Amicus Curiae Brief — Fidelity Exploration & Production Co. v. Northern Plains Resource Council, Inc.

FILED

(Lj) | SEP 18 2003

OFFICE OF THE CLERK

No. 03-257

IN THE

Supreme Court of the United States

FIDELITY EXPLORATION AND PRODUCTION COMPANY,

Petitioner,

v.

NORTHERN PLAINS RESOURCE COUNCIL, INC.,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES CourT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF OF AMICUS CURIAE

NORTHERN CHEYENNE TRIBE

IN SUPPORT OF RESPONDENT

JOHN B. ARUM

Counsel of Record

STEVEN H. CHESTNUT

ZIONTZ, CHESTNUT, VARNELL

BERLEY & SLONIM

2101 Fourth Avenue

Suite 1230

Seattle, WA 98121-2331

(206) 448-1230

Attorneys for Amicus Curiae

183062 g

COUNSEL PRESS

(800) 274-3321 + (800) 359-6859

t

—

» i

TABLE OF CONTENTS

Page

Table of Cited Authorities ................2505- li

Interests of the Amicus Curiae ...............5. l

Statutory Provisions Involved ................. 2

SUMtOMNOT OT TIS CORE ww. cic cc esc eens cose +

_ A. The Threat to Water Quality Posed by the

| Coal Bed Methane Industry. ............. 4

B. Proceedings Below. ..... 0... .ccssvscess 5

Reasons for Denying the Petition ............... 6

I. Water Discharged As A Result Of Natural Gas

Production Is A “Pollutant” Under The Plain

Language Of The Clean Water Act. ....... 7

A. Fidelity’s Discharge is “Industrial Waste.”

LTPULS em O eee eis Ua SRN CO os 7

B. Water Derived in Association with

the Production of Natural Gas is a

“Pollutant” under the Clean Water Act.

Ped eNee a eed oan ex eee es 10

I]. This Case Does Not Turn On The Outcome

PCC Te Pee TTT eee eT eee 16

III. Practical Considerations Do Not Support

Issuance Of A Writ Of Certiorari. ......... 18

ee ee et ee ee 20

il

TABLE OF CITED AUTHORITIES

Page

Cases:

Andrus v. Glover Constr. Co., 446 U.S. 608 (1980)

Seatac eee en eens 5 6 a tenna 11

BP Exploration & Oil v. United States Envtl.

Protection Agency, 66 F.3d 784 (6th Cir. 1995)

MPOUEREUee TT 12

Catskill Mountains Chapter of Trout Unlimited v.

City of New York, 273 F.2d 481 (2d Cir. 2002) .. 16, 17

Dubois v. United States Dept of Agric., 102 F.3d

1273 (1st Cir. 1996), cert. denied, 521 U.S. 1119

(1997) . . .. <6 06 0s eo 16, 17

Miccosukee Tribe of Indians v. South Florida Water

Management Dist., 280 F.3d 1364 (11th Cir. 2002)

ees e nsec ee see 5 6 en inne 7, 16, 17, 18

Montana Envt'l Info. Center v. Montana Dept of

Envtl. Quality, 296 Mont. 207, 988 P.2d 1236

G4.) MI 10

National Wildlife Fed'’n v. Consumers Power Co.,

862 F.2d 580 (6th Cir. 1988) ........ era 8, 16, 17

National Wildlife Fed’n v. Gorsuch, 693 F.3d 156

(D.C. Cir. 1908) .. .. 2. 6c due ee 8, 16, 17

iil

Cited Authorities

Page

Okanogan Highlands Alliance v. Williams, 236 F.3d

468 (9th Cir. 2000) ......-- eee e reer etree: 10

Sierra Club v. Cedar Point Oil, 73 F.3d 546 (5th Cir.),

cert. denied, 519 U.S. 811 (1996) .. 5, 6, 8, Hi, 12, $5

Southern Colorado C.U.R.E. v.Evergreen Operating

Corp., No. 98-WM-1518 (D. Colo. 1999) ...... 19

State Water Resources Department v. City of Klamath

Falls, 68 Or. App. 148, 682 P.2d 779 (1984) ... 10

Swartz v. Beach, 229 F. Supp. 2d 1239 (D. Wyo.

aad wa Wad Rene Keen ees teres 19

TRW Inc. v. Andrews, 534 U.S. 19 (2001) ...----- 11

United States v. Hamel, 551 F.2d 107 (6th Cir 1977)

(QUES oo eee eee 8

United States v. Standard Oil Co., 384 U.S. 224

ESE ied 9

Village of Oconomowoc v. Dayton Hudson Corp.,

24 F.3d 962 (7th Cir.), cert. denied, 513 U.S. 930

Uap aes e sien ansreseoedekaedres es 9

iv

Cited Authorities

Page

Statutes:

Pub. L. 102-374, 106 Stat. 1186 (Sept. 30, 1992) .. 1

ENA Saat 8 Serene er rrr ner ey Pr nr 8

gk Oe Ye reer te meee 2

Pe es © ERE vet oka Re eee aes

pie tee os | eee ey Pre re er rire 2

Pe es OEE - ccc iekee ctee seed passim

gtk 5 oe Bg: re a ne errr rrr 9

OP Ws REED os 6. sce 6s been eeeee ines 9

PP Rae EOE 6. 64x 40K vs tanew eee moans 6

Ce Bok a Be rer rrr rr a err 2

Regulations:

ee FM Ge rr rrr ner Pree 9

ee a ee rr er ee Te 12

Op Ge POE ov kph dv eles cosets 12

Vv

Cited Authorities

Page

Other:

55 Fed. Reg. 40,235 (Oct. 2, TOGO. cvcevaurneives 19

66 Fed. Reg. 46,455 (Sept. 5, yer 19

A Legislative History of the Water Pollution Control

Act Amendments of 1972 (Envtl. Pol. Div., Cong.

