[Federal Register Volume 67, Number 97 (Monday, May 20, 2002)]
[Notices]
[Pages 35541-35544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-12617]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-7213-3]


General Administrative Compliance Order Issued Under Section 309 
of the CWA to Permittees Covered by the NPDES General Permit for New 
and Existing Sources and New Dischargers in the Offshore Subcategory of 
the Oil and Gas Extraction Category for the Western Portion of the 
Outer Continental Shelf of the Gulf of Mexico (GMG290000)

AGENCY: Environmental Protection Agency.

ACTION: Notice of availability of general administrative compliance 
order.

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SUMMARY: Region 6 of the Environmental Protection Agency (EPA) today 
issues a general administrative compliance order applicable to those 
dischargers affected by EPA's recent modification to the National 
Pollutant Discharge Elimination System (NPDES) general permit for the 
Western Portion of the Outer Continental Shelf of the Gulf of Mexico 
(GMG290000) for discharges from new sources, existing sources and new 
dischargers in the Offshore Subcategory of the Oil and Gas Extraction 
Category, which was published on December 18, 2001 (``the offshore 
general permit'' or ``the permit''). The general administrative 
compliance order requires those dischargers who cannot comply with the 
modified permit's limits for discharges of drill cuttings generated 
using synthetic and other non-aqueous based drilling fluids to achieve 
compliance no later than August 16, 2002, with all limitations except 
the four-day sediment toxicity limit. Permittees must achieve 
compliance with the limitation for four-day sediment toxicity no later 
than February 1, 2003.

ADDRESSES: Mr. Taylor Sharpe, EPA Region 6, 1445 Ross Ave., Dallas, 
Texas 75202, Telephone: (214) 665-7112, or via EMAIL at the following 
address: [email protected].

FOR FURTHER INFORMATION CONTACT: Mr. Taylor Sharpe at (214) 665-7112.

SUPPLEMENTARY INFORMATION: As published on December 18, 2001 (66 FR 
65209), EPA modified the offshore general permit, which was originally 
published November 2, 1998 (63 FR 58722) and modified April 19, 1999 
(64 FR 19156), to address certain discharges and uses of non-aqueous 
based (synthetic) drilling fluids. The December 18, 2001 (66 FR 65209), 
modification will become effective on February 16, 2002, and can be 
found on the Internet at http://www.epa.gov/region6/6wq/npdes/genpermt/
offshore/fr__not.pdf.
    EPA received several comments on the draft permit, published on 
June 4, 2001 (66 FR 29948), requesting additional time for compliance 
with the permit modification. EPA is aware that this permit 
modification may cause many permittees to add and/or modify existing 
pollution control equipment in order to obtain compliance with the 
modified permit. Upon review of the probable process modifications 
necessary for compliance, EPA has agreed that a reasonable schedule for 
compliance may be issued for facilities that become aware of a 
violation, report it to EPA, and request an administrative compliance 
order within thirty (30) days of becoming aware of the violation. 
Compliance Order Notices for all violations except violations of the 
four-day sediment toxicity limitation, must be postmarked before August 
16, 2002. Compliance Order Notices for violations of the four-day 
sediment toxicity limitation must be postmarked before February 1, 
2003. The compliance order will provide until August 16, 2002, for 
permittees to make any necessary pollution control changes for all 
discharges to come into compliance with the new permit modifications 
for all new limitations except the four-day sediment toxicity limit. 
Permittees will be given until February 1, 2003, to make any necessary 
pollution control changes for all discharges to come into compliance 
with the new limitation for four-day sediment toxicity.
    It is the policy of EPA to achieve full compliance with the NPDES 
permit program as rapidly as possible. If you have any questions 
regarding the applicability of this action to a particular entity, 
please contact the person listed in the preceding FOR FURTHER 
INFORMATION CONTACT section. An ``Information Sheet'' relating to the 
Small Business Regulatory Enforcement Fairness Act (SBREFA) may pertain 
to you and you may find this ``Information Sheet'' on the Internet at 
http://es.epa.gov/oeca/ccsmd/sbrefa.pdf>. You may be subject to 
providing a ``Notice of Registrants Duty to Disclose'' relating to the 
disclosure of environmental legal proceedings to the Securities and 
Exchange Commission (SEC). This SEC notice may be found on the Internet 
at http://www.epa.gov/earth1r6/6en/w/sec.pdf>. You can find out more 
information regarding your NPDES Offshore program on the Internet at: 
http://www.epa.gov/region6/offshore.

