[Federal Register: June 12, 2006 (Volume 71, Number 112)]
[Rules and Regulations]
[Page 33628-33640]
[DOCID:fr12jn06-14]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 122

[EPA-HQ-OW-2002-0068; FRL-8183-3]
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: Final rule.

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SUMMARY: EPA is taking final action to codify in the Agency's
regulations changes to the Federal Water Pollution Control Act, also
known as the ``Clean Water Act'' or ``CWA,'' resulting from the Energy
Policy Act of 2005. This action modifies the National Pollutant
Discharge Elimination System regulations to provide that certain storm
water discharges from field activities or operations, including
construction, associated with oil and gas exploration, production,
processing, or treatment operations or transmission facilities are
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: This final rule is effective on June 12, 2006. For the purposes
of judicial review, this final rule is promulgated as of June 12, 2006.
See 40 CFR 23.2.

ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-OW-2002-0068. All documents in the docket are listed on the
http://www.regulations.gov Web site. 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, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically through http://www.regulations.gov
 or in hard copy at the Water Docket, EPA/DC, EPA

West, Room B102, 1301 Constitution Ave., NW., Washington, DC. 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<PHONE_NUMBER>, and the telephone number for the Water
Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Jeff Smith, Water Permits Division,
Office of Wastewater Management (4203M), Environmental Protection
Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20460; telephone
number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>; e-mail address:
<EMAIL_ADDRESS>

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, or treatment
operations or 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 with references to industrial classification codes
is not intended to be exhaustive, but rather to provide a guide for
readers regarding entities likely to be affected by this action. This
description identifies the principal 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 40 CFR 122.26(a)(2), (b)(14)(x), (b)(15), (c)(1)(iii)
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. When Does This Final Rule Take Effect?

    This final rule is effective on June 12, 2006. Because this final
rule provides relief from permitting requirements for certain
dischargers, this final rule is not subject to the general requirement
for a thirty-day waiting period after publication before a final rule
takes effect. By providing such relief, this final rule ``relieves a
restriction'' on these dischargers. 5 U.S.C. 553(d)(1). Moreover,
pursuant to 5 U.S.C. 553(d)(3), EPA has good cause to make this final
rule effective immediately upon publication. Without this final rule,
dischargers eligible for this permit exemption would, in accordance
with EPA's regulations, be required to obtain permit authorization by
June 12, 2006. This action eliminates this permit obligation, which
would otherwise have applied during the period between the time the
rule is published and the time it would take effect (ordinarily, 30
days after publication). Making this rule effective as soon as it is
published will help reduce any confusion on the part of those affected
by the rule regarding the necessity for obtaining permit coverage.
Therefore, a thirty-day waiting period is unnecessary and would be
contrary to the public interest.

II. Background Information

    The 1987 amendments to the CWA 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 in the
Act states that ``[t]he Administrator shall not require a permit 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.'' The 1990 NPDES Phase I Storm Water rule (55 FR 47990,
November 16, 1990) established permit requirements for certain storm
water discharges, including storm water discharges associated with
construction activities that disturb five acres or greater or that
disturb less than five acres when part of a larger common plan of
development or sale that disturbs five acres or more. One provision of
the Phase I rule codified the CWA section 402(l)(2) exemption at 40 CFR
122.26(a)(2). The 1990 rule also codified, at 40 CFR 122.26(c)(1)(iii),
the conditions that would be considered indicative of contamination by
contact with raw material, intermediate products, finished product,
byproduct, or waste products located on a site and would thus
necessitate an NPDES storm water permit application by oil and gas
exploration, production, processing or treatment operations or
transmission facilities. Specifically, 40 CFR 122.26(c)(1)(iii)
established permit requirements for contaminated discharges 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 any time 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 regulation on the legislative history of CWA section
402(l)(2), which directed EPA to consider whether reportable quantities
(RQs) of oil or hazardous substances under either the CWA or the
Comprehensive Environmental Response, Compensation, and Liability Act
(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. (Pub. L. 95-217, Sec. 33(c), added subsec. (l))
    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
to 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.
    A collection of trade associations brought a lawsuit against EPA
over this memorandum, asserting that it was unlawful and requesting
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). The interpretation of CWA
section 402(l)(2) contained in that memorandum, i.e., that oil and gas-
related construction activities required permit coverage, formed the
basis of EPA policy on the issue.
    When EPA promulgated the Phase II storm water rule on December 8,
1999, EPA included a requirement that storm water discharges from small
construction activities obtain NPDES permit coverage beginning on March
10, 2003. The Phase II rule defined small construction activities as
those disturbing between one and five acres or those disturbing less
than one acre when part of a larger common plan of development or sale
that disturbs one to five acres. As part of its rulemaking, EPA
analysis suggested that few, if any, oil and gas exploration 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 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 rights-
of-way 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 discharges
associated with small oil and gas construction activity. This extension
was intended to provide EPA time 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 characteristics of oil and gas sites 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. EPA also gathered
economic data for the industry and initiated an economic impact
analysis of the effects of the existing Phase II regulations on the oil
and gas industry. EPA's preliminary analysis indicated that there could
be administrative delays in the permitting process for oil and gas
construction sites which could result in substantial economic impacts,
particularly in the form of lost production revenues, 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 it had identified 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 first time EPA had acknowledged in its NPDES regulations
that those regulations apply to construction activities associated with
oil and gas activities. Petitioners further asserted that the deferral
rule was inconsistent with CWA section 402(l)(2). On June 16, 2005, the
Fifth Circuit dismissed the petition on the grounds that the issue was
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).
    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 operations 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
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).
    On January 6, 2006, EPA proposed 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 (71 FR
894) to implement the new provision in the Energy Policy Act of 2005.
This action finalizes that rule.

