Amendments to the National Pollutant Discharge Elimination System (NPDES) Regulations for Storm Water Discharges Associated With Oil and Gas Exploration, Production, Processing, or Treatment Operations, or Transmission Facilities, 894-901 [E6-36]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 71, Number 4 (Friday, January 6, 2006)]
[Proposed Rules]
[Pages 894-901]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-36]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 122

[OW-2002-0068; FRL-8019-6]
RIN 2040-AE81


Amendments to the National Pollutant Discharge Elimination System 
(NPDES) Regulations for Storm Water Discharges Associated With Oil and 
Gas Exploration, Production, Processing, or Treatment Operations, or 
Transmission Facilities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: Today EPA proposes action to codify in the Agency's 
regulations changes to the Federal Water Pollution Control Act 
resulting from the Energy Policy Act of 2005. This proposed action 
would modify National Pollutant Discharge Elimination System 
regulations to provide that certain storm water discharges from field 
activities, including construction, associated with oil and gas 
exploration, production, processing, or treatment operations, or 
transmission facilities would be exempt from National Pollutant 
Discharge Elimination System permit requirements. This action also 
encourages voluntary application of best management practices for oil 
and gas field activities and operations to minimize the discharge of 
pollutants in storm water runoff and protect water quality.

DATES: Comments must be received on or before February 21, 2006.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OW-
2002-0068 by one of the following methods:
     www.regulations.gov: Follow the on-line instructions for 
submitting comments.
     E-mail: ow-docket@epa.gov
     Mail: Water Docket, Environmental Protection Agency, 
Mailcode: 4101T, 1200 Pennsylvania Ave., NW., Washington, DC 20460. 
Please include a total of three copies.
     Hand Delivery: EPA Docket Center, EPA West, Room B102, 
1301 Constitution Ave., NW., Washington, DC 20004. Such deliveries are 
only accepted during the Docket's normal hours of operation, and 
special arrangements should be made for deliveries of boxed 
information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OW-2002-
0068. EPA's policy is that all comments received will be included in 
the public docket without change and may be made available online at 
www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be Confidential 
Business Information (CBI) or other information whose disclosure is 
restricted by statute. Do not submit information that you consider to 
be CBI or otherwise protected through www.regulations.gov or e-mail. 
The www.regulations.gov Web site is an ``anonymous access'' system, 
which means EPA will not know your identity or contact information 
unless you provide it in the body of your comment. If you send an e-
mail comment directly to EPA without going through www.regulations.gov, 
your e-mail address will be automatically captured and included as part 
of the comment that is placed in the public docket and made available 
on the Internet. If you submit an electronic comment, EPA recommends 
that you include your name and other contact information in the body of 
your comment and with any disk or CD-ROM you submit. If EPA cannot read 
your comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment. Electronic 
files should avoid the use of special characters, any form of 
encryption, and be free of any defects or viruses. For additional 
information about EPA's public docket, visit the EPA Docket Center 
homepage at www.epa.gov/epahome/dockets.htm. For additional 
instructions on submitting comments, go to Unit I.C of the 
SUPPLEMENTARY INFORMATION section of the document.
    Docket: All documents in the docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly

[[Page 895]]

available only in hard copy. Publicly available docket materials are 
available either electronically in www.regulations.gov or in hard copy 
at the Water Docket, EPA/DC, EPA West, Room B102, 1301 Constitution 
Ave., NW., Washington, DC 20004. This Docket Facility is open from 8:00 
a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The 
Docket telephone number is (202) 566-2426. The Public Reading Room is 
open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding 
legal holidays. The telephone number for the Public Reading Room is 
(202) 566-1744.

FOR FURTHER INFORMATION CONTACT: Jeff Smith, Office of Wastewater 
Management, Office of Water, Environmental Protection Agency, 1200 
Pennsylvania Ave., NW., Washington, DC 20460; telephone number: (202) 
564-0652; fax number: (202) 564-6431; e-mail address: 
smith.jeff@epa.gov.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does This Action Apply to Me?

