[Federal Register: June 16, 2006 (Volume 71, Number 116)]
[Rules and Regulations]
[Page 35005-35046]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16jn06-23]
[[Page 35005]]
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Part II
Environmental Protection Agency
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40 CFR Parts 9, 122, 123, et al.
National Pollutant Discharge Elimination System; Establishing
Requirements for Cooling Water Intake Structures at Phase III
Facilities; Final Rule
[[Page 35006]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 9, 122, 123, 124, and 125
[OW-2004-0002, FRL-8181-5]
RIN 2040-AD70
National Pollutant Discharge Elimination System--Final
Regulations To Establish Requirements for Cooling Water Intake
Structures at Phase III Facilities
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: On November 1, 2004, EPA published a proposal that contained
several options for the control of cooling water intake structures at
existing Phase III facilities and at new offshore oil and gas
extraction facilities. This rule establishes categorical section 316(b)
requirements for intake structures at new offshore oil and gas
extraction facilities that have a design intake flow threshold of
greater than 2 million gallons per day and that withdraw at least 25
percent of the water exclusively for cooling purposes. For existing
Phase III facilities, EPA determined that uniform national standards
are not the most effective way at this time to address cooling water
intake structures at these facilities. Instead, EPA believes that it is
better to continue to rely upon the existing National Pollutant
Discharge Elimination System (NPDES) program, which implements section
316(b) for existing facilities not covered under the Phase II rule on a
case-by-case, best professional judgment basis. This final action
constitutes Phase III of EPA's section 316(b) regulation development.
This rule does not alter the regulatory requirements for facilities
subject to the Phase I or Phase II regulations.
DATES: This regulation is effective July 17, 2006. For judicial review
purposes, this final rule is promulgated as of 1 p.m. Eastern Daylight
Time (EDT) on June 30, 2006 as provided in 40 CFR 23.2.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-OW-2004-0002. All documents in the docket are listed on the
http://www.regulations.gov web site. Although listed in the index, some
information is not publicly available, e.g., confidential business
information (CBI) or other information whose disclosure is restricted
by statute. Certain other material, such as copyrighted material, is
not placed on the Internet and will be publicly available only in hard
copy form. Publicly available docket materials are available either
electronically through http://www.regulations.gov or in hard copy at the Water
Docket in the EPA Docket Center, EPA/DC, EPA West, Room B102, 1301
Constitution Ave., NW, Washington, DC. The Public Reading Room is open
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The telephone number for the Public Reading Room is (202)
566-1744, and the telephone number for the Water Docket is (202) 566-
2426.
FOR FURTHER INFORMATION CONTACT: For additional technical information
contact Paul Shriner, OW/OST at (202) 566-1076. For additional
biological information contact Ashley Allen, OW/OST at (202) 566-1012.
The address for the above contacts is: Office of Science and
Technology, Engineering Analysis Division (Mailcode 4303T),
Environmental Protection Agency, 1200 Pennsylvania Ave., NW.,
Washington, DC 20460; fax number: (202) 566-1053; e-mail address:
rule.316b@epa.gov.
SUPPLEMENTARY INFORMATION:
I. General Information
A. What Entities Are Regulated By This Action?
This final rule applies to new offshore and coastal oil and gas
extraction facilities, which were specifically excluded from the Phase
I new facility rule. New offshore and coastal oil and gas extraction
facilities with a design intake flow threshold of greater than 2
million gallons per day (MGD) are subject to requirements similar to
those under the Phase I rule. A new offshore or coastal oil and gas
extraction facility is defined as any building, structure, facility, or
installation that (1) meets the definition of a ``new facility'' in 40
CFR 125.83; (2) is regulated by either the Offshore or Coastal
subcategories of the Oil and Gas Extraction Point Source Category
Effluent Guidelines in 40 CFR part 435, Subpart A or Subpart D; and (3)
commences construction after July 17, 2006. Any offshore or coastal oil
and gas extraction facility that does not meet these three criteria is
subject to section 316(b) requirements established by the permit writer
on a case-by-case basis. Exhibit I-1 provides examples of other
industrial facility types potentially interested in this final action.
Exhibit I-1.--Industrial Facility Types Potentially Interested in This Final Action
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Examples of potentially Standard industrial North American
Category interested entities classification codes industry codes (NAIC)
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Federal, State and local government Operators of steam electric 4911 and 493.......... 221111, 221112,
generating point source 221113, 221119,
dischargers that employ 221121, 221122
cooling water intake
structures.
Industry........................... Operators of industrial See below............. See below
point source dischargers
that employ cooling water
intake structures.
Agricultural production.... 0133.................. 111991, 11193
Metal mining............... 1011.................. 21221
Oil and gas extraction..... 1311, 1321............ 211111, 211112
Mining and quarrying of 1474.................. 212391
nonmetallic minerals.
Food and kindred products.. 2046, 2061, 2062, 311221, 311311,
2063, 2075, 2085. 311312, 311313,
311222, 311225, 31214
Tobacco products........... 2141.................. 312229, 31221
Textile mill products...... 2211.................. 31321
Lumber and wood products, 2415, 2421, 2436, 2493 321912, 321113,
except furniture. 321918, 321999,
321212, 321219
Paper and allied products.. 2611, 2621, 2631, 2676 3221, 322121, 32213,
322121, 322122,
32213, 322291
Chemical and allied 28 (except 2895, 2893, 325 (except 325182,
products. 2851, and 2879). 32591, 32551, 32532)
[[Page 35007]]
Petroleum refining and 2911, 2999............ 32411, 324199
related industries.
Rubber and miscellaneous 3011, 3069............ 326211, 31332, 326192,
plastics. 326299
Stone, clay, glass, and 3241.................. 32731
concrete products.
Primary metal industries... 3312, 3313, 3315, 324199, 331111,
3316, 3317, 3334, 331112, 331492,
3339, 3353, 3363, 331222, 332618,
3365, 3366. 331221, 22121,
331312, 331419,
331315, 331521,
331524, 331525
Fabricated metal products, 3421, 3499............ 332211, 337215,
except machinery and 332117, 332439,
transportation equipment. 33251, 332919,
339914, 332999
Industrial and commercial 3523, 3531............ 333111, 332323,
machinery and computer 332212, 333922,
equipment. 22651, 333923, 33312
Transportation equipment... 3724, 3743, 3764...... 336412, 333911, 33651,
336416
Measuring, analyzing, and 3861.................. 333315, 325992
controlling instruments,
photographic, medical, and
optical goods, watches and
clocks.
Electric, gas, and sanitary 4911, 4931, 4939, 4961 221111, 221112,
services. 221113, 221119,
221121, 221122,
22121, 22133
Educational services....... 8221.................. 61131
Engineering, accounting, 8731.................. 54171
research, management and
related services.
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This exhibit is not intended to be exhaustive, but rather provides
a guide for readers regarding entities likely to be interested in this
action. This exhibit also lists the types of entities that EPA is now
aware could potentially be regulated by this action. Other types of
entities not listed in the exhibit could also be regulated. To
determine whether your facility is regulated by this action, you should
carefully examine the applicability criteria in Sec. 125.131 of this
rule. If you have questions regarding the applicability of this action
to a particular entity, consult the persons listed for technical
information in the FOR FURTHER INFORMATION CONTACT section.
B. Supporting Documentation
The final regulation is supported by three major documents:
1. Economic and Benefits Analysis for the Final Section 316(b)
Phase III Existing Facilities Rule (EPA-821-R-06-001), hereafter
referred to as the Economic and Benefits Analysis or EA. This document
presents the methodology employed to assess economic impacts of the
options we considered for this action and the results of the analysis.
2. Regional Analysis for the Final Section 316(b) Phase III
Existing Facilities Rule (EPA-821-R-06-002), hereafter referred to as
the Regional Analysis Document. This document examines cooling water
intake structure impacts and the environmental benefits of the national
categorical regulatory options we considered for this action at the
regional level.
3. Technical Development Document for the Final Section 316(b)
Phase III Existing Facilities Rule (EPA-821-R-06-003), hereafter
referred to as the Technical Development Document. This document
presents the technical information that formed the basis for our
decisions in this action, including information on the costs and
performance of the impingement and entrainment reduction technologies
we considered.
Table of Contents
I. General Information
II. Scope and Applicability of the Final Rule
III. Legal Authority, Purpose, and Background of This Regulation
IV. Environmental Impacts Associated with Cooling Water Intake
Structures
V. Description of the Rule
VI. Basis for the Final Rule Decision
VII. Response to Major Comments on the Proposed Rule and Notice of
Data Availability (NODA)
VIII. Implementation
IX. Economic Impact Analysis
X. Benefits Analysis
XI. Comparison of Benefits and Costs
XII. Statutory and Executive Order Reviews
II. Scope and Applicability of the Final Rule
The national categorical requirements in this rule apply to new
offshore oil and gas extraction facilities, which were specifically
excluded from the Phase I new facility rule. (40 CFR part 125, Subpart
I). This rule defines the term ``new offshore oil and gas extraction
facility'' to encompass facilities in both the offshore and the coastal
subcategories of EPA's Oil and Gas Extraction Point Source Category for
which effluent limitations are established at 40 CFR part 435. Although
the term ``offshore'' denotes only one of these two subcategories for
purposes of the effluent guidelines, EPA is using the term ``offshore''
here to denote facilities in either subcategory because the
requirements in this rule are the same for both offshore and coastal
facilities and the term ``offshore'' is commonly understood to include
any facilities not located on land. In order to be covered by this
rule, these facilities would need to use cooling water intake
structures to withdraw water from waters of the U.S. and meet all other
applicability criteria, as described in this section.
New offshore oil and gas facilities that meet all of the following
criteria are subject to this rule:
The facility is a point source;
The facility uses or proposes to use cooling water intake
structures,
[[Page 35008]]
including a cooling water intake structure operated by one or more
independent suppliers (other than a public water system), with a total
design intake flow equal to or greater than 2 million gallons per day
(MGD) to withdraw cooling water from waters of the United States;
The facility is expected to use at least 25 percent of
water withdrawn exclusively for cooling purposes, based on the new
facility's design and measured as a monthly average, during at least
one month over the course of a year.
For the purposes of this rule, a new facility is a point source if
it has, or is required to have, an NPDES permit. If a new facility is a
point source that uses a cooling water intake structure, but does not
meet the applicable design intake flow/source waterbody threshold or
the 25 percent cooling water use threshold, it would continue to be
subject to permit conditions implementing CWA section 316(b) set by the
permit director on a case-by-case, best professional judgment basis.
Section II.A of the preamble discusses what constitutes a ``new''
offshore oil and gas extraction facility for purposes of the section
316(b) Phase III rule. Requirements for new offshore oil and gas
extraction facilities are specified in 40 CFR Subpart N.
Existing Phase III facilities, including manufacturing facilities,
electric power producers with a design intake flow (DIF) less than 50
MGD, and existing offshore oil and gas extraction facilities, are not
subject to the national categorical requirements of this final rule.
These facilities will continue to be regulated on a case-by-case basis
using a permit director's best professional judgment.
Finally, this rule does not establish national categorical
requirements for seafood processing vessels or offshore liquefied
natural gas import terminals. Those facilities would be subject to
permit conditions implementing CWA section 316(b) set by the permit
director on a case-by-case, best professional judgment basis where the
facility is a point source and uses a cooling water intake structure.
A. What Is a ``New'' Offshore Oil and Gas Extraction Facility for
Purposes of the Section 316(b) Phase III Rule?
For purposes of this rule, new offshore oil and gas extraction
facilities are those facilities that (1) are subject to the Offshore or
Coastal subcategories of the Oil and Gas Extraction Point Source
Category Effluent Guidelines (i.e., 40 CFR part 435 Subpart A (Offshore
Subcategory) or 40 CFR part 435 Subpart D (Coastal Subcategory)); (2)
commence construction after July 17, 2006; and (3) meet the definition
of a ``new facility'' in 40 CFR 125.83. For a discussion of the
definition of new facility, see 66 FR 65256, 65258-59, 65785-87
(December 18, 2001) and 69 FR 41576, 41578-80 (July 9, 2004). New
offshore oil and gas extraction facilities were not subject to the
Phase I new facility rule.
