American Oil and Gas Reporter - March 2016 - 101

Wastewater Management

Regulatory Environment Still Evolving
By Kevin J. Garber
and Michael K. Reer
PITTSBURGH-Managing flowback,
produced fluids, and other oil and gas
wastewater continues to be a significant
industry concern in light of ongoing federal and state regulatory activity.
In the Appalachian Basin's Marcellus
Shale play, this is being exacerbated as a
result of fewer newly drilled wells being
available to reuse flowback and produced
fluids because of low gas prices.
For example, the Pennsylvania Department of Environmental Protection estimates that in 2014, operators either directly reused or treated and recycled 98 percent of hydraulic fracturing wastewater and
86 percent of unconventional produced fluid. But operators' ability to maintain such
high percentages for wastewater reuse and
recycling will be challenged by decreased
development. In 2015, 570 fewer unconventional wells were spudded in Pennsylvania than in 2014, a decrease of nearly 43
percent.
Additionally, several federal and state
regulatory initiatives have emerged to
make treatment potentially more costly,
or at least more heavily regulated. At the
federal level, the U.S. Environmental
Protection Agency has proposed to prohibit publicly owned treatment works
(POTWs) from accepting wastewater
from unconventional wells for discharge
or treatment. The agency also has begun
a study of centralized wastewater treatment facilities (CWTs) to determine
whether current regulations are sufficiently stringent.
Finally, the CWT industry could be affected by the findings of EPA's much-publicized hydraulic fracturing assessment,
particularly in light of the EPA Science Advisory Board's recommendation that the
agency include additional information
regarding radioactivity.
At the state level, operators in Pennsylvania likely will be affected by pending
amendments to the commonwealth's oil
and natural gas regulations, several of
which directly implicate the management
of oil and natural gas wastewater.
Wastewater Treatment Regulations
Historically, operators have utilized
both POTWs and CWTs to treat and/or
dispose of wastewater generated by oil and
natural gas production activities. The
EPA has established technology-based
effluent limitation guidelines (ELGs) for

treating oil and gas wastewater at POTWs
and CWTs, which are found in 40 CFR
Parts 435 and 437, respectively. In the nottoo-distant past, operators of shallow
wells used POTWs to treat brine, but that
practice is diminishing. For example, in
May 2011, the Pennsylvania DEP directed operators to stop sending oil and
natural gas wastewater to POTWs.
By contrast, use of CWT facilities
has remained strong. By definition, a
CWT is any facility that treats (for disposal, recycling or recovery of material) any
hazardous or nonhazardous industrial
waste and wastewater, and/or used materials received from off site. The definition
of a CWT facility includes both a facility that treats wastes received exclusively
from off site, and a facility that treats
wastes generated on site as well as waste
received from off site (40 CFR §437.2(c)).
According to EPA's March 2015 Technical Development Document for Proposed Effluent Limitations Guidelines
and Standards for Oil and Gas Extraction,
73 CWT facilities either currently accept
or plan to accept oil and natural gas extraction wastewater: 39 in Pennsylvania, 11 in
Ohio, six in West Virginia, four each in
Texas and Wyoming, three each in
Arkansas and Colorado, two in Oklahoma,
and one in North Dakota. Only two
states-Pennsylvania and Ohio-have CWT
facilities that discharge to a surface water
or POTW.
POTW Amendments
40 CFR Part 435 contains the technology-based ELGs for the oil and gas extraction point-source category. Promulgated in
1993, these ELGs apply to offshore, onshore, coastal, and stripper operations.
Subpart C specifically regulates the onshore oil and gas extraction point-source
subcategory, and prohibits the direct discharge into navigable waters of oil and natural gas wastewater pollutants associated
with production, field exploration, drilling,
well completion, or well treatment. This
includes produced waters and drilling
fluids.
Subpart E acts as an exception to Subpart C, and allows permitted direct discharges of produced water to navigable
waters west of the 98th meridian, provided the produced water has use in agriculture or wildlife propagation.
Part 435 does not now address the indirect discharge of oil and natural gas
wastewaters into navigable waters through
POTW treatment and discharge. Howev-

er, on April 7, 2015, EPA proposed to
amend Subpart C to prohibit discharging
unconventional oil and gas wastewater associated with unconventional production,
field exploration, drilling, well completion,
and well treatment to POTWs.
The proposed rule making is unlikely
to have a significant effect on the unconventional industry, however, because as
EPA notes in the preamble, the prohibition reflects current industry practice. In
fact, the agency states that it did not identify any unconventional operators discharging to POTWs during its site visits
and contacts with treatment facilities
and vendors.
EPA Wastewater Study
40 CFR Part 437 contains the technology-based ELGs for the CWT pointsource category. Part 437 consists of four
subparts:
* Subpart A, metals treatment and recovery;
* Subpart B, oils treatment and recovery;
* Subpart C, organics treatment and
recovery; and
* Subpart D, multiple waste streams.
For example, Subpart B applies to
CWTs that treat wastes or used materials
that contain oil and grease from commercial operations, including oil/water emulsion, contaminated groundwater from
cleaning petroleum spills, and tank cleanout waste from petroleum or oily sources.
If the CWT facility accepts more than
one type of waste stream, it may opt to fulfill the requirements of Subpart D, which
sets effluent limits for a more extensive list
of parameters than any subpart individually, or the individual subparts applicable
to each waste stream accepted by the facility.
In June 2015, EPA released its Final
2014 Effluent Guidelines Program Plan,
in which the agency announced that it had
commenced a detailed study of the CWT
industry to determine whether Part 437
ELGs should be amended. The Program
Plan states that EPA plans to evaluate:
* The number and types of facilities
accepting oil and natural gas extraction
wastewaters;
* The technology used to treat these
wastewaters, their performance, and costs;
* The financial characteristics of the
industry;
* The environmental impacts of CWT
wastewater discharges; and
MARCH 2016 101

American Oil and Gas Reporter - March 2016

Table of Contents for the Digital Edition of American Oil and Gas Reporter - March 2016