    Entities potentially affected by this action include operators of 
oil and gas exploration, production, processing and treatment, and 
transmission facilities and associated construction activities at oil 
and gas sites that generally are defined in the following North 
American Industrial Classification System (NAICS) codes and titles: 
211--Oil and Gas Extraction, 213111--Drilling Oil and Gas Wells, 
213112--Support Activities for Oil and Gas Operations, 48611--Pipeline 
Transportation of Crude Oil and 48621--Pipeline Transportation of 
Natural Gas.
    This description is not intended to be exhaustive, but rather 
provides a guide for readers regarding entities likely to be affected 
by this action. This description identifies the types of entities that 
EPA is aware could potentially be affected by this action. Other types 
of entities not identified could also be affected. To determine whether 
your facility or company is affected by this action, you should 
carefully examine the applicability criteria in 40 CFR 122.26(a)(2), 
(b)(14)(x), (b)(15) and (e)(8). If you have questions regarding the 
applicability of this action to a particular entity, consult the person 
listed in the preceding FOR FURTHER INFORMATION CONTACT section.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
www.regulations.gov or e-mail. Clearly mark the part or all of the 
information that you claim to be CBI. For CBI information in a disk or 
CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as 
CBI and then identify electronically within the disk or CD ROM the 
specific information that is claimed as CBI). In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.
     Explain your views as clearly as possible.
     Make sure to submit your comments by the comment period 
deadline identified.

II. Background Information

A. NPDES Program

    In 1972, Congress amended the Federal Water Pollution Control Act 
(more commonly referred to as the Clean Water Act or CWA) to prohibit 
the discharge of any pollutant to waters of the United States from a 
point source except in compliance with specified provisions of the CWA, 
including section 402. The principal means by which one may lawfully 
discharge pollutants into waters of the United States is by obtaining 
authorization in a NPDES permit issued under CWA section 402. Initial 
efforts to improve water quality under the NPDES program focused 
primarily on reducing pollutants in industrial process wastewater and 
municipal sewage.
    As pollution control measures for industrial process wastewater and 
municipal sewage were implemented and refined, it became increasingly 
evident that more diffuse sources of water pollution were also 
significant causes of water quality impairment. Specifically, storm 
water runoff draining large surface areas, such as agricultural and 
urban land, was found to be a major cause of water quality impairment, 
including the non-attainment of designated beneficial uses. As a 
result, in 1987, Congress added Section 402(p) of the CWA, which 
directs EPA to develop a two-phased approach to regulate storm water 
discharges under the NPDES program.
    The first phase of the national program for controlling storm 
water, commonly referred to as ``Phase I,'' was promulgated on November 
16, 1990 (55 FR 47990). Phase I requires NPDES permits for storm water 
discharges from a large number of priority sources, including municipal 
separate storm sewer systems (MS4s) generally serving populations of 
100,000 or more and industrial activity. EPA defined the term ``storm 
water discharge associated with industrial activity'' in a manner that 
covered a wide variety of facilities, including construction activities 
that disturb at least five acres of land (40 CFR 122.26(b)(14)(x)).
    The second phase of the storm water program, ``Phase II,'' was 
promulgated on December 8, 1999 (64 FR 68722). Phase II expanded the 
existing program to include discharges of storm water from smaller 
municipalities in urbanized areas and from construction sites that 
disturb between one and five acres of land. (40 CFR 122.26(b)(15)(i)). 
Discharges from these sources have generally needed permit 
authorization since March 10, 2003 (40 CFR 122.26(e)(8)). Phase II 
allows certain sources to be excluded from the national program based 
on a demonstrable lack of impact on water quality. The Phase II rule 
also allows for other sources not automatically regulated on a national 
basis to be designated for inclusion based on increased likelihood for 
localized adverse impact on water quality.

B. NPDES Program Provisions Specific to Oil and Gas Activities

    The 1987 amendments to the CWA also added language at section 
402(l)(2) that exempts from NPDES permitting requirements certain storm 
water discharges from oil and gas exploration, production, processing, 
or treatment operations or transmission facilities. That provision 
states that ``[t]he Administrator shall not require a permit

[[Page 896]]

under this section, nor shall the Administrator directly or indirectly 
require any State to require a permit, for discharges of storm water 
runoff from mining operations or oil and gas exploration, production, 
processing, or treatment operations or transmission facilities, 
composed entirely of flows which are from conveyances or systems of 
conveyances (including but not limited to pipes, conduits, ditches, and 
channels) used for collecting and conveying precipitation runoff and 
which are not contaminated by contact with, or do not come into contact 
with, any overburden, raw material, intermediate products, finished 
product, byproduct, or waste products located on the site of such 
operations.''
    On January 4, 1989, EPA promulgated a rule [National Pollutant 
Discharge Elimination System Permit Regulations] that, among other 
actions, codified the CWA section 402(l)(2) exemption at what was then 
40 CFR 122.26(a)(3). (See 54 FR 246). The preamble to that rule 
explained that the legislative history of CWA section 402(l)(2) 
suggests that, with respect to oil or grease or hazardous substances, 
the determination of whether storm water is contaminated by contact 
with such materials, as established by the Administrator, shall take 
into consideration whether these materials are present in such storm 
water runoff in excess of reportable quantities under section 311 of 
the CWA or section 102 of CERCLA.
    The 1990 NPDES Phase I storm water regulations also codified the 
CWA section 402(l)(2) exemption, this time moving the regulatory 
exemption to 40 CFR 122.26(a)(2) for uncontaminated storm water 
discharges from oil and gas activities while also imposing permit 
requirements for storm water discharges associated with industrial 
activities, including construction sites disturbing at least five acres 
(40 CFR 122.26(b)(14)(x)). The Phase I rule re-codification of the CWA 
section 402(l)(2) provision also revised the regulatory language to 
specify that the ``Director may not require a permit'' rather than the 
section 402(l)(2) language that specifies that the ``Administrator 
shall not require a permit under this section, nor shall the 
Administrator directly or indirectly require any State to require a 
permit'' for these discharges. This change helped clarify that States 
may not require permits for these discharges under the NPDES program.
    The rule also codified at Sec.  122.26(c)(1)(iii) the conditions 
which would be considered indicative of contamination by contact with 
overburden, raw material, intermediate products, finished product, 
byproduct, or waste products located on the site and would thus 
necessitate an NPDES storm water permit application by oil and gas 
exploration, production, processing or treatment operations or 
transmission facilities. Section 122.26(c)(1)(iii) provides as follows:

