Federated Oil & Gas of Traverse City, Michigan (Board decision, January 8, 1997)

Plain-English summary

James and Alice Valentine challenged EPA Region V's permit authorizing Federated Oil & Gas to operate the Valentine 3-18 SWD Class II injection well in Bear Lake Township, Michigan. They argued that their lease did not allow an injection well, that other operators had contaminated their property, that Federated had connected piping before obtaining a permit, and that the permit lacked adequate controls on injection rate, cement integrity, and future commercial disposal. The Board held that lease disputes, generalized enforcement concerns, and conduct by other operators were outside its permit-review authority or unrelated to this permit. It found Region V's pressure limit, casing analysis, and non-commercial permit conditions reasonable, and held that a future transfer or commercial modification would require regional review. The Board denied the petition for review in all respects. No monetary penalty was imposed by this permit decision.

Decision snapshot

• Cited authorities: 40 C.F.R. §§ 124.13, 124.19, 144.6, 144.35, 144.38, 144.39, 144.40, 144.41, 144.51, and 146.8; 42 U.S.C. §§ 300h, 300h-1, 300h-2, 300i, and 300j-8
• Outcome: Review of the UIC permit was denied in all respects.
• Key point: The EAB reviews permit conditions under the UIC rules, not private lease disputes or generalized concerns about enforcement.

Full text (EPA EAB public release)

722 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

IN RE FEDERATED OIL & GAS OF
TRAVERSE CITY, MICHIGAN

UIC Appeal No. 95-38
ORDER DENYING REVIEW

Decided January 8, 1997

Syllabus

James and Alice Valentine (“Petitioners”) of Bear Lake Township, Michigan, seek review of an Underground Injection Control (“UIC”) permit issued by U.S. EPA Region V. The permit would authorize Federated Oil & Gas (“Federated”) to operate a Class II injection well on prop- erty leased from the Petitioners, for the non-commercial disposal of waste fluids brought to the surface by Federated in connection with oil or natural gas production elsewhere in Michigan.

In their petition for review, the Petitioners chiefly contend that Region V should have denied Federated’s permit application because the lease agreement between Federated and the Petitioners does not authorize the operation of an injection well on the leased premises. The Petitioners further contend that certain producing wells located on Petitioners’ property, oper- ated by entities other than Federated, have caused damage to the property in the past. They express concern regarding Federated’s own willingness to comply with applicable regulatory requirements, alleging that Federated connected piping to the proposed Class II injection well on their property before obtaining a permit for that well. In addition, Petitioners object to the issuance of this permit because they are not confident that the permit will be conscientiously enforced by the appropriate government agencies, and because they fear that the permit will eventually be sold to a “commercial” injection well operator who will accept waste from many different sources. Finally, Petitioners argue that the Region's permit decision is erroneous because it does not expressly limit the permissible injection rate for the well on their property, and because they believe the cement used in constructing the well is not sufficiently dense to provide an effective casing.

Held: The Board has no authority to resolve disputes between Petitioners and their lessee concerning the terms of the lease that may govern the well site, and the Board therefore cannot review Petitioners’ objections based on the lease. General concerns regarding the enforcement practices or capabilities of the State of Michigan, which are not linked to any condition of the per- mit, also lie beyond the limits of the Board’s role in reviewing a UIC permit decision. The Board declines to review Petitioners’ objections based on alleged conduct of other well operators, because such allegations are not relevant to the disposition of Federated’s permit application. The contention that Federated violated the law by connecting piping to the well on Petitioners’ prop- erty (before obtaining a permit) does not justify denial of this permit, activities like those alleged are matters normally addressed by the Region, as appropriate, in an enforcement context. Petitioners’ contentions regarding injection rate and the integrity of the well’s cement casing have been addressed by Region V in a reasonable manner, and the Board finds nothing erroneous in the Region’s decision with respect to those issues. The Board further declines to review this per- mit based on Petitioners’ fear that it may be transferred and/or revised to allow for “commercial”

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operation at some future time; any such changes would have to be accompanied by a request for permit modification. For these reasons, the petition for review is denied.

Before Environmental Appeals Judges Ronald L. McCallum,
Edward E. Reich and Kathie A. Stein.

