Management of Oil and Gas Exploration and Production Pits

United States Department of the InteriorBUREAU OF LAND MANAGEMENTWyoming State OfficeP.O. Box 1828IN REPLY REFER TO: Cheyenne, Wyoming 82009-1828 3160 (921Bargsten) PNovember 15, 2011EMS Transmission: 11/16/2011Instruction Memorandum No. WY-2012-007Expires 09/30/2013To: District ManagersFrom: Deputy State Director, Minerals and LandsSubject: Management of Oil and Gas Exploration and Production PitsProgram Area: Fluid Minerals, Hazardous MaterialsPurpose: This Instruction Memorandum (IM) will provide the minimum standards for management of pits authorized by the Bureau of Land Management (BLM) on Federal/Indian oil and gas leases for exploration & production (E&P) activities, with the exception of coalbed natural gas produced water impoundments. Pits covered by this IM include (but are not limited to): reserve, completion, flare, oil-base mud, drill cuttings, emergency, workover, and production pits.Policy/Action: The BLM has the authority to regulate environmental aspects of oil and gas activities associated with exploration, development, and production of oil and gas deposits from Federal and Indian leases (43 CFR 3162.5-1 and 25 CFR 225.4). This policy provides minimum standards for pit management and is organized by phase of operations. Pits associated with oil and gas activities have substantial variation for their purpose(s), contents, and potential environmental and health effects. In the absence of site-specific information, E&P pits should be considered to contain potentially hazardous wastes harmful to human health; in all cases, BLM personnel shall follow the BLM's Site Entry Policy (Washington Office (WO) IM No. 2002-138) when working near E&P pits. Where necessary and appropriate, the BLM may require the operator to submit information about the nature, quantity, and hazards posed by chemicals and materials used at facilities located on Federal oil and gas leases.Operators may be obligated to obtain permit approvals from the State of Wyoming and/or other Federal and local agencies. It is the responsibility of the operator to ensure that all necessary permits are obtained. Where other Federal or State permitting and/or regulations are applicable, the guidance and standards in this policy do not supersede or replace those requirements. Field Offices are instructed to consider and evaluate the standards in this policy when approving actions on Federal oil and gas leases or BLM-administered surface estate that pertain to construction, use, maintenance, closure, and reclamation of oil and gas exploration & production pits. When considering an alternative or modification of a proponent's proposed action, the Field Office must ensure that:1-In accordance with 43 CFR 3100.4(b), the BLM will keep data and information confidential that is submitted by the operator and that is marked as confidential or proprietary, to the extent allowed by law and regulation. These data and information may be necessary to consider in our compliance with the National Environmental Policy Act (NEPA). See WY IB No. 1997-011, “Hazardous Materials Management/NEPA/Oil and Gas Developments."2-alternatives and modifications are appropriately analyzed and disclosed under the National Environmental Policy Act (NEPA), are reasonable, and are consistent with existing lease rights.The BLM's authority to consider and/or apply reasonable restrictions to Federal oil and gas lease operations is described in WO Information Bulletin (IB) No. 2007-119.3 A pick-list of sample Conditions of Approval (COAs) is attached to this document (Attachment 1). These COAs provide a standardized list of protection measures and requirements consistent with this policy. The BLM should encourage operators to incorporate the appropriate protection measures and requirements into their surface use plans. If necessary, appropriate and reasonable COAs may be attached to authorizations processed by the BLM.1. Use of enclosed tanks and closed loop or semi-closed loop systems is environmentally preferable to the use of open pits and is to be encouraged by the BLM. Open production pits are to be strongly discouraged. Closed tanks and systems minimize waste, entry by wildlife, fugitive emissions that affect air quality, and reduce the risk of soil and groundwater contamination. In addition, the use of tanks instead of pits expedites the ability to complete interim reclamation. Costs may be reduced with the use of tanks, particularly when the pit requires solidification or netting.2. Siting and construction of pits Wherever possible, the BLM should seek to avoid approving pits located in sensitive areas or other locations that have heightened potential to result in adverse impacts to human health or the environment.a. Within sensitive areas,5 the BLM will require that an alternative to