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July 2007

Vol. 12, No. 26 Week of July 01, 2007

Wastewater permit sparks legal debate

EPA, industry say new Cook Inlet general permit meets strict clean water requirements; operators voluntarily moving to zero discharge

Petroleum News

On June 15 an environmental group, two fishing associations and two Native village corporations filed an administrative appeal to block renewal of a federal wastewater discharge permit for oil and gas operators in Alaska’s Cook Inlet. The new permit covers 16 offshore and three onshore production facilities and goes into effect July 2. The nonprofit law firm Trustees for Alaska that represents the coalition told the Anchorage Daily News it would not seek an injunction, but expects to begin court proceedings this fall.

The appeal, which was filed in the 9th Circuit Court of Appeals on behalf of Cook Inletkeeper, Cook Inlet Fishermen’s Fund, United Cook Inlet Drift Association and the Native villages of Port Graham and Nanwalek, challenges the renewal of the general permit, which was issued by the U.S. Environmental Protection Agency. The permit allows the 19 established oil and gas production facilities to discharge drilling wastewater into the inlet. The permit exempts the operators of those facilities from zero-discharge rules that are in effect in other U.S. coastal drill zones.

The permit also applies to any new inlet exploration and production facilities that are built or brought into the inlet in the next five years, said Dianne Soderlund, communications coordinator for EPA’s Alaska oil and gas section.

EPA: Permit in full compliance

Contrary to the claims of the coalition and a press release issued by Cook Inlet Keeper, Soderlund said the new permit remains within federal guidelines: “Obviously, we issued a permit that we think fully complies with federal law.”

Marilyn Crockett, incoming executive director of the Alaska Oil and Gas Association, agreed. “Contrary to statements made in the Cook Inletkeeper’s press release, the new permit is not in violation of the Clean Water Act. Discharges from different industry sectors in different geographic areas are governed by effluent guidelines developed by EPA. Cook Inlet oil and gas facilities are geographically located in the ‘coastal subcategory,’ while facilities farther offshore are governed by the ‘offshore subcategory’ effluent guidelines. The coastal effluent guidelines specifically allow for discharges to occur in Cook Inlet because it is a water body that essentially mirrors the dynamics of offshore areas.”

Because Cook Inlet is such “a dynamic environment with strong tides and currents, it is considered to have a very high assimilative capacity — the amount of a contaminant that it can receive without damage,” Crockett said. “As a result, discharges such as drilling muds and cuttings and produced water, (which are) low in toxicity, are greatly diluted and dispersed in the inlet’s turbulent waters.”

Soderlund’s statements confirmed that Cook Inlet has been exempt from the zero wastewater discharge ban because of its strong wave action and currents, which help dilute the wastes.

Many Cook Inlet platforms will be shut down in just a few years, as the oil runs out from the fields beneath them. But for the others, industry is already moving in the direction of zero discharge without being required to do so by government regulation.

The Cook Inlet Osprey platform, currently operated by Forest Oil, is not covered under the general wastewater discharge permit because it is a newer facility that has the technology to dispose of drilling wastes on land.

And although ConocoPhillips’ North Cook Inlet platform is covered under the general wastewater permit, it has stopped discharging wastewater into the inlet.

Company spokeswoman Natalie Knox told Petroleum News that ConocoPhillips “no longer discharges produced water. … We re-inject it downhole into a permitted disposal well,” as part of a “significant investment” the company has made in the last few years to minimize its discharge volumes from the platform.

And Chevron, another major Cook Inlet producer, is working on solving what it calls the “technically challenging goal of zero discharge.” It has already made changes in its operations that have “eliminated produced water” from several of its platforms, company spokeswoman Roxanne Sinz told Petroleum News.

“However,” she said, “technically it is very difficult. There are issues related to the formation. As we speak, we have engineers working on this issue.”

Sinz made another point that was echoed by other industry officials: “None of the (Cook Inlet water) studies we have seen have detected any degradation attributed to oil and gas.”

Industry advocate Jason Brune, executive director of Resource Development Council for Alaska, said there is no scientific evidence that drilling pollution is harming Cook Inlet wildlife, including whales. “Tissue samples have shown the belugas of Cook Inlet are cleaner than belugas elsewhere. There’s no indication that what’s currently being done is harming the waters of Cook Inlet,” he said.

But the coalition alleges that as Cook Inlet fields age, the operators pump more water to recover less oil, “drastically” increasing pollution.

Soderlund said the new permit does consider the condition of the aging oil and gas fields, which are emitting more produced water and less oil than in the past.

Cook Inletkeeper’s analysis indicates that producers will discharge about three times as much pollution as with previous permits, up to 100,000 gallons of oil and grease and 835,000 pounds of toxic metals, including mercury.

Soderlund said she was unsure of those numbers, but that the agency does not base permits on total pollution volumes. Rather, EPA allows discharges containing a maximum concentration of pollutants.

More water, but no more toxicity

Crockett said that while the volumes of produced water continue to slowly increase in Cook Inlet, “as they do in any field which has been producing for 40-plus years, the permit does not allow for increased toxicity levels of these discharges, and the discharges must meet the state’s stringent water quality standards.”

“There have been numerous studies conducted in Cook Inlet to determine whether discharges are negatively impacting the environment. Time and again these studies have concluded that that there is no evidence of industry contaminants in Cook Inlet water or sediments. Further, a study commissioned by EPA of subsistence species in Cook Inlet found that contaminant loads were at pre-industrial levels,” Crockett said.

Justin Massey, the attorney handling the case for Trustees for Alaska, said the coalition questions the agency’s methodology.

The coalition wants EPA to rewrite the new permit, tightening limits on effluents and barring the 19 facilities from discharging any drilling wastes into the waters, even if those still emitting discharges are in full compliance with state and federal clean water laws.

—The Associated Press contributed to this report






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