    (iii) The operator of an existing or new discharge composed 
entirely of storm water from an oil or gas exploration, production, 
processing, or treatment operation, or transmission facility is not 
required to submit a permit application in accordance with paragraph 
(c)(1)(i) of this section, unless the facility:
    (A) Has had a discharge of storm water resulting in the 
discharge of a reportable quantity for which notification is or was 
required pursuant to 40 CFR 117.21 or 40 CFR 302.6 at anytime since 
November 16, 1987; or
    (B) Has had a discharge of storm water resulting in the 
discharge of a reportable quantity for which notification is or was 
required pursuant to 40 CFR 110.6 at any time since November 16, 
1987; or
    (C) Contributes to a violation of a water quality standard.

EPA based this interpretation of contamination on the legislative 
history of section 402(l)(2), which directed EPA to consider whether 
reportable quantities (RQs) of oil or grease or hazardous substances 
under either the CWA or CERCLA had been exceeded in determining whether 
storm water from oil and gas operations had been contaminated by 
contact with overburden, raw material, intermediate products, finished 
products, byproduct, or waste products.
    Shortly after issuance of EPA's first general permit specific to 
storm water discharges associated with construction activity (Final 
NPDES General Permits for Storm Water Discharges From Construction 
Sites, September 9, 1992, 57 FR 41176), EPA Region 8 raised a question 
to EPA Headquarters about the applicability of the permit requirements 
for oil and gas-related construction activities. On December 10, 1992, 
EPA Headquarters sent a memorandum to EPA Region 8 stating that all 
construction activities that disturb five or more acres must apply for 
a permit, including those construction activities associated with oil 
and gas activities.
    This memorandum was legally challenged by a collection of trade 
associations who asserted that the memorandum was unlawful and 
requested that the court set it aside as inconsistent with the CWA. The 
United States Court of Appeals for the Fourth Circuit dismissed this 
challenge on the grounds that the internal EPA memorandum itself did 
not constitute an action reviewable by the courts. Appalachian Energy 
Group v. EPA, 33 F.3d. 319, 322 (4th Cir. 1994).
    As noted previously, EPA promulgated the final Phase II storm water 
rule on December 8, 1999 with a requirement that storm water discharges 
from small construction activities (those disturbing between one and 
five acres) obtain NPDES permit coverage beginning on March 10, 2003. 
Based on public comments on the January 9, 1998, proposed Phase II 
rule, EPA had considered including oil and gas exploration sites in its 
economic analysis for the rulemaking, but further analysis suggested 
that few, if any, of these sites would actually disturb more than one 
acre of land. Economic Analysis of the Final Phase II Storm Water Rule, 
October 1999 (see p 4-2). Accordingly, EPA decided that separate 
analysis of this sector was unnecessary. After promulgating the final 
Phase II rule, EPA became aware that close to 30,000 oil and gas sites 
annually may, in fact, be affected. EPA now believes that the majority 
of such sites may exceed one acre when the acreage attributed to lease 
roads, pipeline right-of-ways and other infrastructure facilities is 
apportioned to each site.
    In light of this new information, on March 10, 2003, EPA published 
a rule (the ``deferral rule'') that postponed until March 10, 2005, the 
permit authorization deadline for NPDES storm water permits for oil and 
gas construction activity that disturbs one to five acres of land. This 
extension allowed EPA to analyze and better evaluate (1) the impact of 
the permit requirements on the oil and gas industry, (2) the 
appropriate best management practices (BMPs) for preventing 
contamination of storm water runoff resulting from construction 
associated with oil and gas exploration, production, processing, or 
treatment operations or transmission facilities, and (3) the scope and 
effect of section 402(l)(2) and other storm water provisions of the 
Clean Water Act. 68 FR 11325.
    Between 2003 and 2005, EPA gathered information on size, location 
and other site characteristics to better evaluate compliance costs 
associated with the control of storm water runoff from oil and gas 
construction activities. EPA met with various stakeholders and visited 
a number of oil and gas sites with construction-related activities, to 
discuss and review existing BMPs for preventing contamination of storm 
water runoff resulting from construction associated with these oil and 
gas activities. Additionally, EPA gathered economic data for the 
industry and

