Environmental Release Reporting Requirements for E&P

1. Environmental Release Reporting Requirements for E&P February 21, 2007 Michael R. Scoggins

2. Environmental Protection • Environmental protection is important. • The E&P Industry has made much progress in improving environmental protection through better practices, innovation, new technologies, etc. • While great effort may be placed on protecting the environment, managing our business, properly managing waste, preventing environmental damage, etc., incidents still occur such as spills or other releases. • In many cases, there are regulatory requirements that require reporting and/or notification of such events above some established threshold.

3. DISCLAIMER • The content of this presentation is for informational purposes only and is not intended, and should not be viewed or construed as, legal advice. • The intent is to simply provide a general awareness related to environmental reporting and notification requirements. • Consult the Legal Department of your company or an attorney for legal advice.

4. Types of Releases • Spills • “Products” • Chemicals from E&P operations • Wastes from E&P operations • Releases/Emissions to Air • Natural Gas • Emissions from sources

5. Types of Spills • Types of Spills • Oil/condensate • Produced water • Chemicals • Other E&P waste, e.g.: • Drilling mud • Completion brine • Fuel

6. Federal Oil Spill Reporting Requirements • Immediately notify the National Response Center (NRC): 800-424-8802 of discharges of oil that: • Violate applicable water quality standards; or • Cause a film or sheen upon or discoloration of the surface of the water or adjoining shorelines or cause a sludge or emulsion to be deposited beneath the surface of the water or upon adjoining shorelines. (40 CFR §110.3) • Sheen means an iridescent appearance on the surface of water

7. Federal Oil Spill Reporting Requirements – Issues • Be aware of the language in the reporting legislation/regulations such as “adjoining shorelines” and what it might mean. • May not mean what you think. • An oil spill to a water body or drainage conveyance may be reportable, regardless of whether it contains water or is dry at the time of the spill. • May still be considered “Waters of the U.S.” • “Waters of U.S.” arguments/positions • Being formed by case law • District Courts have differing opinions • Consider how your company will address the issue

8. Chemical Spill Reporting • Under Emergency Planning and Community Right-to-Know Act (EPCRA) of 1986 EPA designated: • Hazardous Substances - several hundred chemicals • “Extremely Hazardous Substances (EHS)” - and several hundred more as based on their acute lethal toxicity • EPCRA requires that the owner or operator of a facility that releases a hazardous substance or EHS in an amount greater than the RQ to notify the SERC and LEPC established in the location where the incident occurs. • Refer to the RQ Tables to make determination: • CERCLA Hazardous Substances and RQs (See 40 CFR §302.4, Table 302.4) • CERCLA Extremely Hazardous Substances and RQs (Appendices A & B) (See 40 CFR §355, Appendix A, alphabetical order, and Appendix B, in order of CAS Number) • Hazardous Substances with CWA-Designated RQs (See 40 CFR §117.3)

9. Chemical Spill Reporting • SARA Extremely Hazardous Substances (EHS) • Release of Reportable Quantities (EHS RQ) • Report to State and Local Emergency Response Committees • A written follow-up report to the SERC and LEPC is also required “as soon as practicable” after the occurrence of the release. • CERCLA Hazardous Substances • Release of Reportable Quantities in any 24-hour period (CERCLA RQ) - Report to: • National Response Center • State Emergency Response Commission • Local Emergency Planning Committee

10. Federal Reportable Releases • All reportable releases of a hazardous substance or oil spills must be reported to the National Response Center (NRC) as soon as possible (40 CFR §110.6 & §302.6). • National Response Center: 1-800-424-8802 • Or report electronically at: www.nrc.uscg.mil/report.htm • The NRC is staffed 24 hours a day by trained U.S. Coast Guard personnel. • The NRC relays the release information to an EPA or U.S. Coast Guard On-Scene Coordinator (OSC), depending on the location of the incident. • OSC’s are on-call and ready to respond to an oil or hazardous substance release at any time of day. • The NRC records and maintains all hazardous substance releases and oil spills reported to the federal government in the Emergency Response Notification Systems database.

11. Federal Reportable Releases • When reporting a release to the NRC expect to be asked the following information: • Name, location, organization, and telephone number of reporting party • Name and address of responsible party • Date and time of the incident • Location of the incident • Source and cause of the release or spill • Types of material(s) released or spilled • Quantity of materials released or spilled • Medium (e.g., land, water) affected by release or spill • Danger or threat posed by the release or spill • Number and types of injuries or fatalities (if any) • Weather conditions at the incident location • Identification of transportation vehicle • Whether an evacuation has occurred • Whether other agencies have been notified

12. Spill Reporting • Caution: Be aware of differences between Federal and specific state’s reporting requirements including: • RQs. Some states may have an RQ different from/more stringent than the Federal RQ which triggers notification. • Texas • TCEQ Reportable Quantities (See 30 TAC §101.1 & §327.4) • Louisiana\ • LDEQ Determination and Use of Reportable Quantity (See 33 LAC.I.3927 & 3931) • Time Frames. Some states may have more stringent requirements regarding the time allowed for reporting a release/spill. • Louisiana – 1 hour standard

