661 F.2d 340 (5th Cir. 1981), 76-4497, American Petroleum Institute v. E.P.A.

Docket Nº:76-4497, 79-1829 and 79-2944.
Citation:661 F.2d 340
Case Date:November 13, 1981
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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661 F.2d 340 (5th Cir. 1981)




Nos. 76-4497, 79-1829 and 79-2944.

Unit A [*]

United States Court of Appeals, Fifth Circuit

November 13, 1981

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Liskow & Lewis, Gene W. Lafitte, J. Berry St. John, New Orleans, La., McCutchen, Black, Verleger & Shea, Robert K. Wrede, Philip K. Verleger, Sharon F. Rubalcava, Los Angeles, Cal., for petitioners.

Jeffrey M. Gaba, E.P.A., Patrick Cafferty, Lloyd S. Guerci, Pollution-Control Section, Land & Nat. Resources, Washington, D. C., James W. Moorman, Asst. Atty. Gen., U. S. Dept. of Justice, Washington, D. C., for respondent.

Petitions for Review of an Order of the Environmental Protection Agency.

Before BROWN, THORNBERRY and WILLIAMS, Circuit Judges.

JOHN R. BROWN, Circuit Judge:

In this Battle of Acronyms, the American Petroleum Institute (API) takes the field against the Environmental Protection Agency (EPA) to protest its actions with regard to National Pollutant Discharge Elimination System (NPDES) permits for oil and gas installations employing best practicable control technology currently available (BPT). At one end of the battleground stands the arm of the federal government charged with the protection of our environment, surrounded by a phalanx of regulations. Arrayed against it stands API, a trade organization that represents the Nation's petroleum industry, joined with its allies, some fifteen oil companies. 1 Both parties court our assistance, hoping with our intervention to rout the enemy and emerge victorious. 2 Declining the invitation, we judge the clash to be a draw.

API requests us to reverse or remand certain EPA Guidelines that limit the discharge of wastes generated by oil and gas production facilities. In the period since it filed these petitions, API has negotiated with EPA on many of the issues involved. Having resolved all the major problems, the couple has started down the aisle but pauses for a last question or two. Their differences boil down to four narrow points: upset, bypass, recategorization of certain wells, and "stripper" wells. As to those final questions, we affirm EPA's actions with regard to upset and bypass, but remand to the Agency for further consideration of the remaining two issues.

Siamese Petitioners

In this case, yet another in the ongoing chronicles of the EPA and its efforts to defend the American environment, API seeks review of EPA's Final Effluent Guidelines for the oil and gas extraction

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"point source category". 3 Under those Guidelines, 4 EPA restricted the discharge of pollutants from oil and gas exploration and production facilities. API asserts that the Guidelines contravene both the Clean Water Act, 33 U.S.C. § 1251 et seq., 5 their statutory begetter, and the Administrative Procedure Act, 5 U.S.C. § 551 et seq. Jurisdiction exists under section 509(b)(1)(E) of the Clean Water Act, 33 U.S.C. § 1369(b)(1)(E).

EPA originally issued separate, interim final regulations establishing Guidelines for the "onshore" and "offshore" segments of the industry. 6 Petitioners sought review in this court and in the U.S. Court of Appeals for the Ninth Circuit of the onshore and offshore effluent Guidelines, respectively. 7 After the filing of petitioners' opening briefs in both circuits, EPA promulgated one set of "final" regulations, combining the Guidelines and standards for both the onshore and offshore segments. The parties then sought to amend their petitions. As these regulations, unlike the interim ones, constituted an integrated whole, the Ninth Circuit transferred the offshore petitions to the Fifth Circuit. This Court on August 30, 1979 granted leave to amend and to consolidate the petitions for hearing in this Circuit. Accordingly, our decision will dispose of issues raised by the parties initially in both this and the Ninth Circuit.