[[Page 897]]

initiated an economic impact analysis of the existing Phase II 
regulations specific to the oil and gas industry. EPA's preliminary 
analysis indicated that there could be significant and potentially 
costly administrative delays in the permitting process for oil and gas 
construction sites that were not considered in the original economic 
analysis for the 1999 Phase II rulemaking. As a result, on March 9, 
2005, EPA further postponed the date for NPDES regulation for an 
additional 15 months until June 12, 2006, to provide additional time 
for the Agency to complete its evaluation of the economic and legal 
issues that were raised and to assess appropriate procedures and 
methods for controlling storm water discharges from these sources to 
mitigate impacts on water quality.
    A collection of trade associations petitioned the United States 
Court of Appeals for the Fifth Circuit for review of the March 10, 2003 
deferral rule. The petitioners asserted that the deferral rule 
represents the Agency's first acknowledgment that the NPDES regulations 
apply to construction activities associated with oil and gas 
activities, but that such regulations are inconsistent with CWA section 
402(l)(2). On June 16, 2005, the Fifth Circuit dismissed the petition 
on the grounds that the issue is not ripe for review. Specifically, the 
Court acknowledged EPA's ongoing analysis of this issue and indicated 
that ``any interpretation [of CWA section 402(l)(2)] we would provide 
would necessarily prematurely cut off EPA's interpretive process.'' 
Texas Independent Producers and Royalty Owners Ass'n, et al. v. EPA, 
413 F.3d 479, 483 (5th Cir. 2005).

III. Description of Proposed NPDES Program Modifications

A. Objectives EPA Seeks To Achieve in Today's Proposal

    The primary purpose of today's proposed rule is to propose 
modifications to the NPDES regulations in 40 CFR part 122 based on 
changes to the Clean Water Act (CWA) resulting from the Energy Policy 
Act of 2005 language (See Pub. L. 109-58, 119 Stat. 694 (codified as 
amended at 33 U.S.C. 1362 (2005))). A second purpose is to encourage 
voluntary application of best management practices (BMPs) for oil and 
gas field activities and operations, including construction, to provide 
additional protection of water quality from potential storm water 
discharges.
    On August 8, 2005, the President signed into law the Energy Policy 
Act of 2005. Section 323 of the Energy Policy Act of 2005 added a new 
paragraph (24) to section 502 of the CWA to define the term ``oil and 
gas exploration, production, processing, or treatment, or transmission 
facilities'' to mean ``all field activities or operations associated 
with exploration, production, processing, or treatment operations, or 
transmission facilities, including activities necessary to prepare a 
site for drilling and for the movement and placement of drilling 
equipment, whether or not such field activities or operations may be 
considered to be construction activities.'' This term is used in CWA 
section 402(l)(2) of the CWA to identify oil and gas activities for 
which EPA shall not require NPDES permit coverage for certain storm 
water discharges. The effect of this statutory change is to make 
construction activities at oil and gas sites eligible for the exemption 
established by CWA section 402(l)(2). EPA interprets this extension of 
the statutory exemption to include construction of drilling sites, 
drilling waste management pits, and access roads as well as 
construction of the transportation and treatment infrastructure such as 
pipelines, natural gas treatment plants, natural gas pipeline 
compressor stations and crude oil pumping stations.
    The action is being published in the Federal Register as a proposed 
rule to provide the public and interested stakeholders with the 
opportunity to comment on this rulemaking.

