Storm Water Pollution
Information Needed on the Implications of Permitting Oil and Gas Construction Activities Gao ID: GAO-05-240 February 9, 2005To prevent pollutants from entering storm water runoff, the Clean Water Act's National Pollutant Discharge Elimination System Storm Water Program requires controls for construction activities that disturb land. Phase I of this program requires permitting for construction activities that disturb 5 acres or more, while Phase II requires permitting for activities disturbing between 1 and 5 acres. The Environmental Protection Agency (EPA) extended the Phase II compliance date for discharges associated with oil and gas construction activities until March 2005 to analyze the impact of Phase II on the oil and gas industry. GAO was asked to provide information about oil and gas construction activities--such as well drilling and pipeline construction--affected by Phase I and likely to be affected by Phase II, as well as Phase II's financial and environmental implications.
A small fraction of total oil and gas construction activities have been permitted under Phase I of EPA's storm water program. Phase I storm water permit data for three of the six largest oil and gas producing states--Louisiana, Oklahoma, and Texas--showed that 433 construction activities were permitted under Phase I over the most recent 12 months for which data were available. About 70 percent, 304 of the 433, were oil and gas pipeline activities, most of which were much larger than the 5 acre criterion under Phase I. About 17 percent, 72 of the 433, were drilling activities. In comparison, these three states reported drilling an average of about 10,000 wells for each of the past 3 years. Industry must decide whether to seek permit coverage, and it has sought to have its drilling activities permitted on few occasions because it has determined that most drilling activity involves distinct projects that disturb less than 5 acres each. In states we reviewed, there were few reported compliance problems associated with oil and gas construction activities. While it appears that most oil and gas construction activities may have to be permitted under Phase II, the actual number of activities that could be affected is uncertain, and the financial and environmental implications are difficult to quantify. The oil and gas construction activities affected by the rule may lead to increased financial costs for the oil and gas industry and federal agencies implementing the rule. Many of the potential costs stem from meeting permit requirements to review the impact of construction activities on endangered species, although this impact would be site specific and difficult to quantify. Potentially offsetting these costs, the rule may lead to additional environmental protections that are difficult to quantify, such as decreased levels of sediment in water and benefits for endangered species and their habitat. After delaying implementation of this rule for oil and gas construction activities for 2 years to study the impact of Phase II, EPA is analyzing the impact but, as yet, has not quantified the number of activities affected or the potential financial and environmental implications.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-05-240, Storm Water Pollution: Information Needed on the Implications of Permitting Oil and Gas Construction Activities
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Report to Congressional Requesters:
February 2005:
Storm Water Pollution:
Information Needed on the Implications of Permitting Oil and Gas
Construction Activities:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-240]:
GAO Highlights:
Highlights of GAO-05-240, a report to congressional requesters:
Why GAO Did This Study:
To prevent pollutants from entering storm water runoff, the Clean Water
Act‘s National Pollutant Discharge Elimination System Storm Water
Program requires controls for construction activities that disturb
land. Phase I of this program requires permitting for construction
activities that disturb 5 acres or more, while Phase II requires
permitting for activities disturbing between 1 and 5 acres. The
Environmental Protection Agency (EPA) extended the Phase II compliance
date for discharges associated with oil and gas construction activities
until March 2005 to analyze the impact of Phase II on the oil and gas
industry. GAO was asked to provide information about oil and gas
construction activities”such as well drilling and pipeline
construction”affected by Phase I and likely to be affected by Phase II,
as well as Phase II‘s financial and environmental implications.
What GAO Found:
A small fraction of total oil and gas construction activities have been
permitted under Phase I of EPA‘s storm water program. Phase I storm
water permit data for three of the six largest oil and gas producing
states”Louisiana, Oklahoma, and Texas”showed that 433 construction
activities were permitted under Phase I over the most recent 12 months
for which data were available. About 70 percent, 304 of the 433, were
oil and gas pipeline activities, most of which were much larger than
the 5 acre criterion under Phase I. About 17 percent, 72 of the 433,
were drilling activities. In comparison, these three states reported
drilling an average of about 10,000 wells for each of the past 3 years.
Industry must decide whether to seek permit coverage, and it has sought
to have its drilling activities permitted on few occasions because it
has determined that most drilling activity involves distinct projects
that disturb less than 5 acres each. In states we reviewed, there were
few reported compliance problems associated with oil and gas
construction activities.
While it appears that most oil and gas construction activities may have
to be permitted under Phase II, the actual number of activities that
could be affected is uncertain, and the financial and environmental
implications are difficult to quantify. The oil and gas construction
activities affected by the rule may lead to increased financial costs
for the oil and gas industry and federal agencies implementing the
rule. Many of the potential costs stem from meeting permit requirements
to review the impact of construction activities on endangered species,
although this impact would be site specific and difficult to quantify.
Potentially offsetting these costs, the rule may lead to additional
environmental protections that are difficult to quantify, such as
decreased levels of sediment in water and benefits for endangered
species and their habitat. After delaying implementation of this rule
for oil and gas construction activities for 2 years to study the impact
of Phase II, EPA is analyzing the impact but, as yet, has not
quantified the number of activities affected or the potential financial
and environmental implications.
Gas Construction Site in Wise County, Texas:
What GAO Recommends:
GAO recommends that EPA‘s Administrator complete the agency‘s analysis
of the Phase II program before making a final decision on its
implementation.
In reviewing our draft report, EPA officials agreed with our
recommendation. EPA subsequently proposed an extension for the Phase II
deadline for small oil and gas activities until June 2006 to allow time
to complete its analysis.
www.gao.gov/cgi-bin/getrpt?GAO-05-240.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact John Stephenson at (202)
512-3841 or stephensonj@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Permit Coverage under Phase I Has Been Obtained by a Small Fraction of
Total Oil and Gas Activities:
Most Oil and Gas Construction Activity Will Likely Be Affected by Phase
II, but the Financial and Environmental Implications of Phase II Are
Difficult to Quantify:
Conclusions:
Recommendation for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Acknowledgments:
Tables:
Table 1: Oil and Gas Activities for Which Storm Water Construction
Permit Coverage Was Obtained, by State:
Table 2: Oil and Gas Activities for Which Storm Water Permit Coverage
Was Obtained, by State and Construction Activity:
Table 3: Onshore Well Completions from 2001-2003, by State:
Figures:
Figure 1: Activities Covered under Phase I and II of the NPDES Storm
Water Program:
Figure 2: Steps to Obtain Coverage under EPA's Construction General
Permit:
Figure 3: A Texas Gas Construction Location with Three Adjacent
Drilling Operations:
Abbreviations:
DOE: Department of Energy:
EPA: Environmental Protection Agency:
FWS: Fish and Wildlife Service:
NMFS: National Marine Fisheries Service:
NPDES: National Pollutant Discharge Elimination System:
LADEQ: Louisiana Department of Environmental Quality:
Letter February 9, 2004:
The Honorable James M. Jeffords:
Ranking Minority Member:
Committee on Environment and Public Works:
United States Senate:
The Honorable James L. Oberstar:
Ranking Democratic Member:
Committee on Transportation and Infrastructure:
House of Representatives:
Polluted storm water runoff can lead to U.S. surface water degradation.