Opinion of the Board by Judge Stein:

I. BACKGROUND

Before us is a petition for review of a decision issued by Region V of the U.S. Environmental Protection Agency, granting a permit for the operation of an injection well (designated “Valentine 3-18 SWD”) in Bear Lake Township, Manistee County, Michigan. Under the permit, this well would inject fluid byproducts of oil and gas recovery opera- tions conducted elsewhere in Michigan by the permittee, Federated Oil & Gas (“Federated”) of Traverse City, Michigan. Those byproducts, commonly referred to as “brines,” are extracted in the course of oil and natural gas production and separated from the oil or gas, and must then be disposed of.' Disposal of such fluids by deep well injec- tion in the State of Michigan, as proposed by Federated, is regulated under a federally administered Underground Injection Control (“UIC”) regulatory program promulgated pursuant to the Safe Drinking Water Act, 42 U.S.C. §§ 300h(b) and 300h-1(c), and codified at 40 C.F.R. Parts 144, 146, and 147.

The petitioners in the matter before us, James and Alice Valentine (“Petitioners”), are the owners of the land on which Valentine 3-18 SWD is located. Petitioners acknowledge having executed one or more leases authorizing oil or gas production wells to be constructed on their property,’ but they claim that no lease they have signed can

1 As used in this opinion, “brine” refers specifically to fluids of the kind described in 40 C.F.R. § 144.6(b)(1), i.e. fluids “brought to the surface in connection with * * * conventional oil or natural gas production.” According to section 144.6(b)(1), injection wells used for disposal of such fluids are designated “Class II” injection wells.

2 Petitioners have attached to their petition a copy of a document titled “Oil and Gas Lease,” dated December 1, 1983, executed by the Petitioners as lessors and by Bob Adams & Associates as lessee. Petitioners assert that this document represents “the operative contract” for purposes of their appeal (Petition for Review at 5) — meaning, we assume, that this is the con- tract under which Federated Oil & Gas now claims a right to operate Valentine 3-18 as an injec- tion well. Petitioners make several legal arguments concerning the proper interpretation of the lease, and concerning the nature of Federated’s rights under the lease. They argue, among other things, that the lease applies only to the wells designated Valentine 1-18 and 2-18, and that even if the lease applied to Valentine 3-18 it would confer no right to use that well as an injection well. See Petition for Review at 2, 5. For the reasons set forth in the text of this Order, the

Continued

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be construed as authorizing the use of their property as the site of an injection well operation. Federated is the assignee of a lease execut- ed by the Petitioners, and Federated apparently believes that the lease authorizes it to operate an injection well on Petitioners’ property.

Under the terms of the permit, Valentine 3-18 would inject brine into the Traverse Limestone formation at a depth of 1150 to 1733 feet. That injection zone is separated from the base of the lowermost underground source of drinking water (‘USDW”) by 366 feet of sedi- mentary rock strata. The permit authorizes only “non-commercial” dis- posal of brine — that is, disposal of brine from Federated’s own pro- duction wells? — and requires Federated to comply with detailed construction, operation, monitoring and reporting provisions.

Petitioners submitted written comments to Region V during October 1995, following issuance of the draft permit, and the Region addressed each of Petitioners’ objections at length in a letter dated November 8, 1995. The final permit decision was issued on or about November 21, 1995, and the Petitioners then submitted their petition for review. Much of the petition has nothing to do with any alleged inconsistency between the Region’s permit decision and the require- ments of the Safe Drinking Water Act and/or the UIC regulations. Instead, it is a plea for the Environmental Appeals Board to adopt a “broader view” of the UIC permit review process by intervening, on Petitioners’ behalf, in what is essentially a private landlord-tenant dis- pute. Petitioners urge the Board to take on that role because Petitioners believe it would be costly for Petitioners themselves to enforce compliance with their lease through the local court system.

We recognize the obvious sincerity with which Petitioners are seeking to hold their lessee to a standard of what they regard as responsible conduct. This Board, however, simply has no authority to intervene in private contractual disputes. Moreover, to the extent that the Petitioners address matters within the scope of the Board’s permit review authority, they nonetheless identify no clear factual or legal error affecting the Region’s permit decision, nor any important policy

Environmental Appeals Board expresses no opinion regarding any of the issues of lease inter- pretation that the Petitioners have raised.