III. Summary of This Final Rule and Statutory Basis

    This action implements an amendment to the Clean Water Act
contained in the Energy Policy Act of 2005. This amendment expanded the
scope of oil and gas-related activities that are exempt from the
requirement to obtain an NPDES permit for storm water discharges to
include most storm water discharges from construction activities
associated with oil and gas field operations. Under this final rule,
storm water discharges from construction activity associated with oil
and gas field operations are exempt from NPDES permitting requirements,
except in situations when the construction-related activity results in
the discharge of a hazardous substance or oil in ``reportable''
quantities or in situations when the discharge of a pollutant other
than sediment contributes to a violation of an applicable water quality
standard. See NRDC v. EPA, 966 F.2d 1292, 1307 (9th Cir.) (noting that
40 CFR 122.26(c)(1)(iii)(C) addresses ``contamination with substances
other than oil and hazardous substances''). Such storm water discharges
continue to be subject to NPDES permitting requirements.
    This final rule revises 40 CFR 122.26(a)(2), which EPA promulgated
in 1990 to codify the statutory exemption in CWA section 402(l)(2). The
features of this final rule are the same as those EPA proposed on
January 6, 2006 (71 FR 894). First, EPA is creating separate
subparagraphs for the purpose of distinguishing between mining
operations and oil and gas operations. See 40 CFR 122.26(a)(2)(i)
(mining operations) & (ii) (oil and gas operations). Second, in new
subparagraph (a)(2)(ii), which applies to oil and gas operations, this
final rule incorporates the new definition of ``oil and gas
exploration, production, processing, or treatment operations or
transmission facilities'' (also referred to herein as ``oil and gas
field operations'') now found in CWA section 502(24) as a result of the
Energy Policy Act of 2005. Finally, new subparagraph (a)(2)(ii)
provides that sediment discharged from construction activities at oil
and gas sites does not trigger the requirement for NPDES permit
coverage.
    As described above in section II (Background), until passage of the
Energy Policy Act of 2005, EPA had taken the position that storm water
discharges from oil and gas construction activities were not eligible
for the NPDES permit exemption in CWA section 402(l)(2). In the Energy
Policy Act of 2005, however, Congress squarely addressed the issue and
specifically included construction activities among the types of oil
and gas field operations eligible for the permitting exemption. The
Energy Policy Act of 2005 achieved this by adding a new paragraph (24)
to section 502 of the CWA to define the term ``oil and gas exploration,
production, processing, or treatment operations or transmission
facilities''--a term which appears only in section 402(l)(2)--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.'' (emphasis added).
    This final rule both codifies this new definition and specifically
exempts from NPDES permitting storm water discharges of sediment from
oil and gas construction activities. While the Energy Policy Act
amendment does not specifically address sediment, that pollutant
naturally falls within the

newly created exemption from NPDES permitting.
    Indeed, singling out storm water discharges of sediment in today's
rule is the best way to implement and conform the Energy Policy Act of
2005 with the preexisting text of CWA Sec.  402(l)(2). First of all,
for oil and gas exploration, production, processing, or treatment
operations, or transmission facilities, only those discharges
contaminated by contact with raw material, intermediate products,
finished product, byproduct, or waste products located on the site are
subject to permitting requirements under 402(l)(2). (Overburden is
applicable only to mining.) The presence of sediment in a discharge
from a construction site is not itself indicative of contact with those
materials. Oil and hazardous substances for which there is an RQ under
either CERCLA or the CWA, in contrast, is indicative of such contact
and are not likely to be found in runoff from oil and gas exploration,
production, processing, or treatment operations or transmission
facilities except as a result of such contact.
    Second, sediment is the pollutant most commonly associated with
construction activities, whether at oil and gas sites or elsewhere. 69
FR 22475 (April 26, 2004); 67 FR 42654 (June 24, 2004). EPA's 2003
construction general permit, for example, focuses primarily on limiting
discharges of sediment. In EPA's view, to codify a permitting exemption
for storm water discharges from oil and gas construction activities but
simultaneously to exclude from the new exemption sediment, the
discharge most closely associated with construction, would not be
consistent with the intent of the CWA amendments enacted by the Energy
Policy Act of 2005. This view is consistent with contemporaneous
interpretations of the exemption by members of Congress. Several
members of Congress opposed this amendment because it would exclude oil
and gas construction sites from NPDES permitting requirements.\1\
Although these members opposed the amendment to CWA section 502 (which
ultimately passed despite their opposition), today's rule is consistent
with their descriptions of the impacts this amendment would have on
NPDES permit requirements for oil and gas construction sites.
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    \1\ See 151 Cong. Rec. S9262, S9339, S9342, S9346, S9347 and
E1726.
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    CWA Section 402(l)(2) provides that EPA ``shall not require'' an
NPDES 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.''
(emphasis added). In 1990, EPA codified regulations at 40 CFR
122.26(c)(1)(iii) to implement this exemption. Specifically, 40 CFR
122.26(c)(1)(iii) provides that an NPDES permit is required for those
storm water discharges from oil and gas field operations resulting in
the discharge of reportable quantities (RQs) of hazardous substances or
oil that trigger notification requirements pursuant to 40 CFR 110.6,
117.21 or 302.6, or that contribute to a violation of water quality
standards. The first of these two conditions, discharge of RQs,
reflects specific language in the legislative history of Section
402(l)(2) directing EPA to consider exceedances of RQs in determining
whether contamination through contact with raw material, intermediate
products, finished product, byproduct, or waste products had occurred.
The second condition reflects EPA's judgment at the time the Phase I
Storm Water rule was promulgated that violation of a water quality
standard would also generally be indicative of contamination through
contact with raw material, intermediate products, finished product,
byproduct, or waste products. However, it is important to bear in mind
that EPA has historically interpreted Section 402(l)(2) as not applying
to construction activities at oil and gas sites, and therefore did not
previously need to consider how sediment discharges would be treated by
these regulations. These regulations were upheld in NRDC v. EPA, 966
F.2d 1292, 1306-08 (9th Cir. 1992). EPA did not propose to change the
requirements in 40 CFR 122.26(c)(1)(iii), and is not revising that
provision in this final rule, although EPA is revising the
applicability of 122.26(c)(1)(iii)(C) by including in new
122.26(a)(2)(ii) a provision that (c)(1)(iii)(C) does not apply to
sediment discharges. This change reflects EPA's judgment that
discharges of sediment, which may become an issue now that Congress has
determined that 402(l)(2) applies to construction activities at oil and
gas sites, do not necessarily indicate contamination through contact
with raw material, intermediate products, finished product, byproduct,
or waste products. Indeed, the only change that EPA is making to the
regulations today is to modify 122.26(a)(2) to expand the NPDES permit
exemption to cover storm water discharges of sediment from construction
sites associated with oil and gas field operations as mandated by the
CWA amendment in the Energy Policy Act of 2005, together with CWA
section 402(l)(2).
    Nothing in the Energy Policy Act amendment altered the structure of
section 402(l)(2) itself or the conditional nature of that NPDES
permitting exemption. Thus, storm water discharges contaminated by
contact with raw material, intermediate products, finished product,
byproduct, or waste products, as indicated by discharges of reportable
quantities of hazardous substances or oil, or by violations of water
quality standards for pollutants other than sediment from a
construction site associated with oil and gas operations, would
continue to be subject to NPDES permitting requirements. By
specifically exempting sediment (which is not considered indicative of
contact) but no other pollutant, this final rule thus honors both the
precise focus of the 2005 amendment and the text of CWA section
402(l)(2) itself.

IV. Response to Comments

    EPA received over 50 comments on its proposal to codify provisions
of the Energy Policy Act of 2005 into the NPDES regulations. EPA's
responses to all the comments received on the proposed rule are
available in the Response to Comment document that is part of the
docket for this final rule (Docket identification number: EPA-HQ-OW-
2002-0068). EPA's responses to significant issues raised on the
proposed rule are discussed below.

