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To prevent pollutants from entering storm water runoff, the Clean Water Act's National Pollutant Discharge Elimination System Storm Water Program requires controls for construction activities that disturb land. Phase I of this program requires permitting for construction activities that disturb 5 acres or more, while Phase II requires permitting for activities disturbing between 1 and 5 acres. The Environmental Protection Agency (EPA) extended the Phase II compliance date for discharges associated with oil and gas construction activities until March 2005 to analyze the impact of Phase II on the oil and gas industry. GAO was asked to provide information about oil and gas construction activities--such as well drilling and pipeline construction--affected by Phase I and likely to be affected by Phase II, as well as Phase II's financial and environmental implications.

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Recommendations for Executive Action

Agency Affected Recommendation Status
Environmental Protection Agency So that EPA may fully understand the implications of Phase II of its storm water rule prior to deciding whether the oil and gas industry should be subject to it, the EPA should complete its Phase II analysis before making any final decision. Furthermore, as a part of this analysis, the EPA should assess (1) the number of oil and gas sites impacted by the Phase II rule; (2) the costs to industry of compliance with the rule and whether these costs are solely attributable to the storm water rule; and (3) the environmental implications and benefits of the storm water rule, including, but not limited to, potential benefits for endangered species.
Closed - Not Implemented
EPA has not issued a formal response to GAO's recommendation in GAO-05-240 but expects to do so toward the end of CY 2005. After GAO issued its report, EPA extended the deadline for Phase II storm water permit coverage for oil and gas construction activity between 1 and 5 acres until June 12, 2006. EPA did so to allow itself additional time to complete its analysis of the impact of the rulemaking. Later, in August 2005, Congress passed the Energy Policy Act of 2005. Section 323 of this act modifies the Clean Water Act's definition of an oil and gas exploration and production activity to include oil and gas construction activities. Because the Clean Water Act mandates that EPA not require a storm water permit for oil and gas exploration and production activities, the change in the Energy Policy Act of 2005 would appear to exclude oil and gas construction activities from storm water permit coverage as well.

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