Runoff from sites where the ground has been disturbed--in particular,
construction sites--can deposit sediment and other harmful pollutants
into rivers, lakes, and streams. Sediment--the primary environmental
concern associated with construction activities--clouds water,
decreases photosynthetic activity; reduces the viability of aquatic
plants and animals; and, ultimately, destroys organisms and their
habitat. According to the Environmental Protection Agency (EPA),
sediment runoff rates from cleared and graded construction sites are
typically 10 to 20 times greater than those from agricultural lands and
one-thousand to two-thousand times greater than those from forest
lands.
Storm water discharges from certain construction activities, as well as
from other defined industrial sources and municipal storm water sewer
systems, are subject to the Clean Water Act's National Pollutant
Discharge Elimination System (NPDES) Storm Water Program. This program
is designed to reduce the impact of storm water by requiring the
implementation of controls designed to reduce harmful pollutants from
being washed by storm water runoff into local water bodies. The NPDES
program regulates a variety of municipal, industrial, and construction
activities, such as oil and gas construction activities.[Footnote 1]
Oil and gas construction activity includes clearing, grading, and
excavating[Footnote 2] activities associated with oil and gas
exploration and production, processing and treatment operations, and
transmission facilities. These activities are often associated with oil
and gas well drilling and pipeline construction, as well as other oil
and gas construction.
Phase I of this program, which became effective in 1990, regulates
storm water discharges from construction activities that disturb 5
acres or more of land, as well as smaller construction activities that
are part of a common plan of development that disturbs 5 acres or
more.[Footnote 3] Phase II of the storm water program applies to
construction activity disturbing between 1 and 5 acres of
land.[Footnote 4] EPA published the Phase II rule in December 1999 and
set a March 2003 compliance date for permit coverage for discharges
from small construction sites. EPA had originally assumed that few oil
and gas construction activities would be affected by Phase II; but
subsequent to rule promulgation, EPA became aware that as many as
thirty-thousand oil and gas sites per year might be affected. So that
EPA could perform further analysis of key issues, including the likely
impact of Phase II's permitting requirements on the oil and gas
industry, EPA postponed the Phase II compliance date for storm water
discharges from small oil and gas construction sites until March 10,
2005.
Both phases of the rule allow oil and gas companies to obtain storm
water permit coverage for their discharges under a general permit. In
many other environmental programs, regulated entities obtain individual
permits tailored to site-specific conditions. Though oil and gas
companies may obtain individual storm water discharge permits, they
almost always elect to obtain coverage under an NPDES general permit
that contains general conditions applicable to a large number of sites.
To obtain coverage, companies file a Notice of Intent to be covered
under a general permit. This generally informs the permitting
authority--EPA or the state, depending on the type of entity and its
location--of planned activities that might involve storm water
discharges and requires the operator to develop a plan to manage storm
water pollution caused by these activities. The operator must also
evaluate other potential impacts, including whether the construction
activity is likely to adversely affect endangered or threatened species
or their habitats before seeking coverage under EPA's Construction
General Permit.
This report provides information about (1) oil and gas construction
activities that have obtained permit coverage under Phase I and (2) oil
and gas construction activities that are likely to be affected by Phase
II and its financial and environmental implications.
To gather information about the oil and gas construction activities
that have sought permit coverage under Phase I, we spoke to oil and gas
industry associations representing both large and small companies, and
government representatives, to get a national perspective on the number
and types of sites affected. Because there is no centralized database
that tracks nationwide oil and gas construction activities subject to
Phase I, we reviewed the storm water permitting history of Louisiana,
Oklahoma, and Texas--three of the nation's six largest oil and gas
producing states. EPA administers the permitting process for oil and
gas-related projects in Oklahoma and Texas, while Louisiana administers
the entire NPDES Storm Water Program for its state.[Footnote 5] We
reviewed EPA's and Louisiana's storm water databases and spoke with the
administrators of these databases to assess the reliability of these
data, which we found to be sufficiently reliable for our purposes. In
addition, in order to gather information about the characteristics of
oil and gas construction activities, we visited oil and gas
construction sites in Louisiana, Oklahoma, and Texas. To obtain
information about the number of oil and construction activities
potentially affected by Phase II, we spoke with industry and government
representatives. We discussed the financial and environmental
implications of Phase II with storm water stakeholders, including
representatives of various federal agencies, an environmental group,
and the oil and gas associations and member companies. A more detailed
description of our scope and methodology is presented in appendix I. We
conducted our review between August 2004 and January 2005 in accordance
with generally accepted government auditing standards.
Results in Brief:
A small fraction of total oil and gas construction activities have
obtained permit coverage under Phase I of EPA's Storm Water Program.
Although there is currently no centralized, nationwide storm water
permit database, our review of Phase I storm water permit data for
three of the six largest oil and gas producing states--Louisiana,
Oklahoma, and Texas--identified 433 oil and gas construction activities
that obtained Phase I permit coverage in these states over the most
recent 12 months. About 70 percent of these activities were oil and gas
pipelines, which were generally much larger than the 5-acre threshold,
while about 17 percent were drilling activities. In comparison, these
three states reported drilling an average of over ten thousand wells
for each of the past 3 years. Industry officials must decide whether
they should seek permit coverage, and they have sought to have their
drilling activities permitted on few occasions because they concluded
that most drilling activity involved distinct projects that disturbed
less than 5 acres each. Neither EPA nor state officials reported many
compliance problems associated with oil and gas construction activities
in states we reviewed, although actual compliance rates are not known.