A. Applicability

    Several commenters asserted that the Energy Policy Act of 2005
amendment to the CWA effectively excludes almost all oil and gas
exploration, production and transmission construction activities from
the NPDES permitting requirements regardless of the amount of acreage
disturbed. One of these commenters also specifically supported applying
the exemption to all site sizes. EPA agrees with these commenters that
Congress intended to exempt discharges from the specified oil and gas
activities regardless of size; under this final rule, all covered oil
and gas-related construction activities are eligible for the NPDES
permitting exemption for their uncontaminated storm water

discharges without regard to the amount of acreage disturbed.
    Another commenter agreed with EPA that pipelines and compressor
stations should be included in the exemption. One commenter identified
a number of what it believed to be exempt construction activities
necessary to support construction of pipeline and compressor stations
as well as long term maintenance of the system. EPA generally agrees
with these commenters' assessments about the applicability of this
final rule to natural gas transmission pipelines and their associated
infrastructure. Storm water discharges from field activities, such as
the clearing, grading, and excavation associated with pipeline and pump
station construction, are within the scope of activities eligible for
the NPDES permit exemption under this final rule. One commenter
interpreted the language in the exemption to include material mining
sites (e.g., sand and gravel pits and quarried aggregate) that exist
only to support pipeline and pump station construction and maintenance
activities. EPA disagrees with this comment. The Agency does not
believe that Congress intended the term ``oil and gas exploration,
production, processing, or treatment operations or transmission
facilities'' to include off-site operations whose only connection to
such facilities is that they produce products (e.g., sand, gravel, or
aggregate) that are later used by such facilities. Under this theory,
producers of any product used at oil and gas sites (e.g., drilling
equipment) could similarly claim entitlement to the 402(l)(2)
exemption. Nothing in the definition provided in the Energy Policy Act
of 2005 or Section 402(l)(2) itself suggests that Congress intended
such a broad reach for this exemption. However, the Agency does
consider ``cut and fill'' activities (i.e. where excavated earth and
rock at the site is used to level the surface of the site) within the
project area of a well pad, access road, pipeline, etc., to be an
integral part of the on-site construction activities and, thus, within
the scope of activities for which storm water discharges are eligible
for the NPDES permit exemption under this final rule.
    One commenter requested that EPA provide definitions in the rule
for the terms ``processing operations,'' ``treatment operations'' and
``transmission facilities.'' EPA believes the terms are generally
unambiguous as understood by experienced oil and gas operations
personnel and most state regulators and thus the creation of a new set
of definitions specific to this rule is unnecessary. These terms are
discussed in Section V (Terminology).
    One commenter suggested that EPA define the term ``facility'' to
mean only those areas subject to oil and gas activity under control of
the owner operator. EPA does not think that such a definition is
warranted or appropriate because, as used in the proposed rule, the
term ``facilities'' simply describes the types of field activities that
cannot be subject to NPDES permitting under certain circumstances and
is not intended to address ownership or operational issues.
    One commenter noted that ``the mining industry and its exemption
are distinct from the oil and gas industry and its exemption, both in
terms of the nature of the activities involved and the definition of
`contamination' that applies under the statute and EPA's regulations.''
Another commenter stated that the term ``overburden'' is applicable to
mining activities only and commended EPA for providing a separate
section in the regulatory language [40 CFR 122.26(a)(2)(i)] describing
the mining activities eligible for exemption from storm water NPDES
permit requirements. EPA acknowledges the commenter's detailed account
of the legislative history of the CWA with respect to the definition of
the term ``overburden'' and agrees that the language in the proposed
rule appropriately differentiates between mining and oil and gas field
activities and operations for purposes of implementing Section
402(l)(2) and the Energy Policy Act of 2005. EPA notes, however, that
this final rule is not intended to make any change to NPDES permit
requirements applicable at mining sites.
    Two commenters requested general, rather than individual, permit
coverage for storm water discharges that do not qualify for the
permitting exemption. This would mean, for example, that coverage of
releases in excess of reportable quantities (see 40 CFR 110.6, 117.21
and 302.6) in storm water from spills or other releases during pipeline
construction be available under a construction general permit or an
industrial permit, such as EPA's Multi-Sector General Permit (MSGP) for
releases during other field activities or operations. EPA believes an
individual permit application will generally be the most appropriate
way to address such contaminated discharges and establish appropriate
controls to minimize impacts from future discharges. EPA notes,
however, that this final rule is not intended to modify any
requirements or provisions regarding the availability of general
permits in lieu of individual permits.
    Several commenters engaged in activities that are not related to
oil and gas exploration and production suggested that their industrial
sectors should also be exempt from CWA permitting requirements for
discharges associated with construction activities because they believe
that their construction-related activities result in no significant
discharges or impairment of water quality in adjacent water bodies. One
trade association, representing the geothermal energy industry, argued
that its members used oilfield contractors, suppliers and equipment and
constructs well pads, access roads, and pipeline rights-of-way that are
virtually identical to those employed by the oil and gas exploration
and production industry. This industry, however, is not engaged in oil
and gas field operations or activities and, therefore, does not qualify
for the exemption that is the subject of this rule.
    Similarly, another commenter representing home builders argued that
the application of this exemption solely to the oil and gas industry,
coupled with regulatory burden on the residential construction industry
imposed by the existing Phase II storm water rules, constituted
overregulation. This commenter urged EPA ``to defer the regulation of
the residential construction industry until adequate data has been
collected to provide either outright support for the current regulation
or to support its modification so that the impact of the rule is both
fair and justified.'' This commenter also provided a discussion of the
regulatory burden on the residential construction industry imposed by
the final Phase II storm water regulations promulgated in 1999 (64 FR
68722, December 8, 1999).
    EPA acknowledges comments raised by the geothermal and home
building sectors but notes that this rulemaking is in response to the
Energy Policy Act of 2005, and any comments on the applicability of the
Phase II regulations to activities other than oil and gas field
activities or operations associated with exploration, production,
processing, or treatment operations or transmission facilities are
outside the scope of this rulemaking. The Energy Policy Act of 2005
merely defines the term ``oil and gas exploration, production,
processing, or treatment operations or transmission facilities'' and
does not reference any other industrial sectors. Consistent with the
Act, EPA's proposal and this final rulemaking are also limited to oil
and gas field activities or operations that fall within the definition
of this term and do

not address any other industrial sectors. Therefore, these comments are
outside the scope of this rulemaking.
    Several commenters stated their concerns that all oil and gas-
related operations and activities will no longer be held accountable
for storm water discharges. EPA acknowledges the commenters' concerns
but believes they are outside the scope of this rulemaking. The final
rule merely implements clear Congressional intent to exempt certain
storm water discharges from NPDES permit requirements. The Agency
notes, however, that this exemption is limited to discharges that are
not contaminated by contact with raw material, intermediate products,
finished product, byproduct, or waste products. EPA has further
included in the final regulatory text a note encouraging 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. EPA further notes that the industry has developed and is
promoting the use of a manual designed to assist operators in
implementing such practices (see Section IV.B below).

