United States Environmental Protection Agency
Washington, D.C. 20460
Office of Solid Waste and Emergency Response

November 21, 1988

Mr. Robert H. Lloyd
Lloyd, Gosselink, Ryan
  & Fowler, P.C.
P.O. Box 1725
Austin, Texas 78767

Dear Mr. Lloyd:

     Thank you for your October 13, 1988, letter concerning the status of certain oil and gas wastes generated by The Western Company of North America.

     The Environmental Protection Agency (EPA) believes that none of the wastes in question is exempt from hazardous waste regulations under Subtitle C of the Resource Conservation and Recovery Act (RCRA). Congress intended to exempt the large volumes of wastes that are intrinsic to exploration, development, or production processes and are generated at exploration or production facilities. Based on the scope of the RCRA exemption as identified in the regulatory determination published July 6, 1988, EPA believes that the acidic waste water, field waste liquids, and waste cement identified in your letter are clearly not exempt.

     Acidic wastewater is not exempt because it is not intrinsically derived from the exploration, development, or
production of oil or gas within the meaning of the statute. It was never used in such operations, regardless of the intent in preparing the mixture. This type of waste fits the non-exempt category listed in the regulatory determination as "oil and gas service company wastes, such as ... spilled chemicals, and waste

     Field waste liquids are included in the non-exempt category of "unused fracturing fluids or acids." There is no distinction made between pre-mixed fluids or wastes composed of the unmixed raw ingredients. Here again, the unused portions are not intrinsically derived from oil and gas exploration, development, or production
operations as this term is used in the statute, regardless of the intent in preparing the mixture.

    Your third item, waste cement, is also an unused product and, as such, is not exempt. As you indicated, the waste lubricants, hydraulic fluids, motor oil and paint, waste solvents from equipment maintenance, and waste from truck cleaning operations that you listed in your letter as items four, five and six are also not exempt.

     We understand the confusion that can arise when the different states in which Western operates interpret the exemption differently. However, we believe that the regulatory determination has provided substantial clarification regarding the scope of the exemption. We hope that this letter will help Western to plan and implement proper waste management programs in all the states in which it operates.

J. Winston Porter
Assistant Administrator

Lloyd, Gosselink, Ryan & Fowler, P.C.
Attorneys at Law
Post Office Box 1725
Austin, Texas 78767
(512) 472-4551

October 13, 1988

Mr. J. Winston Porter
Assistant Administrator for Solid
   Wastes OS-100
United States Environmental
   Protection Agency
401 M Street S.W.
Washington, D.C. 20460

Re: The Western Company of North America - 79703

Dear Mr. Porter:

As a multi-state provider of services to the oil and gas industry. The Western Company of North America (Western) is directly impacted by the acts of the United States Congress and the Environmental
Protection Agency (EPA) with respect to the management of oil and gas wastes. Western must necessarily manage the oil and gas wastes generated from its well servicing operations pursuant to all
applicable federal laws and regulations, as well as those of the various states within which it conducts business.

Western, therefore, is justifiably interested in the portion of the 1980 amendments to the Resource Conservation and Recovery Act (RCRA) which exempts from Subtitle C regulations "drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil or natural gas (see
footnote 1). In order to plan and implement proper waste management programs, Western must have a clear understanding and, hopefully, an official determination of whether particular wastes it generates
are covered within the scope of this exemption.

In this regard, Western has studied the EPA's "Regulatory Determination for Oil and Gas and Geothermal Exploration: Development and Production Wastes (see footnote 2). While this determination provides the most detailed description to date of exactly which oil and gas wastes are exempt from Subtitle C regulations, Western still needs additional clarification. This need stems not only from Western's commitment to comply with RCRA
regulations but from the fact that the different states in which Western operates are interpreting this exemption differently.

For example, the Texas Solid Waste Disposal Act confers to the Texas Water Commission (TWC) jurisdiction over "hazardous waste" identified pursuant to RCRA (see footnote 3). At present, the TWC regulates wastes generated by Western's well servicing activities as hazardous waste under RCRA if such wastes are either listed or are characteristically hazardous.

