Tuesday, March 18, 2014

Halliburton Loophole -- actual text of the law

The IPAA's Public Relations program Energy in Depth has been busy again with their denialism of plain facts. This time they are claiming that the Halliburton Loophole doesn't exist. (exemptions in the Federal Law from regulations of the Oil+Gas industry from the 2005 Energy Policy Act).

Which is really bizarre, because all anyone has to do is use Google to look up the text of the law itself, as the New York Times did:


Here is a list of the actual sections of the United States Code which clearly shows the exemptions.  (from here: http://nofrackohio.com/tools-and-reseach/federal-information/Fed%20Frack-all%20exemptions.pdf )

Clean Air Act

§ 112 Hazardous Air Pollutants, § 112(a)(1) Aggregation. Aggregation of Collected Stationary Sources -- any "group of stationary sources located within a contiguous area and under common control" with aggregate emissions equal to a major source shall be regulated as such. 42 U.S.C. § 7412(a)(1).

Oil and Gas Production Facilities Cannot Be Aggregated for Major Source Control -- "Emissions from any oil or gas exploration or production well (with associated equipment) and emissions from any pipeline compressor or pump station shall not be aggregated with emissions from other similar units...." 42 U.S.C. § 7412(n)(4)(A).

§ 112(a)(2) Small Sources Regulation. Area Source Regulation -- "any stationary source of hazardous air pollutants that is not a major source" excepting motor vehicles. 42 U.S.C. § 7412(a)(2)
Oil and Gas Production Facilities Cannot Be Regulated as Small Sources -- EPA "shall not list oil and gas production wells (with associated equipment) as an area sources category… except that the Administrator may establish an area source category… in any metropolitan statistical area... with a population in excess of 1 million, if the Administrator determines that emissions of hazardous air pollutants from such wells present more than a negligible risk of adverse effects to public health." 42 U.S.C. § 7412(n)(4)(B).

§ 112(b)(1) List of HAPs. Regulated HAPs -- Designated by Congress in the 1990 amendments to the CAA. 42 U.S.C. § 7412(b)(1).

Hydrogen Sulfide Emissions from Wells Not Regulated -- Hydrogen sulfide was not listed as a HAP by Congress as a concession to oil industry even though human exposure is linked to irritation, difficulty breathing, nausea, vomiting, headaches, loss of consciousness, and even death in some circumstances (see NRDC report "Drilling Down" 11-13 (2007)).

§ 160 Prevention of Significant Deterioration, § 169(1). Major Emitting Facility -- potential to emit ≥ 100 tn/yr of any criteria pollutant -- regulated sources include petroleum refineries and petroleum storage and transfer facilities. 42 U.S.C. § 7469(1).

Well fields are not regulated directly as MEFs -- emissions from production facilities 'eat up' remaining emissions capacity in PSD areas -- may be subject to regulation under state implementation plans.

§ 171 Nonattainment Areas, § 172(c)(5). Permits for Major Stationary Sources -- new and modified major sources require special permits in nonattainment areas -- permit requirements set out at § 173. 42 U.S.C. § 7501(c)(5).

Well Fields Are Not Major Sources Subject to Permitting Requirements -- refineries and other large facilities are major sources.

§ 173(a)(1)(A). Pollution Offset Requirements -- as a condition for issuance of new permits "sufficient offsetting emissions reductions" must be obtained, so as to represent "reasonable further progress" towards NAAQS attainment. 42 U.S.C. § 7503(a)(1)(A).

O&G Production Offsets may be required by states in nonattainment areas to demonstrate pollution offsetting for other industrial growth -- this possibility is identified as a factor limiting growth of O&G production (see Argonne National Laboratory, USDOE, "Environmental Policy
& Regulatory Constraints to Natural Gas Production" 84-85 (2004)).

§ 181 (note). 1990 Amendments to the CAA contain a minor note exempting stripper wells from nonattainment provisions. These are oil and natural gas wells with marginal daily production, but which make up 85% of all U.S. oil wells and account for 18% of U.S. crude production. 42 U.S.C. § 7511.

Stripper Well Exemption in Nonattainment Areas -- ozone, carbon monoxide, PM-10, sulfur dioxide, nitrous oxides, and lead nonattainment provisions contained in Title I of the CAA will not apply with respect to the production of and equipment used in O&G production from stripper wells or stripper well natural gas. This exemption does not apply (1) in serious nonattainment areas having a population of 350,000 or more, or (2) in severe or extreme nonattainment areas.

Clean Water Act

§ 402(p) NPDES Storm Water Discharge Permits. Permit Program for Municipal and Industrial Storm Water Discharges -- NPDES permits required for discharges associated with industrial activity and municipal storm and sewer collection and treatment systems.