B. BMP Implementation

    EPA received a number of comments supporting the use of voluntary
Best Management Practices (BMPs) to control erosion and sedimentation
runoff from oil and gas construction activities. Several commenters
suggested that EPA's proposed approach encouraging the use of BMPs is
an appropriate means for controlling runoff. Many of these commenters
liked the approach outlined by the Independent Petroleum Association of
America in their ``Guidance Document: Reasonable and Prudent Practices
for Stabilization (RAPPS) of Oil and Gas Construction Sites'' (Horizon
Environmental Services, Inc., April 2004). This guidance advocates the
selection and practical application of BMPs based on specific physical
characteristics of the site (e.g., proximity to waterbody, slope,
vegetative cover, and geographic location). The guidance is presented
in a straight-forward format that is appropriate for field personnel to
access and understand. Additionally, one commenter indicated that EPA's
proposed approach will significantly reduce paperwork and the lead time
required to implement a project while still preventing adverse impacts
to the environment. Several commenters suggested that not having to
obtain permit coverage provides operators with more flexibility to
schedule land disturbance activities in a way that minimizes erosion
and sedimentation. One commenter suggested that EPA has met
Congressional intent by encouraging the voluntary use of BMPs through
the implementation of RAPPS or other similar approaches.
    Several commenters indicated that similar programs already exist to
control erosion and sedimentation from oil and gas activities.
Specifically, one commenter described the Federal Energy Regulatory
Commission (FERC) requirements for pipeline projects. Although not
specifically identified by the commenter, EPA believes that the
commenter is likely referring to two documents entitled ``Upland
Erosion Control, Revegetation, and Maintenance Plan, January 2003'' and
``Wetland and Water Body Construction and Mitigation Procedures,
January 2003'' that are designed to assist pipeline license applicants
by identifying ``* * * baseline mitigation measures for minimizing the
extent and duration of project-related disturbance of field
activities.'' Although less detailed than some BMP guidelines developed
by states and industry, the FERC plans are a valuable addition to the
information base available to oil and gas operators for minimizing
environmental damage. Another commenter noted that the state of West
Virginia requires BMPs, consistent with the state environmental
agency's erosion and sediment control field manual, through its well
drilling and well re-working permit program.
    Conversely, several other commenters suggested that the use of
voluntary approaches is inadequate to ensure protection of water
quality and also suggested that the RAPPS document is overly broad and
should focus more on keeping sediment on site than keeping sediment out
of nearby waterbodies. Some of these commenters suggested that NPDES
permits, which would require BMP implementation, are the best approach
for regulating these discharges. Several commenters believe that EPA
should do more to encourage and support state efforts to control
sediment from oil and gas activities. One commenter suggested that EPA
should require operators to utilize BMPs and violations should be
subject to enforcement.
    In response to comments criticizing the adequacy of the recommended
BMP provisions, the Agency again notes that this final rule merely
codifies Congress' clear intent to prohibit EPA from requiring an NPDES
permit for certain storm water discharges associated with oil and gas
construction activities.
    EPA believes that a ``one size fits all'' approach or the use of a
single suite of BMP is generally inappropriate to control erosion and
sedimentation from all types of oil and gas construction activities.
The RAPPS document and other relevant guidance are intended to provide
information to operators to assist them in selecting appropriate BMPs,
and combinations of BMPs, to protect water quality. EPA believes that
use of this guidance will result in practical, cost-effective
approaches that are flexible enough to address the variety of
situations and water quality concerns that might be encountered in the
field. EPA also intends to continue to work cooperatively with industry
representatives and other interested groups to further develop and
refine RAPPS and other industry-specific BMPs to promote even wider
acceptance and implementation of these tools for reducing potential
environmental impacts associated with oil and gas field operations.
Additionally, EPA encourages state regulatory agencies and others with
an interest in protecting water quality to assist in this effort to
further clarify appropriate erosion and sedimentation control measures
for oil and gas field operations.
    As in the proposed rule, this final rule includes a note at 40 CFR
122.26(a)(2)(ii) encouraging operators of oil and gas field activities
or operations to implement and maintain BMPs to minimize discharges of
pollutants, including sediment, in storm water both during and after
construction activities. EPA also encourages State and local
authorities to address storm water discharges of sediment from
construction activities associated with oil and gas field operations
through authorities other than the NPDES permit program where
appropriate but, as discussed in Section IV.D, Section 402(l)(2)
prohibits EPA or the States from requiring a permit for these
discharges under the authority of the CWA NPDES program.

C. Interpretation of Energy Policy Act Regarding Sediment

    EPA received a number of comments both agreeing with and disputing
the Agency's interpretation of the Energy Policy Act of 2005,
particularly as it applies to discharges of sediment from construction
activities. Several commenters stated that the Energy Policy Act simply
clarified Congress' original intent with respect to the 1987 amendments
to the Clean Water Act exempting certain oil and gas activities from
the requirement to obtain NPDES permits when the activity does not
involve the discharge of any raw