• The term “non-commercial” is not defined in the permit. Region V stated, however, in its
  response to Petitioners’ comments, that the “non-commercial” limitation means that the named permittee “will not be allowed to accept brine from wells owned or operated by other compa- nies.” Response to Comments at 2. We adopt the Region's interpretation of the term “non-com- mercial,” as used in this permit, as an authoritative reading that is binding on the Agency. See also infra note 8.

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matter or exercise of discretion warranting review by the Board. The petition for review must therefore be denied.

II. DISCUSSION

Under the rules governing this proceeding, a UIC permit decision ordinarily will not be reviewed unless it is based on a clearly erro- neous finding of fact or conclusion of law, or involves an important matter of policy or exercise of discretion that warrants review. See 40 C.F.R. § 124.19; 45 Fed. Reg. 33,412 (1980). The preamble to section 124.19 states that this Board’s power of review “should be only spar- ingly exercised” and that “most permit conditions should be finally determined at the Regional level.” Id. The petitioner bears the burden of demonstrating that review should be granted. See In re Brine Disposal Well, Montmorency County, Michigan, 4 E.A.D. 736, 740 (EAB 1993); In re Beckman Production Services, 5 E.A.D. 10, 14 (EAB 1994).

Petitioners’ fundamental contention is that they, as landowners, should be entitled to prevent an unwanted course of conduct pro- posed by their lessee. That contention, however, is one that Region V simply had no authority to resolve in acting on a UIC permit applica- tion, and that this Board is likewise without authority to resolve on appeal. As a general matter, 40 C.F.R. § 124.19 contemplates that the Board will review only permit “conditions” that are claimed to be erroneous. The contractual rights and obligations created under a pri- vate lease agreement are not permit conditions, and are therefore not matters on which the Board is authorized to rule. Further, with respect to UIC permit appeals in particular, it is well established that the Board will only review permit conditions claimed to violate the requirements of the Safe Drinking Water Act or of the applicable UIC regulations. As the Board has previously explained:

“The Safe Drinking Water Act and implementing crite-
ria and standards are designed to assure that no cont-
aminant in an underground source of drinking water
causes a violation of a primary drinking water regula-
tion or otherwise affects the health of persons. * ** A
permit condition or denial is appropriate only as nec-
essary to implement these statutory and regulatory
requirements.” * * * Thus, the SDWA, as enacted by
Congress, and the UIC regulations promulgated by EPA
pursuant to Congress’ mandate, establish the only cri-
teria that EPA may use in deciding whether to grant or
deny an application for a UIC permit, and in estab-

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lishing the conditions under which deep well injection
is authorized.

In re Envotech, L.P., 6 E.A.D. 260, 264 (EAB 1996) (quoting In re Terra Energy Lid., 4 E.A.D. 159, 161 n.6 (EAB 1992)). Petitioners’ arguments based on the terms of their lease with Federated are therefore beyond the scope of the UIC permitting process and beyond the limits of this Board’s permit review authority. See Brine Disposal Weill, 4 E.A.D. at 741; In re Suckla Farms, Inc., 4 E.A.D. 686, 695 (EAB 1993). As we have explained in several of our previous cases:

EPA is simply not the correct forum for litigating con-
tract- or property-law disputes that may happen to
arise in the context of waste disposal activity for which a federal permit is required. These disputes properly belong in a court of competent jurisdiction.

Envotech, 6 E.A.D. at 276 (quoting Brine Disposal Well, 4 E.A.D. at 741); accord Suckla Farms, 4 E.A.D. at 695.4

Because we have no authority to rule upon strictly private matters, the task before us is to identify which, if any, of Petitioners’ objections raise issues that fall within the legitimate confines of our jurisdiction. In that regard, we note as an initial matter that some of the Petitioners’ objections are so lacking in specificity that we are unable to consider them on the merits. As we have consistently held, “a petition for review must contain certain fundamental information in order to justi- fy consideration on the merits.” Envotech, 6 E.A.D. at 267 (quoting In re Beckman Production Services, 5 E.A.D. 10, 18 (EAB 1994)). In par- ticular, 40 C.F.R. § 124.19 requires a petition for review to include, at a minimum, “two essential components: (1) clear identification of the conditions in the permit [that are] at issue, and (2) argument that the conditions warrant review.” Beckman, 5 E.A.D. at 18.

