By Robert E. Holden and Carlos J. Moreno

On October 1st, 2012, the Environmental Protection Agency (“EPA”) released the final NPDES general permit for discharges from oil and gas facilities in the western and central portion of the Outer Continental Shelf of the Gulf of Mexico (the “final permit”). The final permit has yet to be published in the Federal Register, but it is available here.

Operators already covered under the 2007 permit have until January 31, 2013 to file new Notices of Intent (“NOIs”) for continuous coverage. Permit coverage and compliance under the terms of the 2012 permit start when the new NOI is filed.

While many of the changes were already spelled out in the proposed permit, and summarized in our April 12, 2012 blog entry, operators should pay close attention to new provisions related to permit coverage. The final permit defines “Operator” as a party that falls in one of three categories: (1) Primary Operator (leaseholder or designated operator registered with BOEM), (2) Day-to-day Operator, and (3) vessel operator. The Primary Operator is the one that submits the NOI for coverage by block. However, other operators or vessel operators must file separate NOIs for discharges directly under their control but beyond the Primary Operator’s control (unless the Primary Operator already covered those discharges in its NOI).

This new language creates important changes in how discharges from Mobile Offshore Drilling Units (“MODUs”) are permitted in most of the Gulf of Mexico.

  • Typically, the MODU operator will now have to obtain coverage for discharges that are solely controlled by it. These could include deck drainage, sanitary and domestic waste, and Cooling Water Intake Structure (“CWIS”) requirements.
  • To address this issue, Oil and Gas Operators and Drilling Contractors may want to review their contractual provision on NPDES responsibility for all types of discharges.
  • The MODU operator would have to obtain coverage in each lease block they plan to discharge in. The NOI for each new location must be submitted before the MODU commences drilling operations.
  • The OCS operator’s existing discharges must be reauthorized by submission of a new NOI before January 31, 2013. This change may severely impact drilling in the event of expiration of coverage without timely NOI submission, undercutting permit continuation theories under the Administrative Procedures Act.
  • NOI submittal must be done electronically and will require identification of the types of discharges under the control of the operator requesting coverage.