material into waters of the United States. Others stated simply that
they believed EPA's interpretation of the Energy Policy Act to be
correct and reasonable.
    A number of commenters expressed opposition to EPA's interpretation
of the Energy Policy Act. Many of these commenters simply expressed
opposition to exempting the oil and gas industry from permitting
requirements but did not suggest how their opposition could be
reconciled with the statutory revisions of the Energy Policy Act of
2005 which clearly exempts certain oil and gas related construction
activities from NPDES permitting requirements. Others expressed their
belief that EPA had failed to represent Congressional intent and
suggested that storm water discharges of sediment that contribute to a
violation of water quality standards should not be exempt from the
requirement to obtain NPDES permit coverage.
    EPA notes that its interpretation of the CWA amendment found in the
Energy Policy Act of 2005 is consistent with contemporaneous
Congressional floor statements interpreting the amendment. Even without
consideration of these floor statements, however, the Agency views
today's rule as adopting the best interpretation of the legislation
itself. The amendment to the language in CWA section 502, together with
the exemption found in CWA section 402(l)(2), clearly conveys
Congressional intent to provide oil and gas construction projects with
relief from the potential burdens associated with NPDES permits.
Accordingly, EPA views sediment from oil and gas construction
activities to be the very pollutant being exempted from permitting by
the Energy Policy Act of 2005.
    Under CWA section 402(l)(2), storm water discharges associated with
oil & gas exploration, production, processing, or treatment operations
or transmission facilities are exempt from NPDES permitting
requirements under two scenarios. Under the first scenario, storm water
discharges associated with oil & gas activities are exempt if they do
not come in contact with, i.e., if they are diverted around, any ``raw
materials, intermediate products, finished product, byproduct, or waste
products located on the site of such operations.'' (The term
``overburden'' in CWA section 402(l)(2) is not commonly associated with
oil and gas operations; therefore, it is not relevant to this
discussion or today's regulation.) Under the second scenario, the storm
water discharges are exempt even if they do come in contact with those
materials, provided that the storm water is not contaminated by such
contact. Under EPA's regulations, storm water is considered
contaminated by contact with these materials if the discharge contains
a reportable quantity of certain substances or if the discharge
contributes to a violation of a water quality standard. See 40 CFR
122.26(c)(iii).
    The Energy Policy Act of 2005 did not alter this general regime.
Rather, by defining ``oil and gas exploration, production, processing,
or treatment operations or transmission facilities'' to include
construction activities, the 2005 amendment simply provided that storm
water discharges associated with construction at those oil and gas
sites are eligible for the statutory exemption.
    Some commenters have questioned, however, whether Congress intended
to exempt construction-related storm water discharges from NPDES
permitting when those discharges contain only sediment. EPA believes
the answer is yes. Nothing in the 2005 amendment altered the statutory
concept that storm water (of whatever type) is exempt so long as it is
not contaminated by contact with ``raw materials, intermediate
products, finished product, byproduct, or waste products.'' Further,
nothing in the 2005 amendment defined ``raw materials, intermediate
products, finished product, byproduct, or waste products''--to include
naturally occurring sediment exposed or displaced as a result of
construction activity, and those terms are not generally understood in
the oil and gas industry to refer to such sediment.
    As discussed in more detail in the proposed rule (71 FR 897-898),
EPA determined, consistent with the legislative history of CWA section
402(l)(2) at the time that it originally promulgated 40 CFR
122.26(c)(1) that exceedence of an RQ for pollutants such as oil and
hazardous substances would generally be indicative of contamination
through contact with raw material, intermediate products, finished
product, byproduct or waste products, and that violation of a water
quality standard would also generally be indicative of such contact.
However, now that Congress has broadened the 402(l)(2) exemption to
include construction activities at oil and gas field operations, EPA
believes that discharges of sediment are not necessarily indicative of
such contact. Sediment is the pollutant most commonly associated with
construction activity. Hence, exempting storm water discharges of
sediment from oil and gas construction sites from NPDES permitting
requirements reflects a reasonable (and EPA believes, the best)
interpretation of Congressional intent in limiting the 402(l)(2)
exemption to discharges not contaminated by contact with raw material,
intermediate products, finished product, byproduct or waste products,
in the context of the new definition for oil and gas exploration,
production, processing or treatment operations or transmissions
facilities included in the Energy Policy Act of 2005. Therefore,
pursuant to today's rule, discharges of storm water from oil and gas
construction sites that do not come in contact with those materials are
exempt under CWA section 402(l)(2) even if the storm water contains
construction-related sediment, and even if those sediment discharges
cause water quality impacts. Sediment could, however, serve as a
vehicle for discharges of other pollutants, such as oil or grease or
hazardous substances (e.g., heavy metals) and if an RQ is exceeded or a
water quality standard violated for such other pollutants, such
contamination would trigger permitting requirements.
    Several commenters suggested the goal of protecting water quality
would be better served if discharges associated with small oil and gas
construction activity required NPDES permit coverage. EPA believes that
it is appropriate for operators of exempted oil and gas facilities to
adopt BMPs that will, among other things, minimize the transport of
sediments to surface waters, and has included in the final rule
language encouraging voluntary adoption of such BMPs. However, the
Agency's purpose in promulgating today's final rule is to implement the
narrow statutory change relating to Section 402(l)(2) that is contained
in the Energy Policy Act of 2005. The Agency believes that the best
interpretation of this statutory change is that it excludes storm water
discharges associated with oil and gas construction activities from
regulation under the NPDES program, except where contamination by
contact with raw materials, intermediate products, finished product,
byproduct, or waste products (as understood within the context of
Section 402(l)(2)) has occurred.
    One commenter thought that EPA should interpret the statutory
language more narrowly--in a way that ``gives the benefit of the doubt
to the environment.'' The commenter further suggested that the
exemption is applicable only if storm water is diverted around
operations to prevent contamination. EPA agrees with this commenter up
to a point. One way that an operator can ensure that there is no
contamination of storm water through contact with raw materials,
intermediate

products, finished product, byproduct, or waste products is to ensure
either that all such material is covered, or that storm water is
diverted around it, and EPA strongly urges operators to do this.
Operators that fail to do this will not be eligible for the Section
402(l)(2) exemption if an exceedance of an RQ or a violation of a water
quality standard occurs as a result of contact with such materials.
However, this does not change EPA's determination that the best
interpretation of Congressional intent in enacting the revised
definition in the Energy Policy Act of 2005 is that contact with
naturally occurring sediment which is not itself contaminated with
toxic or hazardous substances does not constitute ``contact'' for
purposes of Section 402(l)(2). The Agency has clearly communicated this
through its proposed rule and through today's regulation which does not
require an NPDES permit for uncontaminated storm water discharges but
encourages the voluntary use of BMPs through a note in the regulation.

D. Non-NPDES Program Authority

    One commenter requested clarification on a state's authority to
regulate storm water discharges associated with oil and gas
construction activities. This rulemaking clarifies that uncontaminated
storm water discharges associated with oil and gas field activities
cannot be regulated directly or indirectly by either EPA or a state
under the authority of the NPDES permit program. Another commenter
noted that states are not pre-empted by the CWA amendment or by the
Energy Policy Act of 2005 from acting to regulate discharges pursuant
to more stringent state programs. EPA agrees with this statement and
affirms the fact that States and Indian Tribes have the right to
regulate or otherwise reduce pollutants (including sediment) from storm
water discharges associated with oil and gas field operations under
State or Tribal law, but not under NPDES program authority. While EPA
agrees that States and Tribes have broad discretion to use a variety of
approaches in instances where water quality standards have been
violated, the ability to require an NPDES permit from sites described
in CWA section 402(l)(2) that discharge storm water from oil and gas
activities is limited to those discharges that contain reportable
quantities of oil or a toxic and/or hazardous substance or that
contribute to a violation of water quality standards for a pollutant
other than sediment.
    Discharges exempt from NPDES permit requirements in this final
rulemaking are exempt from these requirements regardless of whether
EPA, a State, or an authorized Tribe is the permitting authority. This
final rule is not intended to interfere with the ability of States,
Tribes, or local governments to regulate any discharges through a non-
NPDES permit program. In fact, EPA expects that operators whose storm
water discharges are exempt from NPDES permit requirements will comply
with any other applicable Federal, State, tribal, and local controls on
oil and gas field operations. This final rule does not in any way
curtail the ability of an appropriate environmental management agency
(e.g., State, Tribal or local government) to impose specific discharge
conditions on an oil and gas operator that is exempted from NPDES
requirements under this final rule so long as these requirements are
imposed pursuant to authority other than an NPDES permit program. For
example, a State or Tribe could choose, under its own authorities, to
require that an operator meet certain discharge conditions in sensitive
watersheds. However, if a State, Tribe, or local government were to
require a permit for discharges exempt from the Clean Water Act NPDES
program requirements, those permit requirements would not be considered
part of an NPDES program. See 40 CFR 123.1(i)(2).