On the other hand, in 1981, Oklahoma's Director of the Industrial Waste Division of the Oklahoma State Department of Health indicated that the Western service facilities were exempt from RCRA
regulation pursuant to 40 CFR 261.4(b)(5) the federal regulatory provision setting forth the exemption for oil and gas wastes (see footnote 4).

Thus, while both Texas and Oklahoma determined which oil and has wastes to regulate based on respective interpretations of RCRA, and not on a more stringent state law, their determinations are different for essentially identical  wastes generated by essentially identical operations. For Western, this means that identical wastes must be managed differently depending on which state is involved. This problem is complicated by the fact that
Western operates a total of 57 facilities in Texas, Oklahoma, Louisiana, Mississippi, Alabama, Utah, New Mexico, Kansas, Wyoming and South Dakota.

Western, of course, will manage its wastes pursuant to RCRA if it is determined that the wastes are not covered by the exclusion.

In some states it is already doing so based on individual state determinations that the wastes are not exempt. It is apparent, however, that a consistent interpretation of the RCRA exemption is needed.

In this regard, Western has relied on two primary sources to formulate its own preliminary interpretation of the scope of the exemption: the legislative history related to the original RCRA exemption and the EPA's recent Regulatory Determination related to oil and gas wastes.

First, as stated previously, the 1980 RCRA Amendments exempted from Subtitle C regulations "drilling fluids, produced waters and other wastes associated with the exploration, development, or production
of crude oil or natural gas." (Emphasis added)(See Footnote 5). Regarding these "other wastes," RCRA's legislative history indicates that:

     The term "other wastes associated" is specifically
     included to designate waste materials intrinsically
     derived from primary field operations associated with the
     exploration, development, or production of crude oil,
     natural gas or geothermal energy. It would cover such
     substances as: hydrocarbon bearing soil in and around
     related facilities; drill cuttings; and materials (such
     as hydrocarbons, water, sand, and emulsion) produced from
     a well in conjunction with crude oil, natural gas or
     geothermal energy; and the accumulated material (such as
     hydrocarbons, water, sand and emulsion) from production
     separators, fluid treating vessels, storage vessels, and
     production impoundments.

     The phrase "intrinsically derived from the primary field
     operations" is intended to differentiate exploration,
     development, and production operations from
     transportation (from the point of custody transfer or of
     production separation and dehydration) and manufacturing
     operations. (Emphasis added (See footnote 6.)

Clearly, Western is involved in the exploration, development and production components of the oil and gas industry. The services Western provides consist primarily of well stimulation and completion through hydraulic fracturing and acidizing, and well cementing. In fact, the respective Western facilities are located near well fields to  facilitate the efficient transportation of people, equipment and supplies from the facility to the well head.

Next, with respect to the EPA's recent Regulatory Determination, Western has carefully scrutinized the lists setting forth which wastes are included in the exemption and which are not (see footnote 7). Using these lists, Western has tentatively determined whether the following wastes are  subject to, or exempt from Subtitle C regulations. In addition to the type of waste, Western has included a description of how each waste is generated, and its determination and rationale as to whether the waste is exempt or non-exempt.

1.   Acidic Wastewater

     Well stimulation is the process of either acidizing or
     fracturing an oil or gas well to enhance production.
     Stimulation is performed by pumping specially prepared
     solutions of acid, water, chemicals and sand into a well
     to stimulate production by eliminating obstacles to the
     flow of oil and gas. These solutions are partially
     prepared at the Western facility by combining the
     respective ingredients in the 5,000 gallon tank of a tank
     truck. These solutions are further augmented by adding
     additional materials (such as chemicals, gels and sand)
     at the well site prior to pumping the solution into the

     Back at the Western facility, acid is stored in a large,
     overhead tank before it is added to the water and
     chemical solution in the tank truck. The acid is
     transferred to the tank truck by gravity flow through a
     flexible hose, four inches in diameter. During transfer,
     small quantities of acid can spill from the hose or
     overflow from the tank truck. These spills do not result
     from carelessness or inattention but are a natural result
     of transferring large quantities of liquid into a tank
     truck. Any spilled solution is rinsed with fresh water
     onto a concrete containment slab which drains into a
     wastewater holding tank. This method is used throughout
     the industry.

