Environmental Regulations Growing Concern in Oilpatch

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Journal Record Staff Reporter The odds of stricter federal environmental regulations in the oilpatch are greater than ever, but states need to consolidate regulatory efforts and the industry should respond early, oil and gas executives were told Tuesday.

Environmental issues took center stage Tuesday at the annual meeting of the Oklahoma-Kansas Mid-Continent Oil & Gas Association in Oklahoma City. Scheduled highlights today will be Arkoma Basin development and natural gas deliverability.

Last year, there were 37 years of prison terms handed down by the Environmental Protection Agency for violations in the oilpatch plus $11 million in fines imposed, said Jim Collins, conservation engineer for Arco Oil & Gas Co. of Dallas.

Comparatively, in 1984, fines totaled $200,000 and two years of prison time was imposed by EPA.

"Five years ago it really wasn't that hot of a topic," said Collins, who is also chairman of the American Petroleum Institute committee on environmental conservation.

"It's getting the attention of our corporate management, and they see this trend increasing."

Hence, the industry has to develop ways to address environmental concerns.

"The industry itself is losing the trust of the regulatory groups with the way we handle our waste," said Tom Baker, environmental engineer with Arco.

"Proper waste management itself is good business. If we are managing our waste in a strategic manner, we are doing good business for the industry."

Baker detailed a strategy for developing a waste management plan designed for a specific area to respond to the myriad of state agencies and federal regulators that are increasing in numbers. He suggested that compliance above and beyond regulations be targeted, if for no other reason than to mitigate corporate liability.

"The EPA study of production waste exemptions found that one of the problems with E&P (exploration and production) waste was lack of enforcement," said Collins.

"So you can be sure that over the next few years, as EPA has an effect on state programs, which is going to happen, there will be higher levels of enforcement.

Oklahoma, along with other states, already has been asked by EPA to designate one agency to regulate discharges into water, said Brita Haugland-Cantrell, an assistant Oklahoma attorney general.

Currently, there are seven agencies in Oklahoma that have been given some type of statutory authority to regulate discharges into water, she said. And, the state Pollution Control Coordinating Board does not have the clear directive to assign jurisdiction to one agency, she added. The heads of the seven agencies in question and three citizen members make up the coordinating board.

"There are so many individual interests represented in that one group (Pollution Control Coordinating Board), that it's amazing that it does the job it does," Haugland-Cantrell said. …