reserve, completion, and open production pits (see Sections 2(f) and (g), below) be used. Exceptions may only be granted in rare cases with sufficient justification (e.g., when sufficient protections are described in a design submitted for prior BLM approval) and after detailed NEPA analysis. When exceptions to this policy are granted, the BLM will consider more stringent operation, closure, and monitoring standards.b. Pit construction and design criteriai. Wherever possible, all pits shall be located entirely in cut material; where not possible, pits shall be located at least 50 percent in cut, and shall include at least a 2 foot keyway trench for construction of the dike in their design. This dike shall be compacted in 6 inch lifts.ii. All pits shall be designed to allow at least 3 feet of fill over the top of pit contents upon closure, and allow for the re-establishment of the approximate original contour upon final reclamation.iii. The design of all pits shall provide adequate storage capacity to maintain at least 2 feet freeboard; pits that will hold fluids must include a permanent marker designating the point at which 2 feet of freeboard remains in the pit. If the pit is lined, the permanent marker must not impair liner integrity.  For example, see BLM Handbook H-1790-1 (“National Environmental Policy Act Handbook") Page 81 (Section 8.3.6), WO IB No. 2007-119 (“Existing Surface Management Authority for Oil and Gas Leases"). See Onshore Oil and Gas Order Part III.F.a.3. 5 Definitions of this and other important terms in this policy are provided in Attachment 2iv. Pads and pits shall be sited and designed to divert offsite run-on around the pit. Run-on water may be diverted around the pit by sloping the pad or constructing diversion ditches or berms above and/or below the pad cut slope. v. Pit walls must be sloped so that the stability of the pit wall is not compromised; generally pit walls will not exceed a 1:1 slope.vi. All pits shall be fenced on four sides upon construction, or as otherwise specified by the BLM. Minimum standards for fencing are provided in the BLM-USFS publication “The Gold Book" and H-1741-1 (“Fencing"). vii. Re-entering a closed or reclaimed pit is prohibited unless the following protection measures are in place:1. Disturbed pit contents are removed and transported to an authorized commercial disposal or treatment facility, or2. Disturbed pit contents are protected on-site bya. Placing all excavated material on an impervious, secured liner contained within an adequate berm,b. Preventing wind or water erosion of excavated materialsc. Testing previous pit contents to determine potential hazards, andd. Replacing all excavated pit contents upon cessation of operations. If wastes are released during re-entry of a previously closed pit, the operator risks causing a release of materials that may no longer be Resource Conservation and Recovery Act (RCRA) E&P exempt.7c. Water quality protection measuresi. All pits shall be lined (using a synthetic liner or clay liner) with the exception of flare pits; situations where only fresh water, cement, and nontoxic or nonhazardous muds and additives are being used for drilling, completion, and plugging activities; and pits for pneumatic (air) drilling.ii. Synthetic liners must have a thickness of at least 12 mil. Synthetic liner material must be compatible with the pit contents, and resistant to weathering, sunlight, and puncturing or tearing. Seams of liners shall be overlapped and welded in accordance with manufacturer's requirements. The BLM may require bedding material under the liner be amended or compacted to ensure that the liner is not punctured during installation or use.iii. Clay liners must be compacted to a depth of at least 6 inches and having a hydraulic conductivity of no more than 1 x 10-7 cm/sec.iv. Liners must be bedded upon a suitable substrate that is level, free of organic material, and without rocks or materials that could puncture the liner.v. Leak detection for pits may be required by the BLM (1) if site-specific analysis determines that pit contents have potential to adversely affect nearby surface and groundwater sources or (2) as required by Onshore Oil and Gas Order No. 7. Requirements for leak detection are provided in Onshore Oil and Gas Order No. 7. 