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Natural Resources Defense Council v. EPA

Citation: 19 ELR 20225
No. Nos. 86-7390 et al., 863 F.2d 1420/28 ERC 1609/(9th Cir., 12/05/1988)

The court upholds the Environmental Protection Agency's (EPA's) general national pollutant discharge elimination system permit for oil and gas operations on the outer continental shelf in the Gulf of Mexico, but remands the provisions of the permit pertaining to alternative toxicity limits and limits on cadmium and mercury. Citizen groups, industry, and the state of Florida challenged the general permit, which was issued under the "best professional judgment" standard pending EPA's promulgation of national technology-based effluent limitations for discharges associated with drilling. The court first holds that EPA's decision not to require reinjection of produced water containing toxic or conventional pollutants was not arbitrary or capricious. Although reinjection is technologically feasible and EPA had sufficient information to make a determination concerning economic feasibility, the Agency was legitimately concerned that the antibacksliding provisions of the Federal Water Pollution Control Act (FWPCA) would require it to promulgate the reinjection requirement for the Gulf of Mexico, even if the eventual effluent standard for the rest of the country did not mandate reinjection.

The court next holds that although the toxicity limit in the permit differs somewhat from that in the draft permit, interested parties were not deprived of the opportunity to comment, since the final toxicity limit was a logical outgrowth of EPA's initial proposals. The court holds that EPA's choice of a particular bioassay test to calculate the toxicity level of drilling fluids was within the limits of Agency discretion, that EPA was not required to set different limitations for individual toxic pollutants, and that the Agency was not required to use an approved test procedure because many of the pollutants covered by the permit do not have approved test methods. The court upholds the permit's basic standard for toxicity, but holds that an alternative toxicity limit provision that allows EPA to authorize a higher degree of toxicity on a case-by-case basis is arbitrary and capricious. The alternative toxicity limit provision contains no limit on Agency discretion, conflicts with the FWPCA's goal of nationally uniform standards, and violates § 403(c)'s requirement that no permits be issued to ocean polluters in the absence of adequate information regarding ocean degradation. The court also holds that EPA's failure to require the oil and gas industry in the Gulf of Mexico to use clean barite, which contains minimal levels of cadmium and mercury, as long as it is available, violates Congress' intent to require industry to do as much as possible to control toxic discharges. The court holds that EPA's method of monitoring compliance with the prohibition on the discharge of free oil and the Agency's failure to require the barging of conventional pollutants in drilling fluids were not arbitrary or capricious.

In addition, the court holds that the permit's restrictions on the use of diesel "pills" — operational methods of dislodging stuck pipe that result in the discharge of drilling fluids — are not arbitrary or capricious. Finally, the court holds that certification of the permit by Florida is not required by FWPCA § 401. State certification is only required for permits concerning discharges into waters landward from the outer boundaries of the territorial seas. The three-mile definition of territorial seas in the FWPCA supersedes the three-league definition of territorial seas for the Gulf of Mexico in the Submerged Lands Act, and preempts three-league definitions under Florida law. Therefore, since the permit in this case covers only activities beyond the territorial seas, or more than three miles from the coast, certification by Florida is unnecessary.

Counsel for Petitioners
Ronald J. Wilson, Catherine A. Cotter
Natural Resources Defense Council, Inc.
1350 New York Ave. NW, Washington DC 20005
(202) 783-7800

Counsel for Respondents
Lee S. Schroer
U.S. Environmental Protection Agency
401 M St. SW, Washington DC 20460
(202) 475-8040

Ashley Doherty, Michael D. Rowe
Land and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 4633-2000

Before Reinhardt and Leavy, JJ.