The feasibility of effluent trading in the oil and gas industry

In January 1996, the U.S. Environmental Protection Agency (EPA) released a policy statement endorsing wastewater effluent trading in watersheds, hoping to promote additional interest in the subject. The policy describes five types of effluent trades - point source/point source, point source/nonpoint source, pretreatment, intraplant, and nonpoint source/nonpoint source. This paper evaluates the feasibility of effluent trading for facilities in the oil and gas industry. The evaluation leads to the conclusion that potential for effluent trading is very low in the exploration and production and distribution and marketing sectors; trading potential is moderate for the refining sector except for intraplant trades, for which the potential is high. Good potential also exists for other types of water-related trades that do not directly involve effluents (e.g., wetlands mitigation banking). The potential for effluent trading in the energy industries and in other sectors would be enhanced if Congress amended the Clean Water Act (CWA) to formally authorize such trading