On May 4, 2016, the Environmental Integrity Project (EIP), National Resources Defense Council (NRDC); Earthworks; Center for Health, Environment and Justice; and three other environmental groups (hereinafter collectively referred to as the Environmental Groups) filed a complaint in the U.S. District Court for the District of Columbia pursuant to the Resource Conservation and Recovery Act (RCRA). The suit asserts that the U.S. Environmental Protection Agency (EPA) failed to meet certain continuing nondiscretionary duties under RCRA to review and revise, if necessary, regulations relating to the disposal, storage, transportation, and handling of oil and gas wastes.

The Environmental Groups seek, among other things, a court judgment declaring that EPA violated RCRA by its failure to perform such reviews, and to compel EPA to review and, where necessary, revise its regulations relating to the management of oil and gas wastes under court imposed deadlines. The complaint was filed under the citizen suit provisions of RCRA. If successful, the lawsuit can result in changes to the manner in which oil and gas wastes are managed.

Background

Congress passed RCRA in 1976 in order to, among other things, manage the growing amount of municipal and industrial waste in the United States. Subtitle C of RCRA authorizes EPA to regulate hazardous waste, whereas Subtitle D provides a framework for the management of non-hazardous solid wastes and municipal solid wastes. In 1980, Congress passed the Solid Waste Disposal Act Amendments. The amendments exempted oil and gas waste from regulation pursuant to RCRA’s hazardous waste provisions under Subtitle C. The amendments relevant to the oil and gas exploration and production waste (E&P Waste) exemption, referred to as the “Bentsen Amendments,” imposed certain continuing requirements on the EPA. Namely, the amendments required EPA to transmit a Report to Congress considering, among other factors, the human health and environmental effects of oil and gas waste and to make a Regulatory Determination, based on the Report, as to whether regulations under Subtitle C are warranted. EPA published its Regulatory Determination in July 1988 and concluded that oil and gas wastes did not require regulation under Subtitle C of RCRA. Pursuant to Section 2002(b) of RCRA, EPA has a nondiscretionary duty to review and, if necessary, revise hazardous and nonhazardous waste rules at least once every three years.

The Lawsuit

Pointing to the growth in the oil and gas industry as a result of horizontal drilling and hydraulic fracturing technologies, the Environmental Groups state that vast amounts and wide varieties of oil and gas wastes are generated during exploration and production, which “can contain harmful constituents ranging from heavy metals to hydrocarbons to naturally occurring radioactive materials.” The complaint also includes arguments that increased use of injection wells has resulted in more seismicity events. The Environmental Groups assert that changes in industry practices and advances in understanding about public health and environmental risk require the reexamination of the oil and gas waste exemption, and that EPA failed to adhere to the statutory mandate to perform reviews of its existing Subtitle D regulations.

The complaint states that the last time EPA performed the RCRA Section 2002(b) review of its existing Subtitle D regulations was in 1988. The Environmental Groups note that while EPA concluded that regulation under Subtitle C was not warranted, EPA identified gaps in existing State and Federal programs and that it proposed to implement a three pronged approach to filling those gaps and tailoring Subtitle D to address issues associated with oil and gas wastes. According to the complaint, despite the fact that EPA found revisions to Subtitle D regulations for oil and gas wastes were necessary, it took no action, and that EPA violated Section 2002(b) by not performing a review of the Subtitle D regulation, at least, every three years.

Moreover, the Environmental Groups also assert that EPA failed to meet its duty under Section 4002(b) of RCRA to review its guidelines for state solid waste management plans “not less frequently than every three years, and revise as may be appropriate.” According to the Environmental Groups, the last time EPA conducted a review and/or revision of the state plan guidelines for oil and gas wastes was in 1981, and that eleven successive three-year deadlines have passed with no further review or regulatory revision. The Environmental Groups ask the court to: (1) order EPA to promulgate the revisions EPA deemed necessary as a result of its 1988 review of the oil and gas waste exemption; (2) alternatively, order EPA to review the exemption and promulgate any necessary regulations; and (3) order EPA to review state plan guidelines for the management of oil and gas wastes and promulgate any necessary regulations.

Conclusion

The Environmental Groups’ lawsuit could result in the promulgation of updated rules for the regulation of E&P Waste. The likelihood of such an outcome is difficult to predict at this point. The complaint does not explicitly seek to repeal the E&P Waste exemption and points to no data suggesting that a repeal of the exemption is warranted. The loss of the exemption would obviously have severe consequences to the oil and gas industry, but at this point, there is no indication that such an outcome is likely. The narrowing of the exemption could also have significant consequences to the industry, but again, it is uncertain whether any narrowing will take place, and if so, to what extent. We will continue to track the developments in this matter and will provide updates as necessary.