Moreover, it is not enough for a petitioner merely to make refer- ence to comments that were previously submitted to the Region, and to which the Region has already responded. Rather, “in order to obtain review of a contested permit condition, a petitioner must demonstrate why the Region’s response to a particular objection or set

• We would also emphasize that the regulations quite explicitly state that the issuance of a
  UIC permit “does not convey any property rights of any sort,” nor does it “authorize any injury to persons or property or invasion of other private rights, or any infringement of state or local law or regulations.” 40 C.F.R. § 144.35(c).

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of objections is clearly erroneous or otherwise warrants review.” In re Suckla Farms, Inc., 4 E.A.D. 686, 700 (EAB 1993). Therefore, although the Petitioners have included with their petition a complete copy of their comments on the draft permit, the Board will address only matters as to which a minimally sufficient claim of error actually appears in the text of the petition for review.

We have been able to identify six such arguments, which can be summarized as follows:

(1) Well operators other than Federated have allowed con- tamination of the Petitioners’ drinking water supply in the past;

(2) The State of Michigan cannot be trusted to monitor
Federated’s compliance with the conditions of this per-
mit;

(3) Federated connected piping to the Valentine 3-18 well before obtaining a permit, thereby demonstrating its disregard for regulatory requirements;

(4) The permit is legally inadequate because it does not
limit the allowable injection rate;

(5) Injection into Valentine 3-18 should not be authorized because the cement used in constructing the well is not sufficiently dense to provide an effective casing; and

(6) Even though the permit is nominally for “non-com-
mercial” disposal, it could be sold and then used by
the purchaser as authority to undertake “commercial”
disposal — placing the Petitioners’ water supply at
even greater risk.

5 We recognize that the Petitioners in this case are not represented by counsel. As in pre- vious cases of this nature, we have endeavored to construe Petitioners’ objections generously so as to identify the substance of their arguments, notwithstanding the informal manner in which those arguments are presented. However, “[wlhile the Board does not expect or demand that
[pro se] petitions will necessarily conform to exacting and technical pleading requirements, a
{pro se] petitioner must nevertheless comply with the minimal pleading standards and articulate some supportable reason why the Region erred in its permit decision.” Beckman, 5 E.A.D. at 19.

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Each of those contentions will now be examined.®

A. Conduct of Other Operators

In their comments on the draft permit, the Petitioners asserted that the operation of another well on their property, Valentine 1-18, had caused their drinking water supply to be contaminated by petro- leum byproducts during the late 1970s. Petitioners’ Comments on the Draft Permit at 7. They further asserted that they had just finished dig- ging a new drinking water well in the spring of 1995, and that if Valentine 3-18 were somehow to contaminate the new well “it will
[become] very difficult to locate a safe site” for yet another drinking water well. Id. at 8.

The Region’s response to comments indicates that Valentine 1-18 is not an injection well and, consequently, EPA has had no occasion to become involved in regulating the operation of that well, However, the Region states that it contacted the Michigan Department of Environmental Quality in reference to the contamination allegedly arising from Valentine 1-18, and was told that no such allegation had ever been brought to the Department's attention. Region V proceed- ed to point out, in any event, that instances such as those cited by the Petitioners, involving the alleged contamination of drinking water sources during the 1970s, were among the factors that prompted EPA’s development of the Underground Injection Control regulatory pro- gram in 1983 and 1984. Response to Comments at 4. Owing to those regulatory requirements, the Region stated, the UIC permit provisions applicable to Valentine 3-18 should ensure that that well “is con- structed and will be operated in such a manner as to confine the injected fluids to the permitted interval and prevent the migration of any fluids into or between USDWs.” Id. Finally, the Region observed that in the event of noncompliance with regulatory requirements or permit conditions, statutory authority exists for EPA “to require own- ers/operators to clean-up any contamination due to injection, and/or supply alternative water supplies.” Id.

° The petition for review also refers to a concern that the issuance of this permit might lead to increased traffic congestion in the vicinity of Petitioners’ property. Petitioners did not raise that issue in their comments, however, and the issue is therefore not reviewable on appeal.! See 40 C.F.R. § 124.19(a) (petitioners must demonstrate that any issue presented for review was, “to the extent required by these regulations,” previously raised during the public comment period); id. § 124.13 (commenters “must raise all reasonably ascertainable issues and submit all reason- ably available arguments supporting their position by the close of the public comment period”). EPA, in any event, has no legal authority to deny a UIC permit based on local land-use or zon- ing considerations such as the traffic situation cited by Petitioners,