E. Other Comments

    Several commenters suggested that the EPA discussion in the 1990
Phase I Storm Water Application Regulation addressing issues regarding
``stale'' (i.e., dated) data on releases of reportable quantities of
oil and/or toxic substances is appropriate to this rulemaking as well.
However, these commenters were concerned that there was no specific
timetable for them to file an application for a storm water permit
necessitated by a discharge of a reportable quantity that took place
many months or even years prior to this rulemaking going into effect.
Therefore, these commenters suggested that the requirement to seek
coverage under an NPDES permit as the result of such a discharge should
be limited to discharge events occurring no more than three years prior
to the date of the publication of this final rulemaking. EPA finds this
comment to be outside the scope of this final rulemaking. EPA notes
that under CFR 122.26(c)(1)(iii), an oil or gas exploration or
production facility of any size that had a discharge of an RQ at any
time after November 16, 1987 was already required to have obtained an
NPDES storm water permit for a discharge associated with industrial
activity. EPA did not propose to change 40 CFR 122.26(c)(1)(iii), and
the Agency is not revisiting that provision in this final rule.
    Two commenters suggested that EPA's recognition of States'
authority to implement their own regulatory program outside of the
``umbrella'' of the NPDES program should obligate EPA to provide
technical expertise and resources to help States act on this authority.
To the extent practicable, given its own limited resources, EPA will
develop guidance to assist States, Tribes, and local governments in
exercising their authority reserved for them by the CWA. EPA has always
assisted States and Tribes with responses to technical inquiries
relating to interpretation of NPDES program and CWA statutory
requirements, and the Agency intends to continue providing such
assistance.
    One Tribe notes in its comments that EPA did not consult with
tribal governments during the rulemaking process, as called for in
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments.'' As discussed below, EPA did not need to consult
with the Tribes under Executive Order 13175 because the proposed rule
would not--and this final rule does not--have any substantial direct
effects on tribal governments, on the relationship between Federal
Government and Indian tribes, or on the distribution of power and
responsibilities between the Federal Government and Indian tribes. This
final rule does not add to the existing requirements under EPA's
regulations. Rather, this final action codifies a recently-enacted
amendment to the CWA which exempts certain oil and gas field activities
from NPDES permitting requirements.

V. Terminology

    As noted earlier in this document, questions have arisen regarding
some of the terms used in this final rule. This section collects EPA's
interpretation of these terms.

Field Activities or Operations

    This final rule adopts in 40 CFR 122.26(a)(2)(ii) language from the
Energy Policy Act of 2005. EPA interprets the specific phrase ``all
field activities or operations'' in this language to include the
construction of drilling sites, drilling waste management pits, access
roads, 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 may thus be eligible for the
CWA section 402(l)(2) exemption from NPDES permitting requirements.

Processing

    The terms ``processing,'' ``treatment,'' and ``transmission'' are
generally well understood among industry professionals and oilfield
personnel engaged in oil and gas exploration, production, processing,
or treatment operations or transmission. These terms are described in
turn below.
    ``Processing'' may be used in connection with either oil or gas
field activities, but it is more commonly used to describe certain
natural gas field activities. Industry professionals generally regard
``processing'' as applying strictly to removal of either contaminants
(such as hydrogen sulfide or carbon dioxide), natural gas liquids or
rare gasses (such as helium) from produced natural gas.
    Most produced natural gas contains over 90 percent methane by
volume. ``Pipeline quality'' natural gas sold by intrastate and
interstate transmission pipeline companies usually has been upgraded to
be as much as 99 percent methane by volume. For the purposes of this
final rule, EPA considers the term ``processing'' to refer to those
field operations related to either upgrading of natural gas by removal
of contaminants (e.g., carbon dioxide, hydrogen sulfide and water) or
the extraction of valuable, higher molecular weight ``natural gas
liquids'' (e.g., ethane, propane, butane, and condensate) or rare gas
constituents (e.g., helium and xenon) prior to sale of the gas to an
intrastate or interstate gas transmission pipeline. Regardless of the
physical size or throughput capacity of a processing facility or its
geographic location (either within a single producing field or at a
centralized location serving several producing fields), a gas
processing plant merely serves as an intermediate step in the supply-
transmission-distribution chain that transports natural gas from the
producing well to the ultimate end-user. Gas processing does not
physically or chemically change the basic constituent (methane) in
natural gas. Gas processing is not analogous to the term ``chemical
processing'' as is commonly used by chemical engineers to describe
manufacturing operations that create finished products in the petroleum
and petrochemical refining industrial sectors. The North American
Industrial Classification System (NAICS) codes for oil and gas
extraction activities (including ``natural gas processing'') are found
under the designation 211 (equivalent to the older Standard Industrial
Classification [SIC] code designation 1311). EPA regards the processing
described above as an inherent component of natural gas extraction
field activities.