6 Surface Operating Standards and Guidelines for Oil and Gas Exploration and Development, 2007 (4th Edition), or most current edition 7 See WY IB No. 1994-349 (“Oil and Gas Exemptions Under RCRA and CERCLA") for more information about RCRA-exempt wastes. d. Number and type of pitsi. Wherever feasible, pit management should allow for the recycling and reuse of fluids and in accordance with the transporting requirements of this policy. This may require, for example, that drilling fluids are removed from a pit prior to the flow-back of completion fluids to that pit, where applicable.ii. Considering other aspects of this policy (see Section 3(d)), the BLM may require consolidated or separate reserve/completion pits in the design of a drilling location. iii. When a proposal includes the use of oil-base muds, a lined drill cuttings pit that is separate from the reserve pit must be used to store oil-base mud cuttings.e. Pit centralizationi. Where feasible, centralized reserve and completion pits are encouraged. However, the mixing of wastes from non-Federal and Federal leases is prohibited unless the wastes are being disposed of or treated at an authorized commercial disposal or treatment facility. The provisions of this section do not apply to reserve and completion pits servicing multiple-well pads, or wells with completion zones in both Federal and non-Federal leases.f. Alternatives to reserve, completion, and production pits i. As previously mentioned in Section 2(a), alternatives to reserve, completion, and production pits are required when operations are proposed in sensitive areas. Using these alternatives in nonsensitive areas is to be encouraged by the BLM, but should consider the potential tradeoffs to their use (such as increased disturbance areas to accommodate storage tanks, and the final disposition of wastes generated). Alternatives include:1. Closed-loop drilling2. Semi-closed loop drilling3. Completion flowback to temporary storage tanksg. Preferred alternatives to open production pitsi. Below-grade enclosed tanks for storage of produced fluids may be allowed if designed to the following standards:1. For single-walled tanks, the sides must be available for periodic inspection and leak detection must be employed.2. For double-walled tanks, the interstitial space must be periodically monitored such that a leak would be detected prior to release from the tank.3. All below-grade tanks must include a monitoring and reporting plan to ensure that leaks are promptly discovered and reported to the BLM.4. Open-bottom sub-grade structures are prohibited.5. Below-grade tanks are prohibited in sensitive areas.ii. Above-grade tanks for storage of produced fluids must adhere to the following standards:1. Secondary containment storage around the tanks for spill control must be capable of holding at least 110 percent of the volume of the largest tank inside the containment area.2. The containment system must be capable of containing the wastes or product such that the material will not escape the containment system prior to cleanup.3. Secondary containment structures shall be protected from livestock, wildlife, and human activities. This may be accomplished by fencing, graveling over earthen berms, expanded metal or grate covers, etc.4. Monitoring, inspection, and enforcementi. The BLM will require the operator to regularly inspect pit liners to ensure that the liner has been properly installed and remains intact throughout operations.ii. Where present, secondary containment of above-ground storage facilities should be inspected, at minimum, during the first interim reclamation (IR) inspection.83. Management of pits during drilling and production operationsa. Where necessary to protect public health and safety, or to prevent adverse environmental impacts resulting from access to a pit by wildlife, migratory birds, domestic animals, or members of the general public, the BLM will require operators to install fencing and/or other deterrents necessary to preclude access to pits.i. Fencing on one side of the pit may be temporarily laid down or removed during active drilling, completion, or workover operations. All four sides shall be fenced upon release of the rig or equipment for those activities.ii. Other deterrents to preclude pit access may include screening and/or netting. Flagging is not considered an effective deterrent. The BLM will require that the operator ensure pit access is precluded; the BLM generally should avoid prescribing specific deterrents to the operator, but should notify the operator that failure to adequately preclude access may result in violations and/or penalties (e.g., the Migratory Bird Treaty Act provides for up to $15,000 in fines and up to 6 months in jail, per count).iii. As described elsewhere in this policy (Section 3(h)), pits containing oil or hazardous substances must sufficiently preclude entry by wildlife, livestock, and members of the general public. Onshore Oil and Gas Order No. 7 requires that all pits under purview of the Order be secured to prevent entry by livestock, wildlife, and unauthorized personnel (III.E.1.c).b. Only wastes that qualify for the E&P exemption under RCRA can be disposed of on-lease, and only when permitted by the BLM. All non-exempted wastes must be removed from the lease facility and recycled or disposed of in accordance with applicable Federal, State, and local rules and