United States Environmental Protection Agency, Region 6

In Re: NPDES PERMIT NO. GMG290000

General Administrative Compliance Order

    The following Findings are made, and Order issued, under the 
authority vested in the Administrator of the United States 
Environmental Protection Agency (EPA), by sections 308(a) and 309(a) of 
the Clean Water Act (``the Act''), 33 U.S.C. 1318(a) and 1319(a). The 
Administrator of EPA has delegated the authority to issue this Order to 
the Regional Administrator of EPA Region 6, who has further delegated 
this authority to the Director of the Compliance Assurance and 
Enforcement Division. Issuance of this order is not ``final agency 
action'' and is subject to

[[Page 35542]]

judicial review only in connection with an action to enforce its terms.

Findings

    1. Section 402(a) of the Act, 33 U.S.C. 1342(a), provides that the 
Administrator of EPA may issue permits under the National Pollutant 
Discharge Elimination System (NPDES) program for the discharge of 
pollutants from point sources to waters of the United States. Any such 
discharge is subject to the specific terms and conditions prescribed in 
the applicable permit.
    2. Pursuant to section 402(a) of the Act, EPA issued the ``Final 
NPDES General Permit for New and Existing Sources and New Discharges in 
the Offshore Subcategory of the Oil and Gas Extraction Category for the 
Western Portion of the Outer Continental Shelf of the Gulf of Mexico,'' 
63 FR 58722 (November 2, 1998) (GMG290000), which was modified April 
19, 1999 (64 FR 19156), and December 18, 2001 (66 FR 65209). The 
general permit authorizes discharges from new sources, existing 
sources, and new discharges in the Offshore Subcategory of the Oil and 
Gas Extraction Point Source Category (40 CFR part 435, subpart A) to 
operators of lease blocks in the Oil and Gas Extraction Point Source 
Category which are located in Federal waters of the Western Portion of 
the Gulf of Mexico (defined as seaward of the outer boundary of the 
territorial seas off Louisiana and Texas) to the Western Portion of the 
Federal Waters of the Gulf of Mexico (``the industry''), but only in 
accordance with the conditions of the permit. The permit does not 
authorize discharges from facilities located in or discharging to the 
territorial seas of Louisiana or Texas or from facilities defined as 
``coastal,'' ``onshore,'' or ``stripper'' (see 40 CFR part 435, 
subparts C, E, and E). The permit does, however, authorize the 
discharge of produced water to the Western portion of the Federal 
Waters of the Gulf of Mexico from wells located in lease blocks in the 
territorial seas of Louisiana and Texas.
    3. As published on December 18, 2001 (66 FR 65209), EPA Region 6 
again modified the permit to allow for discharges of drill cuttings 
generated using synthetic and other non-aqueous based drilling fluids 
and hydrostatic test water from pressure testing of existing pipelines. 
These permit modifications, effective February 16, 2002, impose new 
discharge limitations and standards for non-aqueous drilling fluids as 
specified below. Any further reference to ``the permit'' in this Order 
shall refer to the modified permit published on December 18, 2001 (66 
FR 65209).