B. Today's Regulatory Approach

1. Requirements for Regulated Entities Under Today's Proposal
    Today's action proposes to codify changes to section 502, subpart 
(24) (``Oil and Gas Exploration and Production Defined'') of the Clean 
Water Act (CWA) into EPA regulations in 40 CFR part 122 (``EPA-
Administered Permit Programs: The National Pollutant Discharge 
Elimination System [NPDES]''). Specifically, the language in the Energy 
Policy Act of 2005, signed by the President on August 8, 2005, states 
that section 502 of the CWA is amended by adding the following 
subparagraph at the end of the current section: ``(24) OIL AND GAS 
EXPLORATION AND PRODUCTION.--The term `oil and gas exploration, 
production, processing, or treatment operations or transmission 
facilities' means all field activities or operations associated with 
exploration, production, processing, or treatment operations, or 
transmission facilities, including activities necessary to prepare a 
site for drilling and for the movement and placement of drilling 
equipment, whether or not such field activities or operations may be 
considered to be construction activities.''
    In extending this statutory exemption at CWA section 402(l)(2) to 
oil and gas construction activities, Congress did not differentiate 
among operations on the basis of the size of the disturbed acreage. 
Accordingly, there is no distinction in today's proposal as to whether 
the amount of disturbed acreage is less than 1 acre, between 1 and 5 
acres, or greater than 5 acres. Hence, discharges from ``large'' 
construction activity (disturbing at least 5 acres) at oil and gas 
facilities would be eligible for the exemption from NPDES permitting 
requirements under today's proposal to the same extent as discharges 
from small construction activity at such facilities.
    In addition to the construction of drilling sites, drilling waste 
management pits, and access roads, EPA also interprets the specific 
phrase in the statutory language ``all field activities or operations'' 
[emphasis added] as being applicable to construction of in-field 
treatment plants and the transportation infrastructure (e.g., crude oil 
and natural gas pipelines, natural gas treatment plants and both 
natural gas pipeline compressor and crude oil pump stations) necessary 
for the operation of most producing oil and gas fields. Such 
construction activities would thus be eligible for the CWA section 
402(l)(2) exemption from NPDES permitting requirements.
    This proposed regulation would implement Congress' intention, in 
the Energy Policy Act of 2005, to exclude virtually all oil and gas 
construction activities from regulation under the NPDES storm water 
program. However, consistent with the language of CWA section 
402(l)(2), the proposed regulatory changes would not exclude oil and 
gas construction activities from regulation under the NPDES storm water 
program when such field activities or operations discharge storm water 
that has been contaminated by contact with ``* * * any overburden, raw 
material, intermediate products, finished product, byproduct or waste 
products located on the site of such operations.'' [CWA section 
402(l)(2)].
    The legislative history of CWA section 402(l)(2) provided guidance 
to EPA in interpreting the phrase ``contaminated by contact with.'' It 
provides as follows:

    The substitute [final version of the bill] provides that permits 
are not required where stormwater runoff is diverted around mining 
operations or oil and gas operations and does not come in contact 
with overburden, raw material, product, or process waste. In 
addition, where stormwater runoff is not contaminated by contact 
with such materials,

[[Page 898]]

as determined by the Administrator, permits are also not required. 
With respect to oil or grease or hazardous substances, the 
determination of whether stormwater is `contaminated by contact 
with' such materials, as established by the Administrator, shall 
take into consideration runoff in excess of reportable quantities 
under section 311 of the Clean Water Act or section 102 of the 
Comprehensive Environmental Response, Compensation, and Liability 
Act of 1980, or in the case of mining operations, above natural 
background levels.