Research Serv. 1973) .....----eeee eres yaw dy br ho

H.R. Rep. No. 92-911 (1972) ....-- +++ s eee eeees 14

S. Rep. No. 92-414 (1971) «0... - +e seers 8, 13

Supreme Court Rule 37.2(a) ..-...---++++++05: 1

W.H. Rodgers, Environmental Law: Air and Water

§ 4.9 (West Publishing 1986) .........---++->. 8,9

l

INTERESTS OF THE AMICUS CURIAE

This brief is filed by amicus curiae Northern Cheyenne

Tribe (the “Tribe”) in opposition to the Petition for Certiorari

filed by Fidelity Exploration and Production Company

(“Fidelity”). The Tribe participated as amicus curiae below, and

files this brief pursuant to Supreme Court Rule 37.2(a)'.

The Tribe has a direct interest in the case because Fidelity and

other natural gas producers operating upstream of the Northern

Cheyenne Reservation discharge waste water associated with

coal bed methane production into the Tongue River, the mid-

channel of which forms the eastern boundary of the

Reservation.” /d. The Tribe holds reserved water rights to the

Tongue River which were recognized in a Tribal-State compact

ratified by Congress on September 30, 1992. Pub. L. 102-374,

106 Stat. 1186. Tribal members, as well as many off-Reservation

farmers and ranchers, depend on the Tongue River to irrigate

their farms and pastures.

This case concerns whether natural gas producers may

discharge salty waste water generated in association with the

production of natural gas from coal beds (coal bed methane or

‘““CBM”) into the Tongue River of southeastern Montana without

a National Pollutant Discharge Elimination System (“NPDES”)

permit issued by the State of Montana under the federal Clean

Water Act. The answer to this question does not turn on the

outcome of South Florida Water Management District v.

1. The parties have consented to the filing of this brief. Their letters

of consent are on file with the Clerk of the Court. This brief has been

authored in its entirety by undersigned counsel for the amicus curiae.

No person or entity, other than the named amicus and their counsel,

made any monetary contribution to the preparation and submission of

this brief.

2. The Northern Cheyenne Tribe has approximately 8,000 members

and occupies a Reservation comprising approximately 445,000 acres of

land in southeastern Montana. About 90 percent of the Reservation’s

population is Northern Cheyenne and all but one percent of the land is

held in trust by the United States for the Tribe and its members.

2

Miccosukee Tribe of Indians, No. 02-626, a case the Court will

hear in its October 2003 term. Rather, it turns on whether CBM

waste water falls under the plain language of the Clean Water

Act’s definition of the term “pollutant.” 33 U.S.C. § 1362(6).

The Ninth Circuit held that Fidelity’s discharge falls under the

Act’s definition because (1) it is an “industrial waste,” and

(2) it is “produced water” i.e. “water derived in association with

the production of. . . gas” which the Act treats as a “pollutant”

unless it is disposed of in a State-approved well in the manner

specified by 33 U.S.C. § 1362(6)(B). App 9a-11a. These narrow

rulings affect only one component of the natural gas industry,

are consistent with the language and legislative history of the

Clean Water Act, follow the holdings of other circuits addressing

the disposal of produced water, and accord with current agency

and industry practice. Notwithstanding the grant of certiorari in

Miccosukee, the Court should deny Fidelity’s petition here.

STATUTORY PROV’ sIONS INVOLVED

The Clean Water Act was enacted to “restore and maintain

the chemical, physical, and biological integrity of the Nation’s

waters.” 33 U.S.C. § 1251. Under the Act, the “discharge of

any pollutant” from a“‘pcint source” into the waters of the United

States is unlawful, unless the discharge is made in accordance

with an NPDES permit issued by either the United States

Environmental Protection Agency (“EPA”) or a state or tribal

agency authorized by EPA to administer the NPDES permit

program. 33 U.S.C. §§ 1311(a), 1342. NPDES permits must

contain conditions that ensure that discharges fall within

technology-based effluent limitations, which in turn must be

sufficiently stringent to provide for compliance with state or

tribal water quality standards.’ 33 U.S.C. §§ 1311(b)(1)(C),

1342(a)(1)(A).

3. The EPA is authorized to treat Indian tribes as States for various

purposes of the Act, including the promulgation of water quality standards

and the issuance of NPDES permits. 33 U.S.C. § 1377(e). The Tribe has

applied for treatment as a state for the purpose of implementing the

Act’s water quality standards program.

3

The sole issue in this case is whether CBM waste water

discharged into the Tongue River is a “pollutant” as that term is

defined in the Act, 33 U.S.C. § 1362(6). App. 7a. Fidelity’s

Petition for Certiorari fails to include the Act’s entire definition

of “pollutant,” omitting a crucial clause which pertains to “water

derived in association with oil or gas production.” 33 U.S.C.

