Storm Water and Texas Oil and Gas Production Facilities

A question came up from a student who had recently sat through my Storm Water Management class.

Are oil & gas facilities with SIC 1389 covered?  That SIC is identified under Section V in Sector I of the MSGP (TXR050000) as "Oil and Gas Field Services" but it indicates it is only applicable if the site had a Reportable Quantity (RQ) release since 1987? (see page 68 of the MSGP)

Interesting.....Here is what I found out.

According to the EPA:

Operators of oil and gas exploration, production, processing, or treatment operations or transmission facilities, that [were] not required to submit a permit [but had] a discharge of a reportable quantity of oil or a hazardous substance (in a storm water discharge) for which notification [to the NRC was] must apply for a [storm water] permit.

 Somehow it is the RQ that triggers EPA jurisdiction over Oil & Gas operations, but not just an RQ, an RQ "in storm water".

So are oil and gas facilities with SIC 1389 covered under the MSGP?  It depends.  Here is what the TCEQ states in the permit:

General permit coverage for oil and gas field service companies is limited to the industrial activities that occur at the service company headquarters, permanent offices, or similar base of operations.

Which means only SIC 1389 field operations do not have to apply for permit coverage.  So does this mean that oil & gas field service operations can ignore storm water and pollute it as they see fit?

No.  Instead of the MSGP, these operations must obtain an NPDES permit from the EPA if they discharge industrial storm water and be authorized by the Texas Rail Road Commission (RRC) if applicable.

Why the RRC?  According to a memorandum of understanding between the TCEQ and the RRC, it has a lot to do not just with turf, but also with the field operations themselves.

Where required by federal law, discharges of storm water associated with facilities and activities under the RRC's jurisdiction must be authorized by the EPA and the RRC, as applicable. Under 33 U.S.C. §1342(l)(2) and §1362(24), EPA cannot require a permit for discharges of storm water from "field activities or operations associated with {oil and gas} exploration, production, processing, or treatment operations, or transmission facilities" unless the discharge is contaminated by contact with any overburden, raw material, intermediate product, finished product, byproduct, or waste product located on the site of the facility.

The RRC prohibits operators from causing or allowing pollution of surface or subsurface water. Operators are encouraged to implement and maintain Best Management Practices (BMPs) to minimize discharges of pollutants, including sediment, in storm water to help ensure protection of surface water quality during storm events.

What this says is this.  Because the operator is prohibited from causing pollution to the waters of the State, a permit to discharge is not required since the water being discharged has not become contaminated by the industrial operation.  If it has, it is industrial storm water and requires an NPDES permit from the EPA.  This makes sense, since the MSGP is a permit to discharge based on the assumption that the storm water has been impacted by the industrial operation and marginally cleaned using BMPs.

OK, thats industrial, what about construction activities?

Similar logic here as well.  The memo states:

Activities under RRC jurisdiction include construction of a facility that, when completed, would be associated with the exploration, development, or production of oil or gas or geothermal resources, such as a well site; treatment or storage facility; underground hydrocarbon or natural gas storage facility; reclamation plant; gas processing facility; compressor station; terminal facility where crude oil is stored prior to refining and at which refined products are stored solely for use at the facility; a carbon dioxide geologic storage facility under the jurisdiction of the RRC; and a gathering, transmission, or distribution pipeline that will transport crude oil or natural gas, including natural gas liquids, prior to refining of such oil or the use of the natural gas in any manufacturing process or as a residential or industrial fuel.  The RRC also has jurisdiction over storm water from land disturbance associated with a site survey that is conducted prior to construction of a facility that would be regulated by the RRC.

Under 33 U.S.C. §1342(l)(2) and §1362(24), EPA cannot require a permit for discharges of storm water from "field activities or operations associated with {oil and gas} exploration, production, processing, or treatment operations, or transmission facilities, including activities necessary to prepare a site for drilling and for the movement and placement of drilling equipment, whether or not such field activities or operations may be considered to be "construction activities" unless the discharge is contaminated by contact with any overburden, raw material, intermediate product, finished product, byproduct, or waste product located on the site of the facility.  The RRC prohibits operators from causing or allowing pollution of surface or subsurface water. 

Now this has not gone on unchallenged.  In the RRC's 2009 Self-Evaluation Report they write:

In 2008 the U.S. Department of Justice filed a petition seeking rehearing of the decision by the Ninth Circuit Court of Appeals in Natural Resource Defense Council v. US E.P.A., 526 F.3d 591 (9th Cir. 2008) which vacated the U.S. EPA’s 2006 oil and gas construction storm water regulation. 

In its petition, the Government contends that the Court erred by overturning EPA’s final rule solely because the Court found it inconsistent with EPA’s prior interpretation of a provision of the Clean Water Act. The regulation effectively exempted from Clean Water Act permit requirements storm water discharges of sediment from construction activities associated with oil and gas exploration, production, processing, or treatment operations or transmission facilities unless the relevant facility had a discharge of storm water resulting in a discharge of a reportable quantity of oil or hazardous substances.

This action also encouraged voluntary application of best management practices for construction activities associated with oil and gas field activities and operations to minimize erosion and control sediment to protect surface water quality. It is unknown at this time what affect, if any, a new decision may have on RRC regulated industries.

Another one to add to "wait n' see."