EPA, industry and state officials believe that most oil and gas
construction activities involve between 1 and 5 acres of land and will
need permit coverage under Phase II of the NPDES Storm Water Program,
although the actual number of activities this rule will affect is
uncertain. Furthermore, the financial and environmental implications of
implementing Phase II for oil and gas construction activities are
difficult to quantify. The additional oil and gas construction
activities affected by the rule may lead to increased financial costs
to the oil and gas industry and to implementing federal agencies. Many
of the potential costs that have been identified relate to EPA's permit
requirements to review construction activities' impact on endangered
species. However, this impact is site specific and difficult to
quantify, given that not all sites will have to perform the same level
of review. Potentially offsetting these costs, additional environmental
protections may result from a greater number of oil and gas
construction activities covered by Phase II, including decreased levels
of sediment in water and benefits for endangered species and their
habitat. Similar to the potential costs, potential environmental
benefits are difficult to quantify. After delaying implementation of
this rule for oil and gas construction activities for almost 2 years to
study the impact of Phase II, EPA has not yet completed its analysis of
the Phase II rule, quantified the number of activities affected, or
determined the potential financial and environmental implications. We
are recommending that EPA's Administrator complete the agency's
analysis of the Phase II program before making a final decision on its
implementation.
Background:
According to EPA, polluted storm water runoff is a leading cause of
impairment to the nearly 40 percent of surveyed U.S. water bodies that
do not meet water quality standards. Pollutants in storm water can
significantly impact the environmental quality of U.S. waters by
destroying aquatic habitat and elevating pollutant concentrations and
loadings. Storm water discharges from construction activities can
increase pollutants and sediment amounts to levels above those found in
undisturbed watersheds.
The NPDES Program was created in 1972 under the Clean Water Act to
control water pollution from point sources--any discernible, confined,
and discrete conveyance.[Footnote 6] Though EPA has had authority since
1972 to regulate storm water discharges, it declined to require permits
for most of these discharges for over 15 years. However, in 1987,
Congress passed the Water Quality Act, which amended the Clean Water
Act to require the regulation of storm water discharges.[Footnote 7]
Accordingly, EPA established the NPDES Storm Water Program, which
requires certain municipal, industrial, and construction sources to
obtain permit coverage for storm water discharges.
The storm water program was implemented in two phases:
1. Phase I, adopted in 1990, which applies to medium and large
municipal separate storm sewer systems and 11 categories of industrial
activity (including large construction activity disturbing 5 or more
acres of land);[Footnote 8] and:
2. Phase II, adopted in 1999, which applies to small municipal separate
storm sewer systems and small construction activity disturbing between
1 and 5 acres of land.[Footnote 9]
The Phase II final rule was published on December 8, 1999, and required
storm water dischargers to obtain permit coverage by March 10, 2003.
When promulgated, EPA assumed that few, if any, oil and gas sites would
be impacted by the construction component of the Phase II rule.
Subsequent to rule promulgation, EPA decided to reevaluate how many oil
and gas construction sites would be subject to the rule and postponed
the deadline for seeking coverage to March 10, 2005, for oil and gas
construction activities disturbing between 1 and 5 acres of
land.[Footnote 10] The postponement was designed to allow EPA enough
time to analyze and better evaluate the impact of the permit
requirements on the oil and gas industry and to reconsider how key
elements of the Phase II regulations would apply to small oil and gas
sites.[Footnote 11]
Analyzing the impact of storm water permitting on oil and gas
construction activities is important because this type of construction
requires companies to undertake a number of earth disturbing
activities. These activities include clearing, grading, and
excavating,[Footnote 12] associated with oil and gas exploration and
production; processing and treatment operations; and transmission
facilities. For example, to prepare a site for drilling, operators must
create a pad to support the drilling equipment, such as the derrick.
Creating the pad generally requires clearing and grading--or leveling-
-an area and then placing rock, concrete, or other materials on it to
stabilize the surface. If necessary, companies may also construct
access roads to transport equipment and other materials to the site as
well as additional pipelines to connect the site to existing pipelines.
As with other construction activities, storm water runoff containing
sediment from oil and gas construction can lead to the degradation of
nearby waters if not properly managed. Figure 1 identifies activities,
including oil and gas construction, covered under Phase I and II of the
NPDES Storm Water Program.
Figure 1: Activities Covered under Phase I and II of the NPDES Storm
Water Program:
[See PDF for image]
[A] Industry categories I, II, and VIII also include some minor oil and
gas activities: I includes petroleum refining, II includes petroleum
products, and VIII includes bulk stations and terminals.
[B] Facilities subject to storm water effluent limitations guidelines,
new source performance standards, or toxic pollutant effluent standards
under 40 C.F.R. subchapter N.
[C] Oil and gas site operators must obtain storm water permit coverage
if their storm water discharges come into contact with raw material or
product of any kind.
[End of figure]
NPDES storm water programs are administered at both the federal and
state level. Under the Clean Water Act, states whose programs EPA has
approved may manage their state's programs. Forty-five states,[Footnote
13] including Louisiana, are responsible for administering their own
NPDES program, including its storm water component; and EPA is
responsible for administering and enforcing the NPDES Storm Water
Program in five states.[Footnote 14] In addition, EPA is the NPDES
storm water permitting authority for oil and gas activities in Oklahoma
and Texas.
In many environmental programs, regulated entities obtain individual
permits. In contrast, under the storm water program, regulated entities
may seek coverage under a single document called a general permit. A
general permit is issued by EPA or by the state environmental regulator
and is available to all eligible operators in the EPA or state
program.[Footnote 15] With respect to regulated discharges of storm
water associated with construction activity, EPA's general permit is
called the Construction General Permit. Each general permit, whether it
is issued by EPA or by a state program, sets forth many steps that
regulated entities must take to ensure the minimization of storm water
pollution.
To obtain coverage under the EPA Construction General Permit, regulated
entities must file a complete and accurate Notice of Intent to be
covered under the general permit prior to initiating the construction
activities. The Notice of Intent includes a signed certification
statement from a company official acknowledging that the operator has
met all eligibility conditions of the permit, including development and
implementation of a plan to control the discharge of pollutants from
the site. Examples of types of sediment and erosion controls that can
be included in the plan consist of vegetative cover, rocks, and hay
bales to filter storm water, or terracing slopes to divert and slow
runoff. Figure 2 diagrams the steps that must be completed to obtain
coverage under EPA's Construction General Permit.
Figure 2: Steps to Obtain Coverage under EPA's Construction General
Permit[A]:
[See PDF for image]
Note: Construction activities must comply with applicable state,
tribal, and local provisions. Additionally, construction site operators
must determine if their construction activity has the potential to
discharge storm water into a water with a total maximum daily load
(TMDL) established--a state limit required by the Clean Water Act on
the amount of pollutants that may enter that body of water. If so,
additional steps may be needed to ensure discharges from the site are
consistent with any applicable limits established by the TMDL.
[A] State programs must have requirements that are at least as
stringent as those in the EPA program. 40 C.F.R. § 123.25.
[B] Operators may submit an application for coverage under an
individual permit.
