ELR Citation: ELR 20610
No(s). 84-4573 (5th Cir. Apr 18, 1986)

The court upholds in substantial part general national pollutant discharge elimination system permits for oil and gas drilling off Alaska that set best available technology (BAT) and best conventional technology (BCT) effluent limitations based on professional judgment. The permits, issued by the Environmental Protection Agency's (EPA's) Region 10 office, cover the Bering and Beaufort Seas. The court first upholds the permits' BAT effluent limitations for cadmium and mercury originating in barite used in drilling fluids. The limitations are based on use of clean barite from a site in Nevada that already supplies all of Alaska offshore drilling needs for thee compound and include an exemption for operators that cannot obtain suitable barite. The court rules that even though §304(b)(2) of the Federal Water Pollution Control Act does not require EPA to compare the costs of BAT to the effluent reduction benefits it will achieve, EPA may not impose standards that achieve de minimis benefits at high cost. Petitioners raised a serious question about the benefits of the proposed control on the two heavy metals, but because they did not show that the costs would be significant, the court upholds the standards. Should EPA extend the clean-barite requirement to other areas, thereby dramatically increasing demand for the material and its cost, it would have to demonstrate more substantial environmental benefits resulting from the elimination of discharges of trace quantities of cadmium and mercury into the ocean environment.

The court next holds that Region 10 violated EPA regulations in setting BAT standards banning use of diesel oil as a lubricating agent or to free pipe stuck in the well bore. EPA national guidelines treat oil and grease as a conventional pollutant. Region 10's argument on brief that diesel oil is an indicator of listed toxics and therefore qualified for BAT standards is invalid as a post hoc rationalization. EPA had indicated that it might later treat diesel oil as an indicator pollutant when it listed diesel oil as a conventional pollutant, but Region 10 based the permits solely on its conclusion that the oil itself was a toxic. The court notes that on remand, Region 10 will have to give more attention to the costs and benefits of regulating the use of dieseloil, concluding that the analysis made was inadequate for a BCT standard and suggesting it even failed to satisfy the requirements for BAT.

The court upholds the permits' provisions limiting the circumstances in which operators may discharge drilling muds containing additives not already approved by EPA. Petitioner failed to demonstrate that (1) the limitations will increase its costs; (2) the 96-hour LC-50 method by which Region 10 required testing of the toxicity of Mud No. 1 was irrational; (3) the limitations significantly restrict operators' choices of drilling muds; (4) requiring use of the least toxic available mineral oil available in drilling muds would prevent use of the additive; or (5) Region 10 was arbitrary in requiring advance testing of additives that would add to the toxicity of Mud Nos. 2-8, but would not make them more deadly than Mud No. 1.

The court upholds the permits' ban on use of biocides without prior EPA approval. Petitioner failed to demonstrate any harm from the delay needed for approval. The court rules that the Federal Water Pollution Control Act allows EPA to promulgate case-by-case BAT rules for nonconventional pollutants such as biocides up until the 1987 deadline, rejecting petitioners' argument that the statute precludes use of BAT standards. After that date, the agency must promulgate national effluent limitations for such pollutants.

The court upholds Region 10's inclusion in the Beaufort Sea permit of a ban on discharges of drilling muds in shallow waters during the open water season pursuant to the ocean discharge requirements of §403 of the Act. The agency sufficiently considered petitioners' evidence supporting elimination or relaxation of the ban. The court also upholds Region 10's requirement that a new "visible sheen" test be employed to monitor compliance with a permit requirement banning discharges of free oil in drilling muds and cuttings. The record shows the test to be reliable and replicable and the permits protect against any false indications of violations by excusing noncompliance resulting from uncontrollable upsets. Finally, the court upholds Region 10's requirement that compliance with diesel oil limitations be tested with gas chromatography, citing lack of record support for petitioners' claims of inaccuracy.

Counsel for Petitioners
Berry J. St. John Jr.
Liskow & Lewis
50th Fl., One Shell Sq., New Orleans LA 70139
(504) 581-7979

Counsel for Respondents
Barry S. Neuman
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2664

Before Clark and Thornberry, JJ.