On September 2, 2014, the Department of Justice announced a settlement in United States v. Trans Energy, Inc., No. 14-117 (N.D.W.Va.), requiring the oil and gas company to pay $3 million in civil penalties and to spend approximately $13 million to restore 15 sites in West Virginia that had been developed without dredge and fill permits. The United States and the West Virginia Department of Environmental Protection alleged that the company impounded streams and discharged dirt, sand, rocks and other materials into streams and wetlands without permits to construct well pads, pipeline stream crossings, surface impoundments, and other structures relating to natural gas extraction. According to the Justice Department, the violations affected 13,000 linear feet of stream and more than an acre of wetlands.
The Trans Energy settlement shows that exploration and production (E&P) companies need a rigorous compliance strategy for wetlands permit requirements. In this regard, the legal commentary has placed a high degree of emphasis on the jurisdictional question under Section 404 of the Clean Water Act of whether a planned activity will involve the discharge of dredged or fill material into “waters of the United States.” See our previous blog entry on the proposed rule redefining the “waters of the United States” covered by the Clean Water Act.
On the other hand, the legal commentary has virtually ignored the importance of Nationwide Permits (NWPs) 12 and 39 to E&P activities. The Army Corps of Engineers (Corps) issues NWPs for activities that have minimal individual and cumulative adverse effects on the aquatic environment. The most recent versions of the NWPs were reissued in 2012, and they will be valid for five years, until March 18, 2017. See 77 Fed. Reg. 10184 (Feb. 21, 2012).
NWP-12 is for “utility line activities.” It authorizes activities required for the construction, maintenance, repair, and removal of “utility lines and associated facilities” in “waters of the United States,” provided the activity does not result in the loss of greater than 1/2-acre of “waters of the United States” for “each single and complete project.” 77 Fed. Reg. at 10271. “Utility lines” are defined broadly enough to include oil and gas gathering lines. In addition, NWP-12 expressly authorizes the construction of access roads for the construction and maintenance of “utility lines,” with certain limitations. NWP-12 requires pre-construction notification to the Corps only for seven specified types of circumstances, including where:
- A Rivers and Harbors Act Section 10 permit is required;
- The length of the “utility line” in “waters of the United States” exceeds 500 feet; or
- The discharge results in a loss of more than 1/10th of an acre of “waters of the United States.”
Id. at 10272.
Moreover, NWP-39 authorizes discharges of dredged or fill material into non-tidal “waters of the United States” for the construction or expansion of commercial and institutional building foundations and building pads and attendant features necessary for the use and maintenance of the structures. The discharge must not cause the loss of greater than 1/2-acre of non-tidal “waters of the United States,” including the loss of no more than 300 linear feet of stream bed (unless for intermittent and ephemeral stream beds the Corps waives the 300 linear feet limit). Id. at 10279. Notably, the Corps has expressly stated that the construction of oil and gas well pads is a type of commercial development appropriate for authorization under NWP-39. Id. at 10223. Pre-construction notification is required for all NWP-39 permits.
The use of the NWPs also requires water quality certification under Section 401 of the Clean Water Act. The Louisiana Department of Environmental Quality has issued water quality certification (PDF) for NWP-12 without conditions, but it will issue such certification for NWP-39 only on a case-by-case basis. Likewise, the Texas Railroad Commission, which handles water quality certifications for federal permits covering activities associated with oil and gas exploration, development, and production operations,has issued water quality certification for activities under NWP-12 (PDF).
Individual Section 404 permits are not required when a nationwide permit is available. The E&P industry should utilize the NWP program as a way to streamline and simplify wetlands permit requirements.