    Based on this language, EPA codified its interpretation of 
``contaminated by contact with'' at Sec.  122.26(c)(1)(iii). It 
provides that oil and gas operations are exempt except where their 
discharges contribute reportable quantities of oil or grease or 
hazardous substances to waters of the United States or contribute to a 
violation of a water quality standard.
    However, a plain reading of CWA section 402(l)(2) suggests that oil 
and gas sites where runoff is not contaminated by contact with raw 
material, intermediate products, finished product, byproduct or waste 
products located at the site are not required to obtain NPDES permits, 
even in situations where the runoff might be contributing to a 
violation of water quality standards (the term overburden is applicable 
only to mining). At the time that EPA promulgated Sec.  
122.26(c)(1)(iii), EPA believed it reasonable to presume that causing 
or contributing to a violation of water quality standards was an 
indication of contamination as envisioned in the statute. However, now 
that Congress has explicitly extended the exemption to construction 
activities associated with oil and gas operations, EPA believes this 
presumption may no longer be valid in some instances. For example, 
sediment in runoff related to the clearing of ground or construction of 
an access road could cause or contribute to a water quality standard 
violation even where the runoff does not come into contact with raw 
material, intermediate products, finished product, byproduct or waste 
products located at the site.
    For this reason, EPA is proposing to clarify in Sec.  
122.26(a)(2)(ii) that a water quality standard violation for sediment 
alone does not trigger a permitting requirement. Because most 
substances for which an RQ has been established are the types of 
materials (e.g., oil, grease, toxic or hazardous chemicals) that would 
likely not be present in storm water discharge from an oil or gas site 
other than through contact with exposed raw material, intermediate 
products, finished product, byproduct or waste products, EPA would 
generally consider an exceedance of an RQ as indicative of 
contamination. This would be true whether such contact occurred during 
or after construction. Sediment, in contrast, could easily be present 
in the discharge even without such contact, and thus in and of itself 
would not lead to a determination of contamination through contact. 
Sediment could serve as a vehicle for discharges of oil or grease or 
hazardous substances (e.g., heavy metals) and if an RQ is exceeded or a 
water quality standard violated for such a pollutant, such 
contamination could trigger permitting requirements. EPA believes that 
this interpretation is fully consistent with Congress' intent in 
enacting the 2005 Energy Policy Act, which specifically included within 
the scope of the section 404(l)(2) exemption construction activities 
associated with oil and gas sites.
    Finally, EPA proposes to reorganize regulatory language in Sec.  
122.26(a)(2) to create two new paragraphs: (i) and (ii). EPA believes 
this change is consistent with the existing regulatory framework 
provided in Sec.  122.26(c)(1)(iii) and (iv) which separates mining and 
oil and gas requirements. Proposed paragraph (i) merely recodifies 
existing requirements at Sec.  122.26(c)(1)(iv) for storm water 
discharges from mining operations that come into contact with, any 
overburden, raw material, intermediate products, finished products, 
byproduct, or waste products located on the site of such operations.'' 
Proposed paragraph (ii) clarifies permit requirements for storm water 
discharges from oil and gas sites consistent with the discussion 
provided above. In addition, EPA is proposing to add a note to the 
regulations encouraging operators of oil and gas field activities or 
operations to implement and maintain Best Management Practices (BMPs) 
to minimize the discharges of pollutants, including sediment, in storm 
water both during and after construction activities to help protect 
surface water quality during storm events. Additional discussion of the 
importance of these activities is provided in section III.B.3.
    Today's proposed rulemaking would apply to all States, Federal 
lands and Indian Country regardless of whether EPA is the NPDES 
permitting authority. Discharges that would be exempted from NPDES 
permit requirements in today's proposal would be exempted from such 
NPDES requirements regardless of whether EPA or a State is the 
permitting authority. EPA wishes to clarify, however, that today's 
proposal is not intended to interfere with the States' ability to 
regulate any discharges through a State's non-NPDES program. However, 
if a State were to require a permit for discharges exempt from the 
Clean Water Act NPDES program requirements, the State's permit 
requirement would not be considered part of the State's EPA-approved 
NPDES program. See 40 CFR 123.1(i)(2).
    EPA requests comment on all aspects of this proposed rule.
2. Timeframe for Final Rule
    EPA intends to issue a final rulemaking in advance of the June 12, 
2006 deadline by which oil and gas construction sites that disturb one 
to five acres of land are currently scheduled to obtain NPDES permits 
for their discharges. If finalized as proposed, EPA's final rulemaking 
would effectively exempt all field activities or operations associated 
with oil and gas exploration, production, processing or treatment and 
transmission construction activities from regulation under the NPDES 
storm water permitting program, except in accordance with Sec.  
122.26(a)(2)(ii) and (c)(1)(iii).
3. Best Management Practices (BMPs)
    In accordance with CWA section 402(l)(2), today's proposed rule 
does not require that operators select, install, and maintain Best 
Management Practices (BMPs) to minimize discharges of pollutants 
(including sediment) in storm water; however, the Agency is adding a 
note within the regulatory text encouraging operators of oil and gas 
field activities or operations to institute these practices both during 
and after construction activities whenever practicable.
    Installation of effective BMPs would provide additional measures to 
help protect surface water during storm events. Appropriate controls 
would be those suitable to the site conditions, both during and after 
the period of construction, and consistent with generally accepted 
engineering design criteria and manufacturer specifications. Selection 
of BMPs could also be affected by seasonal or climate conditions.
    Most storm water controls for construction activities can be 
grouped into three classes: (a) Erosion and sediment controls; (b) 
storm water management measures; and (c) good housekeeping practices. 
Erosion and sediment controls address pollutants (e.g., sediment) in 
storm water generated from the site during active construction-related 
work. Storm water management measures result in reductions of 
pollutants in storm water discharged from the site after the 
construction has been completed. Good housekeeping measures are those 
practices employed to manage materials on the site and control litter. 
While not explicitly

