (2) proper procedures for closing facilities, (3) monitoring that accommodates site specific variability, and (4) clean-up provisions.”
The EPA’s 2014 comprehensive review of states’ regulations of oil and gas wastes found that some of these requirements have been adopted by many states (e.g., “some liner requirements for pits or impoundments;” “closure and reclamation requirements;” “various inspection, operation and maintenance requirements”). However, the EPA also concluded that “[s]tate regulations vary greatly in scope and detail” and found that “[s]ome regulatory parameters that were not typically encountered were groundwater monitoring requirements for solid waste management facilities, leachate collection requirements, air monitoring of solid waste management facilities, and waste characterization requirements.”
It is also worth noting that the EPA’s 1988 list of potential Subtitle D requirements for oil and gas wastes bears some similarities to the EPA’s April 2015 coal ash residue rulemaking, which imposed minimum national criteria for coal ash residue landfills and surface impoundments, including: (1) location restrictions; (2) liner design standards to prevent wastes leaching into groundwater; (3) operating criteria, such as those pertaining to air, run-on, run-off and periodic inspections; (4) groundwater monitoring and corrective action; and (5) closure and post-closure requirements.
5. How Can the Industry Become Involved?
There are several approaches industry members could pursue to ensure its voice is heard with respect to the need for and extent of Subtitle D regulations for oil and gas wastes. For one, industry representatives could intervene in the suit recently filed by the ENGOs, as they did in the Appalachian Voices case. Additionally, if the EPA reviews its existing regulations and determines that Subtitle D regulations are necessary for oil and gas wastes, industry can advance its position by filing comments with the EPA. These comments would be critical, as they not only are considered as part of and should influence any rulemaking, but they also establish the factual bases for subsequently challenging the EPA’s rulemaking in court.