INDUSTRY OPPOSES TIGHTENING RCRA RULES

The U.S. oil industry has warned Congress that a strict approach in reauthorizing the Resource Conservation and Recovery Act (RCRA) could shut down 80% of the country's oil wells and 75% of its gas wells.

Industry officials told the Senate environmental protection subcommittee, during a hearing on RCRA reauthorization, the current mix of state and federal rules is the best way to control the oil industry's production wastes.

Oil and gas wastes and produced fluids are not regulated under RCRA, The Environmental Protection Agency recommended in 1987 that they not be.

About 98% of the wastes are salt water, and 1.6% are drilling muds.

Legislation before the subcommittee would not stiffen RCRA rules for oil wastes, but environmentalists are urging the panel to take a tougher approach.

Sen. Max Baucus (D-Mont.), subcommittee chairman, agreed with them. "It seems to me there is a problem with oil field wastes. The question is, what is the solution?"

ADEQUATE PROTECTION

Larry Bell, vice-president of engineering for ARCO Oil & Gas Co., testified for the American Petroleum Institute and MidContinent Oil and Gas Association.

Bell said the current state regulation of production wastes "works well, it responds to reality, and is fully capable of meeting newly identified needs."

Although the pending legislation, Senate bill 976, would exclude oil and gas wastes from its new industrial waste standards, Bell said Gruy Engineering Corp., Dallas, has estimated if they were included "it would force the shutting in of 500,000 or 80% of our oil wells and 200,000 or 75% of our nation's gas wells.

"We would lose 13% of our oil reserves and 9% of our gas reserves. Oil production would plummet 20% in the first year. Tens of thousands of jobs would be lost."

He added such a rule would cost the oil industry $50-60 billion in compliance costs.

"Because others have proposed that the current exemption be repealed for associated wastes, we also ran that case on the Gruy model using very conservative assumptions," Bell said.

"if only a small portion of the associated wastes tested hazardous, 78% of our nation's oil wells and 59% of our gas wells would be shut in, with significant reserve and production losses."

Denise Bode, Independent Petroleum Association of America president, said tighter RCRA rules would shut in most stripper wells.

She said the Appalachian Energy Group, nine oil and gas trade organizations in 10 Appalachian states, estimated added costs of only $200/year/well would force operators to plug 46,000 wells.

She said, "The application of RCRA to some or all production wastes will not discernibly improve the environment beyond what the existing regulatory structure can do and will overwhelm the capacity of existing RCRA waste facilities."

Bode said tougher regulation would run contrary to the administration's National Energy Strategy, which is aimed at preserving the nation's energy production as much as possible.

STATE'S EFFORTS

Timothy Dowd, executive director of the Interstate Oil and Gas Compact Commission, said, "Production wastes are presently regulated, and the environment is presently protected. A federal program will be wasteful and burdensome.

"Iogcc's member states have been responsible for regulating the oil and gas industry for more than 60 years and have been in the forefront in demonstrating the interest and ability of the state regulatory agencies to adequately protect human health and the environment.

"Some persons have publicly asserted that, because there is no federal program for E&P wastes, these wastes are not currently regulated. This is simply untrue and ignores the efforts made by state governments that are vigorously regulating and upgrading regulations to ensure the protection of human health and the environment."

Robert Krueger, a member of the Texas Railroad Commission, warned that legislation classifying production wastes as industrial waste would "sweep like a scythe through the oil and gas fields, leveling derricks, and crippling the educational and operational budgets of oil and gas producing states."

He noted Iogcc, with EPA, has developed a report on the necessary elements for an effective state oil and gas regulatory program.

"Iogcc is continuing to support the states' efforts by collecting the states' regulations into a central database system, developing a training program to further educate state field inspection personnel in environmental issues, and coordinating a state review project.

"As a result of this work, a peer review process has begun so that each state has the opportunity to have its regulatory program judged by its peers from comparable states."

Krueger also said, "In reality, oil and gas wastes pose no significant threat to public health and the environment when they are properly managed. They are relatively low in toxicity, state and federal programs have protected the environment, and there have been remarkably few damage cases documented by EPA.

DISAGREEMENTS

Chris Shuey, with the Southwest Research and Information Center, Albuquerque, called oil and gas wastes "the most gaping loophole" in RCRA's regulatory scheme.

"Wastes generated during exploration and production for oil and gas constitute the largest category by volume of solid wastes generated annually in the U.S.

"More than 2.8 billion tons of oil field wastes are generated every year, an amount that is equal to 25% of all the wastes generated annually in the U.S."

He said oil field wastes contain dangerously high levels of benzene and other organic contaminants, radioactive isotopes, and heavy metal and salt forming elements.

"Every year oil field pits kill hundreds of thousands of birds and migrating waterfowl that mistake oily pit wastes for fresh water ponds. In 1989 alone, the U.S. Fish and Wildlife Service estimated that more than twice the number of birds killed in the Exxon Valdez accident, more than 500,000, perished in oil and gas pits in just four oil producing states: Texas, New Mexico, Oklahoma, and Kansas.

William Fontenot, an environmental specialist with the Louisiana attorney general's Office, also argued for tighter controls.

He said states need federal help, and existing lenient state programs are far from adequate to control hazardous wastes at well sites.

Fontenot said Louisiana has identified 1,000 well sites where there is naturally occurring radioactive waste, and there may be another 9,000 such sites in the state. "Every major operator has serious problems," he said.

He said EPA's 1987 report advising against regulation of oil and gas wastes was flawed because "the consultants were told to limit what they looked at."