[End of figure]
One of the steps operators must complete when filing a Notice of Intent
involves determining whether the construction activity meets the
permit's eligibility conditions that address endangered species. The
purpose of the Endangered Species Act is to conserve endangered and
threatened species and the ecosystems upon which they depend. The act
prohibits the "taking"[Footnote 16] of any endangered fish or wildlife.
Under the Act and implementing regulations, federal agencies, including
EPA, must determine whether their activities might affect a listed
species or habitat identified as critical. If effects are likely, the
agencies, including EPA, must consult with the Fish and Wildlife
Service (FWS) or the National Marine Fisheries Service (NMFS) to ensure
that the activities, such as issuing permits, will not jeopardize a
species' continued existence or adversely modify its designated
critical habitat.[Footnote 17]
In an effort to satisfy its responsibilities under the Endangered
Species Act, EPA consulted with FWS and NMFS to create language for its
Construction General Permit that requires operators to self-certify
that they have examined their project's potential effects on endangered
species. Specifically, language in appendix C of EPA's Construction
General Permit sets out the procedures operators are to follow in
meeting permit conditions that address endangered species for coverage
under the permit. Briefly, the procedures in the permit require
companies to:
* determine if federally listed threatened or endangered species or
their critical habitats are present on or near the project area,
* determine if the construction activity's storm water discharges or
related activities are likely to affect any threatened or endangered
species or designated critical habitat on or near the project area,
* determine if measures can be implemented to avoid adverse effects,
and:
* if adverse effects are likely, work with FWS or NMFS to modify the
project and/or take other actions to gain authorization for the
activity.
Permit Coverage under Phase I Has Been Obtained by a Small Fraction of
Total Oil and Gas Activities:
A small fraction of total oil and gas construction activities have
sought permit coverage under Phase I of EPA's storm water program.
Industry and state officials we spoke with confirmed that few of their
sites obtained permit coverage under the Phase I rule, since their
activities rarely exceeded Phase I's 5-acre size threshold. However,
EPA clarified that since industry decides whether to seek permit
coverage for their oil and gas construction activities, the total
number of activities for which permit coverage should have been
obtained is unknown. EPA representatives told us they expect that
pipeline projects are more likely to obtain permit coverage than
individual drilling sites due to the higher visibility of pipelines,
additional preconstruction approval processes under other laws, and the
higher likelihood of pipeline construction being conducted by larger
companies with more experienced legal and environmental staff.
Although there is currently no centralized storm water permit database
that tracks storm water permit coverage nationwide, our review of Phase
I storm water permit data for three major oil and gas producing states-
-Louisiana, Oklahoma, and Texas--confirmed that permit coverage has
been obtained for only a small number of oil and gas construction
activities, compared with the thousands of drilling activities
occurring in those states.[Footnote 18] Our review found 433 sites in
Louisiana, Oklahoma, and Texas that have obtained construction storm
water permit coverage for their oil and gas activities in the most
recent 12-month period for which data were available. Table 1 shows the
breakdown of permit coverage by state for the most recent 12 months
that data were available.
Table 1: Oil and Gas Activities for Which Storm Water Construction
Permit Coverage Was Obtained, by State:
State: Louisiana;
Number obtaining permit coverage: 22.
State: Oklahoma;
Number obtaining permit coverage: 119.
State: Texas;
Number obtaining permit coverage: 292.
State: Total;
Number obtaining permit coverage: 433.
Sources: Louisiana Department of Environmental Quality for Louisiana
and EPA's Office of Water for Oklahoma and Texas.
Note: For Oklahoma and Texas, these data covered December 2003 through
November 2004. For Louisiana, the data covered November 2003 to October
2004.
[End of table]
Further analysis of Phase I storm water permitting data showed that the
principal activity for which oil and gas companies sought storm water
permit coverage in these states was for pipeline construction. Three
hundred four of the 433 activities for which permit coverage was
obtained in the most recent 12-month period--about 70 percent--were for
pipeline construction activities. Table 2 shows the breakdown of permit
coverage by state and activity.
Table 2: Oil and Gas Activities for Which Storm Water Permit Coverage
Was Obtained, by State and Construction Activity:
State: Louisiana;
Construction activity: Pipelines: 12;
Construction activity: Drilling: 2;
Construction activity: Other[A]: 8;
Total: 22.
State: Oklahoma;
Construction activity: Pipelines: 104;
Construction activity: Drilling: 3;
Construction activity: Other[A]: 12;
Total: 119.
State: Texas;
Construction activity: Pipelines: 188;
Construction activity: Drilling: 67;
Construction activity: Other[A]: 37;
Total: 292.
Total;
Construction activity: Pipelines: 304;
Construction activity: Drilling: 72;
Construction activity: Other[A]: 57;
Total: 433.
Sources: Louisiana Department of Environmental Quality for Louisiana
and EPA's Office of Water for Oklahoma and Texas.
[A] Other activities include the construction of refineries, compressor
stations, tank batteries, etc.
Note: For Texas and Oklahoma, these data covered December 2003 through
November 2004. For Louisiana, the data covered November 2003 to October
2004.
[End of table]
Fifty-four percent of the 304 pipeline activities in these states
disturbed more than 10 acres of land. Eighty-seven pipeline activities-
-almost 30 percent of all the pipeline permittees--exceeded 20 acres in
size.
Another key oil and gas construction activity in these states was oil
and gas well drilling, with 72 of the 433 permits--about 17 percent--
involving drilling activities. Fifty-six percent of these drilling
activities disturbed between 5 and 8 acres of land. The drilling
activities for which storm water permit coverage was sought represents
a small portion of the total number of oil and gas drilling activities
occurring in these three states. We reviewed onshore well completion
data for Louisiana, Oklahoma, and Texas and found that between 2001 and
2003, an average of ten-thousand wells was completed each
year.[Footnote 19] Table 3 provides data on the number of wells
completed in these three states between 2001 and 2003 and the average
number of wells completed each year over the 3-year period.
Table 3: Onshore Well Completions from 2001-2003, by State:
State: Louisiana[A];
2001: 877;
2002: 556;
2003: 699;
Average per year: 711.
State: Oklahoma;
2001: 2,348;
2002: 2,339;
2003: 2,117;
Average per year: 2,268.
State: Texas;
2001: 7,478;
2002: 5,973;
2003: 7,622;
Average per year: 7,024.
State: Total;
2001: 10,703;
2002: 8,868;
2003: 10,438;
Average per year: 10,003.
Sources: Louisiana Office of Conservation, Oklahoma Corporation
Commission, and Railroad Commission of Texas.
[A] Due to the structure of the Louisiana Office of Conservation's
database, this figure may contain a small number of offshore wells.