Limitations and Monitoring Requirements Which Apply to Drill 
Cuttings Generated Using Non-Aqueous Based Drilling Fluids

A. Stock Limitations

    The permittee shall analyze a representative sample of the stock 
base fluids at the frequencies listed below. The test results shall be 
reported on the Discharge Monitoring Report.
    Alternatively, the permittee may provide certification, as 
documented by the supplier(s), that the stock base fluid being used on 
the well will meet the limits listed below.
    Polynuclear Aromatic Hydrocarbons (PAH). The mass ratio in grams of 
PAH (as phenanthrene) divided by the mass in grams of base fluids shall 
not exceed 0.00001. Monitoring shall be performed at least once per 
year on each base fluid blend. See part I, section D.10. of the permit.
    Sediment Toxicity. The ratio of the 10-day LC50 of 
C16-C18 internal olefin or C12-
C14 or C8 ester reference fluid divided by the 
10-day LC50 sediment toxicity test with Leptocheirus 
plumulosus of the base fluid shall not exceed 1.0. Monitoring shall be 
performed at least once per year on each base fluid blend. See part I, 
section D.8 of the permit.
    Biodegradation Rate. The ratio of the cumulative gas production 
(ml) of C16-C18 internal olefin or 
C12-C14 or C8 ester reference fluid 
divided by the cumulative gas production (ml) of stock base fluid, both 
at 275 days, shall not exceed 1.0. Monitoring shall be performed at 
least once per year on each base fluid blend. See part I, section D.9. 
of the permit.
    Exception: Until February 1, 2003 a blend of different non-aqueous 
base fluids may be considered compliant with the biodegradation rate 
limit if the weighted average of the base fluids' biodegradation rate 
is greater than that of the C16-C18 internal 
olefin standard tested concurrently.

B. Discharge Limitations

    Sediment Toxicity. The ratio of the 4-day LC50 of 
C16-C18 internal olefin reference drilling fluid 
divided by the 4-day LC50 of the drilling fluids removed 
from cuttings at the solids control equipment shall not exceed 1.0. 
Monitoring shall be performed at least once per month on drilling 
fluids which meet the stock limitations for a C16-
C18 internal olefin. The final monthly sample shall be 
collected at the end of drilling with non-aqueous based drilling 
fluids. For drilling fluids which meet stock limitations for 
C12-C14 ester or C8 ester, monitoring 
shall be performed at least once per well at the end of drilling with 
non-aqueous based drilling fluids. See appendix A of the permit.
    The reference drilling fluid shall be formulated from 
C16-C18 internal olefin and meet the criteria 
listed in Table 1 of 40 CFR part 435, subpart A, appendix 8. A uniform 
emulsifier package shall be used for all formulations of reference 
drilling fluids.
    Formation Oil. No discharge. Monitoring shall be performed on the 
drilling fluid as follows:
    (1) Once prior to drilling using the gas chromatography/mass 
spectrometry test method specified in part I, section D.11. of the 
permit. The test results shall be reported on the Discharge Monitoring 
Report (DMR).
    Alternatively, the permittee may provide certification, as 
documented by the supplier(s), that the drilling fluid being used on 
the well will meet the no discharge limit for formation oil.
    (2) Once per week during drilling using the Reverse Phase 
Extraction test method specified in part I, section D.12. of the 
permit.
Base Fluids Retained on Cuttings
    Monitoring shall be performed at least once per day when generating 
new cuttings, except when meeting the conditions of the Best Management 
Practices described below. Operators conducting fast drilling (i.e., 
greater than 500 linear feet advancement of the drill bit per day using 
non-aqueous fluids) shall collect and analyze one set of drill cuttings 
samples per 500 linear feet drilled, with a maximum of three sets per 
day. Operators shall collect a single discrete drill cuttings sample 
for each point of discharge to the ocean. The weighted average of the 
results of all discharge points for each sampling interval will be used 
to determine compliance. See part I, section D.13. of the permit.
    Drilling Fluids which meet stock limitations for C16-
C18 internal olefin: The end-of-well maximum weighted mass 
ratio averaged over all well sections drilled using non-aqueous fluids 
shall not exceed 6.9 grams non-aqueous base fluids per 100 grams of wet 
drill cuttings.
    Drilling fluids which meet stock limitations for C12-
C14 ester or C8 ester: The end-of-well maximum 
weighted mass ratio averaged over all well sections drilled using non-
aqueous fluids shall not exceed 9.4 grams non-aqueous base fluids per 
100 grams of wet drill cuttings.
    See also part I, section B.2.c. of the permit.
    4. To maintain oil and gas production and comply with the permit's 
new