Treatment

    Similarly, the term ``treatment'' may be used in the context of
either the oil or gas industries, but is more commonly used when
referring to the removal of contaminants, such as salt water, sediment,
pipe scale, rust and organic material (i.e., bacterial growths) from
crude oil in the producing field. These contaminants are generally
removed (i.e., the crude oil is ``treated'') prior to sale and
transportation of the oil via tanker truck or dedicated pipeline to a
petroleum or petrochemical refinery.
    All crude oil contains physical and chemical contaminants that
should be removed prior to sale to a refinery. The term ``treatment''
as used by most oil and gas field operations personnel is applied to a
variety of field techniques for removing these naturally occurring
contaminants from crude oil. Mature oil wells in the United States
often produce large volumes of salt water along with smaller volumes of
crude oil. Some oil reservoirs also yield crude oil that contains
significant amounts of dissolved natural gas (predominantly methane).
This mixture of crude oil, water and (sometimes) gas is treated in
order to separate out the oil and gas from the contaminants. In the
course of being pumped out of the well and into holding tanks, the
crude oil may also pick up additional contaminants such as dirt and
sediment from the producing formation, corrosive scale and rust from
the steel tubing and flow lines, and bacterial growths present in the
formation or the flow lines. The entrained gas, water and various
contaminants are removed prior to sale of the crude oil to a refiner or
intermediate buyer. The most common technique for removing these
contaminants involves using a cylindrical steel tank called a separator
which separates the three components of the flow--gas, oil and water.
The separator can be either a vertical or a horizontal tank and
configured to separate only gas from the liquid (two-phase separation)
or to separate gas, oil and water (three-phase separation). This
process relies primarily upon simple gravimetric separation of the gas,
oil and water. Any small amounts of gas are either vented or drawn off
at the top of the tank. The oil and water separates in the tank (the
oil will float on top of the water column) and the heavier sediment
precipitates out of the mixture and eventually settles to the bottom of
the tank as sludge. In some cases chemicals may be added to cause the
suspended sediment particles to aggregate and settle out more easily
from the crude oil and water. In cold weather or cases where there is
bacterial contamination, chemicals may be added to the oil-water
mixture to assist in killing the organisms and removing or neutralizing
the contaminants. ``Clean'' crude oil is periodically or continually
withdrawn from the top of these separators and stored in ``stock''
tanks to await pickup by tanker truck or metered sales to a crude oil
pipeline. In some cases, where rain enters a storage tank or the
temperature drops precipitously, some additional water may become
entrained in the crude oil and form an oil-water emulsion. If the water
content is greater then the specifications set by the crude oil
purchaser, the stock tank oil may be further treated using chemicals
and/or heat to reduce the amount of entrained water prior to sale.
    All of the above activities are typically identified as
``treatment'' by oil and gas field operations personnel, and EPA will
consider these, and similar field activities necessary to remove
contaminants from crude oil, to fall within the scope of ``treatment
operations'' as that term is used in CWA section 402(l)(2).

Transmission

    EPA interprets the term ``transmission facilities'' to include all
necessary infrastructure to deliver natural gas or crude oil from the
producing fields to the final distribution center (in the case of
natural gas) or the refinery (for crude oil).
    This interpretation is consistent with the description of
``transmission facilities'' EPA provided in the preamble to the March
10, 2003 ``deferral rule'' described earlier in this notice. See 68 FR
11327. That discussion noted that transmission lines are typically
major pipelines (e.g., interstate and intrastate pipelines) that
transport crude oil and natural gas over long distances through large-
diameter pipes operating at relatively high pressures. ``Transmission
facilities'' generally include all pipelines, compressor stations (for
natural gas) and pump stations (for crude oil). The line of demarcation
between natural gas ``transmission facilities'' and ``distribution
facilities'' is generally the point where a local gas utility takes
delivery of the gas (often referred to as the ``city gate'') and then
distributes it via lower pressure service lines to small industrial,
commercial or residential customers. While crude oil pipelines that
convey raw material to the

refineries are generally considered ``transmission facilities,''
pipelines that transport refined petroleum products from refineries and
large petrochemical manufacturing plants to storage tank ``farms'' are
not considered ``transmission facilities'' for the purposes of CWA
section 402(l)(2) and this final rule.
    The Pipeline and Hazardous Materials Safety Administration within
the U.S. Department of Transportation (DOT) defines a transmission line
as ``* * * a pipeline, other than a gathering line, that transports gas
from a gathering line or storage facility to a distribution center,
storage facility or large volume customer that is not down-stream from
a distribution center.'' (49 CFR 192.3). Although EPA has not elected
to codify the DOT or any other definition of ``transmission line,'' EPA
believes that its interpretation of the term ``transmission
facilities'' as used in CWA section 402(l)(2) is generally consistent
with DOT's terminology and with widely accepted understanding and usage
among industry professionals.

VI. Best Management Practices

    In accordance with CWA section 402(l)(2), this final 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 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 will not only help protect surface
water during storm events but will also assist the operator in ensuring
that there is no discharge of a reportable quantity or violation of a
water quality standard that would trigger permitting requirements.
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 effective BMPs should include
consideration of seasonal and climatic 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 required by regulation, some good housekeeping
practices may be necessary to ensure that runoff satisfies the
conditions in 40 CFR 122.26(a)(2)(ii) and (c)(1)(iii) for eligibility
for the 402(l)(2) 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 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 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.

VII. Post-Proposal Litigation

    There is already one published court decision addressing CWA
section 402(l)(2) in light of the new language in CWA section 502(24).
EPA's current NPDES General Permit for Storm Water Discharges From
Construction Activities (the ``General Permit'') was issued by EPA on
July 1, 2003. 68 FR 39087. The General Permit was challenged by a
variety of organizations. Three weeks after proposal of this rule, the
last remaining challenges to the General Permit were dismissed. Texas
Independent Producers and Royalty Owners Ass'n, et al. v. EPA, 435 F.3d
758, 767 (7th Cir. 2006). The Court of Appeals took note of the
proposal EPA is finalizing today, but did not address the merits of
that proposal. Id. at 766. The court went on to note the ``limited
circumstances'' under which this challenge was brought: ``The Oil and
Gas Petitioners represent members seeking to challenge permit
requirements for uncontaminated discharges. But Congress made clear in
the Energy Policy Act of 2005 that the EPA may not require permits for
such discharges. Therefore, the Oil and Gas Petitioners cannot
establish standing. Accordingly, we Dismiss this petition for lack of
standing.'' Id. at 767. (emphasis added). This Court had no occasion to
review facts surrounding the conditions at any particular site, and did
not address the issue of what constitutes contaminated storm water
discharges.

VIII. Statutory and Executive 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. As such, EPA submitted this action to OMB for
review. Changes made in response to OMB suggestions or recommendations
are documented in the public record.

B. Paperwork Reduction Act

    This action does 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 in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) 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 this final rule on small entities, small
entity is defined as: (1) a small business as defined by the Small
Business Administration's (SBA) regulations at 13 CFR 121.201; (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 this final 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. This final rule, by
expanding the scope of oil and gas operations eligible for the NPDES
permit exemption under 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. I have therefore concluded that this final 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), Pub.
L. 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.
    This final 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 final rule imposes no
enforceable duty on any State, local or tribal governments or the
private sector. Rather, today's final rule codifies an amendment to the
CWA by expanding the scope of oil and gas operations eligible for the
NPDES permit exemption under CWA section 402(l)(2), and relieves the
regulatory burden for certain discharges associated with construction
activity at exploration, production, processing, or treatment
operations or transmission facilities of obtaining an NPDES storm water
permit. Thus, this final rule is not subject to the requirements of
sections 202 and 205 of the UMRA. For the same reason, EPA has
determined that this rule contains no regulatory requirements that
might significantly or uniquely affect small governments. Thus, today's
final rule is not subject to the requirements of section 203 of 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 final rule does not have federalism implications. It does 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 final rule does not have any Tribal implications as specified in
Executive Order 13175. It does 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. This final rule does not add to the existing
requirements under EPA's regulations. Thus, Executive Order 13175 does
not apply to this rule.