13. Texas Revised RQ • As an example, TCEQ has a revised RQ for releases to water as follows: • A release of hazardous substance to water equal to or greater than the RQ or 100 lbs, whichever is less must be reported to the TCEQ Regional Office ASAP, but within 24 hours. (30 TAC §327.3(b) & (c) and 327.4(a)(2))

14. Louisiana 1-Hour Notification Limit • Louisiana Office of State Police/DPS 24-Hour Louisiana Emergency Hazardous Material Hotline (DPS automatically notifies the Louisiana Department of Environmental Quality) • In the event of an unauthorized discharge that does cause an emergency condition, the discharger shall notify the hotline by telephone at (225) 925-6595 (collect calls accepted 24 hours a day) immediately (a reasonable period of time after taking prompt measures to determine the nature, quantity, and potential off-site impact of a release, considering the exigency of the circumstances), but in no case later than one hour after learning of the discharge. (33LAC:I.3915)

15. Releases to Air • In general, notification of releases to the atmosphere of one of the following is typically required: • Release of a hazardous substance above the RQ • Emissions in excess of the permitted limit (by regulation or by permit); sometimes called “unauthorized discharges” or “unauthorized emissions”

16. Releases to Air • NOx Upset Administrative Exemption • Reportable Quantity increased to 1000 lbs/24 hrs (from previous level of 10 lbs) • Previous exemption did not cover upsets due to accidents & malfunctions (which essentially made the exemption useless) • Change effective November 3, 2006

17. Texas Air Reporting Requirements • Opacity/Visible Emissions • Process/continuous flares require daily observation w/ log • Emergency flares must be observed when they operate • Exceedance of limitation requires Emission Event reporting

18. Texas Air Reporting Requirements • Opacity cannot exceed 20% averaged over a 6-minute period for any vents or stacks. • Visible emissions from process flares are not permitted for more than 5 minutes in any 2-hour period. • Excess opacity events, which are defined as an opacity reading of an additional 15 percentage points above a limit, must be reported to the TCEQ as an unauthorized emission. • Therefore, opacity of 16% for flares (assuming 1% is visible threshold), would be reportable. (see 30 TAC §101.1, §101.201(e) & §111.111)

19. Texas Air Reporting Requirements • Emission Event & Maintenance/Startup/ Shutdown rules • Emission Events (a.k.a. “Upsets”) Notifications • Must determine no later than 24 hours after discovery of upset if the upset is reportable • Requires a follow-up written report within 2 weeks after the end of the upset. This report must be submitted to the TCEQ if the written report is different from the 24-hour report • Maintenance/Startup/Shutdown Notifications • TCEQ must be notified of M/S/S activities that will (or might) exceed the reportable quantity at least 10 days prior to the event • If 10 days cannot be given then notify as soon as possible prior to the event • A follow-up written report within 2 weeks after the end of the M/S/S event must be prepared. It must be submitted to the TCEQ if a reportable quantity is exceeded • Affirmative Defense Required – are actions being taken: • to reduce the frequency of EEs? • to reduce the quantity of emissions? • to reduce the duration of events? • to address the other criteria of the rules used by the TCEQ to investigate these activities? • Events entered into STEERS online reporting system – data in STEERS made available to public

20. Texas Oil Spill Reporting Requirements

21. Texas Chemical Spill Reporting Requirements

22. Texas Air Emissions Reporting Requirements

23. Other Texas Reporting Requirements

24. Written Notification • Written notification may be required: • Initially • As follow-up to initial notification (e.g., via telephone, on-line reporting) written follow-up is often required. • Written notification not required by NRC.

25. Written Notification • Written Notification Examples: • Submit Form H-8 to TX Railroad Commission District Office within 30 days of discovery for any crude oil spill > 5 bbls (16 TAC §3.91(e)(1)) • Immediately report to the TX Railroad Commission District Office, by letter, any breaks or leaks in or from tanks or other receptacles and pipelines from which oil is escaping or has escaped where the oil loss exceeds 5 bbls. (16 TAC §3.20(a)(2) & (b)) • For each crude oil spill > 25 bbls (in addition to the report required for spills > 5 bbls) a final report must submitted to the appropriate TX Railroad Commission District Office upon completion of the cleanup of the site. (16 TAC 3.91(e)(2)) • Submit written information, such as a letter, describing the detail of the discharge or spill and supporting the adequacy of the response action to the TCEQ Regional Manager within 30 days of the discovery of the TCEQ reportable discharge or spill. (30 TAC §327.5(c)) • Submit an “Unauthorized Discharge Report” to LDEQ within 7 calendar days of initial notification.

26. Questions

27. U.S. Coast Guard Area Marine Safety Offices • Mobile, Alabama: 334-441-5121 • New Orleans, Louisiana: 504-589-6261 • Morgan City, Louisiana: 985-380-5320 • Port Arthur, Texas: 409-723-6509 • Houston/Galveston, Texas: 713-671-6100 • Corpus Christi, Texas: 361-888-3162

28. Texas Railroad Commission – District Offices

29. Texas Railroad Commission – District Offices

30. Texas Commission on Environmental Quality

31. Release/Incident Reporting Flowcharts