Hazardous waste issues will continue to be pitfalls for U.S. upstream operations in the 1990s.
Most exploration and production wastes were exempted from classification as hazardous waste by the Environmental Protection Agency in 1988.
Classification of E&P wastes as hazardous, with the accompanying stringent and costly cradle to grave oversight, would have decimated the U.S. upstream industry, oil and gas officials warned at the time. Soaring costs for handling, storing, transporting, treating, and disposal of hazardous wastes would have resulted in the shut-in of thousands of marginal wells and fields, they predicted.
Although upstream operators dodged the regulatory bullet in 1988, E&P wastes are likely to be targeted again next year as Congress debates reauthorization of the Resource Conservation and Recovery Act (RCRA), the regulatory underpinning for U.S. hazardous waste disposal.
Giving hazardous waste issues their main impetus in the 1990s is the resurgence of environmental awareness in the wake of the 1989 Exxon Valdez oil spill. Animosity towards the oil industry as a result of that incident and other widely publicized petroleum related pollution concerns will be fueled further by consumer anger sparked by gasoline price spikes following Iraq's invasion of Kuwait.
To some degree, that anger will be balanced by a sobering assessment of U.S. energy security needs as operators, particularly independents, struggle to maintain output from aging fields and find increasingly scarce new reserves.
That makes it critical for E&P operations to keep all waste generation to minimum, keep waste it does generate out of RCRA classification, and find new ways to treat and dispose of those wastes that are deemed hazardous.
Operators also will have to contend with the proliferating welter of different state regulations governing hazardous waste issues. Some, such as California's, will often exceed federal standards.
Perhaps the best guidelines for that effort can be found in a report by the Interstate Oil Compact Commission (IOCC), unveiled at the IOCC annual meeting this month. That report is the result of a comprehensive 2 year study on state regulation of E&P waste.
IOCC STUDY
The report from IOCC's council on regulatory needs sets out what it believes are criteria for effective state programs to regulate E&P waste.
It was compiled with input from IOCC, industry sources, state oil and gas regulatory officials, environmental groups, and observers from EPA and Department of Energy.
The IOCC study has won praise from government and industry officials who hope it will strengthen state oversight and thus stave off attempts to bring more upstream wastes under RCRA scrutiny.
A related issue that has suddenly revived after a 4 year hiatus is naturally occurring radioactive material (NORM) brought to the surface by oil drilling.
The New York Times reported Dec. 3 that drilling has caused "widespread radioactive contamination of the nation's oil fields."
Officials with American Petroleum Institute, however, contend NORM has been under study for 4 years and there are no new findings that it feels would merit increased federal regulation.
IOCC REPORT
Waste management guidelines in the IOCC report are "a tremendous achievement," said Tom Sawyer, API vice president of industry affairs.
Sawyer praised the study as being flexible enough to achieve its objectives while avoiding excesses that could harm consumers and the industry.
"The petroleum industry is committed to meeting the challenge of protecting the environment," Sawyer said. "In the past 20 years, the industry has invested $55 billion in this effort."
EPA and IOCC have since expanded their cooperative project to provide:
- Training for state oil and gas regulatory officers.
- A review of each state's present regulatory program and whether it complies with new IOCC criteria for such programs,
- A central databank for state environmental regulations for E&P.
BACKGROUND
Since creation of its environmental affairs committee, IOCC has become more involved in environmental issues related to oil and gas production in its 29 member states.
EPA studied E&P wastes and their environmental and potential human health effects in 1986-87. The agency documented the results in its December 1987 report to Congress and received oral and written comments during public hearings in spring 1988.
Based on that report's findings, as well as comments received in hearings, EPA recommended in June 1988 that E&P wastes not be regulated as hazardous under Subtitle C of RCRA (OGJ, July 11, 1988, p. 122).
Existing state and federal regulations are for the most part adequate, EPA found, although some regulatory and enforcement gaps still exist. To deal with those gaps, the agency decided on a three pronged approach of improving federal programs under the Clean Water and Safe Drinking Water acts, working with states to encourage compliance, and working with Congress on future programs.