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FEDERATED OIL & GAS OF TRAVERSE CITY, MICHIGAN 729

The permit includes numerous provisions designed to safeguard against future disruption of any nearby drinking water source. For example, the permit requires Federated to demonstrate the well’s mechanical integrity before any injection will be allowed to com- mence. Permit at 6. The permit further requires Federated to “main- tain” the well’s mechanical integrity so as to ensure compliance, at all times, with the regulatory requirements concerning mechanical integrity that are set forth in 40 C.F.R. § 146.8. Injection must cease if a loss of mechanical integrity becomes evident at any time during the well’s operation, and may thereafter be resumed only with the Region’s approval. Permit at 9. Demonstrations of the well’s mechan- ical integrity must be performed at least every five years, and addi- tional demonstrations may be required by the Region at any time upon written notice to the permittee. Id. The permit as a whole will also be reviewed at least every five years. Permit at 1.

The permit allows injection only into a formation that, within a one-quarter-mile radius of the well, is separated from any under- ground source of drinking water by a “confining zone” free of known open faults or fractures. Permit at 10. The well itself must be cased and cemented to prevent movement of any fluids into or between underground sources of drinking water, and must be equipped with fittings that will enable EPA to measure the wellhead injection pres- sure. Id. The permit expressly prohibits any injection “at a pressure which initiates fractures in the confining zone or causes the move- ment of injection or formation fluids into or between underground sources of drinking water.” Permit at 11. The permit, in addition, imposes extensive monitoring and reporting requirements, and incor- porates a plugging and abandonment plan to which the permittee is required to adhere. Id. at 11-14 and Attachment B.

In their petition for review, Petitioners merely restate their origi- nal objection concerning misconduct by other well operators and complain, in particular, that “our field was repeatedly turned into a lake of spent brine” by one prior operator of Valentine 1-18. Petition for Review at 4. For obvious reasons, however, that contention does not demonstrate that the Region erred by granting a UIC permit to Federated with respect to Valentine 3-18: The conduct complained of was not that of Federated; the well complained of was not subject to regulation under the UIC regulatory program; and, most fundamen- tally, the objection is wholly unrelated to any condition of the permit at issue in this case. In other words, the Petitioners have not identi- fied any error in the Region’s basic response to their original comment
— namely, that if constructed and operated in compliance with the proposed permit, Valentine 3-18 can be expected “to confine the

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injected fluids to the permitted interval and prevent the migration of any fluids into or between USDWs.” We therefore deny the petition for review insofar as it is based on the alleged misconduct of “care- less prior operators” (Petition for Review at 2) in connection with other wells on Petitioners’ property.

B. Fear of Lax Enforcement by the State

In the petition for review, Petitioners repeatedly insist that they have no confidence in the ability of the State of Michigan’s regulato- ry authorities to ensure compliance with the requirements of Federated’s permit. According to the Petitioners, Michigan has yet to achieve an adequate “level of sophistication * * * in monitoring Oil field operators”; rather, Michigan “has allowed * * * numerous ‘fly by night’ operations to act with little oversight.” Petition for Review at 3.

Like the objection we have already addressed, this objection does not challenge the validity of any particular provision of the Federated permit. It is, instead, a general statement of concern regarding the administration of an entire regulatory program throughout the State of Michigan. As such, it fails to satisfy a basic prerequisite for obtaining Board review under 40 C.F.R. § 124.19, namely, the identification of a specific permit term that is claimed to be erroneous. See Brine Disposal Well, 4 E.A.D. at 746 (review denied where petitioner mere- ly alleged a generalized concern over EPA’s ability to enforce compli- ance with UIC regulatory requirements). The Board has the authority to examine specific provisions of a permit that might tend to make subsequent enforcement of the permit more or less effective — mon- itoring and reporting requirements, for example — but no such pro- visions have been challenged in this case. The Petitioners’ request for review based on this objection is, accordingly, denied.’

’ The Petitioners’ objection is also misdirected because EPA itself, rather than the State, is primarily responsible for enforcement of UIC regulatory requirements in Michigan. As we explained in Envotech, Region V has ample legal authority to enforce such requirements:

[A] violation of any permit condition is a potential ground for an EPA enforcement action or an action to terminate the per- mit. SDWA § 1423, 42 U.S.C. § 300h-2; 40 C.F.R. § 144.40(a)(1). EPA can also sue for injunctive relief if [the permittee] violates its permit or any other underground injection control regula- tion. See SDWA § 1423(b), 42 U.S.C. § 300h-2(b).