[[Page 899]]

required by regulation, some good housekeeping practices may be 
necessary to ensure that runoff satisfies the conditions in Sec.  
122.26(a)(2)(ii) and (c)(1)(iii) for eligibility for the permitting 
exemption.
    Effective soil erosion and sedimentation control typically is 
accomplished through the use of a suite of BMPs. Operators should 
design control measures that collectively address the multiple needs of 
holding soil in place, diverting storm water around active areas with 
bare soil, slowing water down as it crosses the site, and providing 
settling areas for soil that has become mobilized.
    The value of EPA's recommended oil and gas construction site BMPs 
has already been recognized by many oil and gas site operators. Under 
the sponsorship of the Independent Petroleum Association of America, 
the oil and gas industry developed guidance entitled ``Guidance 
Document: Reasonable and Prudent Practices for Stabilization (RAPPS) of 
Oil and Gas Construction Sites,'' Horizon Environmental Services, Inc., 
April 2004, that describes the application of appropriate BMPs based on 
general geographical location and the distance, slope, and amount of 
vegetative cover between the construction activity and the nearest 
water body. This document is a relatively simple, common sense approach 
to mitigating environmental consequences arising from a variety of oil 
and gas construction activities. The document has been widely 
publicized and a large number of independent oil and gas operating 
companies have informed EPA that they have adopted the practices 
outlined in the document in their day-to-day field construction 
activities.
4. Other Federal, State, Tribal, and/or Local Controls
    EPA expects that operators will comply with applicable Federal, 
State, Tribal, and/or local controls on oil and gas construction 
activities. For example, today's action does not affect existing 
requirements established under section 404 of the CWA for discharges of 
dredge and fill materials to waters of the United States, including 
requirements as they apply to wetlands. Similarly, the proposed rule 
does not affect decisions made at the local level on the need for 
enhanced protection of local water resources. As such, this proposed 
rulemaking would not curtail the ability of an appropriate 
environmental management agency (e.g., State, Tribal or local 
government) from imposing specific discharge conditions on an oil and 
gas operator that would otherwise be exempted under today's proposed 
rule so long as these requirements are imposed pursuant to authority 
other than an EPA-approved NPDES program. For example, a State or tribe 
could choose, under its own authorities, to set limits or require that 
an operator meet certain discharge conditions in sensitive watersheds.

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866, (58 FR 51735 (October 4, 1993)) the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Alter materially the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, EPA has determined 
that this is a ``significant regulatory action'' within the meaning of 
the Executive Order. EPA has submitted this action to OMB for review. 
Changes made in response to OMB suggestions or recommendations will be 
documented in the public record.

B. Paperwork Reduction Act

    This proposed rule would not impose an information collection 
burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 
3501, et seq., as this rulemaking is deregulatory and imposes no new 
requirements.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information; processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An Agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., 
generally requires an agency to prepare a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements under the Administrative Procedure Act or any other 
statute unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Small entities include small businesses, small organizations, and small 
governmental jurisdictions. For purposes of assessing the impacts of 
today's final rule on small entities, small entity is defined as: (1) A 
small business based on Small Business Administration size standards; 
(2) a small governmental jurisdiction that is a government of a city, 
county, town, school district or special district with a population of 
less than 50,000; and (3) a small organization that is any not-for-
profit enterprise which is independently owned and operated and is not 
dominant in its field.
    After considering the economic impacts of today's proposed rule on 
small entities, I certify that this action would not have a significant 
economic impact on a substantial number of small entities. In 
determining whether a rule would have a significant economic impact on 
a substantial number of small entities, the impact of concern is any 
significant adverse economic impact on small entities, since the 
primary purpose of the regulatory flexibility analyses is to identify 
and address regulatory alternatives ``which minimize any significant 
economic impact of the rule on small entities.'' 5 U.S.C. 603 and 604. 
Thus, an agency may certify that a rule will not have a significant 
economic impact on a substantial number of small entities if the rule 
relieves regulatory burden, or otherwise has a positive economic effect 
on all of the small entities subject to the rule.

[[Page 900]]

Today's proposed rule, by expanding the universe of oil and gas 
operations eligible for the NPDES permit exemption created by CWA 
section 402(l)(2), would relieve the regulatory burden for certain 
discharges associated with construction activity at exploration, 
production, processing, or treatment operations, or transmission 
facilities to obtain an NPDES storm water permit. We have therefore 
concluded that today's proposed rule would relieve a regulatory burden 
for all affected small entities.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted.
    Before EPA establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments, it must have developed under section 203 of the UMRA a 
small government agency plan. The plan must provide for notifying 
potentially affected small governments, enabling officials of affected 
small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates, and informing, educating, and advising 
small governments on compliance with the regulatory requirements.
    Today's proposed rule contains no Federal mandates (under the 
regulatory provisions of Title II of the UMRA) for State, local, or 
tribal governments or the private sector. The proposed rule imposed no 
enforceable duty on any State, local or tribal governments or the 
private sector. Thus, today's proposed rule is not subject to the 
requirements of sections 202 and 205 of the UMRA.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
The phrase ``Policies that have federalism implications'' is defined in 
the Executive Order to include regulations that have ``substantial 
direct effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    This proposed rule does not have federalism implications. It would 
not have substantial, direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. Thus, Executive Order 13132 does 
not apply to this rule.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled, ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This proposed rule does not 
have any Tribal implications as specified in Executive Order 13175. It 
would not have substantial direct effects on Tribal governments, on the 
relationship between the Federal government and Indian tribes, or on 
the distribution of power and responsibilities between the Federal 
government and Indian tribes, as specified in Executive Order 13175. 
Thus, Executive Order 13175 does not apply to this rule. EPA 
specifically solicits additional comment on this proposed rule from 
tribal officials.