IOCC formed its council on regulatory needs in 1989 to help EPA work with states to improve regulations and enforcement practices where needed.
GENERAL SCOPE
The IOCC criteria for effective state programs deal with waste management practices pertaining just to E&P operations. The wastes involved are those exempted by EPA from hazardous waste management standards contained in Subtitle C.
It does not deal with substances regulated by RCRA hazardous waste handling mandates or such general industrial byproducts as solvents, off-specification chemicals, household wastes, and office refuse.
Nor do IOCC state program criteria deal with injection or surface discharge of produced water, since those practices are regulated either by EPA or by states under the federal Safe Drinking Water and Clean Water acts.
The study's technical criteria do, however, cover disposal of produced water in pits, land farms, and at commercial disposal facilities.
The report also defines solid and hazardous wastes, reviews EPA's waste mixture rule, lists major exempt and nonexempt E&P wastes, and describes general rules for managing the nonexempt ones. There is a review of Safe Drinking Water and Clean Water act provisions applicable to E&P wastes.
HAZARDOUS VS. NONHAZARDOUS
A solid byproduct may be designated hazardous under RCRA if it is listed as such in the statute or if it exhibits one or more of the characteristics of hazardous wastes.
EPA regulations contain four lists of hazardous waste-those from nonspecific sources, those from specific sources, and commercial chemical products that become either acutely hazardous, or toxic, wastes when disposed of.
The agency also has listed criteria for wastes that are deemed hazardous because of having characteristics of ignitability, corrosivity, reactivity, or toxicity.
In addition, RCRA contains what has come to be called the "mixture rule." It provides that commingling of any listed hazardous waste with a nonhazardous one renders the entire mixture hazardous. The purpose of the mixture rule is to prevent the avoidance of regulations by diluting hazardous substances.
Throwing a half empty container of a listed solvent in a reserve pit, for example, would render the otherwise exempt contents as hazardous waste and force closing of the pit.
"All reasonable efforts should be made to completely use commercial products, return them to their vendor if they are not fully used, or segregate them from other wastes for management and disposal," the study says.
Nonexempt wastes should be segregated from exempt wastes when possible and tested when there is reason to believe they may exhibit one or more hazardous waste characteristics.
Although some states have waste regulations that differ from EPA'S, those state laws are still required to be at least as stringent as the federal program.
STATE LAW CRITERIA
The report also presents general, administrative, and technical criteria for establishing effective state E&P waste programs covering disposal of those wastes exempted from RCRA.
Its general criteria include a discussion of goals and state or regional variations in the assorted regulations.
Administrative criteria discussed include basic requirements, permitting, and compliance evaluation and enforcement. Also listed as program requirements are contingency planning, public participation, financial assurance, waste hauler certification, waste tracking, location of closed disposal sites, and data management.
Other administrative criteria the report details are personnel and funding, coordination among agencies, state and federal regulations, and strategies for maintaining a successful relationship between state and federal agencies.
Technical criteria are given for reserve and special purpose pits, including operating requirements and closure. Other technical aspects are landspreading, burial and landfilling, roadspreading, and commercial and centralized disposal facilities.
FUTURE WORK
The report also features a brief discussion drafted by the council on its recommendations for future projects and programs.
It encourages industry, states, and federal government officials to increase their efforts to characterize NORM and chemical constituents of E&P wastes. And it challenges industry, federal government, state academic institutions, and public interest groups to conduct more research into effective ways to minimize and reuse wastes produced in oil and gas fields.
The study also calls for those same groups to evaluate and recommend techniques to remedy contamination from use of prior management practices and from violations of laws.
In addition, IOCC should review and act on results of EPA's midcourse review of state UIC programs, and incorporate into the report's technical criteria any needed changes in those state UIC programs.
