Oil and Gas E&P Waste Disposal Compliance Considerations

March 28, 2017

Staying in compliance with current regulations regarding the disposal of oilfield and natural gas production wastes has its challenges. According to the American Petroleum Institute (API), the U.S. generated the equivalent of 9,000 Olympic swimming pools, or over 29 million cubic yards, of solid drilling wastes annually.

Since the 1970s, the federal government has not classified these wastes as hazardous, nor does it regulate their disposal as heavily as similar wastes created by other industrial processes.

Challenges in Compliance with Oil and Gas E&P Wastes

Oil Gas FlareA Complicated Matrix of Regulation

The Resource Conservation and Recovery Act (RCRA), passed in 1976, created the framework for how hazardous and non-hazardous wastes are handled in the U.S. Under RCRA, the EPA has created an overarching regulatory system designed to ensure the safe management of waste from cradle to grave, including during transport, treatment, storage, and disposal.

However, the law (specifically RCRA subtitle C) and subsequent regulations exclude certain waste projects, including some oilfield wastes, from the definitions of which wastes are covered under RCRA. These excluded wastes are sometimes called “Exempt” or “RCRA Exempt” wastes. Relevant to the oilfield, “gas and oil drilling muds and oil production brines” were excluded from the RCRA definitions, though the Subtitle C exemption did not preclude state regulations or other federal regulations (such as the less stringent RCRA Subtitle D solid waste regulations or others) from regulating these otherwise Subtitle C exempt wastes.

The Bentsen Amendment of the Solid Waste Disposal Act in 1980 added drilling fluids, produced waters, and other wastes associated with exploration, development, and production of crude oil or natural gas to the RCRA exempt list. With respect to the vague term “other wastes associated with,” the legislative history suggests that the term was meant to specifically include wastes “intrinsically derived from” primary field operations related to exploration, development, or production of crude oil and natural gas, rather than those associated with transportation and manufacturing operations.

The Bentsen amendment also required the EPA to complete a full assessment of each exempted waste and submit a formal report to Congress on the findings, which it did in 1988. At that time, the EPA issued a regulatory determination that regulation of these wastes under RCRA Subtitle C was not warranted (see 40 CFR 261.4(b)(5)). Instead, oilfield and gas E&P wastes were placed in a special category – Industrial D, a diverse classification with no set federal criteria regulating the design, operation, or closure of solid waste disposal facilities.

According to the EPA, Industrial D wastes are “loosely regulated by RCRA Subtitle D and 40 CFR 257, Subpart A, which governs those solid waste disposal facilities that do not meet the definition of a municipal solid waste landfill.”

Adding to the confusion, certain materials can be exempt or non-exempt depending solely on their point of origin. For example, basic sediments and water, pigging wastes or tank bottoms are considered RCRA exempt when generated in infield gathering systems but not when generated in transport pipelines from the gathering facility to a refinery. Moreover, when multiple classes of wastes are comingled, all of the waste becomes classified under the most stringent classification. Thus, special attention (backed up by documentation able to stand up to audit) is required by operators, transporters, and disposal/recycling facilities to ensure that they have correctly classified their wastes.

As noted above, the exemption under RCRA Subtitle C does not preclude states or localities from regulating oilfield waste to a higher standard. Local and state regulations of oilfield wastes have begun to evolve rapidly with the increase in activity near to population centers driven by the development of shale gas and tight oil since over the past ten years. These state or local regulations govern everything from facility permitting and zoning, to the special handling of specific oilfield wastes such as naturally occurring radioactive materials (NORM), waste characterization and disclosure requirements, operational controls, facility maintenance, facility closure and financial assurance. Moreover, operations on federal land come under the authority of the Department of the Interior’s Bureau of Land Management (BLM), which has its own guidance and regulations. This trend of increasing local regulation could continue or accelerate, particularly in places where the industry’s activities are most felt by the public (Oklahoma, with its induced seismicity issues is a good example of a place where this trend is playing out, despite an oil and gas friendly government and citizenry).

Best Practices for Planning a Waste Management Strategy

OilfieldA large number of industry groups have developed and disseminated best practice guidelines for oil and gas operators including site-specific E&P waste management plans. One example is the American Petroleum Institute (API) which is an industry trade and lobbying organization representing the oil and gas industry. The API also promulgates widely referenced industry equipment and operating standards. For waste management, the API’s Exploration and Production Waste Management Facility Guidelines Workgroup (which included a broad cross-section of state and industry parties interested in oilfield waste management issues) developed a set of guidelines intended to identify various techniques and options for protecting human health and the environment during oil and gas activities.

Both the API and the EPA adopt a hierarchical approach to waste management which aligns with the philosophy of “reduce, reuse, and recycle” first. This is critical as any material which has not been reused or recycled will ultimately end up underground, on the ground, or in the atmosphere. Thus, minimizing or preventing waste and pollution generation is the most important part of a comprehensive waste management strategy. By avoiding the generation of waste in the first place, or by reusing or recycling various oilfield products and byproducts, the downstream issues of disposal are avoided. The trends towards closed loop drilling systems, thermal desorption, mud and road base recycling are examples of how this philosophy has been put into practice.

As a final step, remaining wastes should be disposed of using sound best practice techniques. For example, in some jurisdictions, oil and gas companies are allowed to leave their drilling wastes buried onsite in reserve pits. This choice is one with significant future costs and consequences. A better choice which is well proven in both onshore and offshore environments is to use slurry injection techniques to dispose of all fluid and solid wastes which arise from the drilling activity. In a 1998 report, the EPA noted that “the deep injection of waste is the only disposal option that effectively removes waste from the biosphere.” If the operator is drilling a multi-well pad in a region where there is no such facility, one option would be to complete one of its production wellbores first in an injection zone and to use slurry injection to dispose of all materials (cuttings, pit water, muds, etc.) into that well before recompleting it in the productive interval. This would enable all wastes created to be disposed onsite (thus eliminating costly and dangerous trucking of materials) and without co-mingling wastes with those of another operator. Another option for certain wastes (i.e. low chloride water-based muds) is to landfarm them onsite which again eliminates trucking and co-mingling.

While there are many other proven ways to dispose of oilfield waste, a good guideline to use when selecting the particular method for your environment and waste type is to first look to methods which minimize the risks of human or animal contact with the wastes, prevent contamination of surface waters or deep aquifers, and over time render the waste benign.