The determination of whether a facility is ``new'' or ``existing''
is focused on the point source discharger--not on the cooling water
intake structure. In other words, modifications or additions to the
cooling water intake structure (or even the total replacement of an
existing cooling water intake structure with a new one) does not
convert an otherwise unchanged existing facility into a new facility,
regardless of the purpose of such changes. Rather, the determination as
to whether a facility is new or existing focuses on the point source
itself.
B. What Is ``Cooling Water'' and What Is a ``Cooling Water Intake
Structure?''
This rule adopts the same definition of a ``cooling water intake
structure'' that applies to new facilities under the final Phase I rule
and existing facilities under the final Phase II rule. Under this final
rule, a cooling water intake structure is defined as the total physical
structure and any associated constructed waterways used to withdraw
cooling water from waters of the United States. Under this definition,
the cooling water intake structure extends from the point at which
water is withdrawn from the surface water source up to and including
the intake pumps. This rule also adopts the definition of ``cooling
water'' used in the Phase I and Phase II rules: water used for contact
or noncontact cooling, including water used for equipment cooling,
evaporative cooling tower makeup, and dilution of effluent heat
content. The definition specifies that the intended use of cooling
water is to absorb waste heat rejected from the processes used or
auxiliary operations on the facility's premises. As is the case with
the Phase I and Phase II rules, only the water used exclusively for
cooling purposes is to be counted when determining whether the 25
percent threshold in Sec. 125.131(a)(2) is met.
C. Would My Facility Be Covered if It Is a Point Source Discharger?
This rule applies only to facilities that have an NPDES permit or
are required to obtain one. This is the same requirement EPA included
in the Phase I and Phase II final rules (see 40 CFR 125.81(a)(1) and 40
CFR 125.91(a)(1), respectively). Requirements for complying with
section 316(b) will continue to be applied through NPDES permits.
The Agency recognizes that some facilities that have or are
required to have an NPDES permit might not own and operate the intake
structure that supplies their facility with cooling water. For example,
facilities operated by separate entities might be located on the same,
adjacent, or nearby property(ies); one of these facilities might take
in cooling water and then transfer it to other facilities prior to
discharge of the cooling water to a water of the United States. Section
125.92(c) of this rule addresses such a situation. It provides that use
of a cooling water intake structure includes obtaining cooling water by
any sort of contract or arrangement with one or more independent
suppliers of cooling water if the supplier withdraws water from waters
of the United States. This provision is intended to prevent new Phase
III facilities from circumventing the requirements of this rule by
creating arrangements to receive cooling water from an entity that is
not itself subject to the requirements of Phase III. EPA expects that a
facility that is otherwise subject to the requirements of Phase I and
that is an independent supplier to a Phase III facility would still be
subject to the requirements of Phase I.
D. When Would a New Offshore Oil and Gas Extraction Facility Be
Required To Comply With Any New 316(b) Requirements?
This final rule will become effective July 17, 2006. After that
date, new offshore oil and gas extraction Phase III facilities will
need to comply when an NPDES permit containing requirements consistent
with this rule is issued to the facility (see Sec. 125.132). Under
current NPDES program regulations, this will occur when a new NPDES
permit is issued or when an existing NPDES permit is issued, reissued,
or modified or revoked and reissued.
Most offshore oil and gas extraction facilities are covered by
general permits issued by EPA. New offshore oil and gas extraction
facilities that meet the applicability criteria for the Phase III rule
may obtain permit coverage under these general permits until they
expire. When EPA reissues these general permits, EPA will incorporate
requirements based on today's rule. Facilities that are new offshore
oil and gas extraction facilities, as defined in today's rule, will be
subject to those Phase III section 316(b) new facility
[[Page 35009]]
requirements should they seek permit coverage under those reissued
general permits.
III. Legal Authority, Purpose, and Background of This Final Regulation
A. Legal Authority
This action is issued under the authority of sections 101, 301,
308, 316, 401, 402, 501, and 510 of the Clean Water Act (CWA), 33
U.S.C. 1251, 1311, 1318, 1326, 1341, 1342, 1361, and 1370. Publication
of this action fulfills the final obligation of the U.S. Environmental
Protection Agency (EPA) under a consent decree in Riverkeeper, Inc. v.
Johnson, No. 93 Civ. 0314, (S.D.N.Y).
B. Purpose of This Regulation
Section 316(b) of the CWA provides that any standard established
pursuant to section 301 or 306 of the CWA and applicable to a point
source must require that the location, design, construction, and
capacity of cooling water intake structures reflect the best technology
available for minimizing adverse environmental impact. This rule
establishes requirements that apply to new offshore oil and gas
extraction facilities that have a design intake flow threshold of
greater than 2 MGD. This is the same design intake flow threshold as
for new facilities in the Phase I rule. To be covered, a facility would
need to use at least 25 percent of the water withdrawn exclusively for
cooling purposes and meet other specified criteria in order to be
within the scope of the rule (see section II--Scope and Applicability
of Final Rule). In this action, EPA is not promulgating any new section
316(b) requirements for existing facilities. Therefore, existing
facilities that are not covered by the Phase II rule (Phase II is
described in section III.C.5 of this preamble) must continue to meet
requirements under Section 316(b) of the CWA determined by the
permitting authority on a case-by-case, best professional judgment
(BPJ) basis. See 40 CFR 125.90(b).
C. Background
1. The Clean Water Act
The Federal Water Pollution Control Act, also known as the Clean
Water Act (CWA), 33 U.S.C. 1251 et seq., seeks to ``restore and
maintain the chemical, physical, and biological integrity of the
nation's waters.'' 33 U.S.C. 1251(a). The CWA establishes a
comprehensive regulatory program, key elements of which are (1) a
prohibition on the discharge of pollutants from point sources to waters
of the United States, except as authorized by the statute; (2)
authority for EPA or authorized States or Tribes to issue National
Pollutant Discharge Elimination System (NPDES) permits that regulate
the discharge of pollutants; and (3) requirements for limitations in
NPDES permits based on effluent limitations guidelines and standards
and water quality standards.
Section 316(b) addresses the adverse environmental impact caused by
the intake of cooling water, not discharges into water. Despite this
special focus, the requirements of section 316(b) are closely linked to
several of the core elements of the NPDES permit program established
under section 402 of the CWA to control discharges of pollutants into
navigable waters. For example, while effluent limitations apply to the
discharge of pollutants by NPDES-permitted point sources to waters of
the United States, section 316(b) applies to facilities subject to
NPDES requirements that withdraw water from waters of the United States
for cooling and that use a cooling water intake structure to do so.
Section 301 of the CWA prohibits the discharge of any pollutant by
any person, except in compliance with specified statutory requirements,
including section 402. Section 402 of the CWA provides authority for
EPA or an authorized State or Tribe to issue an NPDES permit to any
person discharging any pollutant or combination of pollutants from a
point source into waters of the United States. Forty-five States and
one U.S. territory are currently authorized under section 402(b) to
administer the NPDES permitting program. NPDES permits restrict the
types and amounts of pollutants, including heat, that may be discharged
from various industrial, commercial, and other sources of wastewater.
These permits control the discharge of pollutants primarily by
requiring dischargers to meet effluent limitations established pursuant
to section 301 or section 306. Effluent limitations are based on
Federal effluent limitations guidelines and new source performance
standards, or in cases where there are no applicable effluent
guidelines or standards, on the best professional judgment of the
permit writer. Limitations based on these guidelines, standards, or
best professional judgment are known as technology-based effluent
limits. Where technology-based effluent limits are inadequate to ensure
attainment of water quality standards applicable to the receiving
water, section 301(b)(1)(C) of the CWA requires permits to include more
stringent limits based on applicable water quality standards. NPDES
permits also routinely include monitoring and reporting requirements,
and other conditions, including conditions to implement the
requirements of section 316(b).
Section 510 of the CWA provides that, except as provided in the
CWA, nothing in the Act shall preclude or deny the right of any State
or political subdivision thereof to adopt or enforce any requirement
respecting control or abatement of pollution; except that if a
limitation, prohibition or standard of performance is in effect under
the CWA, such State or political subdivision may not adopt or enforce
any other limitation, prohibition or standard of performance which is
less stringent than the limitation, prohibition or standard of
performance under the Act. EPA interprets this to reserve for the
States authority to implement requirements that are more stringent than
the Federal requirements under State law. PUD No. 1 of Jefferson County
v. Washington Dep't of Ecology, 511 U.S. 700, 705 (1994).
Under sections 301, 304, and 306 of the CWA, EPA issues effluent
limitations guidelines and new source performance standards for
categories of industrial dischargers based on the pollutants of concern
discharged by the industry, the degree of control that can be attained
using various levels of pollution control technology, consideration of
economics, as appropriate to each level of control, and other factors
identified in sections 304 and 306 of the CWA. EPA has promulgated
regulations setting effluent limitations guidelines and standards under
sections 301, 304, and 306 of the CWA for more than 50 industries. See
40 CFR parts 405 through 471. EPA has established effluent limitations
guidelines and standards that apply to most of the industry categories
that use cooling water intake structures (e.g., steam electric power
generation, iron and steel manufacturing, pulp and paper manufacturing,
petroleum refining, and chemical manufacturing).
Section 316(b) states that any standard established pursuant to
section 301 or section 306 of [the Clean Water] Act and applicable to a
point source shall require that the location, design, construction, and
capacity of cooling water intake structures reflect the best technology
available for minimizing adverse environmental impact.
The phrase ``best technology available'' in CWA section 316(b) is
not defined in the statute, but its meaning can be understood in light
of similar phrases used elsewhere in the CWA. See Riverkeeper, Inc. v.
EPA, 358 F.3d 174, 186 (2nd Cir. 2004) (noting that the cross-reference
in CWA section 316(b) to CWA section 306 ``is an invitation to
[[Page 35010]]
look to section 306 for guidance in discerning what factors Congress
intended the EPA to consider in determining ``best technology
available'' for new sources).
In sections 301 and 306, Congress directed EPA to set effluent
discharge standards for new sources based on the ``best available
demonstrated control technology'' and for existing sources based on the
``best available technology economically achievable.'' For new sources,
section 306(b)(1)(B) directs EPA to establish ``standards of
performance.'' The phrase ``standards of performance'' under section
306(a)(1) is defined as being the effluent reduction that is
``achievable through application of the best available demonstrated
control technology, processes, operating methods or other alternatives
* * * .'' This is commonly referred to as ``best available demonstrated
technology'' or ``BADT.'' For existing dischargers, section
301(b)(1)(A) requires the establishment of effluent limitations based
on ``the application of best practicable control technology currently
available.'' This is commonly referred to as ``best practicable
technology'' or ``BPT.'' Further, section 301(b)(2)(A) directs EPA to
establish effluent limitations for certain classes of pollutants
``which shall require the application of the best available technology
economically achievable.'' This is commonly referred to as ``best
available technology'' or ``BAT.'' Section 301 specifies that both BPT
and BAT limitations must reflect determinations made by EPA under CWA
section 304. Under these provisions, the limitations on the discharge
of pollutants from point sources are based upon the capabilities of the
equipment or ``control technologies'' available to control those
discharges.
The phrases ``best available demonstrated technology'' and ``best
available technology''--like ``best technology available'' in CWA
section 316(b)--are not defined in the statute. However, section 304 of
the CWA specifies factors to be considered in establishing the best
practicable control technology currently available and best available
technology.
For best practicable control technology currently available, the
CWA directs EPA to consider the total cost of application of technology
in relation to the effluent reduction benefits to be achieved from such
application, and shall also take into account the age of the equipment
and facilities involved, the process employed, the engineering aspects
of the application of various types of control techniques, process
changes, non-water quality environmental impact (including energy
requirements), and such other factors as [EPA] deems appropriate. (33
U.S.C. 1314(b)(1)(B)).
For ``best available technology,'' the CWA directs EPA to consider
the age of equipment and facilities involved, the process employed, the
engineering aspects * * * of various types of control techniques,
process changes, the cost of achieving such effluent reduction, non-
water quality environmental impacts (including energy requirements),
and such other factors as [EPA] deems appropriate. (33 U.S.C.
1314(b)(2)(B)).