State and federal governments, the council said, should weigh benefits and economic and energy effects of changes in E&P waste management requirements. EPA should work with all interested groups to develop regulations that affect E&P activities, it said.
IOCC also called on EPA to classify offsite waste crude and tank bottom reclamation activities as nonhazardous. The agency presently exempts only onsite wastes from RCRA.
The commission pointed out that reclamation of waste crude can occur off site. "in addition," IOCC said, "failure to process waste crude oil and crude oil tank bottoms will triple the volume of waste to be disposed."
IPAA STANCE
The study's recommendations will produce positive results, contends Barry Russell, vice president and general counsel for Independent Petroleum Association of America.
"I hope stuff like the IOCC report and the regulations will be flexible enough from state to state to allow for regional and local factors to be properly addressed," Russell said.
"From our point of view hope we can get the state regulators in, the people who are closest to the problem in the area, instead of trying to have some kind of national program where you really don't have that flexibility."
Russell declined to speculate on whether RCRA reauthorization will result in tougher policing of hazardous waste and possible inclusion of more upstream waste as hazardous.
"There are some environmental groups that would like to take our exemption away from us," he said. "There has been an awful lot of work done on this by the IOCC and by other people and we just feel there is no environmental harm from these waste products.
"if you regulate them any more, you're going to have a big impact on the producer, especially the small producer."
It is crucial for Congress to take the IOCC report into account when debating RCRA reauthorization, Russell said, given that it represents the efforts of almost all interested parties, rather than a small sector. "We think we had the smartest people, not just from the industry, but state regulators, EPA, DOE, Interior, and the environmentalists. We had everybody sitting around the table trying to figure out what these programs ought to have."
"Basically, we have a blueprint of what every state program should entail."
NORM REVIVAL
Environmental and government officials still do not know the extent of the NORM health risk, if any, to rig workers or people who live near drillsites. Tests of wells in Louisiana, the New York Times reported, have found the oil/water mixture pumped to the surface contains radiation levels 5-30 times higher than those the government permits for nuclear power plant emissions.
Oil industry officials say the problem has been receiving careful study since 1986, when radioactive pipe was found in several Mississippi schoolyards where it was being used as playground equipment and railings.
Lynne Steingass, project manager for Environmental Policy Center, Washington, D.C., believes Congress may consider bringing oil field radium contamination under RCRA Subtitle C scrutiny.
"My feeling is there is a very good chance that E&P wastes could have more stringent regulation," she said. "They are starting to figure out that this (NORM) is a serious problem. That's going to be, I think, a very hot issue. I would think in reauthorization that if the production wastes don't get regulated for other reasons ... it will for its radioactive aspect."
An API official agreed the radium problem is being studied by state and federal regulators but doubts it will be brought within RCRA any time soon.
"I have not heard that anybody has proposed such a thing," he said. "What happened was in 1986. They found some scaling on pipes that were used on a school playground. Then the investigations all began and the industry went to work on it.
"We produced a video to tell people how to work with scale, and what they should or should not do," the API official said. "There have been three or four research projects so far. We have a committee that's watching this thing. "The EPA in Washington and the regulators in Texas, Louisiana, and Mississippi have been interested in this issue. That's where we are right now. It has not come up as a piece of legislation."
API is also in the process of drafting a guidance document for handling possible radiation. "The reason we haven't done it yet is you have to go out and find out the extent of the problem and then what do you do to solve it and what do you do to prevent it," the official said.
The IOCC's Russell, however, is skeptical Congress will ever bring NORM within the jurisdiction of resource conservation laws.
"I think that would fall outside the scope of RCRA, actually. I think they will be dealing more with the IOCC type issues," he said. "That is a problem that has been around for a long time. It's a very low level of radiation they are talking about, and it is naturally occurring."
REMEDIATION
As more marginal oil field properties change hands or are redeveloped for other purposes, the use of environmental audits will create a need for innovation in treating sites possibly contaminated with hazardous wastes.
