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Texas, Oklahoma look to take control over oil and gas wastewater disposal

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Texas, Oklahoma look to take control over oil and gas wastewater disposal

The U.S. Environmental Protection Agency has a considerable say in the disposal of wastewater from oil and gas exploration and production. However, two of the largest hydrocarbon producing states are looking to change that.

Both Texas and Oklahoma have made moves in recent months to challenge the EPA's primacy over the disposal of wastewater as they look to take control of the matter. While Oklahoma has attempted to operate through the regulatory system, Texas has gone a step further.

During the latest session of the Legislature, a bill calling for state primacy over wastewater disposal was passed and signed by Gov. Greg Abbott. The bill, known as House Bill 2771, calls for the Texas Commission for Environmental Quality to submit a request for delegation of permitting authority to the EPA by no later than Sept. 1, 2021. Specifically, the bill calls for state primacy over "produced water, hydrostatic test water and gas plant effluent resulting from certain oil and gas activities."

The current method of dealing with wastewater disposal is muddled. At present, any applicant seeking to dispose of wastewater in Texas would have to apply for a state permit from the Railroad Commission of Texas and a federal permit from the EPA's National Pollutant Discharge Elimination System. Should the Texas bill eventually succeed, the TCEQ would assume permitting responsibility for wastewater from inside the state.

The Oklahoma Department of Environmental Quality has taken a similar approach, albeit without legislation from the state's elected officials. According to the law firm Locke Lord LLP, the ODEQ initially petitioned the EPA for primacy over the state's wastewater disposal in late 2018 and is in the process of modifying its request.

"State ‎authorization of treated produced water discharges would provide operators with alternatives to ‎manage the waste without injecting it underground, thus further mitigating the risk of seismic ‎activity potentially associated with injection activities," the law firm said. Mitigating the risk of seismic activity has become a major issue in Oklahoma, as industry observers believe a spree of earthquakes in recent years have been caused largely by producers injecting wastewater into the ground too close to fault lines.

If Texas and Oklahoma are allowed to take control over wastewater disposal permitting from the EPA, it could be a major shift in how the oil and gas industry as a whole is regulated.

"Texas and Oklahoma's applications for NPDES primacy for certain types of oil and gas ‎wastewater, if successful, coupled with EPA's reevaluation of federal oil and gas wastewater ‎regulations could mean substantial regulatory changes for the oil and gas industry in coming ‎years," Locke Lord said. "Significantly, such changes would involve each state's environmental regulatory agency, ‎rather than its oil and gas regulatory agency, exercising even greater reach over the industry.‎"