Section 316(b) expressly refers to section 301, and the phrase
``best technology available'' is very similar to ``best available
technology'' in that section. These facts, coupled with the brevity of
section 316(b) itself, prompted EPA to look to section 301 and,
ultimately, section 304 for guidance in determining the ``best
technology available to minimize adverse environmental impact'' of
cooling water intake structures for Phase III existing facilities.
By the same token, however, there are significant differences
between section 316(b) and sections 301 and 304. See Riverkeeper, 358
F.3d at 186 (``not every statutory directive contained [in sections 301
and 306] is applicable'' to a section 316(b) rulemaking). Section
316(b) requires that cooling water intake structures reflect ``the best
technology available for minimizing adverse environmental impact.'' In
contrast to the effluent limitations provisions, the object of the
``best technology available'' is explicitly articulated by reference to
the receiving water: To minimize adverse environmental impact in the
waters from which cooling water is withdrawn. In other words, EPA must
consider the receiving water effects of the candidate technologies.
Because section 316(b) is silent as to the factors EPA should
consider in deciding whether a candidate technology minimizes adverse
environmental impact, EPA has broad discretion to identify the
appropriate criteria. See Riverkeeper, 358 F.3d at 187, n.12 (brevity
of section 316(b) reflects an intention to delegate significant
rulemaking authority to EPA); see id. at 195 (appellate courts give EPA
``considerable discretion to weigh and balance the various factors''
where the statute does not state what weight should be accorded)
(citation omitted).
For this Phase III rulemaking, EPA therefore interprets the phrase
``best available technology for minimizing adverse environmental
impacts'' as authorizing EPA to consider the relationship of the costs
of the technologies to the benefits associated with them. EPA has
previously considered the costs of technologies in relation to the
benefits of minimizing adverse environmental impact in establishing
section 316(b) limits, which historically have been done on a case-by-
case basis. In Re Public Service Co. of New Hampshire, 10 ERC 1257
(June 17, 1977); In Re Public Service Co. of New Hampshire, 1 EAD 455
(Aug. 4, 1978); Seacoast Anti-Pollution League v. Costle, 597 F.2d 306
(1st Cir. 1979).
In addition to helping EPA determine the effects of candidate
technologies on the receiving water, considering the relationship of
costs and benefits also helps EPA determine whether the technologies
are economically practicable. EPA has long recognized, with the support
of legislative history, that section 316(b) does not require adverse
environmental impact to be minimized beyond that which can be achieved
at an economically practicable cost. See 118 Cong. Rec. 33762 (1972)
reprinted in 1 Legislative History of the Water Pollution Control Act
Amendments of 1972, at 264 (1973) (Statement of Representative Don H.
Clausen). EPA therefore may consider costs and benefits in deciding
whether any of the technology options for Phase III existing facilities
actually do minimize adverse environmental impact--or whether the
choice of technologies should be left to BPJ decision-making. When the
costs of establishing a national categorical rule substantially
outweigh the benefits of such a rule, a national categorical section
316(b) rule may not be economically practicable, and therefore not the
``best technology available for minimizing adverse environmental
impact.''
Nothing in section 316(b) requires EPA to promulgate a regulation
to implement the requirements for cooling water intake structures.
Section 316(b) of the CWA grants EPA broad authority to establish
performance standards for cooling water intake structures based on the
``best technology available to minimize adverse environmental impact.''
Although EPA has chosen under section 316(b) to promulgate national
categorical performance standards applicable to certain classes of
point sources using cooling water intake structures, see 40 CFR part
125, Subpart I (new facilities), Subpart J (existing power generating
facilities), and Subpart N (new offshore oil and gas facilities), the
statute does not preclude EPA from determining BTA on a site-specific
basis. Indeed, the U.S. Court of
[[Page 35011]]
Appeals for the Second Circuit, in upholding virtually the entire
316(b) Phase I rule for new facilities, specifically noted that section
316(b) does not compel EPA to regulate cooling water intake structures
using any particular format, e.g. overarching regulation, different
regulations for different categories of sources, or individually on a
case-by-case basis. Riverkeeper, 358 F.3d at 203. In fact, EPA and
state permitting authorities have been implementing Section 316(b) on a
case-by-case basis for over 25 years (see Section III.C.3 below), and
courts have recognized this practice as consistent with the statute.
See Hudson Riverkeeper Fund v. Orange & Rockland Utils., Inc., 835 F.
Supp. 160, 165 (S.D.N.Y. 1993) (``This leaves to the Permit Writer an
opportunity to impose conditions on a case-by-case basis, consistent
with the statute * * * ''). Moreover, in both the Phase I and II rules,
EPA uses a case-by-case, BPJ permitting regime for facilities that do
not meet the applicability criteria for EPA's national categorical
rules. See 40 CFR 125.81(a), 125.90(b). In Riverkeeper, this provision
of the Phase I rule was upheld by the Second Circuit. 358 F.3d at 203
(``[w]e see no textual bar in sections 306 or 316(b) to regulating
below-threshold structures on a case-by-case basis.'').
2. Consent Decree
This final action fulfills EPA's obligation to comply with the
Second Amended Consent Decree, which was filed on November 25, 2002, in
the United States District Court, Southern District of New York, in
Riverkeeper, Inc. v. Johnson, No. 93 Civ 0314 (AGS). That case was
brought against EPA by a coalition of individuals and environmental
groups. The original Consent Decree, filed on October 10, 1995,
provided that EPA was to propose regulations implementing section
316(b) by July 2, 1999, and take final action with respect to those
regulations by August 13, 2001. Under subsequent interim orders, the
Amended Consent Decree filed on November 22, 2000, and the Second
Amended Consent Decree, EPA divided the rulemaking into three phases.
EPA took final action promulgating a rule governing cooling water
intake structures used by new facilities (Phase I) on November 9, 2001
(66 FR 65255, December 18, 2001). EPA took final action promulgating a
rule governing cooling water intake structures used by large existing
power producers (Phase II) on February 16, 2004 (69 FR 41576, July 9,
2004). The consent decree further requires that EPA propose by November
1, 2004, and take final action on by June 1, 2006 regulations
applicable to the following categories: Utility and non-utility power
producers not covered by the Phase II regulations, pulp and paper
manufacturing, petroleum and coal products manufacturing, chemical and
allied products manufacturing, and primary metals manufacturing (Phase
III). EPA proposed Phase III regulations on November 1, 2004 (69 FR
68444) and this final action fulfills EPA's obligations for Phase III.
3. What Other EPA Rulemakings and Guidance Address Cooling Water Intake
Structures?
In April 1976, EPA published a final rule under section 316(b) that
addressed cooling water intake structures. 41 FR 17387 (April 26,
1976), see also the proposed rule at 38 FR 34410 (December 13, 1973).
The rule added a new Sec. 401.14 to 40 CFR Chapter I that reiterated
the requirements of CWA section 316(b). It also added a new part 402,
which included three sections: (1) Sec. 402.10 (Applicability), (2)
Sec. 402.11 (Specialized definitions), and (3) Sec. 402.12 (Best
technology available for cooling water intake structures). Section
402.10 stated that the provisions of part 402 applied to ``cooling
water intake structures for point sources for which effluent
limitations are established pursuant to section 301 or standards of
performance are established pursuant to section 306 of the Act.''
Section 402.11 defined the terms ``cooling water intake structure,''
``location,'' ``design,'' ``construction,'' ``capacity,'' and
``Development Document.'' Section 402.12 included the following
language:
The information contained in the Development Document shall be
considered in determining whether the location, design,
construction, and capacity of a cooling water intake structure of a
point source subject to standards established under section 301 or
306 reflect the best technology available for minimizing adverse
environmental impact.
In 1977, fifty-eight electric utility companies challenged those
regulations, arguing that EPA had failed to comply with the
requirements of the Administrative Procedure Act (APA) in promulgating
the rule. Specifically, the utilities argued that EPA had neither
published the Development Document in the Federal Register nor properly
incorporated the document into the rule by reference. The United States
Court of Appeals for the Fourth Circuit agreed and, without reaching
the merits of the regulations themselves, remanded the rule.
Appalachian Power Co. v. Train, 566 F.2d 451 (4th Cir. 1977). EPA later
withdrew part 402.44 FR 32956 (June 7, 1979). The regulation at 40 CFR
401.14, which reiterates the statutory requirement, remains in effect.
Since the Fourth Circuit remanded EPA's section 316(b) regulations
in 1977, NPDES permit authorities have made decisions implementing
section 316(b) on a case-by-case, site-specific basis. EPA published
draft guidance addressing section 316(b) implementation in 1977. See
Draft Guidance for Evaluating the Adverse Impact of Cooling Water
Intake Structures on the Aquatic Environment: Section 316(b) P.L. 92-
500 (U.S. EPA, 1977). This draft guidance described the studies
recommended for evaluating the impact of cooling water intake
structures on the aquatic environment and recommended a basis for
determining the best technology available for minimizing adverse
environmental impact. The 1977 section 316(b) draft guidance states,
``The environmental-intake interactions in question are highly site-
specific and the decision as to best technology available for intake
design, location, construction, and capacity must be made on a case-by-
case basis.'' (Section 316(b) Draft Guidance, U.S. EPA, 1977, p. 4).
This case-by-case approach was also consistent with the approach
described in the 1976 Development Document referenced in the remanded
regulation.
The 1977 section 316(b) draft guidance suggested a general process
for developing information needed to support section 316(b) decisions
and presenting that information to the permitting authority. The
process involved the development of a site-specific study of the
environmental effects associated with each facility that uses one or
more cooling water intake structures, as well as consideration of that
study by the permitting authority in determining whether the facility
must make any changes for minimizing adverse environmental impact.
Where adverse environmental impact is present, the 1977 draft guidance
suggested a stepwise approach that considers size, location, capacity,
available technology, and other factors.
The draft guidance left the decisions on the appropriate location,
design, capacity, and construction of cooling water intake structures
to the permitting authority. Under this framework, the Director
determined whether appropriate studies have been performed, whether a
given facility has minimized adverse environmental impact, and what, if
any, technologies may be required.
4. Phase I New Facility Rule
On November 9, 2001, EPA took final action on Phase I regulations
governing
[[Page 35012]]
cooling water intake structures at new facilities. 66 FR 65255
(December 18, 2001). On December 26, 2002, EPA made minor changes to
the Phase I regulations. 67 FR 78947. The final Phase I new facility
rule (40 CFR part 125, Subpart I) establishes requirements applicable
to the location, design, construction, and capacity of cooling water
intake structures at new facilities that withdraw greater than two (2)
MGD and use at least twenty-five (25) percent of the water they
withdraw solely for cooling purposes.
With the new facility rule, EPA promulgated national minimum
requirements for the location, design, capacity, and construction of
cooling water intake structures at new facilities. The final new
facility rule establishes a reasonable framework that creates certainty
for permitting of new facilities, while providing significant
flexibility to take site-specific factors into account.
EPA specifically excluded new offshore oil and gas extraction
facilities from the Phase I new facility rule, but committed to
consider establishing requirements for such facilities in the Phase III
rulemaking. 66 FR 65338 (December 18, 2001).
5. Phase II Existing Facility Rule
On February 16, 2004, EPA took final action on regulations
governing cooling water intake structures at certain existing power
producing facilities. 69 FR 41576 (July 9, 2004). The final Phase II
rule applies to existing facilities that are point sources; that, as
their primary activity, both generate and transmit electric power or
generate electric power for sale to another entity for transmission;
that use or propose to use cooling water intake structures with a total
design intake flow of 50 MGD or more to withdraw cooling water from
waters of the United States; and that use at least 25 percent of the
withdrawn water exclusively for cooling purposes.
Under the Phase II rule, EPA established performance standards for
the reduction of impingement mortality and entrainment (see 40 CFR
125.94). The performance standards consist of ranges of reductions in
impingement mortality and/or entrainment. These performance standards
reflect the best technology available for minimizing adverse
environmental impacts at facilities covered by the Phase II rule. The
type of performance standard applicable to a particular facility (i.e.,
reductions in impingement mortality only or impingement mortality and
entrainment) is based on several factors, including the facility's
location (i.e., source waterbody), rate of use (capacity utilization
rate), and the proportion of the waterbody withdrawn. The Phase II
regulations address more than 90 percent of total cooling water intake
flows in the United States.