Envotech, 6 E.A.D. at 274 n.19. In addition, EPA has broad “emergency powers” under SDWA §

1431, 42 U.S.C. § 300i, that it can invoke even in the absence of any permit violation, whenev-

er a contaminant is likely to enter a USDW and “may present an imminent and substantial Continued

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FEDERATED OIL & GAS OF TRAVERSE CITY, MICHIGAN 731

C. Permittee’s Alleged Disregard for Regulatory Requirements

Petitioners have alleged that Federated connected piping to the valentine 3-18 well before obtaining a permit. They acknowledge that Federated disconnected the piping when requested to do so, and they do not allege that any fluid was injected on the occasion to which they refer. They do argue, however, that the incident reflects an attitude of “total disregard [by Federated] for regulations and laws” governing the operation of an injection well, and that it therefore justifies the denial of Federated’s UIC permit application. Petition for Review at 2.

Although Petitioners’ allegation, if true, would indeed highlight the need for appropriate oversight by the Region in assuring compli- ance with this permit, it is nonetheless firmly established that enforce- ment of a carefully written permit — rather than denial of a permit for which an applicant is otherwise eligible — is “the primary means of deterring future noncompliance” with regulatory requirements. In re California Thermal Treatment Services, 3 E.A.D. 88, 91 n.8 (Adm’r 1990). Accord, In re Puerto Rico Electric Power Authority, 6 E.A.D. 253, 259 n.8 (EAB 1995); In re Laidlaw Environmental Services, 4 E.A.D. 870, 883 (EAB 1993); Beckman Production Services, 5 E.A.D. at

22. As we stated in Beckman, “[slhould [the permittee] fail to comply
    with the terms of its permit it may be subject to an enforcement action or permit revocation proceeding.” Beckman, 5 E.A.D, at 22. See also supra note 7 (discussing enforcement mechanisms available to EPA and to private citizens under the Safe Drinking Water Act and the UIC regulations). Accordingly, Petitioners’ allegation does not establish clear error on the part of Region V, nor does it otherwise invalidate the decision to grant Federated’s permit application.

D. Failure to Regulate Injection Rate

In their comments on the draft permit, the Petitioners expressed concern regarding the absence of any provision expressly limiting the permissible injection rate for Valentine 3-18. Petitioners’ Comments on the Draft Permit at 2-3. The Region responded that for an injection well such as Valentine 3-18, which would inject small quantities of

endangerment to the health of persons.” EPA can also terminate a permit during its term if EPA determines “that the permitted activity endangers human health or the environment and can only be regulated to acceptable levels by permit modification or termination.” 40 C.F.R. § 144.40(a)(3); see also Envotech, slip op. at 18 n. 19. Finally, we note that Petitioners themselves are statutorily authorized to bring a civil judicial action, under 42 U.S.C. § 300j-8(a), to abate any violation of the Safe Drinking Water Act that may occur in connection with the operation of this well, See Suckla Farms, 4 E.A.D. at 696 n.16.

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fluid into a relatively large injection zone, the preferable manner of ensuring safe operation of the well is to limit the maximum injection pressure — exactly as this permit proposes to do. By directly regulat- ing maximum injection pressure, the Region explained, the permit would in any event indirectly limit the permissible injection rate for Valentine 3-18. Response to Comments at 2.

On appeal, Petitioners contend that the Region essentially ignored their concern, “still leaving the question of responsibility for the injection rate [unaddressed].” Petition for Review at 3. That is sim- ply not the case. Region V addressed the objection that was present- ed to it, explaining that an injection pressure limit offers greater pro- tection in this context than a limit dealing expressly with injection rate. Petitioners do not argue that the Region's explanation is erro- neous, and we have no reason to assume that it is erroneous. We therefore deny the petition for review insofar as it is based on the per- mit’s alleged failure to regulate injection rate.