§ 1362(6)(B). The full definition of “pollutant,” including the

omitted language reads:

The term “pollutant” means dredged spoil, solid

waste, incinerator residue, sewage, garbage, sewage

sludge, munitions, chemical wastes, biological

materials, radioactive materials, heat, wrecked or

discarded equipment, rock, sand, cellar dirt, and

industrial, municipal, and agricultural waste

discharged into water. This term does not mean

(A) “sewage from vessels or a discharge incidental

to the normal operation of a vessel of the Armed

Forces” within the meaning of section 1322 of this

title, or (B) water, gas, or other material which is

injected into a well to facilitate production of oil

and gas, or water derived in association with oil or

gas production and disposed of in a well, if the well

used either to facilitate production or for disposal

purposes is approved by authority of the State in

which the well is located, and if such State

determines that such injection or disposal will not

result in degradation of ground or surface water

resources.

33 U.S.C. § 1362(6) (emphasis added). The Ninth Circuit held

that Fidelity’s waste water falls within this definition because it

is “industrial . .. waste discharged into water” and because it is

“water derived in association with .. . gas production” that is

not disposed of in accordance with the subsection B exception

(i.e. via State-approved injection wells).

STATEMENT OF THE CASE

A. The Threat to Water Quality Posed by the Coal Bed

Methane Industry.

Fidelity extracts natural gas from coal seams underlying

the Tongue River valley of southeastern Montana from a well

field upstream of the Northern Cheyenne Reservation.

To produce CBM in this region, the coal seam aquifer must

be partially dewatered, a process that produces 13,000 to 17,000

gallons of waste water daily per well. App. 3a.

The waste water produced by Fidelity’s natural gas wells is

“salty.” It is about three times more saline that the ambient waters

of the Tongue River and has a Sodium Absorption Ratio (SAR),

a measure of the ratio of sodium to calcium and magnesium in

the water, which is 40 to 60 times higher than river water.

App. 4a. Use of high SAR water for irrigation causes long-term

damage to soils, especially the clayey soils which predominate

in the Tongue River valley. /d.

Currently there are about 250 producing CBM wells in

Montana. However, the coal beds underlying the Tongue River

valley have been targeted by Fidelity and other natural gas

producers for larger-scale production. A Final Environmental

Impact Statement recently released by the United States Bureau

of Land Management and the State of Montana forecasts up to

14,000 producing CBM wells in Montana portion of the Tongue

River watershed over the next 20 years. Montana Statewide Final

Oil and Gas Environmental Impact Statement (January 2003)

(“FEIS”’) at 4-5, available at www.mt.blm.gov/mcfo/cbm/eis.

Tens of thousands of additional wells are projected in the

upstream Wyoming portion of the watershed. Jd. at 4-9.

The FEIS warns that with this level of development, unregulated

discharge of produced water could lead to “severe” degradation

of water quality that would “limit the uses of affected waters”

on the Northern Cheyenne Reservation. /d. at 4-72.

B. Proceedings Below.

This case began when the Northern Plains Resource Council

(NPRC) brought a citizen enforcement action against Fidelity

under the Clean Water Act alleging that Fidelity was discharging _

waste water from its CBM wells without an NPDES permit.

In the district court, the parties stipulated that Fidelity was

engaged in a discharge of waste water from a point source to a

navigable water without a permit. The only issue before the

court was whether Fidelity’s waste water is a “pollutant.” In an

oral ruling granting Fidelity’s motion for summary judgment,

the district court held that Fidelity’s waste water is not a pollutant

requiring an NPDES permit. App. 7a. The district court never

issued a written opinion.

NPRC appealed to the Ninth Circuit Court of Appeals.

The Tribe as well as several irrigation districts and associations

supported NPRC’s appeal as amici curiae. App. 7a n.3.

On April 10, 2003, the Ninth Circuit issued an opinion reversing

the district court. App. 1a-18a. The Ninth Circuit held that the

“plain language” of the Clean Water Act requires the conclusion

that CBM waste water is a “pollutant” subject to regulation under

the Act. App. 9a.

First, the Court held that Fidelity’s waste water is “industrial

waste,” a term specifically included in the Act’s definition of

“pollutant.” App. 9a. The Court reasoned that “[b]ecause Fidelity

is engaged in production of methane gas for commercial sale

and because CBM water is an unwanted byproduct of the

extraction process, CBM water falls squarely with the ordinary

meaning of ‘industrial waste.’” Jd. at 10a.

Second, the Court held that CBM waste water is a

“pollutant” because it is ““produced water’ derived from gas

extraction.” App. 10a (citing Sierra Club v. Cedar Point Oil,

73 F.3d 546, 568 (Sth Cir.), cert. denied, 519 U.S. 811 (1996)).

The Court reasoned that CBM waste water falls into the EPA’s

definition of the term “produced water” and that the Act

6

“only exempts water derived from gas extraction from regulation

when the water is disposed of in a well and will not result in the

degradation of other water bodies.” /d. at 11a (citing 33 U.S.C.

§ 1362(6)(B)). Because Fidelity discharges its waste water

‘directly into the Tongue, not by reinjection into a state-approved

well,” its waste water “does not meet § 1362(6) exemption

criteria,” and is “a pollutant within the plain meaning of the

{Clean Water Act].” Jd.

The Court explained that its conclusion is supported by the

Act’s definition of “pollution” which is the “man-made or man

induced alteration of the chemical, physical, biological and

radiological integrity of water.” App lla (citing 33 U.S.C.