6. Public Participation
EPA worked extensively with stakeholders from industry, public
interest groups, State agencies, and other Federal agencies in the
development of this rule. EPA included industry groups, environmental
groups, and other government entities in the development, testing,
refinement, and completion of the section 316(b) survey, which was used
as a primary source of data for Phase III. As discussed in section III
of this preamble, the survey, ``Information Collection Request,
Detailed Industry Questionnaires: Phase II Cooling Water Intake
Structures & Watershed Case Study Short Questionnaire,'' was initiated
in 1997, and was used to collect data during 2000.
EPA sponsored a Symposium on Cooling Water Intake Technologies to
Protect Aquatic Organisms, on May 6-7, 2003. This symposium brought
together professionals from Federal, State, and Tribal regulatory
agencies; industry; environmental organizations; engineering consulting
firms; science and research organizations; academia; and others
concerned with mitigating harm to the aquatic environment by cooling
water intake structures. Efficacy and costs of various technologies to
mitigate impacts to aquatic organisms from cooling water intake
structures, as well as research and other future needs, were discussed.
During the development of this regulation, EPA met several times
with trade associations whose members would be subject to Phase III
requirements. EPA also conducted Phase III-specific data collection
activities, including a study of entrainment at Phase III facilities,
contacting Phase III facilities to request biological studies and
conducting an industry survey of offshore oil and gas extraction
facilities and seafood processing vessels.
In developing requirements for new offshore oil and gas extraction
facilities, EPA drew on its experience from the offshore oil and gas,
the coastal oil and gas, and the synthetic drilling fluids effluent
limitations guidelines, which included extensive public outreach,
meetings, public comment periods, industry surveys, and economic
analysis and modeling of representative oil and gas operations as
detailed in 61 FR 66086-66130 and 66 FR 6849-6919.
Finally, EPA convened a Small Business Advocacy Review (SBAR) panel
(in accordance with the Regulatory Flexibility Act section 609(b) as
amended by the Small Business Regulatory and Enforcement Fairness Act)
to provide information to small entities and receive feedback during
the Phase III rulemaking process. EPA hosted a pre-panel outreach
meeting for small entities potentially subject to Phase III on January
22, 2004. The SBAR panel held an outreach meeting with small entity
representatives (SERs) on March 16, 2004. Based on the information
gathered from the participating small entities during these outreach
meetings and subsequent correspondence, the SBAR panel produced a final
report to the EPA Administrator on April 27, 2004. Results of the final
report were considered in the development of the Phase III rule.
These coordination efforts and all of the meetings described in
this section, as well as the comments submitted on the Phase I and II
section 316(b) rules and EPA's response to these comments, are
documented or summarized in the dockets for these three rules. The
Administrative Record for this rule includes all materials from the
Phase I, Phase II, and Phase III section 316(b) rule dockets.
IV. Environmental Impacts Associated With Cooling Water Intake
Structures
EPA has identified a variety of environmental impacts that may be
associated with cooling water intake structures at Phase III
facilities, depending on conditions at an individual facility's site.
These impacts include organism entrainment and impingement, which can
contribute to impacts to threatened and endangered species; reductions
in ecologically critical aquatic organisms, including important
elements of an ecosystem's food chain; diminishment of population
compensatory reserves; losses to populations, including reductions of
commercial and recreational fisheries; and stresses to overall
communities and ecosystems as evidenced by reductions in diversity,
changes in species composition, or other changes in ecosystem structure
or function. (See discussion at 69 FR 68461-66.)
The withdrawal of water affects a variety of aquatic organisms
including phytoplankton (tiny, free-floating photosynthetic organisms
suspended in the water column), zooplankton (small aquatic animals,
including fish eggs and larvae, which may consume phytoplankton and
other zooplankton), macroinvertebrates, shellfish, and fish. Other
organisms, including reptiles,
[[Page 35013]]
birds, and mammals can also be impinged or entrained.
Impingement takes place when organisms are trapped against a
cooling water intake structure, particularly screening materials, by
the force of water being drawn through the intake structure. The
velocity of the water intake by the structure can remove fish scales or
other organism structures, prevent proper gill function, or otherwise
physically harm or cause the death of impinged organisms through
exhaustion, starvation, asphyxiation, and descaling or other injury.
Death from impingement (``impingement mortality'') can take place while
organisms are impinged on an intake structure or it can take place
after organisms have escaped impingement and have returned to a
waterbody. An organism can die despite escaping impingement because of
injuries it receives during the impingement process.
Entrainment occurs when organisms are drawn through a cooling water
intake structure into a facility's cooling system. Organisms that
become entrained are typically relatively small aquatic organisms,
including many early life stages of fish and shellfish. As entrained
organisms pass through a facility's cooling system they can be subject
to mechanical, thermal, and/or, chemical stress. Sources of stress
include physical impacts in the pumps and condenser tubing, pressure
changes caused by diversion of the cooling water into the plant or by
the hydraulic effects of the condensers, shear stress, thermal shock in
the condenser and discharge tunnel, and chemical toxic effects from
cooling system antifouling agents such as chlorine. Similar to
impingement mortality, death from entrainment can occur during
entrainment or at some time after the entrainment and return of
entrained organisms to a waterbody.
Environmental Impacts from New Offshore Oil and Gas Extraction Facility
Cooling Water Intake Structures
Offshore oil and gas extraction facilities currently operate off
the coasts of California and Alaska and throughout the Gulf of Mexico.
Most activity currently takes place in the Gulf of Mexico. EPA expects
that most new facility activity will also take place in this region.
(See Phase III TDD; DCN [9-0004], Chapter 3.)
While EPA is not aware of any studies that directly examine or
document impingement mortality and entrainment by offshore oil and gas
extraction facilities, numerous studies show that offshore marine
environments provide habitat for a number of species of fish,
shellfish, and other aquatic organisms. Many of these species have life
stages that are small and planktonic or have limited swimming ability.
These life stages are potentially vulnerable to entrainment by cooling
water intake structures. Larger life stages are potentially vulnerable
to impingement. The introduction of cooling water intake structures
into the offshore habitat in which these organisms live creates the
potential for impingement and entrainment of these organisms.
The densities of organisms in the immediate vicinity of offshore
oil and gas extraction facilities relative to densities in estuaries
and other nearshore coastal waters is not well characterized. In the
Phase III Notice of Data Availability (NODA) (70 FR 71059), EPA
presented an analysis of additional data from the general regions in
which existing offshore oil and gas extraction facilities operate and
where new facilities might operate in the future in order to better
characterize the potential for impingement and entrainment by these
facilities.
EPA obtained data on densities of ichthyoplankton (planktonic fish
eggs and larvae) in the Gulf of Mexico from the Southeast Area
Monitoring and Assessment Program (SEAMAP).12
This long-term sampling program collects information on the density of
fish eggs and larvae throughout the Gulf of Mexico. EPA analyzed the
SEAMAP data to determine average ichthyoplankton densities in the Gulf
of Mexico for the period of time for which sampling data was available
(1982-2003). Actual conditions at any one location and at any one point
in time may vary from the calculated averages.
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\1\ Adam Rettig and Blaine Snyder, Tetra Tech, Inc. Memorandum
to Ashley Allen, EPA. A summary of ichthyoplankton presence and
abundance in the Gulf of Mexico, as part of an assessment of the
potential for entrainment by offshore oil and gas facilities. 2005.
DCN 8-5220. Document ID OW-2004-0002-951.
\2\ Adam Rettig and Blaine Snyder, Tetra Tech, Inc. Memorandum
to Ashley Allen, EPA. A Summary of Fish Egg Presence and Abundance
in the Gulf of Mexico, as Part of an Assessment of the Potential for
Entrainment by Offshore Oil and Gas Facilities. DCN 9-5200.
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EPA's analysis of the SEAMAP data indicates that ichthyoplankton
occur throughout the Gulf of Mexico. On average, densities are highest
at sampling stations in the shallower regions of the Gulf of Mexico and
lowest at sampling stations in the deepest regions. The overall range
of average larval fish densities was calculated to be 25-450+organisms/
100m \3\ The wide range of ichthyoplankton densities seen in the
offshore Gulf of Mexico region falls within the range of larval fish
densities documented in freshwater and coastal water bodies in various
coastal and inland regions of the United States.\4\ Over 600 different
fish taxa were identified in the SEAMAP samples, including species of
commercial and recreational utility.
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\3\ Average larval fish densities are greater than 450
organisms/100 m3 at sampling stations in waters less than 50 meters
deep. Average larval fish densities gradually decrease to 100
organisms/100 m3 as sampling station depth-at-location increases to
150 meters. At stations in waters greater than 150 meters deep,
larval fish densities are relatively uniform and fall between 25
organisms/100 m3 and 100 organisms/100 m3. See Document ID OW-2004-
0002-951.
\4\ A. L. Allen (EPA). Memorandum to EPA Docket OW-2004-0002.
Summary of Information on Ichthyoplankton Densities in Various
Aquatic Ecosystems in the United States. DCN 8-5240.
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In the area surrounding existing offshore oil and gas extraction
facilities off the California coast, the California Cooperative Oceanic
Fisheries Investigations (CalCOFI) program has gathered data on
densities of ichthyoplankton and other organisms. According to the
CalCOFI and other research programs, a number of fish and shellfish
species, including species of commercial and recreational value, are
known to live and spawn in this region. EPA does not know of similarly
extensive sampling programs for the Alaska offshore region. However, a
number of fish and shellfish species, including species of commercial
and recreational value, are known from various research programs to
live and spawn in the offshore regions of Alaska where oil and gas
extraction activities currently take place or may take place in the
future.\5\ The eggs and larvae of many species found in the offshore
regions of California and Alaska are planktonic and could therefore be
vulnerable to entrainment by a facility's cooling water intake
structure operating in these regions. Larger life stages (e.g.,
juveniles and adults) could be vulnerable to impingement.
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\5\ A.L. Allen (EPA). Memorandum to EPA Docket OW-2004-0002.
Summary of Information on Fish Species that Live and Spawn off the
Coasts of Alaska and California in the Vicinity of Offshore Oil and
Gas Production Areas. DCN 8-5260.
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The densities of organisms in the immediate vicinity of offshore
oil and gas extraction facilities may differ from those suggested by
analysis of SEAMAP and other collections of data that characterize
typical organism densities in marine waters. Offshore oil and gas
extraction facilities have been shown to attract and concentrate
aquatic organisms in the immediate vicinity of the underwater portions
of their structures. A variety of species of pelagic fish have been
found to gather around the underwater portions of
[[Page 35014]]
offshore oil and gas extraction facilities within short time periods
after the facilities' appearance in the water column. If a facility
remains in one place for a sufficient length of time, some aquatic
organism species take up residence directly upon the underwater
structure and form reef-like communities. The increased number of
organisms living near the underwater portion of facilities where
cooling water intake structures are located increases the potential for
impingement mortality and entrainment of those organisms. The extent to
which the increased numbers of aquatic organisms represents an overall
increase in organism populations, rather than a concentration of
organisms from surrounding areas, is not known. (For additional
information, see DCN 7-0013.)
EPA believes the data it has gathered on organisms that inhabit
offshore environments indicate the potential for their entrainment and
impingement by cooling water intake structures associated with new
offshore oil and gas extraction facilities. Given this potential for
impingement and entrainment, EPA believes that these new facilities
have the potential to create multiple types of undesirable and
unacceptable impacts.
V. Description of the Rule
In this rule, EPA is promulgating requirements for new offshore and
coastal oil and gas extraction facilities that are designed to withdraw
at least 2 MGD. New offshore oil and gas extraction facilities were
specifically excluded from the scope of the Phase I new facility rule
so that EPA could gather additional data on these facilities (see 66 FR
65311). This final action also announces EPA's decision not to
promulgate a national rule for existing Phase III facilities.
A. Final Rule for New Offshore Oil and Gas Extraction Facilities
This rule establishes national requirements for new offshore and
coastal oil and gas extraction facilities that have a design intake
flow of 2 MGD or greater and that withdraw at least 25 percent of the
water exclusively for cooling purposes and meet other applicability
criteria (see Sec. 125.131). This rule imposes requirements for the
reduction of impingement mortality on all facilities subject to the
rule; a subset of these facilities must comply with requirements for
the reduction of entrainment. Specifically, fixed \6\ facilities
without sea chests are required to comply with entrainment standards.
