The federal Safe Drinking Water Act and the underground injection of fluids into protected subsurface aquifers – implications for oil and gas production
Considering that oil and gas operators have been producing oil and gas in California since the 1800’s, many oil fields are beyond primary recovery, and operators commonly rely on the subsurface injection of fluids, including water and steam, for enhanced oil recovery projects (“EOR”), as well as for the disposal of waste water associated with oil and gas production. Given that many operators rely on EOR and/or the injection of waste water for the purposes of waste water disposal, it is important to identify and understand the statutes and regulations governing the underground injection of fluids to prevent any unknowing violations and avoid unnecessary penalties. While there are both state and federal regulations governing the injection of fluids subsurface, this article focuses on the federal Safe Drinking Water Act as it is the authority for and has given rise to the current governing state statutes and regulations.[1]
The injection of fluids into the subsurface, including water and steam injection associated with EOR projects (i.e., Class II wells), is regulated under the federal Safe Drinking Water Act (“SDWA”), 42 United States Code section 300f, et seq. The regulations containing the requirements of the Underground Injection Control program promulgated by the USEPA are contained in 40 Code of Federal Regulations part 144 (2011), et seq.
The SDWA regulates any subsurface water-bearing aquifer that is being used or may be used for drinking water under the criteria set forth in the SDWA.[2] “Underground source of drinking water (“USDW”) means an aquifer or its portion: (a)(1) Which supplies any public water system; or (2) Which contains a sufficient quantity of ground water to supply a public water system; and (i) Currently supplies drinking water for human consumption; or (ii) Contains fewer than 10,000 mg/l total dissolved solids; and (b) Which is not an exempted aquifer.” (40 C.F.R. § 144.3 (2011).) [3] “No aquifer is an exempted aquifer until it has been affirmatively designated under the procedures at § 144.7. Aquifers which do not fit the definition of ‘underground source of drinking water’ are not ‘exempted aquifers.’ They are simply not subject to the special protection afforded USDWs.” (40 C.F.R. § 144.1(g) (2011).) Since most of the oil and gas reservoirs in California were created as a result of deposition in ancient marine environments, these oil and gas reservoirs typically contain ancient sea water in addition to oil and gas in the locations where oil and gas deposits are present. While the total dissolved solids concentration in these ancient aquifers varies significantly across the state from one location to another, many fall within the definition of an USDW. This automatically triggers the applicability of the SDWA, subject to the potential that the particular aquifer in question could be exempted under the procedure set forth in the SDWA.
Under the SDWA, “all underground injections” are “unlawful and subject to penalties unless authorized by a permit or rule.” (40 C.F.R. § 144.11 (1993); 42 U.S.C. § 300h(b)(1)(A) (1986).) Underground injection includes not only EOR projects and wastewater disposal associated with oil and gas production, it also applies in many other industrial contexts, such as refineries, chemical plants, metal production, pharmaceutical production, municipal waste water disposal, etc. Injection permits are not issued unless the USEPA first determines that the aquifer into which injection is proposed meets federal criteria demonstrating that the aquifer can be exempted from the protections of the SDWA.
Administration and enforcement of the SDWA is multilayered. All states were required to create an underground injection control (UIC) program containing at least the minimum requirements set forth in 40 Code of Federal Regulations part 146 (2011) and were given the opportunity to administer and enforce the SDWA based upon a showing that appropriate state regulations had been implemented in conformance with the SDWA. (40 C.F.R. part 145 (2011).) California obtained primacy from the USEPA to administer and enforce the SDWA in 1983. (48 Fed.Reg. 6336-01 (Feb. 11, 1983); 40 C.F.R. § 147.250.) The UIC regulations that California enacted to protect underground sources of drinking water and to administer and enforce the SDWA, are set forth at California Code of Regulations, title 14, section 1720.1, et seq. and are administered and enforced by the California Geologic Energy Management Division of the California Department of Conservation (CalGEM).
While California has primary authority to enforce violations, the USEPA has retained the ability to enforce the requirements of underground injection programs enacted by administering states if the administering state fails to enforce those requirements. As a result, if CalGEM (or other applicable state agency) fails to enforce California’s UIC regulations, the USEPA would separately have the authority under the SDWA to take action. The theoretical penalties that could be assessed by the USEPA under the SDWA differ from the theoretical penalties that could be assessed by CalGEM under the California UIC regulations. Under the SDWA, the USEPA may issue an administrative order assessing civil monetary penalties or require compliance with the regulations, or both. (42 U.S.C. § 300h-2(c)(2) (1986).) An order to comply with the SDWA regulations may theoretically include an order to cease steam injection or to shut-in the field.
The presence of oil and gas within an aquifer into which injection is proposed can be a basis to seek an exemption from the SDWA. That process generally involves the preparation of and submission to CalGEM of an aquifer exemption application under 40 C.F.R. § 144.7 (criteria for obtaining the exemption are contained in 40 C.F.R. § 146.4). Aquifer exemption applications are required to contain detailed geologic and petroleum engineering data specific to the aquifer(s) in question and define both the vertical and lateral extent to which the subject exemption is sought. In other words, to the extent the exemption is based upon the presence of oil and gas, the aquifer can be exempted only to the extent that oil and gas is present. The exemption would not include portions of the aquifer where oil and gas is not present. CalGEM, as well as the State Water Resources Control Board and applicable local Regional Water Quality Control Board typically participate in the review of aquifer exemption applications. The agencies can pose questions and require additional information to be provided until they are satisfied with the application. At that point, CalGEM submits the aquifer exemption application to the USEPA for approval. If approved, the subject aquifer is exempted from the SWDA within the vertical and lateral area proposed. The aquifer exemption is not a blanket approval for any proposed injection. Proposed injection, whether an injection project is via a single well or proposed in a group of wells, additionally requires a separate permit from CalGEM.
[1] This article provides a general overview of the SDWA’s application to oil and gas production and does not constitute legal advice respecting any particular property or operations. Legal questions specific to a particular property or operations should be directed to legal counsel with the appropriate background and experience.
[2] The surface corollary to the SDWA mentioned above is the federal Clean Water Act, title 33 United States Code section 1251, et seq. (“CWA”), which regulates discharges into navigable surface waters. In 1978, California obtained primacy to administer and enforce the CWA through the State Water Resources Board and corresponding Regional Water Boards. (43 Fed.Reg. 25180 (June 9, 1978).) Under the CWA, it is unlawful to discharge any pollutant from a point source directly into the navigable waters of the US, unless a permit is obtained. (33 U.S.C. § 1311 (1995).)
[3] The SDWA does not regulate public water systems unless they have at least 15 service connections or serve at least 25 people per day for at least 60 days out of the year. (40 C.F.R. § 141.2 (2021).)