E. Density of Cement

Petitioners contend that a sample of cement taken from Valentine 3-18 does not appear to be dense enough to provide an effective cas- ing. Petition for Review at 6. They raised a similar issue in their com- ments on the draft permit, citing a more general concern regarding “the quality and strength and integrity of the cement walls below the wellhead.” Comments on the Draft Permit at 11. The Region respond- ed to the comment by observing that test results had adequately demonstrated “that the cement is adequate to prevent fluid move- ment behind the casing,” and by assuring the Petitioners that, in any event, by limiting the permissible wellhead injection pressure this permit should ensure that injection “will not fracture the cement sheath.” Response to Comments at 6. Responding specifically to the Petitioners’ contention on appeal regarding the density of the con- crete used in constructing this well, the Region states that the densi- ty of the concrete is not a measure of the strength of the casing. The Region also reiterates that the integrity of the casing for Valentine 3- 18 has been adequately demonstrated, and that the integrity of the casing should be preserved by limiting the injection pressure. Response to Petition for Review at 29. The Region has adequately addressed the integrity of the cement casing in its response to com- ments and in its response to the petition for review, and Petitioners have identified no legal or factual error in the Region’s treatment of the issue. The Region’s response appears to be reasonable and Petitioners have not persuaded us otherwise. Review of this issue is, accordingly, denied.

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F. Fear of “Commercial” Brine Disposal

The injection authorized by this permit is ‘limited to non-com- mercial disposal of salt water from production wells owned or oper- ated by Federated Oil & Gas.” Permit at 1. In their comments, Petitioners objected that the term “non-commercial” was not defined, see Comments on the Draft Permit at 3, and Region V explained that the limitation means that Federated, the permittee, “will not be allowed to accept brine [for disposal] from wells owned or operated by other companies.” Response to Comments at 2.3 On appeal, the Petitioners assert that they fully expect Federated to transfer its lease- hold interest in Petitioners’ property to some other entity in the future. They fear that such a transferee may then seek to use Federated’s per- mit as authority to engage in “commercial” disposal of brine. Petition for Review at 3.

A transfer of Federated’s leasehold interest would not, however, transfer the authority to engage in brine disposal under this permit. To accomplish that result, Federated would actually have to transfer the permit, and in order to transfer the permit, Federated would, among other things, first have to provide notice of the proposed transfer to Region V's UIC Section at least thirty days in advance. See Permit at 5; 40 C.F.R. § 144.38; id. § 144.51(l)(3). Such notice would provide the Region with grounds for modification or for “revocation and reis- suance” of the permit, either of which would address both the identi- ty of the proposed transferee and such other permit amendments as would, in light of the proposed transfer, be necessary to ensure con- tinuing compliance with the Safe Drinking Water Act. See 40 C.F.R. § 144.38(a); id. § 144.51(l)(3).

A proposal to transfer this permit would trigger Regional review to ensure compliance with applicable regulatory requirements. Likewise, a proposal to amend the permit so as to authorize “com- mercial” brine injection would trigger Regional review to ensure com- pliance with applicable regulatory requirements. See 40 C.F.R. § 144.39(a); id. § 144.41(e).° In these circumstances, Region V did not

• For all purposes associated with this particular permit, we adopt the Region's interpreta-
  tion of the term “non-commercial” as an authoritative reading that is binding on the Agency. See In re Austin Powder Co., 6 E.A.D. 713, 717 (EAB 1997); In re Amoco Oil Co., 4 E.A.D. 954, 981 (EAB 1993).

° Because Petitioners’ objection refers to a purely hypothetical situation, and because the Region has had no occasion to consider how it might respond if ownership or operational changes of the kind foreseen by the Petitioners were actually to be proposed, we need not

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clearly err by issuing a permit to Federated notwithstanding the Petitioners’ concern that Federated, at some future time, may seek to transfer the permit or to engage in “commercial” disposal.

III. CONCLUSION

For these reasons, the petition for review is denied in all respects.

>

So ordered.

examine the procedural implications in great detail. We need not consider, for instance, whether a proposal to undertake “commercial” disposal under this permit could under any circumstances be addressed by the Region as a “minor modification” under 40 C.F.R. § 144.41, or whether a change of that nature would “materially and substantially” alter the permitted activity and thus require public notice and public participation as described in 40 C.F.R. § 144.39. It is doubtful, in any event, that the “minor modification” procedures would be available to the Region in the sce- nario of greatest apparent concern to these Petitioners — involving both an ownership change and a change from “non-commercial” to “commercial” operation. See 40 C.F.R. § 144.41(d) (per- mit modification to reflect a change in facility ownership can be treated as a “minor modification” only if the Region “determines that no other change in the permit is necessary”).

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