Petitioners’ Presentation Chapter 2, Appendix H Environmental Quality Council 05-3102

1. Petitioners’ Presentation Chapter 2, Appendix H Environmental Quality Council 05-3102 July 17, 2006

2. Current Appendix H is contrary to Wyoming and Federal law. • DEQ in practice fails to regulate water quantity when it has an unacceptable effect on water quality. • The Environmental Quality Council has the authority and the obligation to correct this regulatory failure. • This matter should be set for a rulemaking hearing.

3. Current Appendix H is contrary to Wyoming and Federal law. It is even worse than a beneficial use determination, It is a blanket regulatory beneficial use “assumption.”

4. Subpart E - Beneficial Use Subcategory§ 435.50 Applicability; description ofthe beneficial use category. (c) The term “beneficial use” shall mean that the produced water is of good enough quality to be used for livestock watering or other agricultural uses and is being put to such use. Federal Register, Vol. 41, No. 199 – Wednesday, October 13, 1976

5. Agricultural and Wildlife Water Use Subcategory – Applicability and Description Description The Agency is changing the name of subcategory E from the “Beneficial Use” subcategory to the “Agricultural and Wildlife Water Use” subcategory. This change in name is prompted by the confusion resulting from the initial labeling of the subcategory. The term “beneficial use” has a long history of use in Western United States water law which is unconnected with its meaning in these regulations and the Agency believes that confusion stemming from this prior usage can be avoided by simply renaming the subcategory. Additionally, the Agency is clarifying the scope of this category by specifying that only facilities located west of the 98th meridian may qualify for inclusion. Subcategory E was initially established in response to comments from certain western states asking that the Agency allow the use of produced water for agricultural or wildlife purposes. Investigation showed that in arid portions of the western United States low salinity produced waters were often the only, or at least a significant, source of water used for those purposes. Although not required by the Clean Water Act, the Agency chose to accommodate this situation by the creation of Subpart E. It is intended as a relatively restrictive subcategorization based on the unique factors of prior usage in the region, arid conditions and the existence of low salinity portable water. Federal Register, Vol. 44, No. 73, April 13, 1979 – Rules & Regulations

6. PRBRC Exhibit #5

7. PRBRC Exhibit #5 . . . For oil and gas discharges, including CBNG, permits issued from 1974 through 2000 by Wyoming, it was assumed that in the arid west region, the produced water would be used for agricultural or wildlife propagation as long as water quality standards and effluent limitations were met. Historically, documentation related to this requirement was not contained or required in the permit applications or permit files for WYPDES permits. It is WDEQ’s belief and understanding that federal permits issued on Indian Lands have been processed in a similar manner. However, in 2000, at the request of Region 8 EPA, the WYPDES Program modified the CBNG permit application to require the applicant to provide a demonstration of compliance with Subpart E. In September 2001, the EPA provided written comments related ‘to several CBNG permits that the WYPDBS Program was proposing to issue. The comments primarily focused on the statements of basis (SOBs) for CBNG permits which

8. PRBRC Exhibit #5 – page 2 invoked WWQRR Chapter 7 and 40 CFR 435 The EPA suggested that the SOBs should describe the beneficial us for the discharged water and that the quality support such a use. The nature of EPA’s comments clearly suggested to WDEQ that EPA concurred with the approach of relying on the oil and gas effluent limitations guideline (40 CFR 435 and WWQRR Chapter 7) as guidance for developing BPJ limitations for CBNG. While not initially stated in the SOBs for the proposed permits, the permit files contained application information regarding the identification of the use(s) for the discharged water and the potential water quality of the proposed discharge. In December 2001, the WYPDBS Program began including statements in the SOBs of each CBNG permit to specifically address how the produced water would be used.

11. DEQ in practice fails to regulate water quantity, whether or not it has an unacceptable effect on water quality.

13. EC @ end-of-pipe

14. Exhibit #25

15. SA Creek – Spring 06

16. ephemeral  perennial

17. CBM Discharge Water Flooding Wildcat Creek, Johnson County, 2006

18. Wild Horse Creek CBM Damage 2-1-06

19. Wild Horse Creek CBM Flooding - April 2006

20. long-term effects

21. CBM Discharge Flowing in Burger Draw – Oct. 2005

25. The Environmental Quality Council has the authority and the obligation to correct this regulatory failure.

26. § 35-11-112. Powers and duties of the environmental quality council. (a)The council shall act as the hearing examiner for the department and shall hear and determine all cases or issues arising under the laws, rules, regulations, standards or orders issued or administered by the department or its air quality, land quality, solid and hazardous waste management or water quality divisions. . . . The council shall: (i) Promulgate rules and regulations necessary for the administration of this act, after recommendation from the director of the department, the administrators of the various divisions and their respective advisory boards; (ii) Conduct hearings as required by the Wyoming Administrative Procedures Act for the adoption, amendment or repeal of rules, regulations, standards or orders recommended by the advisory boards through the administrators and the director. The council shall approve all rules, regulations, standards or orders of the department before they become final; (c) Subject to any applicable state or federal law, and subject to the right to appeal, the council may: (i) Approve, disapprove, repeal, modify or suspend any rule, regulation, standard or order of the director or any division administrator;

27. Wyoming Administrative Procedures Act • § 16-3-106. Petition for promulgation, amendment or repeal of rules. • Any interested person may petition an agency requesting the promulgation, amendment or repeal of any rule and may accompany his petition with relevant data, views and arguments. Each agency may prescribe by rule the form of the petition and the procedure for its submission, consideration and disposition. Upon submission of a petition, the agency as soon as practicable either shall deny the petition in writing (stating its reasons for the denials) or initiate rulemaking proceedings in accordance with W.S. 16-3-106. The action of the agency in denying the petition is final and not subject to reviews. • § 16-3-103. Adoption, amendment and repeal of rules; notice; hearing; emergency rules; proceedings to contest; review and approval by governor. • Sets procedural requirements such as notice, hearing, etc.

28. When the science is “uncertain,” effluent limits should be set conservatively.

29. Set for rulemaking hearing • Promulgate Appendix H (traditional) and Appendix I (CBM) • as attached to Fox March 2, 2006 letter to EQC; • Modify or suspend existing Appendix H.