§ 1362(19)). The Court reasoned that by discharging CBM water

into the Tongue River, Fidelity “alters the water quality of the

Tongue River.” /d. A holding that “the massive pumping of

salty, industrial waste water into protected waters does

not involve the discharge of a ‘pollutant,’” the Court found,

would “undermine the integrity of [the CWA’s] prohibitions.”

Id. at 12a.

REASONS FOR DENYING THE PETITION

1. The plain language of the Clean Water Act supports the

Ninth Circuit’s decision that CBM waste water falls under the

Act’s definition of “pollutant.” Fidelity’s discharge is not only

an “industrial waste,” it also is “produced water,” i.e. “water

derived in association with the production of. . . gas.” 33 U.S.C.

§ 1362(6). Fidelity discharges its waste water directly into the

Tongue River, not via injection into a State-approved well in

accordance with the “produced water” exemption provided for

in 33 U.S.C. § 1362(6)(B). There is no circuit split on the issue

of whether “water derived in association with ... gas

production” is a “pollutant” under the Clean Water Act when it

is discharged directly into the surface waters of the United States.

To the contrary, the only other circuit court decision to address

this issue, Sierra Club v. Cedar Point Oil, 73 F.3d 546

(Sth Cir.), reached the same conclusion as the Ninth Circuit

here, and this Court denied certiorari. 519 U.S. 811 (1996).

7

2. This case is distinguishable from Miccosukee and similar

cases addressing whether dams and other surface water

management activities “add” pollutants to navigable waters.

In the case at bar, the waste water at issue ori ginates from deep

below the surface of the earth (outside the “waters of the United

States”) and is the byproduct of an industrial process ~— the

production of natural gas from coal seams. Even if this Court

reverses the Eleventh Circuit’s ruling in Miccosukee, it would

not affect the Ninth Circuit’s ruling that Fidelity’s CBM

discharge falls within the plain language of the Clean Water

Act’s definition of “pollutant” because it is both “industrial

waste” and “produced water.”

3. The EPA has long required NPDES permits for the

disposal of CBM waste water on lands within its jurisdiction,

as have major CBM producing states such as Colorado and

Wyoming. Fidelity has already obtained NPDES permits from

the State of Montana for all of the discharges at issue in this

case. The lack of any practical or immediate controversy over

the application of the NPDES permit requirement to the

discharge of CBM waste water counsels against a grant of

certiorari which would upset the status quo and create regulatory

uncertainty at a time when CBM production is burgeoning

throughout the Rocky Mountain west.

I. WATER DISCHARGED ASA RESULT OF NATURAL

GAS PRODUCTION IS A “POLLUTANT” UNDER

THE PLAIN LANGUAGE OF THE CLEAN WATER

ACT.

A. Fidelity’s Discharge is “Industrial Waste.”

The first basis for the Ninth Circuit’s ruling that Fidelity’s

discharge is a “pollutant” under the Clean Water Act was that it

fits within the broad category “industrial waste.” App. 9a.

Applying the ordinary meanings of the terms “industrial” and

“waste,” the Court of Appeals concluded that an industrial waste

is “any useless byproduct derived from the commercial

production of goods and services.” App. 10a. Because Fidelity

8

is engaged in the commercial production of natural gas and

because its waste water is an “unwanted byproduct of the

extraction process,” Fidelity’s waste water “falls squarely within

the ordinary meaning of ‘industrial waste.” Jd.

The Ninth Circuit’s ruling not only accords with the

plain meaning of “industrial waste,” it also accords with the

legislative history of the Act’s definition of the term “pollutant.”

4 This history demonstrates that Congress intended to adopt a

definition of “pollutant” that would be “at least as broad” as

that found in the Refuse Act of 1899, 33 U.S.C. § 407, which

prohibits the discharge of ‘‘any refuse matter of any kind or

description whatever” into any navigable water. See United

States v. Hamel, 551 F.2d 107, 110-11 (6th Cir 1977), citing

S. Rep. No. 92-414 at 76, reprinted in, A Legislative History of

the Water Pollution Control Act Amendments of 1972 2:1494

(Envtl. Pol. Div., Cong. Research Serv. 1973) (hereafter “1972

Leg. Hist.”); see also, 2 W.H. Rodgers, Environmental Law:

Air and Water, § 4.9, at 144 (Congress “meant to carry on the

tradition of the Refuse Act and that tradition was to construe

the word ‘refuse’ as condemning each and every variation of

damage-inducing wastes that changing technologies could

invent.”). Thus, while the definition of “pollutant” includes some

very specific items such as cellar dirt,” it also broadly lists

“industrial, municipal and agricultural wastes,” thereby

sanctioning “the inclusion of discharged substances that are not

specifically listed into these broad categories.” Cedar Point Oil,

73 F.3d at 565; see also National Wildlife Fed’n v. Gorsuch,

693 F.3d 156, 174 n.56 (D.C. Cir. 1982); Hamel, 551 F.2d

at 110-111.

Fidelity claims that its discharge does not constitute a

“pollutant” because it does not physically introduce pollutants

from the “outside world” into the waters of the United States.

