Environmental Regulation of Natural Gas Drilling and Production - A Light Touch

In this blog post, I’ll focus on the hazardous waste, underground injection control, and above ground storage tank regulations that apply to companies that are doing exploration and production in the natural gas industry.

Hazardous Waste Regulations

The Resource Conservation and Recovery Act is the federal law that covers solid and hazardous waste management, as well as underground storage tanks.  USEPA delegates the enforcement of these programs to the individual states, as long as the state programs are equivalent or more stringent than the federal program.  When it comes to the exclusions discussed below, all the states that I’ve worked with have adopted the federal standard; i.e., they have chosen NOT to be more stringent.

Definition of solid waste

40 CFR 261.4(a)(12)(ii) contains an important exclusion from the definition of solid waste for recovered petroleum products:

Recovered oil that is recycled in the same manner and with the same conditions as described in paragraph (a)(12)(i) of this section. Recovered oil is oil that has been reclaimed from secondary materials (including wastewater) generated from normal petroleum industry practices, including refining, exploration and production, bulk storage, and transportation incident thereto (SIC codes 1311, 1321, 1381, 1382, 1389, 2911, 4612, 4613, 4922, 4923, 4789, 5171, and 5172.) Recovered oil does not include oil-bearing hazardous wastes listed in subpart D of this part; however, oil recovered from such wastes may be considered recovered oil. Recovered oil does not include used oil as defined in 40 CFR 279.1.

Definition of hazardous waste

40 CFR 261.4(b)(5) contains a further exclusion from the definition of hazardous waste, commonly referred to as a Bentsen waste:

Drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas or geothermal energy.

This exclusion applies not only to waste fluids brought to the surface during the drilling and production processes, but also wastes that come into contact with the gas production stream, for example water used to cool drill bits.  The exclusion was included in the 1980 RCRA law as part of a group of “special wastes” that required further evaluation by EPA. These wastes were temporarily exempted from the law under the Bentsen and Bevill Amendment because they were produced in very large volumes, thought to pose less of a hazard than other wastes, and were generally not amenable to the management practices required under RCRA.

This exclusion from the hazardous waste definition applies during exploration, development, or production of crude oil, natural gas, and geothermal, but it does not apply to transportation, compression, or manufacturing involving these materials.

Together, these two exclusions provide the oil and gas exploration and production industry a great deal of flexibility in managing drilling fluids and recovered oil, since they do not have to meet any specific requirements for storage, characterization, treatment, and disposal.  USEPA has produced a detailed guidance document covering these exclusions, which can be found at the following link and provides a detailed list of waste materials that fall under the exclusion and those that do not.

While some people within EPA and among environmental activist groups have stated that these exclusions need to be eliminated from the RCRA law, it’s hard to imagine these going away anytime soon.

​Regulation of Underground Injection of Liquid Wastes

Under the federal Safe Drinking Water Act, underground injection of liquid wastes is regulated under 40 CFR Parts 144-148.  Class II wells under this program are those used for oil and gas-related fluids. There are over 144,000 Class II wells in operation in the U.S., injecting over 2 billion gallons of brine every day.  They fit into one of three categories:

1. Enhanced recovery wells are used in hydraulic fracking to inject fluids into oil-bearing formations to recover residual oil and natural gas, and these wells are an integral part of the production system.  The UIC program does not regulate these wells, although USEPA has asserted that it has the authority to regulate these wells if diesel fuel is used as an additive to the fluids.
2. Disposal wells inject brines and other fluids associated with the production of oil and natural gas and also for natural gas storage operations.
3. Hydrocarbon storage wells are generally part of the U.S. strategic reserve program

Some states have been given authority to implement the SDWA program for UIC wells.

EPCRA and Tier II reporting

Under the federal Emergency Planning and Community Right to Know Act (EPCRA), oil and gas production facilities that store more than 10,000 pounds of petroleum or hazardous materials must file a Tier II report and provide information to their local and state emergency planning committees about the nature and quantity of materials stored at their facilities.  In most states, submissions are now done electronically over the internet and data may be available to search at the state’s environmental agency website.