ELR Citation: ELR 20191
No(s). 90-9545 (10th Cir. Dec 23, 1993)

The court upholds a U.S. Environmental Protection Agency (EPA or the Agency) finding that waste fluids brought to the surface in connection with a carbon dioxide extraction and processing project require a Class I Safe Drinking Water Act (SDWA) permit for disposal in an underground injection control well. An oil production company petitioned for review of EPA's finding, asserting applicability of an exemption for fluids brought to the surface in connection with natural gas production.

The court first holds that the deferential test of Chevron U.S.A., Inc. v. Natural Resources Defense Council, 14 ELR 20507 (U.S. 1984), applies to EPA's decision because the same standard of review applies whether an agency interpretation is performed through rulemaking or informal adjudication. The court next holds that Congress did not speak directly in the SDWA, or in the legislative history, to the question of whether SDWA §1421(b)(2)'s use of the term "natural gas" includes carbon dioxide. Next, the court holds that EPA's interpretation of "natural gas" as excluding carbon dioxide is permissible and consistent with the SDWA. Finally, the court rejects the company's assertion that EPA's decision to regulate fluids from wells producing carbon dioxide more stringently than fluid from wells producing hydrocarbon gasses is arbitrary and capricious. The court holds that the company's challenge centers on the wisdom of the Agency's policy and declines to second-guess EPA.

Counsel for Petitioner
John F. Shepherd, Jane L. Montgomery
Holland & Hart
555 17th St., Ste. 2900, P.O. Box 8749, Denver CO 80201
(303) 295-8000

Counsel for Respondent
Bradley S. Bridgewater
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000