Petition for Certiorari at 22-23 (citing National Wildlife Fed’n

v. Consumers Power Co., 862 F.2d 580, 584, 586 (6th Cir. 1988)

and Gorsuch, 693 F.2d at 174-75). The force of Fidelity’s

argument, however, depends on how one defines the “outside

world.” From the perspective of the Clean Water Act, the

“outside world” is any place outside “navigable waters” or the

“waters of the United States.” See 33 U.S.C. § 1362(12)

(“discharge of a pollutant” means the “addition of any pollutant

to navigable waters from any point source” [emphasis added});

id. § 1362(7) (“navigable waters” means the “waters of the

United States”). The “waters of the United States” do not include

ground waters. See 40 C.F.R. § 122.2; Village of Oconomowoc

v. Dayton Hudson Corp., 24 F.3d 962, 965 (7th Cir.), cert.

denied, 513 U.S. 930 (1994). Because Fidelity extracts “salty”

groundwater from deep below the earth, water that would

otherwise “never reach the Tongue River were it not for Fidelity’s

extraction process,” App. 3a, and discharges it as a waste product

to the river, it does add pollutants from the “outside world” to

the “waters of the United States.”

Fidelity also argues that the Ninth Circuit’s analysis was

faulty because CBM waste water “‘can be and is used for” various

beneficial purposes including domestic use, stock watering and

wildlife. Petition for Certiorari at 18 n.7. But the mere fact that

CBM waste water has many potential beneficial uses cannot

alter the fact that Fidelity discharges water to the Tongue River

as an unwanted by-product which, if unregulated, will degrade

the natural and economic value of the river’s waters. No doubt,

beneficial uses can be found for many of the other substances

listed in the Act’s definition of “pollutant.” See 33 U.S.C.

§ 1362(6) (listing “rock” and “sand” as pollutants). But under

the Clean Water Act, like the earlier Refuse Act, such substances,

no matter how useful in certain applications, become

“pollutants” once they are discharged as unwanted by-products

into the Nation’s waterways. See United States v. Standard Oil

Co., 384 U.S. 224, 226 (1966) (rejecting contention that the

phrase “refuse matter” in the Refuse Act excluded valuable

substances and holding gasoline to be a “pollutant” under that

statute); 2 Rodgers, supra, § 4.9, at 144 (under Clean Water Act

a “pollutant” can be viewed as a “resource out of place’).

10

In essence, Fidelity argues that “unaltered groundwater”

can never be an “industrial waste” or a “pollutant” under the

Clean Water Act. See Petition for Certiorari at 18. But as the

Ninth Circuit reasoned, such a per se rule would “upset the

integrity” of the Act. App. 14a. The fact that groundwater is

“natural” or “unaltered” does not necessarily mean that it is

benign.* Indeed, the record shows that CBM waste water is

“salty” and contains high levels of SAR which can render surface

waters unusable for irrigation. App. 4a. There is no “compelling

reason” why this Court should grant a wnit of certiorari to review

the Ninth Circuit’s fact-bound ruling that the unwanted, “salty”

water that is discharged into the Tongue River as a result of

Fidelity’s CBM extraction process is an “industrial waste” and

therefore a “pollutant” under the Clean Water Act.

B. Water Derived in Association with the Production

of Natural Gas is a “Pollutant” under the Clean

Water Act.

The Act’s broad definition of “pollutant,” which

encompasses all “industrial, municipal and agricultural waste

discharged into water,” is subject to a narrowly drawn exception

for “water derived in association with oil or gas production”

when the water is “disposed of in a well” which has been

4. Many industries discharge “unaltered groundwater” that may

be hazardous to public health and the environment. For example, mining

operations often result in discharges of “natural” but nevertheless toxic

groundwater. See, e.g., Okanogan Highlands Alliance v. Williams, 236

F.3d 468, 473-75 (9th Cir. 2000) (groundwater filling mine pit and

discharged to adjacent surface waters could exceed State water quality

standards); Montana Envt’l Info. Center v. Montana Dept of Envil.

Quality, 296 Mont. 207, 988 P.2d 1236, 1239 (1999) (mining company’s

discharge of groundwater containing naturally high levels of arsenic).

Similarly, naturally occurring groundwater extracted for geothermal

energy development can pose environmental hazards. See, e.g., State

Water Resources Department v. City of Klamath Falls, 68 Or. App. 148,

682 P.2d 779, 784 & n.5 (1984) (State pollution discharge permit required

for disposal of geothermal fluids derived from wells).

1]

approved by a state based on a determination that underground

disposal will not degrade ground or surface waters. 33 U.S.C.

§ 1362(6)(B). The Ninth Circuit held that F idelity’s discharge

is a “pollutant” because it is “produced water,” i.e. “water derived

in association with . . . gas production,” that is nor disposed of

in accordance with the terms of this exemption. App. 10a-1 1a.

The Ninth Circuit’s holding is consistent with the

Congressional intent. Congress’s use of the broad term

“industrial waste’ in defining pollutant coupled with its crafting

of a very narrow, conditional exception for “water derived in

association with oil or gas production” is an indication that it

intended that such produced water would be treated as a

“pollutant” if it is not disposed of in accordance with the

conditions specified in 33 U.S.C. § 1362(6)(B). TRW Inc. vy.

Andrews, 534 U.S. 19, 28-29 (2001) (“Where Congress

explicitly enumerates certain exceptions to a general prohibition,

additional exceptions are not to be implied, in the absence of

evidence of a contrary legislative intent”); Andrus v. Glover

Constr. Co., 446 U.S. 608, 616-17 (1980). Congress would not

have created this very narrow, conditional exception, if it

intended that all water produced as a byproduct of gas production

would be exempt from the Act.