[End of table]
Industry officials must decide whether or not they will apply for
permit coverage, and some may have applied for storm water permit
coverage on few occasions because they broke their construction
activities--which taken together would exceed 5 acres--into what they
believed were distinct projects that disturbed less than 5 acres each.
During our site visit to a Texas gas construction location, we observed
three drilling sites situated adjacent to each other with an attached
pipeline. Although the total acres disturbed by these activities
exceeded 5 acres, industry officials did not believe these three sites
needed permit coverage because each of the four activities--three
drilling sites and a pipeline--was less than 5 acres, under
construction at different times and stabilized prior to constructing
the next activity. Figure 3 illustrates the layout of this area.
Figure 3: A Texas Gas Construction Location with Three Adjacent
Drilling Operations:
[See PDF for image]
[End of figure]
Sites A, B, and C each disturbed approximately 3.5 acres of land and
were connected by pipeline to an existing pipeline located about a mile
from this site. According to industry officials, site A was financed,
drilled, deemed a productive well, shut-in and the area stabilized
prior to subsequent wells being drilled. The company did not decide to
drill exploratory well B until A was identified as profitable. Once it
drilled well B and found it to be profitable, the company drilled a
well on site C between well A and B. Prior to well C being drilled, a
different company agreed to construct a pipeline to connect this site
with an existing pipeline. The industry officials estimated the
pipeline disturbed less than 5 acres and said it was stabilized prior
to starting construction on site C. The total acres disturbed by these
sites exceeded 5 acres; individually the sites disturbed less than 5
acres of land. Neither the drilling company nor the pipeline company
constructing these activities obtained a permit under Phase I, although
each of the four activities would require permitting under Phase II
after the postponement period passes and small oil and gas sites are
required to comply with the Phase II rules.
EPA's Phase I rule requires that activities disturbing 5 acres or more
of land--as well as smaller construction activities that are part of a
common plan of development that disturbs 5 acres or more--obtain permit
coverage. EPA guidance defines a common plan of development as a
contiguous area where multiple separate and distinct construction
activities occur under a single plan. As this definition relates to oil
and gas activities, EPA guidance considers lease roads, pipeline
activities, and drilling pads to be a single "common" activity if they
are under construction at the same time--provided there is an
interconnecting road, pipeline or utility project, or if the activities
are within one-fourth mile of each other. EPA headquarters officials
said that the aforementioned example highlights a unique situation in
which the definition of the common plan is difficult to interpret
without more information from the site operator(s). They said that
depending on the operator's reasons for drilling the second and third
wells, permit coverage may or may not have been required in this
example. Many oil and gas industry groups assert that EPA's definition
of "common plan" is confusing and illegal because it does not
adequately consider oil and gas industry practices. These oil and gas
groups have raised the issue of EPA's definition of "common plan" in
two lawsuits pending against EPA in federal courts.[Footnote 20]
Although actual compliance rates in the field are unknown, neither EPA
nor state officials reported many compliance problems associated with
oil and gas construction activities that are 5 acres or more in size in
Louisiana, Oklahoma, and Texas. Currently, EPA's Region 6--responsible
for administering the Oklahoma and Texas storm water programs for oil
and gas activities--has not completed any enforcement actions against
oil and gas construction companies for violations of the storm water
program, although it currently has one enforcement action under way.
Region 6 enforcement officials told us they primarily depend on citizen
complaints and state referrals to identify oil and gas construction
activities that may adversely impact water quality. Similar to EPA
Region 6's program, the Louisiana Department of Environmental Quality's
(LADEQ) construction storm water inspections are complaint driven. A
Louisiana inspections representative whom we spoke with said that due
to the traditionally short time frames for completing oil and gas
construction activities, LADEQ found including these activities in the
state's annual compliance monitoring strategy to be impractical. As a
result, the state relies on citizen complaints and routine surveillance
to provide cause for conducting storm water inspections of construction
activities. Although LADEQ does not track storm water enforcement
actions for oil and gas construction separately from those of other
types of construction activities, Louisiana officials with whom we
spoke said they did not believe the state had carried out any storm
water enforcement actions against oil and gas construction activities.
Most Oil and Gas Construction Activity Will Likely Be Affected by Phase
II, but the Financial and Environmental Implications of Phase II Are
Difficult to Quantify:
EPA, industry and state government representatives agree that Phase II
permit coverage will be required for most oil and gas construction
activities, but the actual number of activities that will be affected
by the rule is unknown. In addition, the financial and environmental
implications of implementing Phase II for oil and gas construction
activities are difficult to quantify. Phase II may lead to increased
costs for federal agencies with a role in the storm water permitting
process, as well as for members of the oil and gas industry who obtain
permit coverage. However, Phase II may also lead to environmental
benefits for local waters and endangered species and their habitats,
even though these benefits are difficult to quantify. As EPA approaches
the end of a 2-year period to study the impact of Phase II on oil and
gas construction activities, EPA has not yet quantified the number of
sites impacted or the financial and environmental implications of the
Phase II rule's implementation.
Most Oil and Gas Construction Activities Will Likely Be Required to
Obtain Storm Water Permit Coverage under Phase II, but the Actual
Number of Activities That Will Be Affected by the Rule Is Unknown:
EPA, industry and state government representatives agree that most oil
and gas construction activities will disturb 1 acre or more of land
and, as such, will have to obtain permit coverage under the Phase II
rule. However, the precise number of oil and gas construction
activities that will require storm water permit coverage under the
Phase II rule is unknown, and estimating the specific number of sites
that will be affected by Phase II is problematical because there is no
data source that comprehensively identifies the disparate oil and gas
construction activities subject to the rule and categorizes them by
size. Industry representatives that we spoke with said most, if not
all, of their oil and gas construction activities not covered by Phase
I would be required to seek permit coverage under Phase II. These
representatives said that their typical drilling construction site
disturbs more than 1 acre but less than 5 acres of land. Similarly,
representatives from the Oklahoma Corporation Commission and Railroad
Commission of Texas indicated that almost all of the oil and gas well
construction in their states would disturb over 1 acre of land and
would have to obtain storm water permit coverage. Furthermore, EPA
officials generally concurred that most oil and gas construction
activities would need to obtain coverage, or seek a waiver, under Phase
II. A company may receive an optional waiver from permit coverage in
more arid areas where there is low rainfall. EPA officials told us that
in arid areas, such as western Oklahoma and Texas, most operators could
qualify for waivers with expeditious construction schedules and careful
timing.