regulations. Unused/excess product or materials must be removed from lease facilities, and cannot be disposed of on BLM-administered surface estate.c. Use of oil-base mudsi. The mixing of oil-base mud cuttings and water-base mud cuttings is prohibited.ii. All oil-base mud cuttings pits shall be lined in accordance with requirements above (Section 2(c)).iii. Pits used for the disposal of oil-base muds and cuttings must be solidified in accordance with the Wyoming Oil and Gas Conservation Commission (WOGCC) rules and Section 4(e)(ii) of this policy.iv. The use of a closed-loop system is required when using oil-base muds.v. The BLM will require the operator to provide the BLM a contingency plan for response to accidental discharge of oil-base mud or cuttings to the reserve pit.d. Dependent upon the chemical constituents of materials used in completion and workover operations, the BLM may require that a separate completions pit or temporary storage tank(s) be 8 A tool to measure and evaluate secondary containment berm dimensions is available at web.wy.blm.gov/921/surfaceprotection/toolbox/index.htm used for materials flowed back from downhole. Flowback of fluids other than fresh and/or produced water to the reserve pit is prohibited in sensitive areas (in those rare instances when an exception is granted to Section 2(a)).e. Transfers of E&P wastes from Federal oil and gas leasesi. To BLM-administered surface estate1. To encourage and promote waste minimization, operators may propose plans for managing and transporting E&P waste through beneficial use, reuse, and recycling by submitting a waste management plan for approval through a Sundry Notice or Right-of-Way. Such plans shall describe, at minimum, the type(s) of waste, origin and final disposition of the waste, the proposed use and/or treatment of the waste, the transportation route, and shall include a copy of any certification or authorization required by other laws and regulations.ii. To non-Federal lands1. Transport of wastes to a non-Federal location is only allowed when wastes are transported to an authorized commercial disposal or treatment facility, and only with the BLM's prior written approval.f. Recycling and reuse of wastes generated on E&P locationsi. Treatment of wastes (e.g., fracture stimulation fluids, drilling fluids, drilling solids, produced water, etc.) must be authorized in writing by the BLM, and the operator must obtain permits required by other Federal, State, or local government agencies prior to treatment.ii. Produced water must be tested prior to use for dust abatement and authorized in writing by the BLM prior to application. A copy of any applicable State of Wyoming permits and test results (showing radionuclides, trace elements, metals, salinity, pH, cations, and anions) must be provided to the BLM.iii. Recycling and reuse of wastes must comply with the transfer policy in this IM (Section 3(e)).g. Emergency operations i. Permanent Emergency Pits1. Standards for permanent emergency pits are provided in Onshore Oil and Gas Order No. 7. Alternatives to permanent pits should be considered whenever possible, such as tanks.ii. Temporary emergency pits1. The BLM will require operators to verbally notify the BLM within 24 hours of the construction and use of temporary emergency pits, and provide the BLM the anticipated timeline for the pit's use.2. Following emergency operations, the BLM shall require the operator to provide a summary of the event by Sundry Notice (including NTL-3A notifications, if necessary), and actions taken by the operator. This Sundry Notice must be submitted to the BLM no later than 15 days following the emergency actions. The summary should include identification of wastes generated and disposed of into the emergency pits. Disposal of wastes generated by emergency operations must be in accordance with State, local, and Federal rules and regulations, and described in the summary report. A procedure to close and reclaim the emergency pit must be submitted for approval to the BLM. 7 h. Monitoring, inspection, and enforcement i. Oil or other hazardous substances in pits. The regulations at 43 CFR 3162.7-1(b) state that produced oil is not permitted to go into a pit without the approval of the authorized officer. In addition, Onshore Oil and Gas Order No. 7 requires that pits be kept reasonably free from surface accumulation of liquid hydrocarbons that would retard evaporation (III.F.8). 1. The BLM will require that operators remove oil found in pits as soon as possible, but no later than 48 hours from discovery. Any accumulation of oil in a pit shall be promptly removed. 