EPA has established a two-track approach to offer maximum flexibility.
Fixed facilities may choose to comply under Track I or Track II, but
non-fixed facilities must comply under Track I. Track I establishes
uniform requirements based on facility type (i.e., fixed or non-fixed)
and, for fixed facilities the types of intake structures used (i.e.,
sea chest or non-sea chest). Under Track I, facilities are required to
design their cooling water intake structures to meet a through-screen
velocity of 0.5 feet per second or less. If they are a fixed facility
and are located in estuaries or tidal rivers, they would also be
required to meet proportional flow requirements. All facilities would
need to implement technologies and/or operational measures for
minimizing impingement if the permitting authority determines that
there are protected species or critical habitat for those species, or
species of impingement concern within the hydrologic zone of influence
of the cooling water intake structure, or (based on available
information, including information from fishery management agencies)
that the proposed facility, after meeting the technology-based
performance requirements, would still contribute unacceptable stress to
protected species or critical habitat of those species, or species of
concern. Fixed facilities that do not employ sea chests (openings in
the hull of a vessel for withdrawing cooling water) are required to use
fish protection technologies and/or operational measures to minimize
entrainment.
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\6\ A fixed facility is defined as a bottom founded offshore oil
and gas extraction facility permanently attached to the seabed or
subsoil of the outer continental shelf (e.g., platforms, guyed
towers, articulated gravity platforms) or a buoyant facility
securely and substantially moored so that it cannot be moved without
a special effort (e.g., tension leg platforms, permanently moored
semi-submersibles) and which is not intended to be moved during the
production life of the well.
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As with other new facilities covered by the Phase I rule, fixed
facilities could comply under Track II, which allows the facility to
employ alternative technologies that the facility demonstrates provide
comparable performance to meeting the 0.5 ft/s velocity standard, and
for fixed facilities without sea chests, the requirement to minimize
entrainment. EPA did not extend this provision to mobile facilities, as
EPA does not believe that there were alternatives to the low-velocity
standard for mobile facilities. Further, a Track II demonstration
generally requires consideration of site-specific factors. Since mobile
facilities are designed to operate at multiple locations over their use
life, it is generally not possible for them to provide in advance the
information that would be necessary for a Track II demonstration.
As described in Sec. 125.135, facilities have the opportunity to
conduct a cost-cost test and provide data to show that compliance with
the requirements of Sec. 125.134 would result in compliance costs
wholly out of proportion to those EPA considered in establishing the
requirements, or would result in significant adverse impacts on local
water resources other than impingement or entrainment, or significant
adverse impacts on energy markets. In this case, alternative
requirements may be imposed in the permit. See the Phase I final
preamble for a more detailed explanation of this cost-cost test at 66
FR 65322, which is different than the cost-cost test for Phase II
facilities.
These final requirements for new offshore oil and gas extraction
facilities are essentially unchanged from the Phase III proposal. In
response to comments, however, EPA is not promulgating national
entrainment controls for fixed facilities with sea chests or mobile
facilities in this final rule. EPA's data suggest that the only
physical technology controls for entrainment at facilities with sea
chests and non-fixed (i.e., mobile) facilities would entail
installation of equipment projecting beyond the hull of the vessel or
facility. Such controls may not be practical or feasible since the
configuration may alter fluid dynamics and impede safe seaworthy
travel, even for new facilities that could avoid the challenges of
retrofitting control technologies.
EPA also proposed national categorical requirements for Phase III
existing facilities that use or propose to use a cooling water intake
structure to withdraw cooling water from waters of the United States
and that are point sources and use at least 25 percent of the water
withdrawn exclusively for cooling purposes. As proposed, Phase III
would have included either existing facilities on all waterbody types
that had a design intake flow of 50 MGD or greater, existing facilities
on all waterbody types that has a design intake flow of 200 MGD or
greater, or those existing facilities with a design intake flow of 100
MGD or greater which were located on sensitive waterbodies (i.e.,
estuaries, tidal rivers, coastal waters, or the Great Lakes).
Facilities not meeting these applicability criteria would have
continued to be subject to 316(b) requirements set by the Director on a
case-by-case basis. EPA also proposed the option of not promulgating
national categorical requirements for existing
[[Page 35015]]
facilities potentially covered by Phase III in which case all Phase III
existing facilities would have continued to be subject to 316(b)
requirements set by the Director on a case-by-case basis.
For existing Phase III facilities meeting the selected threshold,
the proposed rule would have established national performance standards
for the reduction of impingement mortality and in some cases
entrainment at land-based Phase III existing facilities (i.e., non-
offshore facilities). The performance standards applicable to a
particular facility (i.e., reductions in impingement only or
impingement and entrainment) were based on several factors, including
the facility's location (i.e., source waterbody) and the proportion of
the waterbody withdrawn. Under the proposed rule, the performance
standards could have been met, in whole or in part, by using design and
construction technologies, operational measures, or restoration
measures.
EPA rejected the proposed requirements for existing Phase III
facilities for the reasons set forth in Section VI.B below. This
section discusses EPA's reasoning in detail as applied to the lead
option (the 50 MGD option). EPA's reasons for rejecting the 100 MGD and
200 MGD option were similar. In particular, the cost-benefit ratios
were still unacceptable and there would have been even fewer facilities
that would ultimately have been regulated by the rule and even smaller
incremental environmental improvements that the regulation would have
realized when compared to the significant environmental gains
attributed to the Phase II rule.
B. Existing Facilities With Cooling Water Intake Structures
For existing Phase III facilities, EPA determined that uniform
national technology-based standards are not the most effective way to
address their cooling water intake structures because the monetized
costs of such standards would have been wholly disproportionate to
their monetized use benefits. Accordingly, EPA believes that it is
better at this time to utilize the existing National Pollutant
Discharge Elimination System (NPDES) program for existing Phase III
facilities, which provides that any NPDES permitted facility not
subject to the national categorical requirements in Phase I, Phase II,
or Phase III of EPA's 316(b) regulation development is subject to
section 316(b) requirements set by the Director on a case-by-case best
professional judgment basis. Examples of such facilities include
existing power generators with a design intake flow of less than 50
MGD, and new seafood processing vessels, and existing manufacturers.
These requirements must ensure that the location, design,
construction and capacity of any cooling water intake structure reflect
the best technology available for minimizing adverse environmental
impact. Because the factors that EPA considered in evaluating candidate
options for a national categorical determination of BTA vary
considerably from site to site, including technology costs and
feasibility, potential for adverse environmental impacts, and
relationship of costs to benefits, EPA believes that for Phase III
facilities a BPJ-based site specific approach is the best way to ensure
that each Phase III existing facility adopts BTA appropriate to its
site. The basis for this determination is further discussed in Section
VI.B. below.
This rule does not alter the regulatory requirements for facilities
subject to the Phase I or Phase II regulations.
VI. Basis for the Final Rule Decision
This section discusses EPA's basis for final requirements
applicable to new offshore oil and gas extraction facilities and EPA's
decision to continue to rely on case-by-case, best professional
judgment permit conditions implementing CWA section 316(b) at existing
Phase III facilities.
A. Why Is EPA Promulgating National Requirements for New Offshore and
Coastal Oil and Gas Extraction Facilities?
After EPA proposed the Phase I rule for new facilities (65 FR
49060, August 10, 2000), the Agency received adverse comment from
operators of offshore and coastal (collectively ``offshore'') drilling
facilities concerning the limited information about their cooling water
intakes, associated impingement mortality and entrainment, costs of
technologies, or achievability of the controls proposed by EPA for new
facilities. On May 25, 2001, EPA published a Notice of Data
Availability (NODA) for Phase I that, in part, sought additional data
and information about mobile offshore and coastal drilling facilities
(see 66 FR 28857). EPA was not able to fully consider this additional
information in time to address new offshore oil and gas facilities in
the final Phase I rule. Accordingly, in the Phase I final rule, EPA
committed to ``propose and take final action on regulations for new
offshore oil and gas extraction facilities, as defined at 40 CFR 435.10
and 40 CFR 435.40, in the Phase III section 316(b) rule.'' See 66 FR
65256. This regulation fulfills that commitment and establishes
national requirements for new offshore oil and gas extraction
facilities that meet the applicability requirements in Sec. 125.131.
Requirements for new offshore oil and gas extraction facilities are
specified in a new Subpart N of Part 125. New onshore oil and gas
extraction facilities are currently regulated by section 316(b) Phase I
requirements if these facilities meet the applicability criteria of the
316(b) Phase I regulations. As described in more detail below, the
requirements for the offshore facilities are similar to some, but not
all, of the requirements contained in the Phase I rule applicable to
other new facilities. For example, the Phase I requirement to reduce
intake flow commensurate with a closed-cycle, recirculating cooling
system does not apply to these offshore facilities.
This rule distinguishes between new offshore oil and gas facilities
that are ``fixed,'' and those that are not fixed. For ``fixed''
facilities, the rule further distinguishes between those with sea
chests and those without. Under this rule, new offshore oil and gas
extraction facilities that meet the applicability criteria in Sec.
125.131 and that employ sea chests as cooling water intake structures
and are fixed facilities would have to comply with the requirements in
Sec. 125.134(b)(1)(ii). These requirements address intake flow
velocity, percentage of the source waterbody withdrawn (if applicable),
specific impact concerns (e.g., threatened or endangered species,
critical habitat, migratory or sport or commercial species), required
information submission, monitoring, and recordkeeping. Under this rule,
new offshore oil and gas extraction facilities that meet the
applicability criteria in Sec. 125.131, that do not employ sea chests
as cooling water intake structures, and that are fixed facilities would
have to comply with the requirements in Sec. 125.134(b)(1)(i). The one
additional requirement for these facilities is Sec. 125.134(b)(5),
which requires the selection and implementation of design and
construction technologies or operational measures to minimize
entrainment of entrainable life stages of fish or shellfish. Fixed
facilities, whether they employ sea chests or not, can also choose to
comply through Track II, which allows a site-specific demonstration
that alternative requirements would produce comparable levels of
impingement mortality and entrainment reduction.
New offshore oil and gas facilities that are not fixed facilities
would have to comply with the regulations at Sec. 125.134(b)(1)(iii),
which address intake flow velocity, specific impact
[[Page 35016]]
concerns (e.g., threatened or endangered species, critical habitat,
migratory or sport or commercial species), required information
submission, monitoring, and recordkeeping. Track II is not available to
non-fixed (mobile) facilities because non-fixed facilities, which are
expected to operate at multiple locations, would not be able to perform
a site-specific demonstration. For this same reason, EPA has dropped
some of the other site-dependent requirements for non-fixed facilities
(e.g., provision of source waterbody flow information).
EPA has limited information on specific environmental impacts
associated with the use of cooling water intake structures at new
offshore oil and gas extraction facilities but believes the potential
for such impacts is sufficient to warrant including requirements for
new offshore oil and gas extraction facilities in this rule (see
section IV for more detailed discussion). SEAMAP data for the Gulf of
Mexico identified over 600 different fish taxa and indicate that
ichthyoplankton occurs throughout the Gulf of Mexico, with densities
highest (e.g., average densities greater than 450 organisms/100
m3) at sampling stations in the shallower regions (less than
50 meters deep) of the Gulf, and lower in deeper waters. (70 FR 71,059-
71,060). Most offshore oil and gas facilities, if they employ cooling
water intake structures, operate them in near-surface (e.g., 20-100
feet deep) waters, rather than in deeper waters. (TDD, Chap. 3, Sec.
III). As stated earlier in this preamble, offshore oil and gas
extraction facilities have been shown to attract and concentrate
aquatic organisms in the immediate vicinity of the underwater portions
of their structures. Data also indicate the presence of aquatic
organisms identified off the California and Alaska coasts, both
additional areas of offshore oil and gas production. In addition,
although such technologies are not generally in use at all existing
offshore oil and gas extraction facilities, technologies are in use and
are available to new facilities in this subcategory to meet the
requirements as described below.