[[Page 35543]]

limits established in the permit modifications, Permittees may have to 
modify process controls to decrease the sediment toxicity, 
biodegradation, formation oil contamination, PAH content, and retention 
of drilling fluids on drill cuttings of the discharge. This may include 
installing new pollution control equipment for compliance with the 
permit.
    5. Permittees may reasonably take all actions necessary to achieve 
final compliance with the permit's limitations by August 16, 2002, 
except for the four-day sediment toxicity limit, with which the 
Permittees may reasonably take all actions necessary to achieve 
compliance by February 1, 2003. Upon submission of a Compliance Order 
Notice, permittees shall become Respondents under this administrative 
compliance order. The EPA will acknowledge receipt of Compliance Order 
Notices and send confirmation to Respondents.
    6. Respondents are ``persons,'' as that term is defined at section 
502(5) of the Act, 33 U.S.C. 1362(5), and 40 CFR 122.2.
    7. At all relevant times, Respondents owned or operated offshore 
platforms described in the Compliance Order Notices (herein ``the 
facilities'') and were therefore ``owners or operators'' within the 
meaning of 40 CFR 122.2.
    8. At all relevant times, the facilities were ``point sources'' 
subject to a ``discharge'' of ``pollutant[s]'' with its discharges to 
the receiving waters of the Gulf of Mexico, which are ``waters of the 
United States'' within the meaning of section 502 of the Act, 33 U.S.C. 
1362, and 40 CFR 122.2.
    9. Because Respondents owned or operated facilities that were point 
sources subject to discharges of pollutants to waters of the U.S., 
Respondents and the facilities were subject to the Act and the NPDES 
program.
    10. Under section 301 of the Act, 33 U.S.C. 1311, it is unlawful 
for any person to discharge any pollutant from a point source to waters 
of the United States, except with the authorization of, and in 
compliance with, an NPDES permit issued pursuant to section 402 of the 
Act, 33 U.S.C. 1342.
    11. Respondents obtained NPDES permit coverage for discharges from 
new sources, existing sources, and new discharges in the Offshore 
Subcategory of the Oil and Gas Extraction Point Source Category.
    12. Violations are those violations specified by Respondents in the 
Compliance Order Notices submitted to EPA per instructions in Order 
Paragraph A below.
    13. Each violation of the conditions of the permit is a violation 
of section 402 of the Act, 33 U.S.C. 1342, or section 301 of the Act, 
33 U.S.C. 1311, and may be subject to enforcement as set forth in 
section 309 of the Act, 33 U.S.C. 1319.
    14. Given the large number of persons regulated under the permit, 
it would be impractical for EPA to issue individual compliance orders 
to all permit violators or conduct ``show cause'' meetings to establish 
individual compliance schedules for all such violators. A general 
compliance order setting forth procedures for establishing such 
schedules will avoid delays attendant on such meetings and issuance of 
individual compliance orders.