     Western classifies the wastewater in the holding tank,
     mentioned above, as "well stimulation fluids" because the
     sole purpose of preparing the solution is to stimulate or
     otherwise enhance the production of oil and gas. Thus,
     they would be exempt. Even though the wastes will not
     reach the well head, they are wastes strictly related to
     production operations not wastes related to
     transportation and manufacturing operations.

     Western recognizes that the EPA has indicated that "oil and
     gas service company wastes, such as...spilled chemicals, and
     waste acid" are not included in the oil and gas exemption (see
     footnote 8). Western would assert that "spilled chemicals and
     waste acids" not included in the exemption would pertain to
     spilled raw products and materials while spilled solutions
     contained in the wastewater holding tank would be exempt
     because once mixed, the well completion, stimulation and
     treatment process has begun. Further, RCRA waste
     classification is generally based on a wastes composition,
     characteristic, or the process by which it is generated, not
     on the geographic location where it is generated. Thus, the
     most sensible and meaningful  interpretation of the category
     of "well completion, treatment and stimulation fluids" would
     include the wastes from this wastewater holding tank.

2.   Field Waste Liquids

     A tank truck carries the treatment and stimulation fluid
     solutions, prepared at the Western service facility, to
     the well site. Depending upon the stimulation function
     (either acidizing or fracturing) and particular service
     needs of the well, the stimulation fluid solution is then
     mixed in a blender truck with varying combinations of
     briny water (from other tanks at the well head or
     produced from the well), crude oil pumped from the well,
     sand, gel, and chemicals as part of the final solution
     being pumped into the well. For example, when a well's
     oil flow is inhibited by paraffin and wax buildup within
     the oil itself, chemicals are added to the stimulation
     fluid to dissolve these materials, thus enhancing flow.

     A pump truck is used to transfer the final stimulation
     fluid solution from the blender truck into the well.
     After well stimulation is accomplished, some fluids
     remain in the tank, blender and pump trucks because it is
     technically impossible to purge all fluids from them. The
     trucks then return to the facility where these residual
     fluids are flushed from the interior portions of the
     trucks. The resulting field waste is a mixture of flush
     water and the treatment or stimulation fluids used at the
     well head.

     Western classifies this field waste as well treatment or
     stimulation fluids. The waste would, thus, be exempt.
     Whether these wastes are handled at the well head or the
     facility does not affect their composition or intended
     purpose and, therefore, should not affect their exempt

     In reaching this conclusion, Western has considered and
     rejected the notion that these field wastes are included
     in the category of "unused fracturing fluids or acids"
     (see footnote 9). Western would interpret this category
     to include those raw products and materials (fluids,
     acids, chemical powders, chemical liquids) which, for
     whatever reason, were never prepared for transportation
     to or use at the well head.

3.  Waste Cement

     After a well hole is drilled, a casing pipe is inserted
     into the hold. Because the casing is smaller in diameter
     than the hole, there is a space between the hole and the
     casing throughout the length of the hole. This "annular
     space" must be filled and sealed with cement to prevent
     groundwater contamination.

     The well is "cemented" using a mixture of dry cement,
     water, and special additives which are mixed at the well
     site and will vary in type and proportion for each well.
     Because the well operator can only estimate how much
     cement will be needed to fill the annular space, Western
     must mix and transport excess cement to well head to
     ensure that no shortages occur. Since the cement is
     specially blended for each well, the excess cannot be
     reused and is taken back to the facility for disposal.