Ensite Inc., Tucker, Ga., has developed a bioremediation technology, SafeSoil, it claims is effective on petroleum related contaminants.
Mark Shearon, SafeSoil program manager, said Ensite is working with two major oil companies that have closed several oil fields and removed pumping equipment in hopes of developing the property. "Before they can sell that land or develop it, they have to remove all the contamination," he said. "One of the hottest marketplaces for us right now is within the petroleum and chemical industries."
Ensite plans to use its bioremediation process, which entails stimulating high growth of natura, oil eating microbes in the soil.
"We take those contaminated soils and mix them with fertilizers, water, surfactants, and some other ingredients and mix them very thoroughly. We make them very healthy," Shearon said. "They are very active. In the process of their growth, they break down the petroleum, fuel, or solvent contaminant.
"Part of it is actually consumed ... And new bacteria grow, so some of that is transformed into new bacterial cells, and the rest goes through respiration."
Ensite is also working with gas pipeline companies on remediating oil and PCB contamination, mainly at compressor stations.
"That treatment offers a lot of advantages for those pipelines because we are a very low equipment intensive technology, so it's easy to go to a remote pipeline site and do small amounts of treatment," Shearon said. "It's also relatively cheap compared with all the other technologies available for getting rid of PCBS. It's anywhere from one third to one half the cost of other technologies."
The firm is looking into the market for cleaning up heavy oil components like benzene, toluene, xylene, and ethylbenzene at E&P locations as well. "We're exploring how to take this technology we have for cleaning contaminated sites and move it upstream to the production source and see if we can't treat out some of those contaminants so that those wastes don't become hazardous," Shearon said.
STATES' ROLES
As with most federal statutes, states are permitted to enact laws and regulations for upstream waste that are more stringent than RCRA. One state that frequently goes beyond federal standards is California, said Ed Malmgreen, manager of special projects for California Independent Petroleum Association. "In some cases, a non-RCRA waste under federal law is not necessarily excluded under California law," he said.
The high metals content common in the heavy and extra heavy crudes that account for the bulk of California's crude production causes extra problems in E&P wastes for producers there. "Sometimes ... you get some problems with metals coming back up," said Malmgreen. "Some of your muds in California, where they would qualify as exempt under federal law, they would not qualify as exempt in California."
A less stringent approach in other states indirectly is cause for producers' concern. If the perception holds that some states are too lax on regulating E&P wastes, that could lead to an accelerated push to expand the scope of regulating E&P wastes at the federal level.
CONGRESSIONAL ACTION
Rewriting RCRA, the nation's primary hazardous and solid wastes disposal law, is expected to be the major environmental initiative in the 102nd Congress. The environmental lobby in Washington claims there are loopholes in RCRA's hazardous wastes disposal regulations that need to be closed.
Barry Williamson, Minerals Management Service director, said the Bush administration's stance will continue to be that amendments "should not impose requirements that may have limited environmental benefit yet could substantially affect the supply and demand for domestic fossil energy resources.
"They also should not preempt existing state programs to regulate oil and gas wastes and coal combustion wastes that EPA, after extensive study under RCRA Sec. 8002, has found are generally adequate to protect health and the environment."
Williamson said Congress should recognize continuing efforts by states to improve design, implementation, and enforcement of state programs to regulate oil and gas E&P wastes.
"And it should recognize the fundamental differences which exist among various industry categories and from region to region within the same industry categories, and diversity in environmental settings among states."
Meanwhile, National Association of Manufacturers has released its 1990 RCRA handbook, detailing EPA rules and compliance requirements implementing the law.
U.S. concerns about uncertain Middle East supplies and plunging domestic production will likely sway legislators enough to continue the E&P exclusions from federal hazardous waste law, say some industry officials.
If lawmakers are impressed with the IOCC report and its concern for plugging what gaps exist in state regulation, they probably will not find it necessary to expand the scope of RCRA.
Widespread adoption of the IOCC guidelines, then, could allow the U.S. upstream industry to dodge a costly bullet again.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
