The disposal of wastes associated with oil and gas production continues to draw the attention of regulators and concerned citizens. In a series of articles we will examine the waste issue from the characterization of these wastes (discussed below) and their ultimate disposal in underground injection wells.
A Brief History of Waste Management and RCRA
By the 1960s it was becoming clear that the country had a waste management problem. The only modern environmental law on the books at the time was the Clean Air Act. So the Solid Waste Disposal Act of 1965 was enacted as an amendment to the air law. This initial foray into comprehensive waste regulation proved inadequate in many respects. The treatment, storage and disposal of waste — even defining what a waste is — is complicated, especially when recycling is considered.
The modern regulation of solid and hazardous waste can be traced to 1976 with the enactment of the Resource Conservation and Recovery Act (RCRA). Generally, when looking at the world through the lens of RCRA, all material is either a product or a solid waste. A subcategory of solid waste is hazardous waste that is regulated under Subtitle C of RCRA.
A solid waste is “hazardous” if it has been specifically listed as hazardous by the EPA or if it has certain hazardous characteristics, e.g., flammability. Subtitle C of RCRA prescribes a “cradle-to-grave” management system for hazardous waste. Nonhazardous solid wastes are addressed in Subtitle D of RCRA. (Note: Under federal law, all hazardous wastes are solid wastes, but not all solid wastes are hazardous wastes.)
The key point to understand is that if a solid waste is a hazardous waste, a considerably more complicated and comprehensive regulatory system applies. For purposes of this discussion, it is this key regulatory difference that is critical to understanding how oil field wastes are regulated.
Defining Exempt vs. Non-Exempt
As RCRA was getting off the ground, EPA recognized that certain solid wastes were relatively benign but generated in large quantities. If properly managed, these “special” wastes pose little threat to human health or the environment. So, in 1978, EPA proposed to exempt oil and gas exploration and production (E&P) waste from the Subtitle C, 43 Federal Register 58946, and in 1980, the exemption was included in amendments to RCRA known as the Solid Waste Disposal Act Amendments.
In the Solid Waste Disposal Act Amendments of 1980, Congress amended RCRA to add section 3001 (b)(2)(A), which exempted drilling fluids, produced waters and certain other wastes associated with exploration, development and production of crude oil, natural gas and geothermal energy from regulation as hazardous wastes. The law also required EPA to study the exemption and report to Congress. In 1988, the EPA concluded that E&P wastes need not be regulated under Subtitle C. The exemption is codified in EPA regulations at 40 CFR § 261.4 (b)(5). EPA also published a list of exempt and non-exempt E&P-related wastes, which is reproduced below. Consequently, most oil and gas E&P-related waste is regulated as a solid waste under Subtitle D, not hazardous waste under Subtitle C.
In a 1988 report to Congress, the EPA identified criteria for determining what wastes are included in the exemption and, therefore, exempt from Subtitle C. For a waste to be exempt:
[I]t must be associated with operations to locate or remove oil or gas from the ground or to remove impurities from such substances and it must be intrinsic to and uniquely associated with oil and gas exploration, development or production operations (commonly referred to simply as exploration and production or E&P); the waste must not be generated by transportation or manufacturing operations.
See, 58 FR 15284, 3/22/93. The EPA further explained that only waste from “primary field operations” is exempt. Primary field operations are activities at or near the wellhead or gas plant and including only those operations necessary to locate and recover oil and gas from the ground and to remove impurities. As a practical matter, any waste generated downhole is probably exempt E&P waste from primary field operations.
With regard to nonexempt transportation-related waste, the EPA explained:
Transportation of oil and gas can be for short or long distances. For crude oil, “transportation” is defined in the Report to Congress and the subsequent Regulatory Determination as beginning after transfer of legal custody of the oil from the producer to a carrier (i.e., pipeline or trucking concern) for transport to a refinery or, in the absence of custody transfer, after the initial separation of the oil and water at the primary field site. For natural gas, “transportation” is defined as beginning after dehydration and purification at a gas plant, but prior to transport to market.
58 FR 15284, 3/22/93.
Exemption for Crude Oil Reclamation Operations
Next, the EPA was asked to clarify the scope of the exemption for crude oil reclamation operations. The EPA explained that the inclusion of “liquid and solid wastes” from crude oil reclamation on the list of non-exempt wastes was intended to refer only to those non-E&P wastes generated by reclaimers (e.g., waste solvents from cleaning reclaimers’ equipment) and was not intended to refer to wastes remaining from the treatment of exempt wastes originally generated by the exploration, development or production of crude oil or natural gas. The EPA explained:
The Agency has consistently taken the position that wastes derived from the treatment of an exempt waste, including any recovery of product from an exempt waste, generally remain exempt from the requirements of RCRA Subtitle C. Treatment of, or product recovery from, E&P exempt wastes prior to disposal does not negate the exemption.
For example, waste residuals (e.g., BS&W) from the on-site or off-site process of recovering crude oil from tank bottoms obtained from crude oil storage facilities at primary field operations (i.e., operations at or near the wellhead) are exempt from RCRA Subtitle C because the crude oil storage tank bottoms at primary field operations are exempt. In effect, reclaimers are conducting a specialized form of waste treatment in which valuable product is recovered and removed from waste uniquely associated with E&P operations.
58 FR 15284, 3/22/93.
However, to the extent that reclaimer wastes are derived from non-exempt oilfield wastes or do not meet the “uniquely associated with E&P operations” standard, they are not exempt. For example, waste solvents generated from the cleaning of tank trucks would not be exempt.
Generally, crude oil reclaimer wastes that are derived from exempt oilfield wastes (e.g., produced water, BS&W) are not subject to the Subtitle C waste management requirements of RCRA. Such wastes, however, remain subject to any applicable state solid waste management requirements. Moreover, this exemption from RCRA Subtitle C requirements may not apply if the crude oil reclaimer wastes are combined with other wastes that are subject to RCRA Subtitle C requirements.
58 FR 15284, 3/22/93.
Exemption for Service Companies
Likewise, service company wastes may or may not be covered by the exemption. Empty drums, drum rinsate, vacuum truck rinsate, sandblast media, painting wastes, spent solvents, spilled chemicals and waste acids are all nonexempt wastes because they are not uniquely associated with “primary field operations.”
It doesn’t matter which company generates the waste. The property owner, a lessee, a contractor — all are potential “generators” and therefore liable if the wastes are hazardous. However, if the service company generates a waste uniquely associated with the exploration, development or production of crude oil or natural gas at primary field operations, those wastes are exempt from regulation under Subtitle C.
Though the current upswing in oil and gas exploration activity in Ohio is relatively new, the characterization of its wastes, and the concordant management standards, are not. EPA and Congress have considered the issues, determined a policy and successfully implemented it for the last 25 years.
Next we will examine the disposal of E&P wastes in underground wells.