     Western classifies these wastes as exempt because they
     are (1) associated with measures to remove oil or natural
     gas from the ground; (2) intrinsic to the exploration
     for, or the development of, crude oil or natural gas; and
     (3) are substances which are injected into the ground to
     facilitate the drilling operation or maintenance of a
     well see footnote 10).

4.   Waste Lubricants, Hydraulic Fluids, Motor Oil and Paint

     These wastes are generated as part of routine vehicle
     maintenance and repair of equipment failures.

     Western classifies these wastes as "used hydraulic
     fuels," "painting wastes," and "used equipment
     lubrication oils." The wastes would, thus, be non-exempt.


5.   Waste Solvents from Equipment Maintenance

     These wastes are generated as a result of equipment parts

     Western would classify these wastes as "spent solvents"
     and, therefore, they are non-exempt.

6.   Waste from Truck Cleaning Operations

     Following each assignment, the truck exteriors are
     cleaned resulting in wastewater, oily wastes and solids.

     Western would characterize these wastes as wastes from
     exterior truck cleaning operations and believes the
     wastes are nonexempt.

Western believes the interpretation of exempt and nonexempt as applied to the above waste streams to be consistent with the meaning and intent of the oil and gas waste exemption contained in the 1980 Amendments to RCRA (see footnote 11). In order to plan and implement proper management programs, it is important that Western know whether the EPA agrees. Western respectfully requests, therefore, that the EPA render an option in this regard.

Very truly yours,
Robert H. Lloyd


cc w/enc: Mr. Lawrence Jensen
          U.S. EPA, Region IV

          U.S. EPA, Region VI
          U.S. EPA, Region VII
          U.S. EPA, Region VIII
          Ms. Michelle McFaddin
          Mr. Graham Adelman
          Mr. Ron McKeel
          Mr. Robert S. Kier

1    42 USC 56921(B)(2)(A).
2    See 53 Fed. Reg. 25446.
3    TEX. REV. CIV. STAT. ANN. art. 4477-7, S1(13), 3(b)
     (Vernon Supp. 1988).
4    A copy of this determination is attached.
5    42 USC 6921(B)(2)(A).
6    EPA "Report to Congress, Management of Wastes from the
     Exploration, Development and Production of Crude Oil,
     Natural Gas, and Geothermal Energy," December, 1987, p.
7    53 Fed. Reg. 25453-54.
8    53 Fed. Reg. 25454.
9    53 Fed. Reg. 25454.
10   See EPA "Report to Congress, Management of Wastes from
     the Exploration, Development, and Production of Crude
     Oil, Natural Gas, and Geothermal Energy," December, 1987,
     p. 7.
11   42 USC 6921(B)(2)(A).

Oklahoma State Department of Health
1000 Northeast 10th Street
P.O. Box 53551
Oklahoma City, Oklahoma  73152

September 28, 1981

Mr. Vernon Sorgee
The Western Company of North America
P.O. Box 186
Fort Worth, Texas 76101

Dear Mr. Sorgee:

     The purpose of this letter is to confirm the interpretation by the Oklahoma Corporation Commission of the State and Federal regulations regarding oil field service facilities (Tim Baker to Vernon Sorgee, September 22, 1981).  The interpretation at this time is that such facilities are regulated by the Corporation omission and are exempted from the requirements of the Resource Conservation and Recovery Act (40 CFR part 261.4, paragraph b5, May
19, 1980) and the Oklahoma Controlled Industrial Waste Disposal Act (63 O.S.Supp. 1979, Sec. 2756, paragraph 2).

     This interpretation is based upon on-site inspection and the regulatory history of the Western Company Yukon facility. Although each Western Company facility will be evaluated separately, it appears at this time that similar jurisdictional interpretation will be applied to all Oklahoma sites.

     Thank you for your attention to regulatory compliance. If you have further questions, please contact me at (405) 271-5338.

Very truly yours,
Donald A. Hensch, P.E.
Director, Industrial Waste Division