G. Executive Order 13045: Protection of Children From Environmental 
Health and Safety Risks

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997), applies 
to any rule that: (1) Is determined to be ``economically significant'' 
as defined under Executive Order 12866, and (2) concerns an 
environmental health or safety risk that EPA has reason to believe may 
have a disproportionate effect on children. If the regulatory action 
meets both criteria, the Agency must evaluate the environmental health 
or safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency. This 
proposed rule is not subject to the Executive Order because it is not 
economically significant as defined under Executive Order 12866, and 
because the Agency does not have reason to believe the environmental 
health or safety risks addressed by this action present a 
disproportionate risk to children.

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This proposed rule is not a ``significant energy action'' as 
defined in Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355 
(May 22, 2001)) because it is not likely to have a significant adverse 
effect on the supply, distribution, or use of energy.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standard bodies. The NTTAA directs EPA 
to provide Congress, through OMB, explanations when the Agency decides 
not to use available and applicable voluntary consensus standards.
    This proposed rulemaking does not involve technical standards. 
Therefore, EPA is not considering the use of any voluntary consensus 
standards.

List of Subjects in 40 CFR Part 122

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Hazardous substances, Reporting and

[[Page 901]]

recordkeeping requirements, Water pollution control.

    Dated: December 30, 2005.
Stephen L. Johnson,
Administrator.

    For the reasons set forth in the preamble, Chapter I of Title 40 of 
the Code of Federal Regulations is proposed to be amended as follows:

PART 122--EPA ADMINISTERED PERMIT PROGRAMS: THE NATIONAL POLLUTANT 
DISCHARGE ELIMINATION SYSTEM

    1. The authority citation for part 122 continues to read as 
follows:

    Authority: The Clean Water Act, 33 U.S.C. 1251 et seq.

Subpart B--[Amended]

    2. Section 122.26 is amended by revising paragraphs (a)(2) and 
(e)(8) to read as follows:


Sec.  122.26  Storm water discharges (applicable to State NPDES 
programs, see 122.35).

    (a) * * *
    (2) The Director may not require a permit for discharges of storm 
water runoff from the following:
    (i) Mining operations composed entirely of flows which are from 
conveyances or systems of conveyances (including but not limited to 
pipes, conduits, ditches, and channels) used for collecting and 
conveying precipitation runoff and which are not contaminated by 
contact with or that have not come into contact with, any overburden, 
raw material, intermediate products, finished product, byproduct or 
waste products located on the site of such operations, except in 
accordance with Sec.  122.26(c)(1)(iv).
    (ii) All field activities or operations associated with oil and gas 
exploration, production, processing, or treatment operations, or 
transmission facilities, including activities necessary to prepare a 
site for drilling and for the movement and placement of drilling 
equipment, whether or not such field activities or operations may be 
considered to be construction activities, except in accordance with 
Sec.  122.26(c)(1)(iii). Discharges of sediment from construction 
activities associated with oil and gas exploration, production, 
processing, or treatment operations, or transmission facilities are not 
subject to the provisions of Sec.  122.26(c)(1)(iii)(C).

    Note to Sec.  122.26(a)(2)(ii): EPA encourages operators of oil 
and gas field activities or operations to implement and maintain 
Best Management Practices (BMPs) to minimize discharges of 
pollutants, including sediment, in storm water both during and after 
construction activities to help ensure protection of surface water 
quality during storm events. Appropriate controls would be those 
suitable to the site conditions and consistent with generally 
accepted engineering design criteria and manufacturer 
specifications. Selection of BMPs could also be affected by seasonal 
or climate conditions.
* * * * *
    (e) * * *
    (8) For any storm water discharge associated with small 
construction activities identified in paragraph (b)(15)(i) of this 
section, see Sec.  122.21(c)(1). Discharges from these sources require 
permit authorization by March 10, 2003, unless designated for coverage 
before then.
* * * * *
[FR Doc. E6-36 Filed 1-5-06; 8:45 am]
BILLING CODE 6560-50-P