1. Waste Associated with a Drilling Operation Kelley Goes, Esquire 500 Lee Street East, Suite 1600, Charleston, WV 25301 Phone: 304-340-1078 kmgoes@jacksonkelly.com www.jacksonkelly.com June 17, 2014

2. w w w. j a c k s o n k e l l y. c o m 2 There are 3 types of waste in this world... Exempt Non-exempt, characteristic hazardous Listed hazardous

3. w w w. j a c k s o n k e l l y. c o m 3 Exempt from what? The EPA’s Resource Conservation and Recovery Act, or “RCRA,” specifically Subtitle C, which requires “cradle to grave” management of hazardous waste from the point of generation to the transportation, treatment, and disposal.

4. w w w. j a c k s o n k e l l y. c o m 4 What is the exemption? Since 1980, exploration and production wastes from oil and gas drilling – E&P wastes – have been exempt from RCRA Subtitle C. This includes gas and oil drilling muds, drilling fluids, produced waters, and other wastes associated with field operations.

5. w w w. j a c k s o n k e l l y. c o m 5 Excellent. So, why are you bothering me? Not everything is exempt.

6. w w w. j a c k s o n k e l l y. c o m 6 Quick Test Was the waste brought to the surface during oil and gas E&P operations? Has the waste been generated by contact with the oil and gas production stream during the removal of produced water or other contaminants from the product? If YES, then likely exempt from RCRA Subtitle C

7. w w w. j a c k s o n k e l l y. c o m 7 EPA’s List of Exempt E&P Waste: Produced water; Drilling fluids; Drill cuttings; Rigwash; Drilling fluids and cuttings from offshore operations disposed of onshore; Geothermal production fluids; Hydrogen sulfide abatement wastes from geothermal energy production; Well completion, treatment, and stimulation fluids; Basic sediment, water, and other tank bottoms from storage facilities that hold product and exempt waste; Accumulated materials such as hydrocarbons, solids, sands, and emulsion from production separators, fluid treating vessels, and production impoundments; Pit sludges and contaminated bottoms from storage or disposal of exempt wastes; Gas plant dehydration wastes, including glycol-based compounds, glycol filters, and filter media, backwash, and molecular sieves Workover wastes; Cooling tower blowdown

8. w w w. j a c k s o n k e l l y. c o m 8 EPA’s List of Exempt E&P Waste Continued: Gas plant sweetening wastes for sulfur removal, including amines, amine filters, amine filter media, backwash, precipitated amine sludge, iron sponge, and hydrogen sulfide scrubber liquid and sludge; Spent filters, filter media, and backwash (assuming the filter itself is not hazardous and the residue in it is from an exempt waste stream); Pipe scale, hydrocarbon solids, hydrates, and other deposits removed from piping and equipment prior to transportation; Produced sand; Packing fluids; Hydrocarbon-bearing soil; Pigging wastes from gathering lines; Wastes from subsurface gas storage and retrieval, except for the non-exempt wastes; Constituents removed from produced water before it is injected or otherwise disposed of; Liquid hydrocarbons removed from the production stream but not from oil refining; Gases from the production stream, such as hydrogen sulfide and carbon dioxide, and volatilized hydrocarbons; Materials ejected from a producing well during blowdown; Waste crude oil from primary field operations; and Light organics volatilized from exempt wastes in reserve pits, impoundments, or production equipment.

9. w w w. j a c k s o n k e l l y. c o m 9 EPA’s List of Non-Exempt Waste: Unused fracturing fluids or acids; Gas plant cooling tower cleaning wastes; Painting wastes; Waste solvents; Oil and gas service company wastes such as empty drums, drum rinsate, sandblast media, painting wastes, spent solvents, spilled chemicals, and waste acids; Vacuum truck and drum rinsate from trucks and drums transporting or containing non-exempt waste; Refinery wastes; Liquid and solid wastes generated by crude oil and tank bottom reclaimers ; Used equipment lubricating oils; Waste compressor oil, filters, and blowdown; Used hydraulic fluids; Waste in transportation pipeline related pits; Caustic or acid cleaners; Boiler cleaning wastes; Boiler refractory bricks; Boiler scrubber fluids, sludges, and ash; Incinerator ash; Laboratory wastes;

10. w w w. j a c k s o n k e l l y. c o m 10 EPA’s List of Non-Exempt Waste Continued: Sanitary wastes; Pesticide wastes; Radioactive tracer wastes; and Drums, insulation, and miscellaneous solids

11. w w w. j a c k s o n k e l l y. c o m 11 No problem. I will just add a little bit of this to a vat of that... and stir. Behold! Exempt!

12. w w w. j a c k s o n k e l l y. c o m 12 Mixing Wastes Keeping it Exempt Exempt Waste Exempt Waste Exempt Waste Non- Hazardous Waste Exempt Waste Non-exempt Characteristic Hazardous Waste Exempt Waste Exempt Waste, If Mix Has No Hazardous Characteristics

13. w w w. j a c k s o n k e l l y. c o m 13 Mixing Wastes Trouble Brewing Non-Exempt Characteristic Hazardous Waste Exempt Waste Non-Exempt Characteristic Hazardous Waste Exempt Waste Listed Hazardous Waste

14. w w w. j a c k s o n k e l l y. c o m 14 What Have We Learned? Not all wastes at E&P sites are exempt. Not all service company waste is exempt. Unused products are not exempt. Not all wastes are harmless to human health and the environment and could be regulated by other state or federal laws, such as hazardous materials transportation regulations and NPDES regulations. Mixing with an exempt waste does not create an exempt waste. Exemption from Subtitle C does not equal exemption from all state and federal regulations, such as the Clean Air Act, the Clean Water Act, Safe Drinking Water Act, and the Oil Pollution Act of 1990

15. w w w. j a c k s o n k e l l y. c o m 15 You don’t make this exempt status sound so special. It is. All E&P waste requires proper management, of course, and the RCRA exemption allows an operator to choose waste management and disposal options that are perhaps more flexible, less stringent, and less costly than those required under RCRA Subtitle C.

16. w w w. j a c k s o n k e l l y. c o m 16 What else do I need to know? Your waste management decisions are being monitored – and challenged.

17. w w w. j a c k s o n k e l l y. c o m 17 PA drilling waste to WV Recent media coverage of the refusal of a PA landfill to accept drilling waste because of radioactivity levels. The landfill in WV that had accepted 12 tons of the drilling sludge was ordered to cease accepting it after media reports.

18. w w w. j a c k s o n k e l l y. c o m 18 Federal Lawsuits The on-site disposal of drill cuttings and drill waste was challenged in federal court in WV.

19. w w w. j a c k s o n k e l l y. c o m 19 MCHM Suit Invoking RCRA Hurricane, WV and the Putnam County Commission sued a landfill and operator in federal court claiming that the acceptance of MCHM and related disposal and clean up wastes is a violation of RCRA. The complaint alleges that MCHM, although not listed as hazardous, meets the criteria for characteristics of hazardous waste.

20. w w w. j a c k s o n k e l l y. c o m 20 A Bright Spot Clean Air Act win for the industry in the D.C. Circuit

21. w w w. j a c k s o n k e l l y. c o m 21 Kelley Goes 304-340-1078 kmgoes@jacksonkelly.com