2. The BLM will require that operators take measures to minimize or preclude recurring releases of oil into the pits. 3. The BLM will require that operators also ensure effective deterrence is present to preclude entry by wildlife, livestock, and the public whenever oil or other hazardous substances are present in pits. ii. The BLM has the authority to require testing and reporting of pit contents on Federal oil and gas leases to ensure regulatory compliance. When testing is necessary, fluid minerals staff should work with their Hazardous Materials Coordinator to stipulate requirements for the operator. Pit testing guidance is provided in Attachment 3 (Pit Contents Testing Guidance). iii. The BLM will require that the operator regularly monitor and inspect liners for integrity. The BLM may require that a pit be closed if the liner integrity is compromised, or may order the pit capacity reduced so that the operator can repair the liner. iv. The BLM will require the operator to monitor and evaluate the effectiveness of fencing and any other required deterrents to animals and humans. The BLM will immediately notify the U.S. Fish and Wildlife Service if a dead or injured bird is found in a pit, if the operator fails to provide such notification. The BLM will require operators to notify the BLM if wildlife (other than insects and other invertebrates), or any livestock are discovered in a pit. v. If illegal trespass dumping of waste into pits is found, the BLM will immediately contact the BLM Law Enforcement Officer. Such wastes must be removed from the pits by the responsible party or operator and brought to an authorized commercial disposal facility. vi. If freeboard is exceeded, the BLM will require the operator to lower the pit volume to provide acceptable freeboard. vii. Notification of any releases from pits must be provided to the BLM, including adherence to applicable NTL-3A requirements. 4. Closure and reclamation of pits a. Fluid removal from pits i. Squeezing of pits is prohibited; however, it is acceptable to remove standing fluids and cut in clean spoils, provided: 1. Pit contents remain in the pit and liner integrity is maintained, 2. The closed pit is sufficient to provide adequate surface stability and prevent settling of the pit, and 3. The transport of fluids complies with Section 3(e) of this policy. ii. Any measurable quantity of oil must be removed from the pit prior to closure; the burning of hydrocarbons is prohibited. iii. The roadspreading or landfarming of wastes requires prior written approval by the BLM. The BLM will also require testing of the wastes prior to distribution. If roadspreading or 8 landfarming of wastes is proposed on split-estate over a Federal oil and gas lease, the operator must provide the surface landowner's written approval to the BLM prior to authorization. b. Muds, cuttings, cement, and synthetic pit liners (if present) must be covered by a minimum of 3 feet of fill. Transport of these materials off-site must comply with Section 3(e) of this policy. i. Oil-base muds and cuttings must be solidified in accordance with Section 4(e)(ii) of this policy. c. In accordance with Onshore Oil and Gas Order No. 7, wastes generated during emergency operations shall be emptied from temporary emergency pits and the liquids disposed of in accordance with applicable State and/or Federal regulations within 48 hours following its use, unless such time is extended by the authorized officer. d. Wastes not exempt under RCRA are prohibited from entering pits. Synthetic liners must be cut to the level of pit solids before backfilling unless the liner is to be folded over to encapsulate the pit contents. Portions of the liner cut away must be disposed of in accordance with applicable local and/or State regulations. e. The use of mechanical treatments, solidification, or stabilization requires prior written approval by the BLM. i. When using sprinklers or misters to hasten pit evaporation, the BLM will require that operators ensure pit contents are not deposited outside the pool area of the pit. ii. The BLM will require prior written approval of pit solidification by the BLM and WOGCC, use of a WOGCC-approved pit treatment company, and a copy of the pit closure report. iii. The use of fly-ash to absorb free standing liquids (which may results in the addition of heavy metals to the waste) is highly discouraged. If the use of fly-ash is determined necessary and appropriate, however, the BLM will require that the pit be capped with bentonite. f. When closure of pits located in sensitive areas is proposed, the BLM will require that the pit contents be tested prior to closure. Unless otherwise required by the State or Environmental Protection Agency (EPA), the BLM will use the Oil Contaminated Soil Remediation Ranking System (OCSRRS) or other acceptable method to determine clean-up criteria for spills and/or pit contents in sensitive areas (see IM No. WY-2009-021). The operator will be required to meet the standards determined by the State, EPA, or BLM, and may be required to remove and dispose of the pit