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Court Grants Settlement on RCRA Oil and Gas Waste Rules Litigation Proposed by EPA and Environmentalists

Prepared for the Katten Environmental Advisory Group
Advisory | January 3, 2017

On December 28, 2016, a U.S. District Court for the District of Columbia granted the joint motion of the U.S. Environmental Protection Agency (EPA or Agency) and plaintiff environmental organizations for entry of a consent decree to settle litigation over EPA's alleged failure to update its rules for management of oil and gas drilling waste. Consent Decree, Envtl. Integrity Project v. McCarthy, No. 1:16-CV-00842-JDB (D.D.C. filed Dec. 28, 2016) (Consent Decree). The settlement will commit the incoming Trump Administration's EPA to propose no later than March 15, 2019, a rulemaking for revision of the Subtitle D criteria regulations pertaining to oil and gas wastes at 40 C.F.R. Part 257, or sign a determination that revision of the regulations is not necessary. Consent Decree at 3. In the event that EPA proposes a rulemaking for revised oil and gas waste regulations, the Consent Decree requires that EPA take final action following notice and comment rulemaking no later than July 15, 2021. Id.

The suit originated in May 2016, when environmental groups sued EPA for failing to update its rules for management of oil and gas drilling waste, claiming that the Agency had ignored its non-discretionary obligations under the federal Resource Conservation and Recovery Act (RCRA). Complaint for Declaratory and Injunctive Relief, Envtl. Integrity Project v. McCarthy, No. 1:16-CV-00842-JDB (D.D.C. filed May 4, 2016) (EIP Complaint). The groups included Environmental Integrity Project, Natural Resources Defense Council, Earthworks, and others. The petitioners requested that EPA revise its regulations for waste materials generated as a result of oil and gas exploration and production activities. Id. at 1. The petitioners claimed that EPA has not reviewed or revised its regulations for management of wastes from oil and gas exploration and production operations since 1988, even though RCRA Subtitle D requires EPA to review and, if necessary, revise the regulations every three years. Id. at 3.

In 1980, Congress exempted oil and gas wastes from regulation under RCRA Subtitle C, which regulates management of hazardous wastes. 42 U.S.C. § 6921(b)(2) (Bentsen Amendment). The statute specified that if EPA later determined that oil and gas wastes should be subject to hazardous waste regulations, the Agency was permitted to propose such regulations to Congress for possible adoption. Id. Subsequently, EPA determined that oil and gas wastes should be treated only as non‑hazardous wastes subject to the non‑hazardous regulations of RCRA Subtitle D. See Regulatory Determination for Oil and Gas and Geothermal Exploration, Development and Production Wastes, 53 Fed. Reg. 25446 (Jul. 6, 1988).

This case concerns two sets of EPA regulations promulgated under RCRA Subtitle D. The first set establishes criteria for the classification of solid waste disposal facilities and approved management practices. 40 C.F.R. Part 257. The second set of regulations establishes guidelines to assist states with the development and implementation of state solid waste management plans. 40 C.F.R. Part 256. The plaintiffs' suit claimed that EPA was required to review, and where necessary, revise the Part 256 and 257 rules not less frequently than every three years. EIP Complaint at 20-23.

The Texas Independent Producers & Royalty Owners Association (TIPRO) filed a motion to intervene in the suit and argued that new regulations sought by plaintiffs exceed EPA's authority under RCRA and would override state regulations previously approved by the Agency. Texas Independent Producers & Royalty Owners Association's Motion for Leave to Intervene, Envtl. Integrity Project v. McCarthy, No. 1:16-CV-00842-JDB (D.D.C. May 4, 2016) (TIPRO Brief). TIPRO argued that there are no federally enforceable standards applicable to oil and gas production wastes under Subtitle D of RCRA, because states are authorized to administer the standards through plans submitted to and approved by EPA. TIPRO Brief at 2. TIPRO further argued that the applicable statutory framework in this case unambiguously places authority and control over solid waste programs in the hands of the states, and this case does not belong before EPA or the court. Id. The American Petroleum Institute, the Independent Petroleum Association of America (IPAA), and the State of North Dakota also filed motions to intervene in the case.

The Court denied all of the motions to intervene in an order issued on November 18, 2016. After considering briefs by plaintiffs and the government, the Court determined that the intervenors lacked standing because the case was focused only on scheduling of the rulemaking review, not substantive provisions of the rulemaking. Memorandum Opinion [on Motions for Intervention], Envtl. Integrity Project v. McCarthy, No. 1:16-CV-00842-JDB at 7 (D.D.C. Nov. 18, 2016) (Court's Memorandum Opinion). Thus, movants were not entitled to intervene as a right. Id.

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