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 final
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 final 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, 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 standards 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 action
does not involve technical standards. Therefore, EPA did not consider
the use of any voluntary consensus standards.

J. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A Major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ''major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective on June 12, 2006.

List of Subjects in 40 CFR Part 122

    Administrative practice and procedure, Confidential business
information, Environmental protection, Hazardous substances, Reporting
and recordkeeping requirements, Water pollution control.

    Dated: June 7, 2006.
Stephen L. Johnson,
Administrator.

0
For the reasons set forth in the preamble, chapter I of Title 40 of the
Code of Federal Regulations is amended as follows:

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

0
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]

0
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 Sec.  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 paragraph (c)(1)(iv) of this section.
    (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
paragraph (c)(1)(iii) of this section. 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 paragraph
(c)(1)(iii)(C) of this section.

    Note to paragraph (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. E6-9079 Filed 6-9-06; 8:45 am]

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[Federal Register: July 27, 2010 (Volume 75, Number 143)]
[Rules and Regulations]
[Page 43815-43816]
[DOCID:fr27jy10-8]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Docket No. FAA-2010-0052; Airspace Docket No. 10-ASO-13]

Amendment of Class E Airspace; Clemson, SC and Establishment of
Class E Airspace: Pickens, SC

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Final rule.

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SUMMARY: This action amends Class E Airspace at Clemson, SC, to correct
the airspace description and establish Class E airspace at Pickens, SC,
to achieve an additional 1000' of airspace to support a new LPV
Approach (Localizer Performance with Vertical Guidance) that has been
developed for Pickens County Airport.

DATES: Effective 0901 UTC, September 23, 2010. The Director of the
Federal Register approves this incorporation by reference action under
title 1, Code of Federal Regulations, part 51, subject to the annual
revision of FAA Order 7400.9 and publication of conforming amendments.

FOR FURTHER INFORMATION CONTACT: Melinda Giddens, Operations Support
Group, Eastern Service Center, Federal Aviation Administration, P.O.
Box 20636, Atlanta, Georgia 30320; telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

History

    On March 23, 2010, the FAA published in the Federal Register a
notice of proposed rulemaking to amend Class E airspace at Clemson, SC
and establish Class E airspace at Pickens, SC (75 FR 13697) Docket No.
FAA-2010-0052. Interested parties were invited to participate in this
rulemaking effort by submitting written comments on the proposal to the
FAA. No comments were received. Class E airspace designations are
published in paragraph 6005 of FAA Order 7400.9T signed August 27,
2009, and effective September 15, 2009, which is incorporated by
reference in 14 CFR Part 71.1. The Class E airspace designations listed
in this document will be published subsequently in the Order.

The Rule

    This amendment to Title 14, Code of Federal Regulations (14 CFR)
part 71 amends the Class E airspace extending upward from 700 feet
above the surface at Clemson, SC to remove Pickens County Airport from
the airspace description and establish Class E airspace at Pickens, SC,
to support a new LPV Approach developed for Pickens County Airport.
This action is necessary for the safety and management of IFR
operations at the airports.
    The FAA has determined that this regulation only involves an
established body of technical regulations for which frequent and
routine amendments are necessary to keep them operationally current, is
non-controversial and unlikely to result in adverse or negative
comments. It, therefore, (1) is not a ``significant regulatory action''
under Executive Order 12866; (2) is not a ``significant rule'' under
DOT Regulatory Policies and Procedures (44 FR 11034; February 26,
1979); and (3) does not warrant preparation of a Regulatory Evaluation
as the anticipated impact is so minimal. Since this is a routine matter
that will only affect air traffic procedures and air navigation, it is

certified that this rule, when promulgated, will not have a significant
economic impact on a substantial number of small entities under the
criteria of the Regulatory Flexibility Act.
    The FAA's authority to issue rules regarding aviation safety is
found in Title 49 of the United States Code. Subtitle I, Section 106
describes the authority of the FAA Administrator. Subtitle VII,
Aviation Programs, describes in more detail the scope of the agency's
authority.
    This rulemaking is promulgated under the authority described in
Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the
FAA is charged with prescribing regulations to assign the use of
airspace necessary to ensure the safety of aircraft and the efficient
use of airspace. This regulation is within the scope of that authority
as it amends Class E airspace at Clemson, SC, and establishes Class E
airspace at Pickens, SC.

List of Subjects in 14 CFR Part 71

    Airspace, Incorporation by reference, Navigation (Air).

Adoption of the Amendment

    In consideration of the foregoing, the Federal Aviation
Administration amends 14 CFR Part 71 as follows:

PART 71--DESIGNATION OF CLASS A, B, C, D AND E AIRSPACE AREAS; AIR
TRAFFIC SERVICE ROUTES; AND REPORTING POINTS

0
1. The authority citation for Part 71 continues to read as follows:

    Authority:  49 U.S.C. 106(g); 40103, 40113, 40120; E.O. 10854,
24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.

Sec.  71.1  [Amended]

0
2. The incorporation by reference in 14 CFR 71.1 of Federal Aviation
Administration Order 7400.9T, Airspace Designations and Reporting
Points, signed August 27, 2009, effective September 15, 2009, is
amended as follows:

Paragraph 6005 Class E Airspace Areas Extending Upward From 700 Feet
or More Above the Surface of the Earth.
* * * * *

ASO SC E5 Clemson, SC [AMENDED]

Clemson-Oconee County Airport, SC
    (Lat. 34[deg]40[min]19[sec] N., long. 82[deg]53[min]12[sec] W.)

    That airspace extending upward from 700 feet above the surface
within a 7-mile radius of Clemson-Oconee County Airport.
* * * * *

ASO SC E5 Pickens, SC [NEW]

Pickens County Airport, SC
    (Lat. 34[deg]48[min]36[sec] N., long. 82[deg]42[min]10[sec] W.)

    That airspace extending upward from 700 feet above the surface
within a 6.5-mile radius of the Pickens County Airport and within
3.6 miles each side of the 044[deg] bearing from the airport,
extending from the 6.5-mile radius to 11 miles northeast of the
airport.

    Issued in College Park, Georgia, on July 13, 2010.
Mark D. Ward,
Manager, Operations Support Group, Eastern Service Center, Air Traffic
Organization.
[FR Doc. 2010-18263 Filed 7-26-10; 8:45 am]
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