In Cedar Point Oil, 73 F.3d at 567-69, the Fifth Circuit

held that waste water derived in association with oil and gas

production was a “pollutant” when discharged into the waters

of Galveston Bay. The court reasoned that the Act’s conditional

exception for “water derived in association with oil or gas

production” from the meaning of “pollutant” was a “strong

indicator of Congress’s concern over the efiects of produced

water on the environment.” Jd. at 568. The court further

reasoned:

[I]f Congress felt that it was necessary to draft a

detailed exemption for produced water that has been

disposed of in a state-approved reinjection well, it

may be that Congress believed that such produced

water would otherwise be a pollutant. If, absent an

12

exemption, produced water reinjected into a state-

approved well is a pollutant, then it is hardly a stretch

to say that produced water deposited directly into a

bay is also a pollutant.

Id. (emphasis in original). The Court emphasized that because

Congress provided a “clear avenue” for oil or gas producers to

avoid regulation by the Clean Water Act, a producer that “chose

not to avail itself” of that avenue should be subject to the Act.

Id. at 568 n.36.

Fidelity attempts to distinguish Cedar Point Oil on the basis

that the “produced water” at issue in that case apparently

included materials added to water in the oil and gas production

process.’ Petition for Certiorari at 18-19. However, as the Ninth

Circuit’s opinion points out, EPA defines “produced water” to

mean “water (brine) brought up from the hyrdocarbon-bearing

strata during the extraction of oil and gas,” a definition which

“does not turn on the addition of chemicals or any other

alteration.” App. 10a (quoting 40 C.F.R. 435.41(bb)).°

Furthermore, the Act’s definition of “pollutant” does not use

the term “produced water,” but instead uses the more inclusive

term “water derived in association with oil or gas production.”

33 U.S.C. § 1362(6)(B). in this case, there can be no dispute

that the waste water discharged by Fidelity into the Tongue River

is “derived in association with . . . gas production ,” and 's not

5. In some cases, produced water contains residual quantities of

crude oil, a “natural” constituent of groundwater found in association

with crude oil deposits. See BP Expioration & Oil v. United States Envil.

Protection Agency, 66 F.3d 784, 792 (6th Cir. 1995). Fidelity position

would mean that “unaltered groundwater” containing naturally occurring

crude oil residues could not be treated as a pollutant when brought to

the surface in an oil well. °

6. Fidelity points out that this definition of “produced water”

applies only to offshore and coastal oil and gas operations. Petition for

Certiorari at 20 n.9. Nevertheless, the regulations applicable to onshore

oil and gas operations specifically list “produced water” as a “waste

water pollutant.” 40 C.F.R. § 435.32.

_ 13

“disposed of in a well” approved by the State of Montana.

Petition for Certiorari at 2-3. Accordingly, the Ninth Circuit

logically concluded that Fidelity’s waste water is a “pollutant”

under the plain language of the Clean Water Act, 33 U.S.C.

§ 1362(6)(B).

The legislative history of the Clean Water Act strongly

supports the Ninth Circuit’s conclusion. The Senate Committee

Report for the legislation that became the Clean Water Act

indicates that the Senate intended to create only “two specific

exceptions from the term pollutant: sewage from vessels, as

that term is defined and controlled through the provisions of

Section 312, and water, gas, or other materials associated with

the secondary recovery of oil.” S. Rep. No. 92-414 at 76 (1971),

reprinted in, 1972 Leg. Hist. 2: 1494 (emphasis added).

The Senate intended to exempt “water derived in association

with oil or gas production” only if the water was “disposed in a

well. . . approved by authority of the State in which the well is

located.” 1972 Leg. Hist. 2:1698.

The House version of the bill further tightened the Senate’s

already narrow exemption by requiring not only that the water

be disposed of in a State-approved well but also that the State

make a determination that the well disposal “will not result in

the degradation of ground or surface water resources.” Compare

1972 Leg. Hist. 1:1068, with id. 2:1697-98. The House

Committee Report emphasized that this exception was to be

construed very narrowly:

It is the intent of Congress that the exclusion from

the term “pollutant” relating to the injection of water,

gas, or other materials into wells applies only . . . to

the properly executed disposal in wells of brines

derived in association with the production of crude

oil or natural gas, with appropriate precautions taken

to assure that such injection or disposal does not

lead to, or make substantially more likely, the

degradation of usable water resources. For such

14

exclusion to be effective, the State is required (1) to

approve the well used either to facilitate production

or for disposal purposes, and (2) to make a

determination, based on sufficient investigation and

evidence, that such degradation has not taken place

and has not been or will not be made substantially

more likely as a result of such injection or disposal.

H.R. Rep. No. 92-911 at 131 (1972), reprinted in, 1972 Leg.

Hist. 1:818 (emphasis added).

The debate on the floor of the House confirms that Congress

would not have intended that produced water be exempt from

the NPDES requirement except under the specific conditions

spelled out in the definition of “‘pollutant.” It also shows that

Congress was concerned about the deleterious effects of the

produced water itself, not only the materials that may be added

to the water in the oil and gas production process. 1972 Leg.

Hist. 1:595. On the House floor, Representative Aspin proposed

an amendment to strike the exception altogether. /d. at 1:589.