Phase II May Lead to Additional Costs that Are Difficult to Quantify:
The Phase II rule may lead to additional costs for industry and federal
agencies, but these costs are difficult to quantify. For example, the
EPA Construction General Permit requires companies to implement erosion
and sediment controls to minimize pollutants in storm water discharges,
which will lead to additional costs for operators. Industry
representatives we spoke with were less concerned with these particular
costs, however, because they said that the oil and gas industry
routinely takes similar preventative measures. These officials did
express concerns about the costs associated with storm water
inspections required by the permit. These inspections are designed to
ensure companies properly implement practices to minimize storm water
pollution and require that sites be inspected (1) at least once every 7
days or (2) at least once every 14 days and within 24 hours of certain
storm events. Industry officials explained that oil and gas activities
typically occur in remote, rural areas, which makes it costly for them
to inspect sites as required by the permit. Furthermore, since sites
may not always have personnel present, these representatives said it
can be difficult to determine when a storm event has occurred. EPA
maintains that it has reduced the inspection burden by allowing less
difficult pipeline inspections and authorizing monthly inspections
under certain circumstances, such as when a site is temporarily
stabilized or when winter conditions make runoff unlikely.
The Phase II storm water rule may also lead to additional costs for
federal agencies and the oil and gas industry associated with the
endangered species requirements of the storm water permit. The EPA
Storm Water Construction General Permit provides coverage under the
permit only if the storm water discharges are not likely to jeopardize
the continued existence of any species that is listed as endangered or
threatened, pursuant to the Endangered Species Act, or result in the
adverse modification or destruction of critical habitat. Because
companies seeking storm water permit coverage must evaluate the impact
their construction activities might have on endangered species, the
workload of agencies such as the U.S. Fish and Wildlife Service (FWS)
and National Marine Fisheries Service (NMFS), which are the regulatory
agencies for the Endangered Species Act, could increase if a
significantly larger number of sites initiated communications or
consultation requests. NMFS headquarters representatives and FWS field
representatives we spoke with indicated that the increased workload
from a greater number of Phase II consultation requests could exceed
staff capabilities. However, they also said they were unsure what
impact Phase II would have on their activities, because they did not
know how many additional oil and gas construction sites would be
affected by the rule.
Oil and gas industry representatives were most concerned about costs
that stem from delays companies may face when identifying a
construction activity's impact on endangered species. These
representatives said that endangered species reviews are often
extremely time intensive and require interactions with federal agencies
that introduce delays into the construction process and lead to
increased costs. Various forms of interactions with FWS and NMFS (the
Services) may be used to ensure that provisions of the storm water
permit concerning endangered species are met--including the more common
informal consultations and less frequent formal consultations.[Footnote
21] Informal consultation can be used to determine whether an activity
will adversely affect endangered or threatened species or critical
habitat. If during informal consultation the action agency--in this
case EPA--determines that no adverse impact is likely and FWS and NMFS
agree, the consultation process is terminated with the written
concurrence of the Service. Although there is no regulatory deadline
for completing an informal consultation, the Services' policy is to
respond to informal consultations about endangered species within 30
days. Formal consultations are necessary if an activity is likely to
adversely affect a listed species. The Endangered Species Act requires
most formal consultations to be conducted within 90 days. In addition,
the implementing regulations require the Services to document in a
biological opinion, within 45 days after the conclusion of the
consultation, whether the activity is likely to jeopardize the listed
species' continued existence or adversely modify its designated
critical habitat. If necessary, the biological opinion may also provide
reasonable and prudent alternatives that, if taken, would avoid
jeopardizing a species or adversely modifying its critical habitat.
However, the Services may postpone the start of any of these time
frames until they have the best available information on which to base
their opinions.
The total time needed to consult with these agencies is difficult to
quantify, given that not all sites will have to perform the same level
of review and because not all construction activities occur in areas
where endangered species are present. In a March 2004 report on the
overall consultation process, we identified concerns from federal
agencies and nonfederal entities about the time it takes to complete
the consultative process. In one limited review that we conducted of
1,550 consultations, about 40 percent exceeded established time frames.
However, we found that FWS and NMFS needed more complete and reliable
information about the level of effort devoted to the process.
Specifically, these time frames did not capture sometimes significant
amounts of preconsultation time spent discussing a project before the
consultation officially was considered to have begun.[Footnote 22] Even
without the requirements of EPA's Construction General Permit and
associated consultations under the Endangered Species Act, operators of
oil and gas construction activities would still have to spend time
complying with the act by ensuring that their activities do not result
in a "take" of an endangered species.
Phase II May Lead to Additional Benefits that Are Difficult to
Quantify:
The Phase II storm water rule may lead to additional environmental
benefits, although these benefits can be difficult to quantify.
Officials from EPA's Office of Water indicated that while it is
difficult to quantify all the benefits associated with the rule, the
principal benefits are based on decreased quantities of sediment in
water. These officials told us that excess amounts of sediment in water
can affect aquatic habitat, water quality, waters' use as a source of
drinking water and water supply reservoir capacity, navigation, and
recreational activities. According to FWS officials, construction
activities may affect listed species in both direct and indirect ways.
Direct effects may include killing or injuring members of listed
species. Indirect effects may include changing essential behavior
patterns like feeding, breeding, or sheltering, as a result of
modifications to the species' habitat. Additionally, the NMFS
acknowledged that land disturbance activities that increase the amount
of sediment in water and turbidity can indirectly influence endangered
species' productivity and ultimately cause changes in migratory
behavior, reduce prey abundance, reduce the survival and emergence of
larvae, and contribute to increased temperatures and chemical
pollutants that can cause habitat loss.
An environmental group representative we spoke with said that voluntary
initiatives are not a viable method for resolving storm water pollution
issues and that the permit process provides a mechanism for ensuring
that practices to mitigate water pollution from construction activities
are implemented. This representative also commented that EPA has not
provided any evidence that the environmental consequences of oil and
gas construction activities are different from those of other types of
construction activities or that the oil and gas industry's controls are
any better. Finally, this representative said that a single industry
should not be exempted from regulations with which other industries
must comply and added that the large number of oil and gas activities
potentially subject to the rule shows the significant amount of
environmental damage that could occur if these activities went
unregulated. EPA is currently studying the environmental impact of oil
and gas construction activities but has not completed its analysis.
Industry representatives, however, believe that the Phase II storm
water rule provides only negligible environmental benefits and that the
current system of regulation encourages environmentally friendly
construction practices. For example, one industry representative stated
that with only the Phase I rule in effect, companies have an incentive
to keep construction activity to less than 5 acres--thus minimizing the
land disturbance and associated environmental effects. If the Phase II
rule were implemented as written, this representative maintained the
industry would have no incentive to minimize the acreage used in order
to keep the site under 5 acres.