Statutory Exemption for O&G from Storm Water Regulation -- EPA shall not require a permit for storm water discharges from O&G exploration or development activities and "transmission facilities" so long as the runoff is not contaminated with any raw material, byproduct, or waste.
33 U.S.C. § 1342(l)(2).

§ 502(24) Definition of Exempt O&G Activities. Expansion of Exempted Activities -- Energy Policy Act of 2005 § 323 (119 Stat. 694) -- defined oil and gas exploration and production to cover many more types of surface disruptions that would otherwise be subject to storm water discharge permitting, including well pads, new roads, and pipelines.

New, Broader Definition of Permissible Disruptions -- 'Oil and gas exploration, production, processing, or treatment operations or transmission facilities' means all field activities [associated with exploration and development]… including activities necessary to prepare a site for drilling... whether or not such field activities or operations may be considered to be construction activities.
33 U.S.C. § 1362(24).

40 CFR § 122.26 Storm Water Discharge Permit Regulations. Storm Water Discharge Regulations -- EPA implemented regulations for storm water discharges -- Phase I large sites (5+ acres); Phase II small sites (1-5 acres).

Exemption for sediment Loading -- EPA revised 40 CFR § 122.26(a)(2)(ii) to say that a water quality standard violation for sediment alone does not trigger a permitting requirement -- based on interpretation of the 2005 amendment that exempted construction activities at O&G sites. 71
Fed. Reg. 33,628 (Jan. 6, 2006).

§ 502(2)(B) Definition of 'Pollutant' -- discharge of pollutants requires a NPDES permit.
Statutory Exemption for Fracing Fluids -- Materials injected into an oil or gas well to facilitate production (such as fracing fluid), or produced water re-injected for disposal, are not considered pollutants if approved by a state and that state determines that such injection or disposal will not result in the degradation of ground or surface water resources. 33 U.S.C. § 1362(2)(B).

Safe Drinking Water Act

Protective Standard for Underground Injection -- UIC regulations shall contain minimum requirements for effective programs to prevent underground injection which "endangers drinking water sources" (defined at §
300h(d)(2)). 42 U.S.C. § 300h(b)(2).

Exemption for Fracing Chemicals -- UIC regulations may not interfere with or impede O&G hydraulic fracing or other underground injection for recovery of oil or natural gas unless such requirements are essential to assure that underground drinking water sources will not be endangered by such injection. 42 U.S.C. § 300h(b)(2).

Underground Injection Defined -- the term "underground injection" means the subsurface emplacement of fluids by well injection. 42 U.S.C. § 300h(d)(1).
Specific Exemptions for Fracing Fluids -- underground injection excludes (i) injection of natural gas for purposes of storage; and (ii) injection of fracturing fluids (other than diesel fuels) related to oil, gas, or geothermal production activities. 42 U.S.C. § 300h(d)(1)(B).
40 CFR § 146.5 Well Classifications for Underground Disposal -- The UIC program classifies different types of wells, imposing stricter regulations on wells used to inject RCRA-classified hazardous materials.
RCRA Exemptions for O&G Toxic Materials means they can be injected into Class II wells with fewer regulatory controls, instead of limiting injection to strictly regulated Class I wells.

Resource Conservation and Recovery Act

§ 3001(2)(A) Hazardous Wastes Designation. Wastes associated with exploration, development, and production were exempted from RCRA pending recommendations from EPA to Congress.
Legislative Exemption -- The exempted wastes were defined as "…drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil or natural gas or geothermal energy…." 42 U.S.C. § 6921(b)(2(a)

53 Fed. Reg. 25,445 (1988). EPA's final regulation on exemption of exploration, development and production wastes.

Wastes "Uniquely Associated" with E&P are exempt from Subtitle C. These include gas and oil drilling muds, oil production brines, drilling fluids, and produced water. Natural gas plants that process NG to remove water and other impurities prior to entering the sales line are considered to be part of the exempt production operations regardless of their location with respect to the wellhead. See the final regulations for a list of exempt and non-exempt wastes.

58 Fed. Reg. 15,284 (1993). EPA clarifications of the exemption rules.

Scope of exemption -- "A simple rule of thumb for determining the scope of the exemption is whether the waste in question has come from down-hole (i.e. brought to the surface during oil and gas E&P operations) or has otherwise been generated by contact with the oil and gas production stream during the removal of produced water or other contaminants from the product.... If the answer to either question is yes, the waste is most likely considered exempt."
§ 3006 State Hazardous Waste Programs. Delegation of Regulatory Authority -- EPA can delegate regulatory authority to state hazardous waste programs that meet the minimum standards of the federal regulations 42 U.S.C. § 6926.

Narrower E&P Waste Exemptions Under State Law -- States may adopt more stringent regulation on hazardous wastes than the federal standards by choosing to regulate federally- exempted wastes. California, for example, has stricter disposal and injection requirements than federal law and uses state standards to classify hazardous wastes.