However, the supporters of the exception led by Representative

Harsha successfully argued that water produced in association

with oil and gas extraction should not be regulated under the

Clean Water Act as long as it was disposed of in a well regulated

under existing state schemes applicable to the oil and gas

industry. Representative Harsha explained that “/h/uge volumes

of water are commonly found in the same underground

strata as oil and gas and come up with produced oil and gas.”

Id. at 1:595 (emphasis added). He noted the “injection of brine

water resulting from petroleum operations back into the earth

for disposal purposes is itself an important form of pollution

control” and argued that it was not appropriate that this form

of control would be “displaced by new Federal authority.”

Id. at 1:596 (emphasis added). Representative Harsha also

explained that the House Committee had previously considered

Representative Aspin’s proposal but had instead added an

amendment providing additional safeguards that were not

present in the Senate bill. He pointed out:

15

[The House bill] is much more stringent than S. 2770

— its Senate-passed counterpart on this issue. [It]. . .

tightens this provision [in S. 2770] down

considerably and will not permit this process until

the State makes a finding or determination that such

process will not degrade the waters.

Id. 1:595.

The Conference Committee largely retained the House

language. According to Senator Muskie, the bill’s sponsor:

The language of the House amendment as regards

pollutants associated with oil and gas production was

clarified to indicate that the process of injection and

disposal of materials associated with oi] and gas

production from wells would be excluded only where

a State regulatory program existed. The Conferees

intend that this provision assure that no injection or

disposal occur in such a manner as to present a

potential hazard to ground water quality.

1972 Leg. Hist. 1:178 (emphasis added). Thus, the legislative

history shows that the exemption for “water derived in

association with oil or gas production” was enacted on the

premise that it was unnecessary to treat water produced by oil

or gas wells as a pollutant under the Clean Water Act only in

cases where the water is disposed of in a State-approved well

pursuant to an adequate State program to protect ground and

surface waters. The debate on this issue confirms that Congress

clearly did not contemplate that “water derived in association

with ... gas production” would be exempt from the Act’s

definition of “pollutant” when discharged directly to surface

waters where it could harm crops, soils, fish and wildlife.

In short, the Ninth Circuit’s holding is consistent with the

plain language of the Act, the Act’s legislative history and the

decision of the Fifth Circuit in Cedar Point Oil. Fidelity has

identified no circuit split on this issue and no other basis that

would warrant the issuance of a writ of certiorari.

16

Il. THIS CASE DOES NOT TURN ON THE OUTCOME

IN MICCOSUKEE.

In an effort to convince the Court to at least provisionally

grant certiorari pending the outcome in Miccosukee, Fidelity

argues that this case turns upon the issue before the Court in

Miccosukee: viz. whether dams and other types of surface water

management activities should be subject to the NPDES

requirement of the Clean Water Act. See Petition for Certiorari

at 29. In Miccosukee Tribe of Indians v. South Florida Water

Management Dist., 280 F.3d 1364, 1367-69 (11th Cir. 2002),

the Eleventh Circuit held that a public agency that manages a

flood control project consisting of a system of levees, canals

and water impoundment areas must obtain an NPDES permit

when it pumps polluted water from one water impoundment

area to another because such pumping constitutes the “addition”

of a pollutant “from” a point source. The First and Second

Circuits have likewise held that an NPDES permit is required

_ for activities that involve interbasin transfers of surface water.

Catskill Mountains Chapter of Trout Unlimited v. City of New

York, 273 F.2d 481, 492 (2d Cir. 2002) (diversion of water from

a reservoir containing pollutants through a tunnel into a creek

constituted “addition” of pollutants from a point source); Dubois

v. United States Dep t of Agric., 102 F.3d 1273, 1299 (Ast Cir.

1996) (pumping of polluted surface water for use in snowmaking

and its subsequent discharge into a lake would constitute an

“addition” of pollutants from a point source), cert. denied, 521

U.S. 1119 (1997). On the other hand, the D.C. Circuit and the

Sixth Circuit have held that dams and other surface water

management facilities do not require an NPDES permit where

they do not “add” pollutants from the “outside world,” i.e. from

outside the “waters of the United States,” into navigable waters.’

7. The above cases have differences as well as similarities.

For example, Consumers Power and Gorsuch involved exchanges of

water from the same water body, while Catskill Mountains and Dubois

involved interbasin transfers. Dubois unlike the other three cases involved

a discharge resulting from a private commercial activity (snowmaking)

rather than more traditional “surface water management.”

17

Consumers Power Co., 862 F.2d at 589; Gorsuch, 693 F.2d at

175.

The case sub judice is distinguishable from the above cases

on at least three important grounds. First, it does not involve a

transfer between two bodies of navigable waters. Second, it does

not involve “surface water management,” but instead involves

an industrial process that produces copious amounts of

groundwater as a waste product — water that would otherwise

remain deep below the earth and never enter the “waters of the

United States.” Finally, the waste water at issue here is “produced

water,” i.e. “water derived in association with ... gas

production,” a waste product which is expressly mentioned in

the Act’s definition of “pollutant” and which is afforded a unique

status under that definition. 33 U.S.C. § 1362(6)(B). These three

differences are entirely dispositive of the issues in this case.

