American Oil and Gas Reporter - January 2015 - 221

comments state. Such areas affected by
precipitation may qualify as WOTUS and
become protected ephemeral stream/tributaries, the associations maintain.
Cost Estimates
EPA and the Corps estimate $11.7
million in incremental costs for the SPCC
program, but the assessment is based on
inadequate information, the industry
groups assert. With the proposed definition's emphasis on a water's "significant
nexus," including wetlands or watersheds
draining to the nearest jurisdictional water,
CWA 404 permitting for discharge of
dredge or fill material is likely to expand,
complicating the task of identifying available mitigation banks and other options,
the associations say.
Changing the definition also probably
will expand jurisdiction of National Pollutant Discharge Elimination System permitting under CWA 402, the comments
note, but that point is absent from the
agencies' economic analyses.
Under the proposal, an ephemeral, rain
dependent stream will qualify as a WOTUS,
and discharge to the stream will require a
permit, the associations assess. Additionally,
a jurisdictional ditch with perennial flow
will fall under the definition with direct discharges to a jurisdictional ditch and require
an NPDES permit, the associations say.
A series of other waters, including
wetlands, in proximity to each other or a
navigable water, also will subject discharges to NPDES permitting. Despite
the requirements, the agencies suggest it
is impossible to estimate the impact of
the proposal on NPDES permitting, the
joint comments assess.
A review of permitted activities under
the new definition undoubtedly will expand
NPDES regulated activities and pose significant economic impacts, although the
agencies have failed to complete the essential economic analysis of the proposal
relative to CWA 402 permitting, the associations write.
The proposal also will affect the use
of nationwide permits, including NWP
12 for utility line activities, and NWP 39
for commercial and institutional developments, the joint comments state. A
more expansive definition of wetlands
and significant nexus likely means existing
general permit authorizations will require
individual permits under both, and agencies
are likely to be swamped with an influx
of applications, the associations warn.
Expanded Jurisdiction
Operational impacts will be substantial,
oil and gas associations insist, and will
reach all the way to desert-like landscapes
such as the Permian Basin. "Association

member companies estimate a 50-60 percent increase in jurisdictional waters affecting operations in West Texas-well
beyond the alleged 3 percent increase asserted by EPA and Corps in the proposal,"
the comments state.
Although the SPCC program is narrowly applied in the Permian, introducing
vague concepts such as "relative strength
of downstream effects" could expand regulatory oversight significantly around
playa lakes and arroyos, the comments
caution. Under past SPCC implementation,
few of the Permian Basin's hydrocarbon
liquid storage facilities are adjacent to
WOTUS, the associations point out. For
one company operating there, the comments say, expanding the definition will
mean 1,000 new SPCC plans for 1,200
sites, with the incremental cost of bringing
facilities into the SPCC program requiring
$11.4 million a year, the comments say.
The comments also cite the proposal's
lack of clarity and point to a number of
examples in the Appalachian Basin. The
proposal states that no uplands in riparian,
or bank, areas and flood plains ever can
be WOTUS, but it also states that "some
neighboring waters that might be located
outside of the riparian zone or floodplain,
such as wetlands immediately next to a
highly incised and manipulated stream
that no longer has a riparian area or flood
plain" may be subject to the CWA.
Despite statements to the contrary,
nearly every water feature will be subject
to CWA jurisdiction, bolstering evidence
that the agencies' 3 percent jurisdiction
increase is a gross underestimate, the associations assess. "These types of issues
must be resolved in the final rule so that
federal regulators, as well as the regulated
community, have a clear understanding
of what are and are not WOTUS," the
comments state.
According to comments, operators in
Kentucky have expressed concerns about
the rule's jurisdictional expansion that
may include an entire watershed. In
eastern Kentucky, seeps from mountains,
ponded or wet areas that form the landscape that are not close to a tributary
may could be considered WOTUS, the
associations comment. Any impact, such
as filling or excavating, would require a
Section 404 permit, they observe.
The rule also clearly indicates that
man-made features can be WOTUS, including ponds from prior mining or agricultural activities, road ditches, and retained water on abandoned mining benches, the associations say.
Impractical Considerations
The Army Corps' and EPA's proposal
also may significantly impact oil and nat-

ural gas operations in the Upper Midwest,
comments reason.
Broadening the regulations to include
"waters located within the riparian area"
and "all adjacent waters in a watershed
(with) significant nexus with their traditional navigable water" potentially expands
WOTUS jurisdiction beyond the high
water mark to include a tributary's drainage
area, from ridge top to ridge top on either
side of a stream, the associations say.
Furthermore, the comments maintain,
the definition of "other waters" is so
vague that case specific analysis of
ephemeral streams may deem as nexus
to a navigable river an entire watershed
or an entire upland around a wetland.
Under the proposal, sites in such a nexus
will need permits. "The result of these
changes likely means every stream crossing and well pad will require a nationwide
permit from the Corps, and possibly, an
individual permit," the associations state.
They go on to say that using high-resolution lidar maps in north-central Oklahoma's Mississippian Lime play increases
fivefold the number of jurisdictional waters, since they incorporate synthetic
stream networks that include ephemeral
streams that current Corps maps do not
identify. The comments also suggest that
the proposal potentially increases by 52.4
percent the number of regulated waters
along headwater drainages in the southcentral Oklahoma oil province, and doubles the jurisdictional review area relating
to wetlands that are associated with typical
flood plain soil types.
Meanwhile, the comments relate, although no prairie potholes in the Bakken
study area are likely to qualify as jurisdictional WOTUS under the current regulations, the proposal is likely to deem
as WOTUS 31 of 127 acres of prairie
potholes in the Bakken study, primarily
because of their connection to downstream WOTUS by ditches.
Moreover, they suggest, the additional
96 acres of prairie potholes have the potential to be considered jurisdictional
under the proposed rule because of their
physical connection to downstream WOTUS either by ditches or by subsurface
flows. The proposal is likely to render
many prairie potholes jurisdictional, the
associations estimate, which means nearby well pads will have to account for
the Army Corps' permitting requirements
alongside customary resource and engineering design factors.
"In conclusion, the exploration and
production industry anticipates significant
operational and economic impacts from
this proposal," the comments relate. "The
agencies have promoted a campaign that
continues to announce the proposition
JANUARY 2015 221
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