## Facts

- The Environmental Protection Agency (EPA) promulgated Clean Water Act (CWA) effluent limitations guidelines for offshore oil and gas extraction operations, including limits for discharges of “produced water” containing oil and grease and other pollutants.
- For existing sources, the CWA required EPA to set limits based on the “best available technology economically achievable” (BAT), considering cost, non-water-quality environmental impacts, and energy requirements.
- EPA selected improved gas-flotation as BAT for produced water and set daily maximum and monthly average oil-and-grease limits using performance data from a composite study of 83 offshore platforms.
- EPA estimated roughly 60% of offshore operations already met or could meet the new limits with gas-flotation upgrades.
- EPA evaluated a stricter option—reinjection of produced water—but declined to require it as BAT based on very high cost, increased energy use and air emissions, and a projected production loss.
- Industry petitioners challenged the rule as too stringent, disputing EPA’s data set, feasibility assumptions, and cost and impact analysis.
- NRDC challenged the rule as too lenient, arguing EPA unlawfully declined to require reinjection and that some limits were insufficiently protective.
- Svedala Industries, an equipment manufacturer, sought review alleging economic injury from EPA’s refusal to mandate reinjection technology.
- Multiple petitions were consolidated in the Sixth Circuit as direct review of an EPA rule under the CWA’s judicial-review provision.

## Issues

1. Whether EPA’s selection of improved gas-flotation (rather than reinjection) as BAT for produced water complied with the CWA’s BAT requirements, including consideration of cost, energy, and non-water-quality environmental impacts.
2. Whether EPA’s methodology and record support for the numeric limits (including reliance on data from 83 platforms and related feasibility and cost estimates) were arbitrary or capricious under the Administrative Procedure Act (APA).
3. Whether Svedala, as an equipment manufacturer alleging reduced demand for its products, had standing to challenge the rule, including whether its asserted injury fell within the CWA’s zone of interests.

## Decision

- The court applied APA arbitrary-and-capricious review and afforded substantial deference to EPA’s technical and policy judgments in BAT determinations when the agency considered relevant factors and explained its choice.
- The court upheld EPA’s choice of improved gas-flotation as BAT and sustained the produced-water limits as adequately supported by the record and reasonably explained.
- The court rejected NRDC’s argument that EPA was required to select reinjection as BAT, holding EPA reasonably considered and declined that option given cost, energy, air-emissions effects, and production impacts.
- The court rejected the principal industry challenges to EPA’s database, extrapolations, and feasibility determinations, concluding EPA’s approach had a rational basis in the record.
- The court dismissed Svedala’s petition for lack of standing because its asserted economic injury as a manufacturer was outside the zone of interests protected by the CWA.
- The court denied the remaining petitions for review on the merits, leaving the EPA rule in place.

## Legal Principles

- Under the CWA, BAT is technology-forcing but is constrained by statutory consideration of economic achievability, cost, energy requirements, and non-water-quality environmental impacts.
- EPA is not required to adopt the most stringent conceivable control method if the agency reasonably concludes another technology is the best available option in light of the statutory factors.
- In reviewing effluent-limitation guidelines, courts apply APA arbitrary-and-capricious review and generally defer to EPA’s technical judgments when the agency examines relevant data and provides a reasoned explanation.
- EPA may rely on composite industry data and reasonable extrapolations to set category-wide limitations; perfection in representativeness is not required if the record supports the agency’s conclusions.
- A petitioner must satisfy both Article III requirements and the zone-of-interests test; economic injury to an equipment manufacturer from reduced demand for its products is not within the CWA’s protected interests focused on water quality and related environmental concerns.

## Conclusion

The Sixth Circuit largely sustained EPA’s offshore oil-and-gas effluent limitations, holding that EPA reasonably selected gas-flotation as BAT and adequately supported its numeric limits under APA review, while dismissing an equipment manufacturer’s challenge because its asserted economic injury fell outside the Clean Water Act’s zone of interests.


BP Expl. & Oil, Inc. v. U.S. Env’t Prot. Agency, 66 F.3d 784 (6th Cir. 1995)