Oil Wells That End Well

Americans have drilled for oil since 1859. Initially, oilmen conducted their operations exclusively on land. Offshore oil development began at the close of the century with the drilling of wells from wooden docks extending short distances from the coastline. As man's uses and need for oil and its by-products have increased, so have the industry's efforts to obtain it. Today, the oil industry operates in three different spheres. Exploration involves mapping, sub-surface surveys, and exploratory drilling to ascertain the existence of oil and gas deposits. Through drilling, which necessitates the boring of wells deep into the earth's crust, oil producers exploit reservoirs of oil, gas and water lying hundreds or thousands of feet inside the earth. Production involves bringing these elements to the surface and then processing them into the finished products for which our society has found so many uses. 8

Today, in addition to a landscape of oil rigs throughout many parts of our Nation,

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offshore activities take place in the seas off both the Atlantic and Pacific coasts, in the Gulf of Mexico, and in the frigid waters around Alaska. Offshore drilling produces approximately 1.3 million barrels of oil per day, about 16% of the Nation's total.

Just as one finds a variety of architectural styles in the average suburb, so one finds different types of oil rigs in the offshore neighborhood. Mobile rigs drill from floating barges or hulls. Especially in coastal areas, oil companies drill wells from barges, with production facilities established adjacent to the well on platforms or artificial islands. Yet others are floated into place and then raised on telescoping legs. Stationary rigs, by contrast, sit astride steel platforms resting on the seabed which do justice to Rube Goldberg.

The oil companies operate in excess of one thousand offshore facilities, the majority of which are in the Gulf of Mexico. They drill in water ranging from less than 100 feet to over 1000 feet deep. Some wells are within swimming distance while others are located as far as 100 miles from shore. Despite these differences, all oil and gas production facilities share one common trait: EPA regulation of waste discharges. And it is primarily upon that issue that API finds fault with EPA's final regulations.

All oil wells generate wastes. To produce the oil that our energy-hungry nation demands, one must take the bitter with the sweet, the waste water with the black gold. Oil wells produce three basic types of effluent. The first two, deck drainage 9 and sanitary wastes from kitchens and toilets, are not in question here.

The third, and inevitable by-product of oil drilling, is "produced water". The underground reservoirs that contain oil also contain fossil seawater water that has been in the ground during the time of oil formation. This unsavory mineral water rises to the surface in large quantities with the oil during production. The mixture of oil and water is then processed and separated. The oil goes into a pipeline for further processing, but the water remains, an unwanted commodity. Onshore facilities customarily reinject this produced water underground. Offshore facilities cannot do so. The problem then arises, what to do with the produced water? In most cases, it is treated on the rig. Existing technology furnishes several methods for treating produced water. 10 The goal of all methods is to cause oil that is dissolved in the water to rise to the surface, where it is skimmed off. Following treatment, the water is pumped overboard into the sea from which it came eons ago.

In certain areas of Louisiana and Texas, adjacent to bodies of saline water, wells located on terra firma have for many years, with the approval of the relevant state authorities, emptied this produced water into bays, inlets, estuaries, and marshes rather than reinject it.

Statutory Forest and Regulatory Trees

In the Federal Water Pollution Control Act of 1972, predecessor to the Clean Water Act, Congress declared as its ambitious purpose "to restore and maintain the chemical, physical and biological integrity of the Nation's waters." Section 101(a). It proposed to eliminate the discharge of pollutants into the Nation's waterways by 1985 and, where possible, sufficiently to improve water quality by 1983 so as to protect marine life and provide clean water for recreational uses. To accomplish these goals, Congress set two

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types of limitations on the discharge of pollutants. Section 303 of the Act sets water quality limitations to insure that no source causes the amount of pollution in a body of water to exceed certain minimum standards. Section 301, in a radical departure from earlier Acts, goes further, to establish "technology-based" limitations. These limitations require industry, regardless of a discharge's effect on water quality, to employ defined levels of technology to meet effluent limitations. Analogous to a strict liability standard, this section mandated technological improvements and imposed stringent pollution restrictions even where the discharge caused no discernible harm to the environment. 11 By July 1, 1977, all sources had to employ the "best practicable control technology currently available" (BPT) to control pollution. 33 U.S.C. § 1311(b)(1)(A). By 1983, those sources must meet even more stringent standards, the "best available technology economically achievable" (BAT).

Section 301 of the Act also directed the Administrator of the EPA within one year to publish regulations providing "Guidelines" for use in establishing effluent limitations. These Guidelines, really a form of nationally applicable regulations for different categories of point sources, would identify the degree to which pollutants could be reduced by the application of BPT. See E. I. duPont de Nemours & Co., Inc...

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