Environmental Regulations

Question 1

Regulatory framework and jurisdiction

Answer 1

Federal

State

Question 2

Federal environmental laws with regulatory requirements impacting the oil and gas industry

Answer 2

Solid Waste Disposal Act, as amended, 42 U.S.C.A. Sec. 901, et seq. [“Resource Conservation and Recovery Act or “RCRA”]
Purpose – To prevent the release of hazardous waste to the environment and to provide a waste management scheme for the handling and disposal of solid and hazardous wastes.
RCRA Subtitle D – Solid [non-hazardous] waste
RCRA Subtitle C – Hazardous waste
“Hazardous waste” - …a solid waste…, which because of its quantity, concentration, or physical, chemical or infectious characteristics may – (A) cause or significantly contribute to an increase in mortality, or an increase in serious irreversible, or incapacitating reversible, illness; or (B) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of or otherwise managed.
RCRA Subtitle C – Hazardous waste
Hazardous waste list [40 CFR 261.31-33]
Hazardous waste by characteristic
Hazardous waste by the “mixture” or “derived from” rules
E&P Exemption” from Subtitle C hazardous waste regulation - …drilling fluids, produced waters, and other associated wastes with the exploration, development and production or crude oil or geothermal energy. 42 U.S.C.A. Sec. 69(b) (2) (A)
Report to Congress: Management of Waste from Exploration, Development, and Production of Crude Oil, Natural Gas, and Geothermal Energy” (52 FR 91 – 1987).
Regulatory Determination for Oil and Gas and Geothermal Exploration, Development and Production Wastes (53 FR 255, 466 – 1988).
“E&P Exemption” from Subtitle C hazardous waste regulation - …drilling fluids, produced waters, and other associated wastes with the exploration, development, and production of crude oil or geothermal energy. 42 U.S.C.A. Sec. 69(b)(2)(A) (cont.)
Management of Exploration Development and Production Wastes: Factors Informing a Decision on Need for Regulatory Action (April 2019).
Concluded that E&P wastes under Subtitle D of RCRA are not necessary at this time. Six steps to the management of hazardous waste under Subtitle C:
a. EPA Generator Identification Number
b. Prepare and label containers
c. Prepare containers for transport
d. Document waste shipments through manifests
e. Report shipments to EPA
f. Maintain records – manifests, reports, and waste analysis

Question 3

Federal Water Pollution Control Act, as amended, 33 U.S.C.A. Sec. 1251, et. seq. [“Clean Water Act”]; and the Oil Pollution Act [“OPA”

Answer 3

Purpose – to prevent and control discharges of oil and hazardous substances into the waters of the United States.
National Pollutant Discharge Elimination System Permit [“NPDES”]
Spill Prevention Control and Countermeasure Plan [“SPCC”]
Stormwater Discharge Plan [“SWP”]
“Wetlands” Permits

Question 4

Safe Drinking Water Act, 42 U.S.C.A. Sec. 300f – 300j-26 [“SDWA”]

Answer 4

Purpose – to protect groundwater from underground injection and maintain quality standards for drinking water.
Class II Underground Injection Control [“UIC”] Program

Question 5

Clean Air Act, 42 U.S.C.A. Sec. 7401 et seq. [“CAA”]

Answer 5

Purpose – to regulate emissions into the air of the United States.
Permitting programs
Minor Source Permit
Permit by Rule
Title V
New Source Review
Enforcement

Question 6

Emergency Planning and Community Right-to-Know Act, 42 U.S.C.A. Sec. 11001, et seq. [“EPCRA”]

Answer 6

Purpose – to provide public information about hazardous material on-site and to require emergency plans for the release of certain extremely hazardous chemicals.
The statute was the direct result of the Bhopal, India disaster (Union Carbide)

Question 7

Wildlife Protection

Answer 7

Migratory Bird Treaty Act, 16 U.S.C. 703, et seq. [“MBTA”]

Endangered Species Act, 16 U.S.C. Sec. 1538, et seq. [“ESA”]

Question 8

State Regulatory Compliance

Answer 8

Oil and gas-producing states have statutes that mandate the promulgation of rules and regulations for the protection of the environment during the exploration, development, and production of oil and gas.
The laws empower the State to police oil and gas operations and enforce regulations through injunctions, fines, and remediation orders.
State primacy programs under federal laws and grants.

Question 9

Areas covered by State rules and regulations include

Answer 9

Plugging abandoned wellbores
Restoration of surface
Underground injection control
Construction, maintenance, and closure of pits
Removal of trash, debris, and abandoned equipment
Handling, transportation, storage, and disposal of deleterious substances
The general prohibition against pollution

Question 10

Comprehensive Environmental Response, Compensation and Liability Act, and amended, 42 U.S.C.A. Sec. 9601, et seq. [“CERCLA” or “Superfund”]

Answer 10

Purpose – to require the cleanup or remediation of sites where there has been a release of hazardous substances or there exists a threatened release of hazardous substances.
Current and prior owners and operators as well as others are strictly and jointly and severally liable for clean-up costs.
Petroleum Exclusion” from CERCLA – Petroleum including crude oil or any fraction thereof and natural gas are excluded from the term hazardous substance.
Petroleum Exclusion did not apply to crude oil tank bottoms from a pipeline facility because the wastes included hazardous substances and the wastes were not considered a fraction of petroleum. [Cose. v. Getty Oil Co., 37 ERC 1153 (9th Cir. 1993), reversing Cose v. Getty Oil Co., 1992 U. S. Dis. Lexis 13, 593 (D. Cal. 1991)]
Leaded gasoline
Condensate from gas well Statutory right of contribution from other responsible parties
Successor Owners: An innocent landowner defense can be established if a successor owner did not know and had no reason to know at the time of the purchase that hazardous substances were disposed on or at the facility or land.
Requires “appropriate inquiry” and “Appropriate inspection”

Question 11

Common-Law Liability for Pollution

Answer 11

A. A Landowner may have several claims against the Lessee/Operator/Nonoperator for pollution to his/her property caused by oil and gas operations. These claims may result in a lawsuit by the Landowner.

1. Nuisance
2. Negligence
3. Trespass
4. Constructive fraud
5. Unjust enrichment
6. Breach of contract
7. Strict liability

B. The Lessee/Operator/Nonoperator may have several defenses to the Landowner’s claims for pollution caused by oil and gas operations.

1. Statute of limitations
2. Coming to the nuisance
3. Contributory negligence
4. Release and satisfaction
5. “Causation”

C. The Landowner may have several forms of recoverable damages for pollution caused by oil and gas operations.
Injury to real property
Permanent injury – the measure of damages is the disminution in the fair market value immediately before and immediately after the injury. [Schneberger v. Apache Corporation, 890 P. 2d 847 (Okla. 1994)]
a. Temporary injury
b. Injury to personal property
c. Injury to the person
d. Lost rents or profits
e. Annoyance, inconvenience, discomfort, and loss of enjoyment
f. Costs of investigation and remediation
g. Punitive damages

D. Other relief may be available to the Landowner for pollution caused by oil and gas operations.
Injunction
Abatement