contents at an authorized commercial disposal facility. Attachment 4 (Radioactive Wastes) provides information and guidance about pit management, including closure, for pits that are known or suspected to contain radioactive materials. g. Timing of pit closure i. Requiring an operator to provide prior verbal or written notification for pit closure is a recommended practice for all BLM Field Offices. ii. Reserve pits must be closed as soon as practical but no later than 6 months after the last well serviced by the pit is spud or completed (whichever is most appropriate for the circumstances and type of drilling activities); variances from closure timing requirements in this policy (shorter or longer timeframes) are allowed with sufficient justification and prior written approval by the BLM. 9 iii. Completion and flare pits will be closed as soon as practical, but no later than 6 months from the end of completion operations. iv. Temporary emergency pits require prior approval by the BLM for closure. Temporary emergency pits must be closed as soon as practical, but no longer than 6 months from the end of emergency operations or unless otherwise required by the BLM. v. Production pits will be closed as soon as practical, but no later than 6 months from the date of final production, or unless otherwise required by the BLM. h. Testing requirements for pit closures, when mandated by the BLM i. Testing is required prior to road spreading and landfarming of wastes. ii. Testing may be required by the BLM prior to closure of emergency pits, depending upon the contents discharged to the pit. iii. Production pits will be tested in accordance with the guidance provided in Attachment 3. iv. Testing of reserve pits prior to closure may be required by the BLM, and is required for instances where pit closures occur in sensitive areas, locations where the pit was unlined or the liner integrity was compromised, at single pits that service multiple wells, or where illegal dumping is suspected. i. Reclamation requirements i. Reclamation of the disturbed surface must comply with the BLM Wyoming Reclamation Policy, and other site-specific requirements. Reclamation activities must protect the integrity of the liner, when present, unless the pit is solidified in accordance with this policy. j. Bioremediation i. Onsite bioremediation of suitable wastes is encouraged wherever feasible and practical. Refer to WO IM No. 1999-061 and WY IM No. 2009-021. k. Monitoring, inspection, and enforcement i. The BLM will require operators to frequently inspect sprinklers/misters while in operation to ensure proper operation and to prevent drift of fluids outside of the pit's pool area. More rigorous protection measures should be in place, or operations temporarily suspended, when wind speeds are high. ii. The BLM will require the operator to inspect the liner throughout the course of operations, and during closure, to ensure that liner integrity is not compromised. iii. The BLM may elect to be present during sampling or testing of pits. The BLM will require the operator to notify the BLM at least 72 hours in advance of sampling to provide the BLM opportunity to be present. iv. If non-RCRA exempt waste is found in a pits, all waste in the pit must be removed and transported to an authorized commercial disposal or treatment facility. v. When liner integrity is compromised in production pits, the BLM may require that the operator determine the extent of contamination/infiltration below the liner. 10 Timeframe: Effective immediately. Budget Impact: No overall budget impact. Background: Current BLM handbooks, manuals, policy and guidance address the management of fluid minerals exploration and production wastes in a general manner. This policy seeks to provide consistent minimum standards for acceptable permitting, operation, and closure of pits, without unduly limiting the ability of Field Offices to tailor their authorizations and decisions to circumstances unique to their office or an individual situation. Manual/Handbook Sections Affected: None. Coordination: This IM was coordinated among the Exploration & Production Pit Management Policy Team (Attachment 5), all district and field offices in Wyoming, and the U.S. Fish and Wildlife Service. Contacts: Travis Bargsten (Physical Scientist, WY-921), 307-775-6197; Ken Henke (Hazardous Materials Coordinator, WY-932), 307-775-6041. Signed by: Authenticated by: Larry Claypool Sherry Dixon Deputy State Director, Secretary Minerals and Lands 5 Attachments 1-Examples of Waste Management Conditions of Approval (4 pp) 2-E&P Waste Management Definitions (5 pp) 3-Pit Contents Testing Guidance (2 pp) 4-Radioactive Wastes (2 pp) 5-Exploration & Production Pit Management Policy Team Members (1 pp) Distribution Director (310), 20 M Street, SE 1 (w/atchs) Field Managers 1 (w/atchs) CF 2 (w/atchs)