EPA Has Not Completed Its Assessment of the Number of Oil and Gas Sites
Impacted by Phase II or Its Financial and Environmental Implications:
Almost 2 years after delaying the implementation of Phase II for oil
and gas activities in order to study and evaluate the impact on the
industry, EPA initiated an analysis of the rule but has not completed
the study, quantified the number of activities affected, or determined
its potential financial and environmental implications. In March 2003,
EPA extended the deadline for operators to obtain Phase II permits for
oil and gas activities in order to allow itself additional time to
analyze and better evaluate the impact of the rule on the oil and gas
industry. This 2-year extended deadline will expire on March 10, 2005.
However, as we performed audit work for this engagement, EPA had not
issued any analysis of the rule's impact; nor could EPA management
representatives provide a specific estimate of when its analysis would
be completed or when a final decision would be reached. We provided a
draft of this report with our recommendation to EPA. Subsequently, on
January 18, 2005, the agency proposed a further extension of the
compliance date to June 12, 2006, to complete its review and take final
action. Within 6 months of a final action on the January 18, 2005,
proposal, EPA intends to propose rulemaking to address storm water
discharges from oil and gas sites and invite public comment. Separate
from EPA's efforts, oil and gas industry representatives informed us of
a Department of Energy (DOE) study to evaluate the impact of the Phase
II rule on the oil and gas industry. During our study, officials from
DOE's Office of Fossil Energy told us that DOE's study was still in
draft form. These officials would not provide an explanation of the
purpose, costs, or estimated completion date of the study.[Footnote 23]
Conclusions:
Our review indicated that it is probable that substantially more oil
and gas activities will be impacted by Phase II of the NPDES storm
water rule than by Phase I. Given that EPA has not been able to
quantify the number of oil and gas activities required to obtain storm
water permit coverage under either rule, it remains important that EPA
identify the universe of oil and gas activities that would most likely
be affected. This analysis would provide the necessary foundation for
understanding the implications that the rule may have for the
environment and the oil and gas industry and determine the overall
effectiveness of the NPDES storm water program.
Recommendation for Executive Action:
So that EPA may fully understand the implications of Phase II of its
storm water rule prior to deciding whether the oil and gas industry
should be subject to it, we recommend that EPA complete its Phase II
analysis before making any final decision. Furthermore, as a part of
this analysis, we recommend that EPA assess:
* the number of oil and gas sites impacted by the Phase II rule;
* the costs to industry of compliance with the rule and whether these
costs are solely attributable to the storm water rule; and:
* the environmental implications and benefits of the storm water rule,
including, but not limited to, potential benefits for endangered
species.
Agency Comments and Our Evaluation:
We requested comments on a draft of this report from the Administrator
of the Environmental Protection Agency (EPA). EPA provided oral
comments and agreed with our findings and recommendation. In addition,
EPA included technical and clarifying comments, which we included in
our report as appropriate.
As agreed with your staffs, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies of the report
to the EPA Administrator and other interested parties. We will also
provide copies to others on request. In addition, the report will be
available at no charge at GAO's Web site at h [Hyperlink,
http://www.gao.gov].
Questions about this report should be directed to me at (202) 512-3841.
Other key contributors to this report are listed in appendix II.
Signed by:
John Stephenson:
Director, Natural Resources and Environment:
[End of section]
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
This report provides information about (1) oil and gas construction
activities for which permits have been obtained under Phase I and (2)
oil and gas construction activities that are likely to be affected by
Phase II and its financial and environmental implications.
To address the number of oil and gas activities for which permits have
been obtained under Phase I, we limited our analysis to three of the
top five natural gas producing states and three of the top six crude
oil producing states in 2003, according to available data from the
Energy Information Administration. We chose states with storm water
programs implemented by both state and federal authorities. Louisiana's
Department of Environmental Quality administers the National Pollutant
Discharge Elimination System's Storm Water Program (NPDES) for its
state, while Oklahoma's and Texas' storm water programs for oil and gas
activities are administered by the Environmental Protection Agency's
(EPA) Region 6. Additionally, Oklahoma and Texas are unique in that
only the oil and gas portions of their storm water program are
administered by EPA; the remainder of their storm water program is
administered by the state.[Footnote 24]
To determine the number of oil and gas construction activities
requesting storm water permit coverage under Phase I in those three
states and to get a national perspective on the number and types of
sites affected, we spoke with oil and gas industry and government
representatives. We also reviewed EPA's (for Oklahoma and Texas) and
Louisiana's storm water database that contains information about
Notices of Intent filed with the program authority to indicate a
company's plan to begin a construction activity that disturbs 5 acres
or more of land. We reviewed the most recent 12-month period of data
available: EPA's information for Oklahoma and Texas from December 2003
to November 2004 and Louisiana's information from November 2003 to
October 2004. Because the database contained more than just oil and gas
construction information, we isolated data for those companies within
the oil and gas industry and reviewed relevant characteristics of those
Notices of Intent. While this data provides information about the
number of companies that requested storm water permit coverage for
their oil and gas construction activities, it does not indicate the
universe of companies that should have filed. Furthermore, these data
are not generalizible to the nation as a whole. We spoke with the
administrator of this database to assess the reliability of this data
and found the data from 2003 and 2004 to be sufficiently reliable for
our purposes. Additionally, to provide us with context for
understanding how the number of drilling activities covered by Phase I
compares with the total number of oil and gas drilling activities being
carried out, we reviewed oil and gas well completion data from
Louisiana, Oklahoma, and Texas. These data provided us with an
additional perspective about the magnitude of oil and gas activities
occurring in these states and proved sufficiently reliable for our
purposes. We gathered these data from the Louisiana Office of
Conservation, Oklahoma Corporation Commission, and Railroad Commission
of Texas. In order to gather information about the characteristics of
oil and gas construction activities, we visited oil and gas
construction sites in Louisiana, Oklahoma, and Texas and viewed
pollution control measures implemented in various terrains. In
Louisiana and Texas, we were accompanied by industry representatives
who were members of the Domestic Petroleum Council; in Oklahoma, we
were accompanied by EPA and oil and gas industry representatives. Both
EPA and industry officials provided perspectives on the choice of
pollution control measures implemented. We spoke with the storm water
enforcement coordinator for oil and gas activities in EPA's Region 6,
as well as the state official responsible for storm water program
permitting at the Louisiana Department of Environmental Quality. We
discussed their respective storm water programs and strategies for
enforcing the storm water regulations. When possible, their offices
provided data about enforcement actions and inspections.
To determine the number of oil and gas activities that may be affected
by Phase II and the financial and environmental implications of
implementing Phase II for oil and gas construction activities, we spoke
with storm water stakeholders, including the Natural Resources Defense
Council. Finally, we spoke with oil and gas industry representatives,
including the Domestic Petroleum Council, the American Petroleum
Institute, and the International Petroleum Association of America and
representatives from some of these organizations' members. These
stakeholders offered contrasting views about the environmental benefits
and economic costs of these regulations. We also reviewed written
comments that environmental groups and oil and gas industry groups
provided to EPA when the agency first proposed postponing the Phase II
deadline for oil and gas activities.