Thus, regardless of how the Court may in Miccosukee resolve

the perceived circuit conflict over whether dams and other

surface water management activities “add” pollutants to

navigable waters, the Court’s decision would not detract from

the Ninth Circuit’s holding that groundwater produced in the

CBM extraction process is a “pollutant” under the Clean Water

Act.®

It is true that the Ninth Circuit cited Miccosukee, Catskill

Mountains and Dubois for the proposition that “transporting

water from one water body to another [without an NPDES

8. Fidelity’s petition repeatedly seizes on the Ninth Circuit’s

statement that the issue of whether CBM water is a pollutant is

“practicably indistinguishable” from the issues considered in Miccosukee

and other similar cases. App. 15a. But as the Ninth Circuit itself

recognized elsewhere in its opinion, the determination of whether

Fidelity’s waste water is a “pollutant” ultimately turns on the plain

language of Act’s definition of “pollutant,” rather than on case law

construing the meaning of the term “addition.” Ironically, Fidelity argued

below that this case was distinguishable from Miccosukee for precisely

this reason. /d. It is only now that the Court granted certiorari in

Miccosukee that Fidelity has changed its position to embrace the alleged

similarities between the two cases.

18

permit] can violate the [Clean Water Act].” App 14a-15a

(emphasis added). But this statement merely responded to

Fidelity’s extreme position that a discharge of “unaltered water”

would never require an NPDES permit under any circumstances,

a proposition that finds no support in the case law. /d. at 15a

(rejecting argument that “discharge of water cannot be a

pollutant simply because the discharged water is unaltered”’).

As shown above, the Ninth Circuit was right to reject that

argument and hold that a discharge of “‘unaltered water” without

a permit does violate the Clean Water Act at least where the

water is a waste product of an industrial process, originates from

deep below the “waters of the United States,” is “derived in

association with oil or gas production,” and is not injected in a

State-approved well. 33 U.S.C. § 1362(6)(B).

Because these important statutory rules were not implicated

in the line of cases addressing dams and other surface water

management activities, the Court’s decision in Miccosukee will

not address the issue presented by this case. Accordingly, there

is no reason for the Court to grant certiorari pending its decision

in Miccosukee as Fidelity requests. See Petition for Certiorari

at 29. On the contrary, because there is no authority supporting

Fidelity’s position on the narrow issue of whether waste water

discharged in the CBM extraction process is a “pollutant” under

the Clean Water Act, Fidelity’s petition should be denied in its

entirety.

Il. PRACTICAL CONSIDERATIONS DO NOT

SUPPORT ISSUANCE OF A WRIT OF

CERTIORARI.

There is no practical necessity for the Court to grant

certiorari to decide whether the waste water generated as aresult

of CBM production should be treated as a “pollutant” under the

Clean Water Act. There is remarkable unanimity among federal

and state agencies that waste water derived from the production

of CBM is a “pollutant” under the Clean Water Act and that its

discharge requires an NPDES permit. The EPA requires CBM

producers to obtain NPDES permits on Indian reservations, the

19

only places where it exercises direct Clean Water Act

jurisdiction.’ Likewise, environmental agencies in major CBM

producing States such as Colorado and Wyoming currently

require NPDES permits for discharges of CBM produced

water.'° Fidelity has itself obtained NPDES permits for all of

the discharges at issue in this case. App. 7a n.2. Fidelity does

not attempt to make any showing that the NPDES permit

requirement has imposed any unreasonable burden on natural

gas producers in Montana or in other states. Indeed, Fidelity is

currently seeking to expand its Montana operation

notwithstanding the NPDES permit requirement.

Fidelity maintains that certiorari should be granted because

the Ninth Circuit’s decision raises federalism concerns. But it

is important to note that the effects of CBM discharges are not

confined to the boundaries of individual states. For example,

CBM discharges in Wyoming already affect water quality in

the downstream Montana reaches of the Tongue River. Fidelity’s

discharges in Montana similarly affect water quality on the

nearby Northern Cheyenne Reservation. The NPDES permit

requirement ensures that the water quality standards of

neighboring states and tribes are respected when another state

decides to allow discharges of CBM water into the “waters of

the United States.” The Tribe believes that disposal of the

massive quantities of waste water produced by this rapidly

expanding new industry should conform to the requirements of

9. See 66 Fed. Reg. 46,455 (Sept. 5, 2001) (announcing

development of “Best Professional Judgment” determination of effluent

limitations for NPDES permitting of CBM wells on Indian lands);

55 Fed. Reg. 40,235, 40,236 (Oct. 2, 1990) (issuing general NPDES

permit for CBM wells on Colorado’s Southern Ute Reservation).

10. See http://deq.state.wy.us/wqd/watershed/91131.pdf (Wyoming

general NPDES permit for CBM production); Swartz v. Beach, 229

F. Supp. 2d 1239, 1270-72 (D. Wyo. 2002); Southern Colorado C.U.R.E.

v. Evergreen Operating Corp., No. 98-WM-1518 (D. Colo. 1999)

Recommendation of Magistrate Judge at 23-24; Colorado NPDES Permit

Issued to J.M. Huber Corp. (Appellee’s Excerpts of Record at 178-80).

20

the federal Clean Water Act and should not be left solely to the

policy choices of individual states.

CONCLUSION

The Petition for Certiorari should be denied.

Respectfully submitted,

JOHN B. ARUM

Counsel of Record

STEVEN H. CHESTNUT

ZIONTZ, CHESTNUT, VARNELL

BERLEY & SLONIM

2101 Fourth Avenue

Suite 1230

Seattle, WA 98121-2331

(206) 448-1230

Attorneys for Amicus Curiae

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