Some offshore oil and gas extraction facilities employ an
underwater compartment within the facility or vessel hull or pontoon
through which sea water is drawn in or discharged, often called a ``sea
chest.'' A passive screen (strainer) is often set along the flush line
of the sea chest. Pumps draw seawater from open pipes in the sea chest
cavity for a variety of purposes (e.g., cooling water, fire water, and
ballast water). These intakes are normally the only source of cooling
water for the facility; therefore, it is crucial to the operation of
these facilities that the intake structures be kept clean and clear of
fish, jellyfish, plastic bags, and other debris. To accomplish this,
these intake structures can be, and have been, designed for low intake
velocity (i.e., less than 0.5 feet per second) and/or include fish
protection equipment. See the Technical Development Document for
details.
As outlined in Alaska's oil and gas leasing requirements, oil and
gas extraction facilities in Alaskan State waters are currently subject
to an impingement control velocity limit of 0.1 feet per second (i.e.,
more stringent than EPA's design requirement of 0.5 feet per second in
this rule). These State regulations suggest that impingement controls
that would meet the velocity requirements of this rule are demonstrated
as available for offshore oil and gas extraction facilities in Alaskan
or similar waters.
However, facilities using sea chests may have few, if any,
opportunities to meet the entrainment control requirements applicable
to facilities subject to the Phase I rule. A 2003 literature survey by
Mineral Management Services (DCN 7-0012) identified no evidence of
entrainment controls successfully fitted to offshore oil and gas
extraction vessels with sea chests such as drill ships, jack-ups,
MODUs, and barges. EPA's data suggests that the only physical
technology controls available for reducing entrainment at facilities
with sea chests would entail installation of equipment projecting
beyond the hull of the vessel. This outward projection has been shown
to create problems with respect to fluid dynamics, vessel shapes and
safe seaworthy profile. Therefore, EPA does not believe entrainment
controls are feasible at such facilities, even for new facilities that
could avoid the challenges of retrofitting control technologies.
EPA also considered whether all new offshore vessels could be
constructed without employing sea chests. A technology must prove to be
practicable to be a viable alternative to current technology. In this
case, a viable alternative to a sea chest is any alternative
configuration/technology successfully implemented at existing
facilities, including those in other manufacturing industries, with
similar seawater intake structures. EPA data suggest the only
demonstrated design for drill ships and semi-submersible MODUs is to
use sea chests because they allow the vessel to maintain appropriate
fluid dynamics, overall optimal vessel shape, and a safe seaworthy
profile. Therefore, EPA has concluded that building new offshore oil
and gas facilities without sea chests has not been shown to be
practicable for the category as a whole.
In contrast to facilities with sea chests, fixed offshore oil and
gas extraction facilities with intake structures other than sea chests
can feasibly install both impingement and entrainment controls. For
example, technologies to reduce impingement mortality and entrainment
of marine life at a caisson intake structure \7\ include passive intake
screens or velocity caps. Other technologies such as acoustic barriers,
electro barriers, or intake relocation may also be used to reduce
impingement and entrainment at intake structures. Air sparges and
copper nickel alloys can also be used to control biofouling. EPA has
concluded that these are all ``available'' technologies for these
facilities and therefore justify impingement and entrainment
requirements.
---------------------------------------------------------------------------
\7\ A caisson intake (a steel pipe attached to a fixed structure
that extends from an operating area down some distance into the
water) is used to provide a protective shroud around another process
pipe or pump that is lowered into the caisson from the operating
area.
---------------------------------------------------------------------------
In summary, EPA is establishing requirements that are similar to
some--but not all--of the Phase I provisions. The differences in
requirements between this rule and the Phase I rule reflect the
differences in technology availability between offshore oil and gas
extraction facilities and those facilities covered in the Phase I rule.
Impingement and entrainment requirements for new offshore oil and
gas facilities are not based on closed-cycle recirculating cooling
because available information indicates that it is not feasible for all
new offshore oil and gas extraction facilities to employ closed-cycle
recirculating cooling systems. The rest of the requirements are similar
to those in Phase I (e.g., velocity information and design and
construction technology plan for Track I facilities, comprehensive
demonstration study for Track II facilities).
B. Why Is EPA Implementing CWA Section 316(b) at Existing Phase III
Facilities Through Case-By-Case, Best Professional Judgment Permit
Conditions?
After considering available data, analyses and comments, EPA has
decided not to promulgate a national categorical rule today for Phase
III existing facilities. This means that section 316(b) requirements
for Phase III existing facilities will continue to be
[[Page 35017]]
imposed on a case-by-case, best professional judgment basis.
EPA bases this decision on its judgment that the monetized costs
associated with the primary option under consideration are wholly
disproportionate to the monetized environmental benefits to be derived
from that option. EPA has long considered the wholly disproportionate
cost test to be appropriate for section 316(b) decision-making for
existing facilities. Here, EPA is using the wholly disproportionate
cost test to determine whether the national categorical rule options
proposed by EPA are the best way to minimize adverse environmental
impact. As the Administrator observed in In Re Public Service Company
of New Hampshire when reviewing contested 316(b) requirements for an
existing facility, costs may be considered ``in determining the degree
of minimization to be required.'' 10 ERC 1257, 1261 (June 10, 1977).
Otherwise, the Administrator noted, ``the effect would be to require
cooling towers at every place that could afford to install them,
regardless of whether or not any significant degree of entrainment or
entrapment was anticipated. I do not believe that it is reasonable to
interpret Section 316(b) as requiring use of technology whose cost is
wholly disproportionate to the environmental benefit to be gained.''
Id.
The primary option EPA considered in today's final action was a
rule that would have regulated Phase III existing facilities with a
design intake flow of 50 MGD or greater. EPA also solicited comment on
variations that would have narrowed the scope of the proposed rule. As
discussed in more detail in section X of this preamble, EPA estimated
that the total pre-tax costs of the 50 MGD option would be $38.3 to $39
million and the monetized benefits for commercial and recreational uses
would be $1.8 to $2.3 million ($2004, 7 percent and 3 percent discount
rates). This yields a cost to benefit ratio ranging from a low of 17 to
1 to a high of 22 to 1. EPA has concluded that the costs associated
with the 50 MGD option are wholly disproportionate to the anticipated
monetized benefits; therefore, EPA has concluded that this regulatory
option does not constitute the ``best technology available for
minimizing adverse environmental impacts.''
Making a decision on the grounds that the costs here are wholly
disproportionate to the benefits is also consistent with Executive
Order 12866, entitled ``Regulatory Planning and Review'' (Oct. 1993).
That Executive Order directs agencies to ``assess both the costs and
the benefits of the intended regulation and, recognizing that some
costs and benefits are difficult to quantify, propose or adopt a
regulation only upon a reasoned determination that the benefits of the
intended regulation justify its costs.'' E.O. 12866, Sec. 1(b)(6). This
Executive Order has been in effect for over a decade under two
Presidents, representing each major political party, and is now widely
accepted as reflecting general principles of sound government
regulation. It does not supersede any of the decision factors specified
in the Clean Water Act and, in fact, says explicitly that it applies
only ``to the extent permitted by law and where applicable,'' E.O.
12866, Sec. 1(b). EPA believes that in this case the directive of the
Executive Order is fully consistent with the requirements of the Clean
Water Act.
EPA considered non-use benefits as well as monetized use benefits
in reaching its final decision. Non-use benefits may arise from reduced
impacts to ecological resources that the public considers important.
These include reduced impacts to species without direct commercial or
recreational fishing value, such as forage fish, which play a role in
the functioning of an aquatic ecosystem. In this rulemaking, EPA fully
considered all benefits, but was able to assign a monetized value only
to benefits associated with commercial and recreational uses. Non-use
benefits can generally only be monetized when two steps have been
completed: (1) Environmental impacts are quantified; and (2) a monetary
value is available to be assigned to those impacts. EPA was unable to
assign a monetary value that fully captured the value of avoiding the
environmental impacts that EPA had identified because the necessary
information was not available. EPA did attempt in the Phase III rule to
monetize the loss of forage fish indirectly through its impact on
reducing commercial and recreational harvests, and found these impacts
to be generally small. However, this approach does not capture the
value that society may place on these fish for their own sake.
Therefore, EPA considered non-use benefits qualitatively. Doing so is
consistent with accepted practices of benefits assessment and with
EPA's past practice of fully evaluating benefits for purposes of
section 316(b).
Ultimately, in reaching today's decision, EPA took into account the
uncertainty inherent in qualitative benefits assessment, the size of
the ratio of monetized costs to monetized benefits, qualitative
information about the likely ecosystem impacts of cooling water
withdrawals from Phase III existing facilities, and other policy
concerns outlined in this preamble. When fully considering these non-
monetized benefits in light of all of these factors, EPA determined
that they were not likely to be of sufficient magnitude to alter EPA's
decision to continue to use a case-by-case, best professional judgment
approach for Phase III existing facilities. In the context of this
rulemaking, EPA believes that a case-by-case approach is a reasonable
way of identifying, for a particular Phase III existing facility, the
best technology available for minimizing adverse environmental impact.
This approach allows the permit writer to assess site-specific
information regarding the impacts of the facility's cooling water
impact structure and to decide how best to minimize them.
In reaching today's decision, EPA has taken note that the vast
majority of environmental benefits from regulating cooling water intake
structures have already been realized by the Phase II rule. As a result
of the Phase II rule, approximately 90 percent of the total volume of
cooling water withdrawn nationally is already subject to national
categorical requirements. The 543 facilities covered by the Phase II
rule withdraw on average more than 214 billion gallons of cooling water
every day from the nation's waters and, in the process, more than 3.4
billion fish and shellfish were killed annually by impingement and
entrainment prior to rule implementation. Compliance with the rule will
reduce this loss by 1.4 billion fish and shellfish. 69 FR at 41586 &
41656-57. The 146 existing facilities that would have been covered by
the broadest of the Phase III proposed options (the 50 MGD proposal),
in contrast, withdraw 31 billion gallons of cooling water every day and
kill about 265 million fish and shellfish annually. The proposed rule
would have reduced this loss by about 98 million fish and shellfish.
Had EPA codified national categorical rules for those facilities, EPA
thus would have saved only an additional 7 percent of the fish and
shellfish from impingement and entrainment while expanding the universe
subject to national categorical regulations by 27 percent. Also
illuminating is the fact that, of the 146 Phase III existing
facilities, only ten have intake structures designed to take in more
than 500 MGD. In contrast, 257 Phase II facilities use cooling water
intake structures designed to take in more than 500 MGD. This
information indicates that the majority of large-flow facilities and
cooling water intake flows
[[Page 35018]]
are already regulated by the Phase II rule. Most of the reductions in
fish impinged and entrained at existing facilities, and therefore most
of the benefits, are also already obtained through implementation of
the Phase II regulations. The other options EPA considered--involving
200 MGD and 100 MGD facilities--involved even less flow and fewer
regulated facilities than the 50 MGD option.
A comparison of the cost-benefit ratio for Phase II to the cost-
benefit ratio for the primary Phase III option supports EPA's decision
here. The ratio of costs to monetized benefits for the Phase II 50MGD
rule was approximately 5 to 1. In contrast, the ratio of monetized
costs to monetized benefits for the proposed Phase III 50 MGD rule
ranges from 17 to 1 to 22 to 1. Moreover, due to the ten-fold greater
impingement and entrainment losses at Phase II facilities, EPA was not
able to determine for Phase II, as it has for Phase III, that non-
quantified benefits, including non-use benefits, would not be
sufficient to justify the costs. In light of the much smaller aggregate
quantity of water withdrawals associated with Phase III and likely
correspondingly smaller non-use benefits, EPA has determined that, at
this time, a national categorical rule is not a reasonable approach for
minimizing adverse environmental impacts for Phase III existing
facilities.
Instead, EPA will continue to rely on case-by-case decision-making
to regulate cooling water intake structures at Phase III existing
facilities. In some situations, as was the case when EPA's Region 1
established section 316(b) requirements for the Brayton Point power
station, a site-specific inquiry can produce performance standards that
are more stringent than the categorical rules would have established.
In other situations, the permit writer may determine that fewer
controls need to be imposed. In both cases, however, the permitting
authority is in a good position to perform the careful balancing
contemplated by section 316(b) in order to select the best technology
available for minimizing adverse environmental impact.
In reaching today's decision, EPA has given special consideration
to the fact that existing manufacturers were the rule's primary focus.