To formulate a more thorough understanding of federal agencies with a
role in implementing the Storm Water Program and level of interagency
coordination, we spoke with U.S. Fish and Wildlife and National Marine
Fisheries officials responsible for carrying out section 7 of the
Endangered Species Act, which requires federal cooperation to protect
endangered species. Specifically, we spoke with representatives from
the U.S. Fish and Wildlife Service's headquarters, Arlington, TX and
Tulsa, OK offices, as well as with the National Marine Fisheries
Service's headquarters and southeast regional offices.
We conducted our review between August 2004 and January 2005 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
John Stephenson (202) 512-3841 or [Hyperlink, stephensonj@gao.gov];
Mark Gaffigan (202) 512-3168 or [Hyperlink, gaffiganm@gao.gov].
Acknowledgments:
In addition to the individuals above, James W. Turkett, Paige
Gilbreath, Omari Norman, Carol Bray and Nancy Crothers made key
contributions to this report.
(360513):
FOOTNOTES
[1] Some oil and gas industry groups are asserting in litigation that
the Clean Water Act does not authorize EPA to regulate most oil and gas
construction activities under the storm water program.
[2] 40 C.F.R. § 122.26(b)(14)(x) and 40 C.F.R. § 122.26(b)(15).
[3] Phase I also regulates storm water discharges from medium and large
municipal storm water sewer systems and other sources of industrial
discharges.
[4] Phase II also regulates storm water discharges from small municipal
storm sewer systems.
[5] Oklahoma and Texas administer the NPDES programs in their
respective states for most nonoil-and nongas-related projects with EPA
oversight of those activities. EPA oversees Louisiana's administration
of its program.
[6] 33 U.S.C. § 1342(p).
[7] 33 U.S.C. § 1362(14).
[8] NPDES Permit Application Regulations for Storm Water Discharges, 55
Fed. Reg. 47,990 (Nov. 16, 1990).
[9] NPDES - Regulations for Revision of the Water Pollution Control
Program Addressing Storm Water Discharges, 64 Fed. Reg. 68,722 (Dec. 8,
1999).
[10] Modification of National Pollutant Discharge Elimination System
(NPDES) Permit Deadline for Storm Water Discharges for Oil and Gas
Construction Activity That Disturbs One to Five Acres of Land, 68 Fed.
Reg. 11325-01.
[11] The NPDES Storm Water Program does not apply to storm water runoff
from operational oil and gas sites, as long as the runoff does not come
into contact with any raw material or product of any kind. Clean Water
Act § 402(l)(2). EPA has asserted that Clean Water Act section
402(l)(2) does not bar EPA from regulating most storm water discharges
from construction activities at oil and gas sites. Some industry groups
disagree, asserting that section 402(l)(2) bars such regulations. The
issue has been raised by industry in a case currently pending in the
U.S. Court of Appeals for the Fifth Circuit. Tex. Indep. Producers and
Royalty Owners Ass'n v. U.S. EPA, No. 03-60506 (filed Jun. 19, 2003).
[12] 40 C.F.R. § 122.26(b)(14)(x) and 40 C.F.R. § 122.26(b)(14).
[13] The Virgin Islands are also authorized to administer their own
NPDES program.
[14] These five states include Alaska, Idaho, Massachusetts, New
Hampshire, and New Mexico plus the District of Columbia and most U.S.
Territories. EPA is also the permitting authority on all Indian lands
and for federal facilities in Colorado, Delaware, Vermont, and
Washington.
[15] Though states may implement the storm water program without
issuing general permits, all states with a storm water program have
authority to issue general permits. In addition, regulated entities may
apply for individual storm water discharge permits (40 C.F.R. §
122.28(b)(3)(iii)); however, regulated entities typically apply for
general permit coverage.
[16] The term "take" is defined as "to harass, harm, pursue, hunt,
shoot, wound, kill, trap, capture, or collect, or attempt to engage in
any such conduct." 16 U.S.C. § 1532(15).
[17] FWS is the agency in the Department of the Interior to which the
Secretary has delegated authority for implementing the Endangered
Species Act for all terrestrial species as well as most aquatic,
nonmarine species. Similarly, NMFS is the agency to which the
Department of Commerce has delegated authority for protecting ocean-
dwelling and anadromous species, such as salmon.
[18] Storm water permit data reflects the number of sites that obtained
permit coverage. It does not necessarily represent the number of sites
that should have obtained coverage.
[19] Operators typically file completion reports with state oil and gas
agencies upon termination of drilling a well. Although the number of
completion reports filed does not translate exactly to the number of
construction activities subject to EPA's Phase I and II storm water
rules, completion numbers do provide context for understanding the
magnitude of oil and gas drilling activities occurring in different
states. Depending on how a state manages its completion records,
completion data may include modifications to wells that do not require
significant amounts of construction and therefore may not be subject to
EPA's storm water rules. Additionally, because completion data pertains
to wells drilled, it does not reflect other construction activities,
such as pipeline construction, that may be subject to the storm water
rules.
[20] Wisc. Builders Ass'n v. U.S. EPA, No. 03-2908 (7th Cir. filed Jul.
16, 2003); Tex. Indep. Producers and Royalty Owners Ass'n v. U.S. EPA,
No. 03-60506 (5th Cir. filed Jun. 19, 2003). Among the industry groups'
assertions is that EPA's definition of "common plan" fails to
adequately consider oil and gas industry practices: according to the
industry groups, drillers do not know at the onset of drilling activity
how much land they will ultimately disturb.
[21] The Endangered Species Act requires federal agencies such as EPA-
not regulated entities such as individual construction site operators-
to consult with the services regarding endangered species. However,
EPA's Construction General Permit requires applicants to self-certify
that they have examined their project's potential effects on endangered
species. In doing so, the Construction General Permit specifies that
operators must satisfy certain criteria, two of which are entering into
formal and informal consultations with the services.
[22] U.S. GAO, Endangered Species: More Federal Management Attention Is
Needed to Improve the Consultation Process, GAO-04-93 (Washington,
D.C.: Mar. 19, 2004).
[23] As we finalized our report, DOE completed and posted its economic
analysis study on its Web site at
http://www.fossil.energy.gov/programs/oilgas/publications/storm_water_an
alysis/Storm_Water_Analysis.html.
[24] EPA also administers the storm water program for certain
agricultural activities in Oklahoma.
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