§ 1004 Definitions. Solid Waste -- "The term 'solid waste' means any garbage, refuse, sludge… and other discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations…." 42 U.S.C. § 6903(27). Hazardous wastes are a subset of solid wastes.

Solid Waste Regulation -- The hazardous waste exemption does not preclude regulation of exempt exploration and production wastes under the less stringent Subtitle D regulations on solid wastes.
§ 7003 Imminent and Substantial Endangerment. Cleanup Actions -- EPA and citizen plaintiffs can bring cleanup actions against "any person (including any past or present generator… or owner or operator…)" where "evidence that the past or present handling, storage, treatment, transportation or disposal of any solid waste or hazardous waste may present an imminent and substantial endangerment to health or the environment...." 42
U.S.C. § 6973.

Operator Liability -- Generators and treatment facilities dealing with otherwise exempt hazardous materials may be liable for cleanup under this standard if the exempt wastes are considered solid wastes. EPA has (informally) acknowledged potential operator liability under this section, but notes that the RCRA hazardous waste exemption allows the operator to choose a waste management and disposal option that is less stringent and possibly less costly than would be required under Subtitle C. -- See
EPA, RCRA Exemptions 21-22 (2002).

Superfund Act

1980 Establishes a governmental response to releases of hazardous substances into the environment and holds polluting industries liable for cleanup costs. But natural gas and oil are not considered hazardous under this law, making it more difficult for the E.P.A. to hold some oil and gas operations liable.

§ 101 Definitions. Materials that Trigger CERCLA Liability -- § 101(14) defines hazardous substances whose release or threatened release is a prerequisite for CERCLA liability.
Specific Exemption for Petroleum and Natural Gas -- "The term does not include petroleum, including crude oil or any fraction thereof which is not otherwise specifically listed or designated as a hazardous substance [in other environmental provisions -- see below], and the term does not include natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel...."
42 U.S.C. § 9601(14).

§ 101(14) Hazardous Materials. Hazardous Materials Defined by Reference to Federal Environmental
Statutes -- CERCLA defines hazardous wastes by reference to hazardous substances definition at: RCRA (42
U.S.C. § 6921); CWA (33 U.S.C. §§ 1317(a), 1321(b)(2)(a)); TSCA (15 U.S.C. § 2606); CAA (42 U.S.C. §

Referenced Sections Contain Exemptions for Oil, Gas, and Associated Wastes -- These citations are to definitions with exemptions for oil and associated wastes -- see relevant provisions in this table for details.

Exemption for Hazardous Materials When They Occur Naturally in Oil or Natural Gas -- EPA has interpreted the exemption to cover other hazardous substances when they occur naturally in oil or gas, including benzene, toluene, xylenes, polycyclic aromatic hydrocarbons, arsenic, and mercury.
-- See Daniel L. McKay, RCRA's Oil Field Wastes Exemption and CERCLA's Petroleum
Exclusion, 15 J. Energy Nat. Resources & Envtl. L. 41, 70-71 (1995).
Emergency Planning and Community Right to Know Act (EPCRA), Toxic Release Inventory (TRI). Section 313.

1986 Requires certain industries to report to the E.P.A. on the storage, release or transfer of significant levels of toxic substances. But much of the oil and gas industry has not been required by the E.P.A. to follow the law’s reporting requirements.

National Environmental Policy Act

Energy Policy Act of 2005 § 390. Categorical Exclusion of NEPA Review in DOI and USFS Lands -- "Action by [DOI] in managing the public lands, or the Secretary of Agriculture in managing National Forest System Lands… shall be subject to a rebuttable presumption that the use of a categorical exclusion under [NEPA]
would apply if the activity is conducted pursuant to the Mineral Leasing Act for the purpose of exploration or development of oil or gas." 42 U.S.C. § 15924(a).
Categorical Exclusion Applies when:

-- surface disturbance of < 5 acres;
-- sites where drilling took place w/in previous 5 years
-- drilling of wells w/in a developed field for which an approved land-use plan or NEPA document
was prepared. 42 U.S.C. § 15924(b)

Most Drill Pads Are Less Than 5 Acres -- opens possibility that large drilling projects could avoid
NEPA review as any number of individual wells.

72 Fed. Reg. 45,504. Categorical Exclusion of NEPA Review for Oil and Gas Exploration Activities on BLM Lands -- BLM categorical exclusion for geophysical exploration projects that do not include the construction of roads.

Where Exploration Activities Do Not Require New Road Building -- If the proposed action involves no new or temporary road construction, the field office shall use the categorical exclusion to satisfy NEPA compliance, unless the authorizing officer determines that an EA would be helpful, or there are extraordinary circumstances involved in the application. 516 DM 11.9(B).

No comments: