American Petroleum Institute v. E.P.A.
| Decision Date | 18 April 1986 |
| Docket Number | No. 84-4573,84-4573 |
| Citation | 787 F.2d 965 |
| Parties | , 16 Envtl. L. Rep. 20,610 AMERICAN PETROLEUM INSTITUTE, et al., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY, et al., Respondents. |
| Court | U.S. Court of Appeals — Fifth Circuit |
J. Barry St. John, Jr., Robert E. Holden, New Orleans, La., for petitioners.
Lee Schroer, Atty., William D. Ruckelshaus, Administrator, U.S.E.P.A., Barry S. Neuman, U.S. Dept. of Justice, Land and Natural Resources Division, Mark P. Fitzsimmons, Atty., Envir. Def. Sec., Dept. of Justice, Washington, D.C., for respondents.
Sarah Chasis, Atty., Natural Resources Defense Council, Inc., Sanford Sagalkin, Washington, D.C., for amicus curiae.
On Petition for Review of Action of The Regional Administrator, Region 10, Environmental Protection Agency.
Before CLARK, Chief Judge, THORNBERRY, and EDITH HOLLAN JONES, Circuit Judges.
The American Petroleum Institute, an industry trade association, and four individual companies, Atlantic Richfield Company, Conoco, Inc., Exxon Corporation, and Mobil Oil Corporation (hereinafter collectively The scope of our examination, in terms of both the data presented and the law involved, has been defined in previous decisions, and we dispense with repeating it anew. See, e.g., American Petroleum Institute v. EPA, 661 F.2d 340, 348-49 (5th Cir.1981). Having carefully reviewed the administrative record, it is our conclusion that one of the discharge limitations must be remanded to the agency, but that, enforcing traditional principles of judicial deference, the other features of the permits are approved.
"API" or "industry"), seek judicial review of the action by the Regional Administrator for the Environmental Protection Agency's Region 10 ("Region 10") in issuing two permits controlling discharges of pollutants from offshore drilling rigs to the Alaskan Outer Continental Shelf ("OCS") and territorial seas. The two challenged permits, issued on May 30, 1984, are "area-wide" or general permits, authorizing discharges from oil and gas exploration rigs in areas of the Bering Sea and the Beaufort Sea. The permits allow certain discharges, but also set limits and conditions on the discharges. API contends that EPA overreached its statutory authority in imposing five of the discharge limitations and requiring two test methods in the permits, thereby restricting exploration.
STATUTORY FRAMEWORK
The Clean Water Act ("CWA" or "Act"), 33 U.S.C. Secs. 1251 et seq., prohibits the discharge of any pollutant into the nation's waters unless the discharge complies with its specific requirements. 1 Sec. 301(a), 33 U.S.C. Sec. 1311(a). Compliance may be achieved by obtaining a permit issued pursuant to Sec. 402, 33 U.S.C. Sec. 1342. National Pollutant Discharge Elimination System ("NPDES") permits are issued by EPA or, in those jurisdictions in which EPA has authorized a state agency to administer the NPDES program, by a state agency subject to EPA review. 2 See 33 U.S.C. Sec. 1342(a)-(d). NPDES permits must incorporate applicable technology-based effluent limitations guidelines promulgated by EPA on a nationwide industry-by-industry basis under Secs. 301(b) and 304 of the Act. 33 U.S.C. Secs. 1311(b), 1314. Where EPA has not promulgated applicable technology-based effluent limitations guidelines, the permits must incorporate, on a case-by-case method, "such conditions as the Administrator determines are necessary to carry out the provisions of the Act." Sec. 402(a)(1), 33 U.S.C. Sec. 1342(a)(1). See Consolidated Coal Co. v. Costle, 604 F.2d 239, 248 n. 46 (4th Cir.1979), rev'd on other grounds sub nom. EPA v. Nat'l Crushed Stone Ass'n; NRDC v. Costle, 568 F.2d 1369, 1378-79 (D.C.Cir.1977).
Sections 301 and 304, which contain the effluent limitations guidelines, are the fundamental technology-related provisions of the Act. Section 301 sets sequential deadlines for the achievement of a series of increasingly stringent "technology-based effluent limitations." Section 301(b)(1)(A) directs the Administrator to establish effluent limitations requiring "the application of best practicable control technology currently available" ("BPT"), which dischargers were to have met by July 1, 1977. Section 301(b)(2)(E) requires the Administrator to establish effluent limitations for conventional pollutants to have been met not later than July 1, 1984, requiring "application of the best conventional pollutant In addition to technology-based limitations, an NPDES permit for ocean discharges must also incorporate ocean discharge criteria established by EPA pursuant to Sec. 403(c) of the Act. 33 U.S.C. Sec. 1343(c). Ocean discharge criteria require EPA to ascertain that pollutant discharges will not have a significant adverse effect on the receiving water.
control technology" ("BCT"). 3 Section 301(b)(2)(A) and (F), elevating the BPT standard even further, requires the dischargers to have begun applying "the best available technology economically achievable" ("BAT") to listed toxic 4 pollutants, by July 1, 1984, and to all other pollutants 5, by July 1, 1987. Section 304(b) of the Act (which will be discussed more fully infra) sets the technical criteria for determining effluent reductions attainable under BPT and BAT
Oil and natural gas exploration in the offshore areas of Alaska began at Cook Inlet, off Anchorage on the south-central coast of the State, in the late 1950's and early 1960's. In the late 1960's and early 1970's, exploratory drilling spread to nearshore areas of the Alaskan Arctic. Federal offshore leasing there began in December 1979 with the lease of joint federal and state areas in the Beaufort Sea. In 1982 and 1984, additional OCS sales, both for the Diapir Field in the Beaufort Sea, were held. The Beaufort Sea general permit at issue in this case covers these lease sales.
The first federal lease sale for the areas offshore the western coast of Alaska was held in 1983 for Norton Sound. Subsequent federal lease sales in the Bering Sea occurred in 1983 for St. George Basin and in 1984 for Navarin Basin. The Bering Sea general permit at issue in this case covers St. George and Navarin Basins federal lease sales.
The offshore areas covered by the Bering Sea and Beaufort Sea general permits are home to a diverse, abundant and/or unique population of marine life. Subsistence fishing (in nearshore waters) plays an important cultural, social, and economic role in the lives of coastal residents. The Bering Sea, one of the world's major fishing grounds for both fish and shellfish, also provides an important feeding and breeding habitat, as well as a migratory pathway, for large numbers of marine mammals, and supports many of Alaska's most important marine and coastal bird populations. The nearshore shallow-water region of the Beaufort Sea is also an important marine and bird habitat.
Alaskan offshore oil and gas operations also possess unique features. Unlike offshore production areas of California and the Gulf of Mexico, the majority of current Alaskan operations involve exploratory drilling rather than development of proven reserves. Only the major oil companies operate exploratory wells in these Alaskan offshore areas, where extensive planning and a large financial commitment are necessary. In the deep waters of the Bering Sea (greater than 230 feet), drilling is conducted from newer semi-submersible drilling vessels built to survive high seas and harsh weather. In order to withstand ice forces in the Beaufort Sea, drilling is conducted from gravel islands (usually manmade), concrete island drilling structures or other special Arctic structures, which rest on the sea floor. At present these technologies can be used only in shallow waters (depths less than approximately 60 feet). The cost of drilling an exploratory well is approximately $40 to $50 million in the Beaufort Sea, not including the island or
drilling structure (costing up to $100 million), and roughly $20 to $30 million in the Bering Sea. These figures compare to the cost for an average well in the Gulf of Mexico of $1.5 to $3 million. 6
Region 10 issued its first general permits 7 in 1983, one covering Norton Sound and another covering the Lease Sale BF in the Beaufort Sea (the "1983 permits"). 48 Fed.Reg. 54,881 (December 7, 1983). These two permits were not challenged. On May 30, 1984, Region 10 issued the Bering Sea and Beaufort Sea general permits which are the subject of API's instant petition for review. 49 Fed.Reg. 23,734 (June 7, 1984).
The permits here were the first in the nation to incorporate case-by-case effluent limitations purportedly based on BAT and BCT for the offshore oil and gas industry. In the absence of promulgated nationwide BAT and BCT effluent limitations guidelines, Region 10 made a best professional judgment ("BPJ") determination of what represented the appropriate BAT and BCT effluent limitations. 40 C.F.R. Sec. 125.3. In addition to these technology-based effluent limitations, the agency took into account factors imposed under Sec. 403(c) of the Act to prevent unreasonable degradation of the marine environment.
The permits authorize discharges from 15 different waste streams generated by offshore oil and gas operations. 49 Fed.Reg. 23,749. The permit conditions challenged by API relate to two of these waste streams, drilling fluids and drill cuttings. Drilling fluids, commonly called drilling "mud," include any fluid that is pumped down the drill pipe and through the drill bit, from the time a well is begun until cessation of drilling at that hole. Drilling muds have numerous functions, including maintaining hydrostatic pressure control in the well, lubricating the drilling bit, and removing drill cuttings from the well. Drill cuttings are the mineral particles generated by drilling into subsurface geologic formations. The drill cuttings and eventually the drilling...
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