Order

    Based on these Findings and pursuant to the authority of sections 
308(a) and 309(a) of the Act, EPA hereby orders Respondents to take the 
following actions:
    A. Any NPDES permittee in the Offshore Subcategory of the Oil and 
Gas Extraction Category for the Western Portion of the Outer 
Continental Shelf of the Gulf of Mexico with coverage under the permit 
may request coverage under this administrative compliance order by 
submitting a ``Compliance Order Notice,'' to EPA Region 6. Such 
Compliance Order Notices must be postmarked before August 16, 2002, and 
no more than thirty (30) days after becoming aware of a violation, 
except for violations of the four-day sediment toxicity limit. For 
violations of the four-day sediment toxicity limit, all Compliance 
Order Notices must be postmarked before February 1, 2003, and no more 
than thirty (30) day after becoming aware of a violation. All 
Compliance Order Notices shall be sent to: Ms. Sharon Haggard, Water 
Enforcement Branch (6EN-WC), U.S. EPA, Region 6, P.O. Box 50625, 
Dallas, Texas 75250.
    The Compliance Order Notice must be signed and certified by an 
``authorized official'' (40 CFR 122.22), and include the following:
    i. Identification of the violating facility by name, location and 
NPDES facility identification number (GMG29####) (by lease block), the 
legal name and address of its operator, the name and address of an 
authorized official, as defined at 40 CFR 122.22, and the name, 
address, and telephone number of a contact person with whom EPA may 
further discuss the violation.
    ii. A brief description of the violation, Respondent's opinion on 
the cause of the violation, and the basis for that opinion.
    iii. A commitment to achieve final compliance with the permit by 
August 16, 2002, except for the four-day sediment toxicity limit; and a 
commitment to comply with the four-day sediment toxicity limit by 
February 1, 2003.
    B. By August 16, 2002, Respondents shall complete all necessary 
pollution control changes for all discharges to come into compliance 
with the new permit modifications for all new limitations except the 
four-day sediment toxicity limit. By February 1, 2003, Respondents 
shall complete all necessary pollution control changes for all 
discharges to come into compliance with the new limitation for four-day 
sediment toxicity. This Order covers only those discharges by 
Respondents that are authorized by the permit published on December 18, 
2001 (66 FR 65209) and listed in the Compliance Order Notices described 
above.
    C. Respondents shall report all violations in accordance with 
permit requirements, including those that result during the period of 
this administrative compliance order. Part II.D.7. of the permit 
requires a 24 hour oral report or else a 24 hour e-mail to the 
following Internet e-mail address: [email protected]. Additionally, 
part II.D.7 of the permit requires a written submission within 5 days 
of the time the permittee becomes aware of the circumstances. All 
reports submitted to the EPA shall be signed by an authorized person in 
accordance with part II.D.10. of the permit, and shall include the 
following certification set forth in this part of the permit:

    I certify under penalty of law that this document and all 
attachments were prepared under my direction or supervision in 
accordance with a system designed to assure that qualified personnel 
properly gather and evaluate the information submitted. Based on my 
inquiry of the person or persons who manage the system, or those 
persons directly responsible for gathering the information, the 
information submitted is, to the best of my knowledge and belief, 
true, accurate, and complete. I am aware that there are significant 
penalties for submitting false information, including the 
possibility of fine and imprisonment for knowing violations.

If the report is made by e-mail, the 24 hour report should include this 
statement and be submitted by an authorized official. Please note that 
only authorized officials as defined by the permit may sign such 
documentation unless a delegation of authority letter has been sent to 
EPA Region 6.
    D. Issuance of this Order shall not be deemed an election by EPA to 
forego any administrative, civil, or criminal action to seek penalties, 
fines, or any

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other relief appropriate under the Act for the violations cited herein. 
EPA reserves the right to seek any remedy available under the law that 
it deems appropriate for the violations cited.
    E. Failure to comply with this Order or the Act can result in 
further administrative action, or a civil judicial action initiated by 
the U.S. Department of Justice. If the United States initiates a civil 
judicial action, Respondents will be subject to civil penalties of up 
to $27,500 per day per violation.\1\
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    \1\ The civil penalty amounts that can be assessed under Section 
309 of the Clean Water Act were amended by the Civil Monetary 
Penalty Inflation Adjustment Rule (61 FR 69359, December 31, 1996, 
as corrected in 62 FR 13514, March 20, 1997), effective June 1, 
1997, under the Debt Collections Improvement Act of 1996, 31 U.S.C. 
3701, et. seq., for all violations occurring or continuing after 
January 30, 1997.
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    F. This Order is not an NPDES permit, and compliance with the terms 
and conditions of this Order does not relieve Respondents of their 
obligations to apply for and comply with any applicable permit, and 
comply with any applicable federal, state or local law or regulation.
    G. This Order shall be effective on February 16, 2003.

Tai-Ming Chang,
Acting Director, Compliance Assurance and Enforcement Division.
[FR Doc. 02-12617 Filed 5-17-02; 8:45 am]
BILLING CODE 6560-50-P