According to the study published by the U.S. Department of Commerce
entitled ``Manufacturing in America: A Comprehensive Strategy to
Address the Challenges to U.S. Manufacturers'' (Jan. 2004),
manufacturers have ``focused on reducing costs to improve productivity
and ensure their competitiveness.'' Id. at 33. At the same time, some
manufacturers have found these efforts ``eroded by costs they cannot
control--costs that result in part from government policy.'' Id. at 33.
A study by the U.S. Office of Management and Budget (OMB) found that
regulatory costs in 1997 comprised 3.7 percent of gross domestic
product (GDP) (``Report to Congress on the Costs and Benefits of
Federal Regulations,'' September 1997). These costs have risen
significantly over time and U.S. manufacturers face considerably higher
compliance costs than do many of the U.S.'s trading partners. Since
U.S. manufacturers compete with other firms from both developed and
developing countries in a global economy, any additional regulatory
costs should be carefully evaluated in order to ensure U.S. firms'
continued competitiveness in the global marketplace. In a second report
entitled ``Regulatory Reform of the U.S. Manufacturing Sector'' (2005),
OMB stated that ``[s]treamlining regulation is a key plank in the
President's economic program.'' Id. at 1. This report suggests that any
unnecessary regulatory burdens, especially on small and medium-sized
manufacturers, should be removed. To address these concerns for U.S.
manufacturers, benefits justifying costs is of paramount importance.
Today's decision, while based on statutory factors in the Clean
Water Act, does also address the concerns in these reports. As
proposed, the Phase III rule would have required most facilities to
submit a number of highly detailed studies and reports to the permit
writer, with additional studies required for facilities seeking
alternative standards based on site-specific considerations. Today's
final action for Phase III adopts a more flexible approach under which
the permit writer can tailor the data and information request more
specifically to the location, technology constraints, and potential
adverse environmental impacts of a particular facility. Today's
decision provides manufacturing facilities the opportunity to provide
information to the permit writer relating to the site specific
environmental impacts attributable to their cooling water intake
structures and the technological feasibility and economic burdens
associated with various levels of control. This tailored regulatory
approach not only meets the Clean Water Act requirement to adopt the
best technology available to minimize adverse environmental impacts,
but it also advances EPA's policy of avoiding imposing unnecessary
burdens on manufacturers.
Continuing a regime of BPJ decision-making for Phase III existing
facilities does not mean that EPA is merely preserving the status quo.
To the contrary, EPA believes that the rulemaking record contains
important factual data that can help permit writers when reissuing
NPDES permits for the Phase III existing facilities. The numeric
performance standards that EPA had proposed, for example, reflect EPA's
judgment regarding the level of reduction in impingement mortality and
entrainment that available technologies can achieve. Similarly, the
regulatory support documents describe a variety of control devices,
analyze their effectiveness and present their costs. The record also
contains information regarding environmental impacts associated with
cooling water intake structures. EPA expects permit writers and
permittees to fully consider this information and other useful guidance
contained in the record as they develop site-specific section 316(b)
requirements.
For the foregoing reasons, EPA has decided, based on its assessment
of costs and benefits in this rulemaking, to continue to rely on permit
writers' use of their best professional judgment to establish the
statutorily mandated section 316(b) requirements on a case-by-case
basis for existing Phase III facilities.
VII. Response to Major Comments on the Proposed Rule and Notice of Data
Availability (NODA)
Fifty-one organizations and individuals submitted comments on a
range of issues in the proposed rule. An additional six comments were
received on the NODA. Detailed responses to all comments, including
those summarized here, can be found in the Response to Comments
document in the official public docket.
A. Offshore Oil and Gas Extraction Facilities
Commenters raised many issues concerning the regulation of offshore
oil and gas extraction facilities. One commenter requested that EPA
exclude mobile offshore drilling units (MODUs) from the rule. A few
commenters also claimed that EPA did not demonstrate a need to regulate
offshore oil and gas extraction facilities. Another commenter asserted
that new offshore oil and gas extraction facilities should be included
under the new facility definition promulgated under Phase I.
One commenter suggested that EPA exempt offshore oil and gas
extraction facilities employing sea chests in order to facilitate
international movement of MODUs. This commenter and others also
requested that EPA establish a higher minimum flow threshold (of at
[[Page 35019]]
least 25 MGD) for offshore oil and gas units in shallow waters, and
exempt units in unproductive deep waters (over 100 meters deep).
One commenter added that the ichthyoplankton density data (SEAMAP
data) provided in the NODA supports the assertion that location alone
should be used to regulate requirements for offshore oil and gas
extraction facilities and supports the exemption of units in
unproductive waters offshore. The commenter stated that the SEAMAP data
shows that these waters have significantly reduced levels of biological
life. Several commenters expressed concern that intake technologies
from other industries may not be appropriate for offshore oil and gas
extraction facilities.
As presented in the NODA, EPA collected biological data from the
Gulf of Mexico and other locations demonstrating that there is a
potential for adverse environmental impacts due to the operation of
cooling water intake structures at new offshore oil and gas extraction
facilities. While the data did show spatial and temporal variations, as
well as variability at different depths, the range of ichthyoplankton
densities found were within the same range seen in coastal and inland
waterbodies addressed by the Phase I final rule. As discussed in
section IX, there is no economic barrier for new offshore oil and gas
facilities to meet the performance standards as proposed. Based in part
on these results, EPA is addressing new offshore oil and gas extraction
facilities in this final rule. EPA proposed to set a regulatory
threshold of 2 MGD for new offshore oil and gas facilities. EPA has not
identified nor have commenters provided a basis for selecting an
alternative regulatory threshold. Therefore, consistent with the Phase
I rule, new offshore oil and gas extraction facilities with a design
intake flow greater than 2 MGD are subject to this rule.
EPA recognizes the inherent differences in the design and operation
of land-based and offshore facilities (as well as the differences
between the several types of offshore facilities) and has adopted a
regulatory approach that allows new offshore oil and gas extraction
facilities ample flexibility in complying with the rule. EPA's record
shows the technologies evaluated for use by new facilities are already
in use at some existing offshore facilities. Furthermore, EPA does not
have any (and commenters did not provide) data to suggest that MODUs
with sea chests would be inhibited from international movement by the
proposed requirements. Commenters did not submit any information that
would lead EPA to believe that the intake technologies already used and
demonstrated at existing facilities are inadequate or inappropriate for
use at new offshore facilities. However, EPA recognizes that
differences in types of offshore facilities may limit the technologies
available, and is therefore requiring different performance standards
for these classes of facilities. For this reason, new offshore oil and
gas extraction facilities are subject to a new Subpart N rather than
being included under the new facility definition promulgated under
Phase I. As discussed in section II.A of this preamble, new offshore
oil and gas extraction facilities are defined based on three criteria,
one of which is that the facility meets the definition of a ``new
facility'' in 40 CFR 125.83.
B. Applicability to Phase III Existing Facilities/Costs & Benefits
Numerous commenters argued that Phase III facilities should be
regulated on a case-by-case basis, citing the proposed rule's high
cost, low benefits, and a lack of Phase III data indicating
environmental harm. Commenters questioned the need for and benefit of
promulgating national standards covering existing manufacturing
facilities and small electric utility plants that comprise smaller
cooling water flows.
Many commenters expressed concern over the high costs relative to
the monetized benefits of all three regulatory approaches presented in
the proposed rule and indicated that EPA should thus withdraw the
proposed rule.
As discussed in section VI of this preamble, EPA has decided not to
promulgate national categorical requirements for Phase III existing
facilities based in part on a consideration of relative costs and
benefits. Section 316(b) requirements for these facilities will
continue to be developed by permit writers using their best
professional judgment.
C. Environmental Impacts Associated With Cooling Water Intake
Structures
Many commenters asserted that there is no demonstrated need for
national requirements at Phase III facilities since Phase III
facilities have much smaller flows than Phase II facilities. These
commenters also stated that most of the environmental impact data cited
in the Phase III proposed rule is from Phase II power generator
facilities and is not relevant to Phase III facilities. One commenter
stated that EPA did not define adverse environmental impact. Another
commenter argued that any measure of impingement or entrainment
constitutes adverse environmental impact.
Another commenter stated that the low number of 316(b) studies
conducted at Phase III facilities indicates that these facilities are
not causing a problem. Other commenters maintained that actual national
impacts due to cooling water intake structures are vastly
underestimated due to poor data collection methodologies utilized when
the majority of the studies were performed and because studies
conducted on impinged and entrained organisms overlooked the vast
majority of affected species.
As discussed in section IV of this preamble, EPA collected
impingement mortality and entrainment data from multiple existing
facilities including many Phase III facilities, and believes that the
data is sufficient to demonstrate the potential for adverse
environmental impacts by Phase III facilities (see also Regional
Analysis Document). Consistent with discussions presented in the Phase
I and Phase II rules, EPA believes that it is reasonable to interpret
adverse environmental impact as the loss of aquatic organisms due to
impingement mortality and entrainment. Commenters did not suggest
alternative interpretations of adverse environmental impact. For
additional discussion, see section IV of this preamble.
EPA believes that the studies collected from existing facilities
and utilized in its analysis of impingement and entrainment impacts are
sufficient to estimate and generally characterize the potential for
national level impacts for the purposes of this action. The Regional
Analysis document discusses a number of issues associated with the
quality of the data in these studies. It is difficult to predict the
effects of these study limitations on the impacts estimates,
specifically whether they have led to an overestimate or underestimate
of impacts. EPA acknowledges that the studies often measure impacts to
only some of the fish and shellfish species impacted by cooling water
intake structures and typically do not measure impacts to other marine
organisms such as phytoplankton or invertebrates. However, EPA fully
considered these impacts in its assessment of potential non-monetized
benefits. For the reasons discussed above, including the much smaller
withdraws associated with Phase III facilities relative to Phase II,
EPA has determined that for these facilities impacts were not likely to
be of sufficient magnitude to change its
[[Page 35020]]
decision to rely on the existing site-specific regulatory framework for
Phase III facilities. EPA believes the site-specific approach is
particularly suited to addressing these non-quantified impacts because
the nature and magnitude of such impacts is itself highly site-
specific.
VIII. Implementation
Final section 316(b) requirements for new offshore oil and gas
extraction facilities will be implemented through the NPDES permit
program. This final rule establishes implementation requirements for
new offshore oil and gas extraction facilities that are generally
similar to the Phase I requirements. This regulation establishes
application requirements under 40 CFR 122.21 and Sec. 125.136,
monitoring requirements under Sec. 125.137, and record keeping and
reporting requirements under Sec. 125.138. The regulations also
require the Director to review application materials submitted by each
regulated facility and include monitoring and record keeping
requirements in the permit (Sec. 125.139).
A. When Does the Final Rule Become Effective?
This rule becomes effective July 17, 2006. Under this final rule,
new offshore oil and gas extraction facilities will need to comply with
the Subpart N requirements when an NPDES permit containing requirements
consistent with Subpart N is issued to the facility.
B. What Information Will I Be Required To Submit to the Director When I
Apply for My NPDES Permit?
General Information
This final rule modifies regulations at Sec. 122.21 to require new
offshore oil and gas extraction facilities to prepare and submit some
of the same information required for new Phase I and existing Phase II
facilities. New offshore oil and gas extraction facilities may be
required to submit the Source Water Baseline Biological
Characterization Data depending on whether they are fixed or non-fixed
facilities. Non-fixed facilities are exempt from the requirement.
Specific data requirements for the Source Water Baseline Biological
Characterization Data are described later in this section. Studies to
be submitted by new offshore oil and gas extraction facilities are
described below. Under EPA's NPDES regulations new facilities must
apply for their NPDES permit at least 180 days prior to commencement of
operation. Under this final rule, new offshore oil and gas extraction
facilities must submit the specified information with their application
for permit issuance.
1. Source Water Physical Data (Sec. 122.21(r)(2))
Under the requirements at Sec. 122.21(r)(2), new offshore oil and
gas extraction facilities are required to provide the source water
physical data specified at Sec. 122.21(r)(2) in their application for
a permit. EPA believes these data are necessary to characterize the
facility and evaluate the type of waterbody and species potentially
affected by the cooling water intake structure. EPA intends for the
Director to use this information to evaluate the appropriateness of the
design and construction technologies and/or operational measures
proposed by the applicant.
