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Texas Oil & Gas Ass'n v. EPA

ELR Citation: 29 ELR 20397
Nos. Nos. 97-60042, -60321, 161 F.3d 923/47 ERC 1801/(5th Cir., 12/10/1998)

The court upholds the U.S. Environmental Protection Agency's (EPA's) zero discharge limits for produced water and produced sand in the effluent limitation guidelines for the coastal oil-and gas-producing industry as well as EPA's more lenient discharge limits for produced water and drilling wastes in Cook Inlet, Alaska. The court first holds that EPA adequately considered the age of equipment and facilities factor under the Federal Water Pollution Control Act (FWPCA) in promulgating the zero discharge limit for produced water. Although the exclusion of pre-1980 facilities in its economic achievability analysis may have had some effect on the precision of EPA's analysis of the age factor, this exclusion does not rise to the level of an arbitrary and capricious agency action. EPA's actions were more than sufficient to establish a rational relationship between the FWPCA §308 survey data and the pre-1980 wells. Next, the court holds that EPA's use of a challenged study provides no basis to contest the produced water limit. EPA only used the challenged study to estimate pollution reduction benefits that would result from the zero discharge limit. Whatever value such benefit estimates may have, they are not a required part of the best available technology (BAT) determination. Thus, even if every one of petitioners' criticisms about the study were accurate, the court still could not reverse or remand the produced water limit on this basis. Moreover, the benefit to be achieved from adopting a particular pollution control technology is not an element of that technology's cost under a BAT evaluation. Thus, EPA was fully capable of assessing the cost of achieving such effluent reduction even if its reduction estimates were flawed.

The court then holds that EPA's decision to set a zero discharge limit on produced sand based on a nearly uniform industry practice at the time of rulemaking is valid and that EPA gave adequate attention to a sand washing technology alternative. Even if EPA completely ignored the sand washing limit, it still did not abuse its discretion because every coastal facility surveyed except one was practicing zero discharge at the time of rulemaking, and the one discharging facility was planning to switch to zero discharge. Given the near perfect uniformity of industry practice in this area, it can hardly be said that EPA's decision did not at least conform to minimal standards of rationality. Moreover, the record plainly shows that EPA gave adequate consideration to the sand washing option.

The court also holds that EPA's decision to set different effluent limits for Cook Inlet without labeling Cook Inlet as a separate subcategory was based on a permissible construction of the FWPCA. Nothing in the text, legislative history, or structure of the FWPCA suggests that Congress intended to deny EPA discretion to set different effluent limits within a category or subcategory when circumstances so require. Moreover, point sources within the Cook Inlet are dramatically different from all other point sources within the coastal oil and gas industry subcategory. Thus, under the facts of this case, the promulgation of different effluent limits within the same subcategory was an acceptable alternative to further subcategorization.

Last, the court holds that challenges to the general national pollutant discharge elimination system (NPDES) permit mandating zero discharge limitations for coastal facilities in Texas is moot. Were the court to review and remand the permit, any subsequent NPDES permit decision would be governed by the effluent limitation guidelines, and the final results would be unchanged.

Counsel for Petitioners
Susan G. Zachos
Kelly, Hart & Hallman
301 Congress Ave., Ste. 2000, Austin TX 78701
(512) 495-6400

Counsel for Respondent
Cherie L. Rogers
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before Reavley and Duhe, JJ.