Appendix 1 to Subpart D of Part 435 - Procedure for Determining When Coastal Cook Inlet Operators Qualify for an Exemption From the Zero Discharge Requirement for EMO-Cuttings and SBF-Cuttings in Coastal Cook Inlet, Alaska

Appendix 1 to Subpart D of Part 435 - Procedure for Determining When Coastal Cook Inlet Operators Qualify for an Exemption From the Zero Discharge Requirement for EMO-Cuttings and SBF-Cuttings in Coastal Cook Inlet, Alaska

1.0 Scope and Application

This appendix is to be used to determine whether a Cook Inlet, Alaska, operator in Coastal waters (Coastal Cook Inlet operator) qualifies for the exemption to the zero discharge requirement established by 40 CFR 435.43 and 435.45 for drill cuttings associated with the following non-aqueous drilling fluids: enhanced mineral oil based drilling fluids (EMO-cuttings) and synthetic-based drilling fluids (SBF-cuttings). Coastal Cook Inlet operators are prohibited from discharging oil-based drilling fluids. This appendix is intended to define those situations under which technical limitations preclude Coastal Cook Inlet operators from complying with the zero discharge requirement for EMO-cuttings and SBF-cuttings. Coastal Cook Inlet operators that qualify for this exemption may be authorized to discharge EMO-cuttings and SBF-cuttings subject to the limitations applicable to operators in Offshore waters (see subpart A of this part).

2.0 Method

2.1 Any Coastal Cook Inlet operator must achieve the zero discharge limit for EMO-cuttings and SBF-cuttings unless it successfully demonstrates that technical limitations prevent it from being able to dispose of its EMO-cuttings or SBF-cuttings through on-site annular disposal, injection into a Class II underground injection control (UIC) well, or onshore land application.

2.2 To successfully demonstrate that technical limitations prevent it from being able to dispose of its EMO-cuttings or SBF-cuttings through on-site annular disposal, a Coastal Cook Inlet operator must show that it has been unable to establish formation injection in nearby wells that were initially considered for annular or dedicated disposal of EMO-cuttings or SBF-cuttings or prove to the satisfaction of the Alaska Oil and Gas Conservation Commission (AOGCC) that the EMO-cuttings or SBF-cuttings will be confined to the formation disposal interval. This demonstration must include:

a. Documentation, including engineering analysis, that shows

(1) an inability to establish formation injection (e.g., formation is too tight),

(2) an inability to confine EMO-cuttings or SBF-cuttings in disposal formation (e.g., no confining zone or adequate barrier to confine wastes in formation), or

(3) the occurrence of high risk emergency (e.g., mechanical failure of well, loss of ability to inject that risks loss of well which would cause significant economic harm or create a substantial risk to safety); and

b. A risk analysis of alternative disposal options, including environmental assessment, human health and safety, and economic impact, that shows discharge as the lowest risk option.

2.3 To successfully demonstrate that technical limitations prevent it from being able to dispose of its EMO-cuttings or SBF-cuttings through injection into a Class II UIC well, a Coastal Cook Inlet operator must show that it has been unable to establish injection into a Class II UIC well or prove to the satisfaction of the Alaska Oil and Gas Conservation Commission (AOGCC) that the EMO-cuttings or SBF-cuttings will be confined to the formation disposal interval. This demonstration must include:

a. Documentation, including engineering analysis, that shows the inability to confine EMO-cuttings or SBF-cuttings in a Class II UIC well (e.g., no confining zone or adequate barrier to confine wastes in formation);

b. Documentation demonstrating that no Class II UIC well is accessible (e.g., operator does not own, competitor will not allow injection); and

c. A risk analysis of alternative disposal option, including environmental assessment, human health and safety, and economic impact, that shows discharge as the lowest risk option.

2.4 To successfully demonstrate that technical limitations prevent it from being able to dispose of its EMO-cuttings or SBF-cuttings through land application, a Coastal Cook Inlet operator must show that it has been unable to handle drilling waste or dispose of EMO-cuttings or SBF-cuttings at an appropriate land disposal site. This demonstration must include:

a. Documentation of site restrictions that preclude land application (e.g., no land disposal sites available);

b. Documentation of the platform's lack of capacity for adequate storage of EMO-cuttings or SBF-cuttings (e.g., limited storage or room for cuttings transfer); or

c. Documentation of inability to transfer EMO-cuttings or SBF-cuttings from platform to land for disposal (e.g., extremely low tides, high wave action).

3.0 Procedure

3.1 Except as described in Section 3.2 of this appendix, a Coastal Cook Inlet operator believing that it qualifies for the exemption to the zero discharge requirement for EMO-cuttings or SBF-cuttings must apply for and obtain an individual NPDES permit prior to discharging EMO-cuttings or SBF-cuttings to waters of the United States.

3.2 Discharges occurring as the result a high risk emergency (e.g., mechanical failure of well, loss of ability to inject that risks loss of well which would cause significant economic harm or safety) may be authorized by a general NPDES permit provided that:

a. The Coastal Cook Inlet operator satisfactorily demonstrates to EPA Region 10 the fulfillment of the other exemption requirements described in Section 2.0 of this appendix, or

b. The general permit allows for high risk emergency discharges and provides Reporting Requirements to EPA Region 10 immediately upon commencing discharge.

[66 FR 6918, Jan. 22, 2001]