The applicant is required to submit the following specific data:
(1) A narrative description and scale drawings showing the physical
configuration of all source waterbodies used by the facility, including
areal dimensions, depths, salinity and temperature regimes, and other
documentation; (2) an identification and characterization of the source
waterbody's hydrological and geomorphological features, as well as the
methods used to conduct any physical studies to determine the intake's
zone of influence and the results of such studies; and (3) locational
maps. For new non-fixed (mobile) offshore oil and gas extraction
facilities, this provision requires only some of the location
information and not the source water physical data required for new
fixed offshore oil and gas extraction facilities.
EPA recognizes that mobile facilities may not always know where
they will be operating during the permit term, and the requirement in
(r)(2)(iv) is not meant to restrict them only to locations identified
in the permit application. However, EPA expects that permit applicants
will provide, based on available information, their best estimate as to
where they will be operating during the permit term, at whatever level
of detail they can.
2. Cooling Water Intake Structure Data (Sec. 122.21(r)(3))
New offshore oil and gas extraction facilities are required to
submit the cooling water intake structure data specified at Sec.
122.21(r)(3) to characterize the cooling water intake structure and
evaluate the potential for impingement and entrainment of aquatic
organisms. Note that Sec. 122.21(r)(3)(ii)--latitude and longitude of
each intake structure--is not applicable to non-fixed (mobile) offshore
oil and gas extraction facilities. Information on the design of the
intake structure and its location in the water column allows the permit
writer to evaluate which species or life stages are potentially subject
to impingement mortality and entrainment. A diagram of the facility's
water balance is used to identify the proportion of intake water used
for cooling, make-up, and process water. The water balance diagram also
provides a picture of the total flow in and out of the facility,
allowing the permit writer to evaluate the suitability of proposed
design and construction technologies and/or operational measures.
The applicant is required to submit the following specific data:
(1) A narrative description of the configuration of each of its cooling
water intake structures and where they are located in the waterbody and
in the water column; (2) latitude and longitude in degrees, minutes,
and seconds for each of its cooling water intake structures (not
applicable to new non-fixed (mobile) offshore oil and gas extraction
facilities); (3) a narrative description of the operation of each of
the cooling water intake structures, including design intake flows,
daily hours of operation, number of days of the year in operation, and
seasonal operation schedules, if applicable; (4) a flow distribution
and water balance diagram that includes all sources of water to the
facility, recirculating flows, and discharges; and (5) engineering
drawings of the cooling water intake structure.
The applicability criterion in Sec. 125.131(a)(3) is based on
total design intake flow. Total design intake flow must be specified by
the applicant with the information required above. A facility may
permanently decrease its total design intake flow (e.g., by removing an
intake structure or installing intake pumps with a lower maximum
capacity) and request that the permitting authority consider the
facility's new total design intake flow to determine the applicability
of the 316(b) Phase III Rule at the time of permitting. Note that for a
facility that has a variable speed pump, the total design flow is the
maximum intake capacity for the cooling water intake structure.
Specific Requirements
Under this final rule, new offshore oil and gas extraction
facilities are required to submit the application requirements
consistent with Sec. 122.21(r)(2) (except (r)(2)(iv)), (3), and (4)
and Sec. 125.136 of Subpart N if they are fixed facilities and choose
to comply with the Track I or II requirements in Sec. 125.134(b) or
(c). A fixed facility is defined as a bottom
[[Page 35021]]
founded offshore oil and gas extraction facility permanently attached
to the seabed or subsoil of the outer continental shelf (e.g.,
platforms, guyed towers, articulated gravity platforms) or a buoyant
facility securely and substantially moored so that it cannot be moved
without a special effort (e.g., tension leg platforms, permanently
moored semi-submersibles) and which is not intended to be moved during
the production life of the well. This definition does not include MODUs
(e.g., drill ships, temporarily moored semi-submersibles, jack-ups,
submersibles, tender-assisted rigs, and drill barges). The Track I and
Track II application requirements are generally consistent with the
Phase I requirements for new facilities (66 FR 65256). Under Track I,
this includes velocity information, source waterbody flow information,
and a design and construction technology plan. Track II requirements
include source waterbody flow information and Track II comprehensive
demonstration study (including source water biological study,
evaluation of potential cooling water intake structure effects, and
verification monitoring plan). These requirements are detailed later in
this section.
As described in Sec. 125.135, new offshore oil and gas extraction
facilities have the opportunity to conduct a cost-cost test and provide
data to assist the permit writer in determining if compliance with the
Subpart N requirements would result in compliance costs wholly out of
proportion to those EPA considered in establishing the requirement, or
would result in significant adverse impacts on local water resources
other than impingement or entrainment, or significant adverse impacts
on energy markets. In this case, alternative requirements may be
imposed in the permit. See the Phase I final preamble for a more
detailed explanation of this cost-cost test which is different than the
cost-cost test for Phase II facilities (66 FR 65256).
In this final rule, fixed facilities with sea chests and all non-
fixed (or ``mobile'') facilities are not required to comply with
standards for entrainment. Fixed facilities with sea chests may choose
either Track I or Track II to comply with impingement mortality
performance standards. Non-fixed facilities must comply with the Track
I 0.5 feet per second through-screen design intake flow velocity
performance standard for impingement mortality. In addition, the
Director must consider whether more stringent conditions are reasonably
necessary to comply with any provision of federal or state law,
including compliance with applicable water quality standards. Thus, the
Director may determine that additional design and construction
technologies to minimize impingement mortality are necessary where
there are either protected species or critical habitat for these
species or other species of impingement concern within the hydrologic
zone of influence of the cooling water intake structure, or based on
other information from fishery management services or agencies. The new
mobile facility, when applying to operate under a general permit, must
identify where it expects to be operating. EPA expects the Director to
consult with the fishery management agencies, consider their data as
well as any other relevant data, and decide whether to propose
additional requirements based on any concerns the Director identifies
(see Sec. 125.134(b)(4)). For example, Region 10 has established a
general permit for Cook Inlet that established a 0.1 feet per second
through-screen design intake flow velocity performance standard.
However, non-fixed facilities are not required to submit the source
water baseline biological characterization data and some aspects of the
source water physical data. Requirements for non-fixed facilities are
described later in this section.
1. For New Offshore Oil and Gas Extraction Fixed Facilities, What
Information Is Required To Be Collected for the NPDES Application?
Source Water Baseline Biological Characterization Data (Sec.
122.21(r)(4))
Under this final rule, Track I and Track II new offshore oil and
gas extraction fixed facilities are required to submit source water
baseline biological characterization data, just as other new facilities
were required to do under Phase I. The data will be used to
characterize the biological community in the vicinity of the cooling
water intake structure and to characterize the operation of the cooling
water intake structure. The data must include existing data (if
available) supplemented with new field studies as necessary. Detailed
data requirements are at Sec. 122.21(r)(4). EPA recognizes that many
offshore oil and gas extraction facilities are regulated under NPDES
general permits and that regional studies are typically conducted as
part of the general permit requirements. EPA expects that some new
offshore oil and gas extraction fixed facilities may choose to jointly
conduct a regional study to collect the source water baseline
biological characterization data. The biological conditions
characterized by a regional study should reflect the conditions found
at each individual cooling water intake structure. EPA anticipates the
regional studies would be conducted once each permit cycle. Under this
final rule, the regional study would also include annual monitoring
requirements.
Velocity Information (Track I)
The final rule requires that new offshore oil and gas extraction
fixed facilities submit velocity information consistent with Sec.
125.136(b)(2). The information will be used to demonstrate to the
Director that the facility is complying with the requirement to meet a
maximum through-screen design intake velocity of no more than 0.5 feet
per second at the cooling water intake structure. The following
information must be submitted: (1) a narrative description of the
design, structure, equipment, and operation used to meet the velocity
requirement; and (2) design calculations showing that the velocity
requirement would be met at minimum ambient source water surface
elevations (based on best professional judgment using available
hydrological data) and maximum head loss across the screens or other
device or, if the facility uses devices other than a surface intake
screen, at the point of entry to the device.
Source Waterbody Flow Information (Track I and II)
The final rule also requires that new offshore oil and gas
extraction fixed facilities located in an estuary or tidal river to
submit source waterbody flow information in accordance with Sec.
125.136(b)(2) or (c)(1). The information will be used to demonstrate to
the Director that a new coastal facility's cooling water intake
structure meets the proportional flow requirements at Sec.
125.134(b)(3) or (c)(2). These requirements include specific provisions
for fixed facilities located on estuaries or tidal rivers to provide
greater protection for these sensitive waters. Specifically, the final
rule requires that the total design intake flow over one tidal cycle of
ebb and flow must be no greater than one (1) percent of the volume of
the water column within the area centered about the opening of the
intake with a diameter defined by the distance of one tidal excursion
at the mean low water level. See the final Phase I rule for the basis
for this design intake flow limitation. Calculations and guidance on
determining the tidal excursion is found
[[Page 35022]]
in the preamble to the final Phase I rule at section VII.B.1.d.
Design and Construction Technology Plan (Track I)
The final regulation requires that new offshore oil and gas
extraction fixed facilities submit a design and construction technology
plan consistent with Subpart N requirements at Sec. 125.136(b)(3). The
design and construction technology plan must demonstrate that the
facility has selected and will implement the design and construction
technologies necessary to minimize impingement mortality and/or
entrainment in accordance with Sec. 125.134(b)(4) and/or (5). The
design and construction technology plan requires delineation of the
hydrologic zone of influence for the cooling water intake structure; a
description of the technologies implemented (or to be implemented) at
the facility; the basis for the selection of that technology; the
expected performance of the technology, and design calculations,
drawings and estimates to support the technology description and
performance. The Agency recognizes that the selection of a specific
technology or a group of technologies depends on the individual
facility and waterbody conditions.
Track II Comprehensive Demonstration Study (Track II)
If a fixed facility chooses to comply under the Track II approach,
the facility must perform and submit the results of a Comprehensive
Demonstration Study (Study). This information will be used to
characterize the source water baseline in the vicinity of the cooling
water intake structure(s); characterize operation of the cooling water
intake(s); and to confirm that the technology(ies) proposed and/or
implemented at the cooling water intake structure reduce the impacts to
fish and shellfish to levels comparable to those the facility would
achieve were it to implement the applicable requirements in Sec.
125.134(b)(2) and, for facilities without sea chests, in Sec.
125.134(b)(5). To meet the ``comparable level'' requirement, the
facility must demonstrate that it has reduced both impingement
mortality and entrainment of all life stages of fish and shellfish to
90 percent or greater of the reduction that would be achieved through
the applicable requirements in Sec. 125.134(b)(2) and, for facilities
without sea chests, in Sec. 125.134(b)(5).
Similar to the Proposal for Information Collection required in
Phase II, the facility must develop and submit a plan to the Director
containing a proposal for how information will be collected to support
the study. The plan must include:
A description of the proposed and/or implemented
technology(ies) to be evaluated in the Study;
A list and description of any historical studies
characterizing the physical and biological conditions in the vicinity
of the proposed or actual intakes and their relevancy to the proposed
Study. If the facility proposes to rely on existing source waterbody
data, the data must be no more than 5 years old, and the facility must
demonstrate that the existing data are sufficient to develop a
scientifically valid estimate of potential impingement mortality and
entrainment impacts, and provide documentation showing that the data
were collected using appropriate quality assurance/quality control
procedures;
Any public participation or consultation with Federal or
State agencies undertaken in developing the plan; and
A sampling plan for data that will be collected using
actual field studies in the source waterbody. The sampling plan must
document all methods and quality assurance procedures for sampling and
data analysis. The sampling and data analysis methods proposed must be
appropriate for a quantitative survey and based on consideration of
methods used in other studies performed in the source waterbody. The
sampling plan must include a description of the study area (including
the area of influence of the cooling water intake structure and at
least 100 meters beyond); taxonomic identification of the sampled or
evaluated biological assemblages (including all life stages of fish and
shellfish); and sampling and data analysis methods.
The facility must submit documentation of the results of the Study
to the Director. Documentation of the results of the Study includes:
Source Water Biological Study, an evaluation of potential cool