Full opinion text
JOHN R. BROWN, Circuit Judge: In this Battle of Acronyms, the American Petroleum Institute (API) takes the field against the Environmental Protection Agency (EPA) to protest its actions with regard to National Pollutant Discharge Elimination System (NPDES) permits for oil and gas installations employing best practicable control technology currently available (BPT). At one end of the battleground stands the arm of the federal government charged with the protection of our environment, surrounded by a phalanx of regulations. Arrayed against it stands API, a trade organization that represents the Nation’s petroleum industry, joined with its allies, some fifteen oil companies. Both parties court our assistance, hoping with our intervention to rout the enemy and emerge victorious. Declining the invitation, we judge the clash to be a draw. API requests us to reverse or remand certain EPA Guidelines that limit the discharge of wastes generated by oil and gas production facilities. In the period since it filed these petitions, API has negotiated with EPA on many of the issues involved. Having resolved all the major problems, the couple has started down the aisle but pauses for a last question or two. Their differences boil down to four narrow points: upset, bypass, recategorization of certain wells, and “stripper” wells. As to those final questions, we affirm EPA’s actions with regard to upset and bypass, but remand to the Agency for further consideration of the remaining two issues. Siamese Petitioners In this case, yet another in the ongoing chronicles of the EPA and its efforts to defend the American environment, API seeks review of EPA’s Final Effluent Guidelines for the oil and gas extraction “point source category”. Under those Guidelines, EPA restricted the discharge of pollutants from oil and gas exploration and production facilities. API asserts that the Guidelines contravene both the Clean Water Act, 33 U.S.C. § 1251 et seq., their statutory begetter, and the Administrative Procedure Act, 5 U.S.C. § 551 et seq. Jurisdiction exists under section 509(b)(1)(E) of the Clean Water Act, 33 U.S.C. § 1369(b)(1)(E). EPA originally issued separate, interim final regulations establishing Guidelines for the “onshore” and “offshore” segments of the industry. Petitioners sought review in this court and in the U.S. Court of Appeals for the Ninth Circuit of the onshore and offshore effluent Guidelines, respectively. After the filing of petitioners’ opening briefs in both circuits, EPA promulgated one set of “final” regulations, combining the Guidelines and standards for both the onshore and offshore segments. The parties then sought to amend their petitions. As these regulations, unlike the interim ones, constituted an integrated whole, the Ninth Circuit transferred the offshore petitions to the Fifth Circuit. This Court on August 30, 1979 granted leave to amend and to consolidate the petitions for hearing in this Circuit. Accordingly, our decision will dispose of issues raised by the parties initially in both this and the Ninth Circuit. Oil Wells That End Well Americans have drilled for oil since 1859. Initially, oilmen conducted their operations exclusively on land. Offshore oil development began at the close of the century with the drilling of wells from wooden docks extending short distances from the coastline. As man’s uses and need for oil and its by-products have increased, so have the industry’s efforts to obtain it. Today, the oil industry operates in three different spheres. Exploration involves mapping, sub-surface surveys, and exploratory drilling to ascertain the existence of oil and gas deposits. Through drilling, which necessitates the boring of wells deep into the earth’s crust, oil producers exploit reservoirs of oil, gas and water lying hundreds or thousands of feet inside the earth. Production involves bringing these elements to the surface and then processing them into the finished products for which our society has found so many uses. Today, in addition to a landscape of oil rigs throughout many parts of our Nation, offshore activities take place in the seas off both the Atlantic and Pacific coasts, in the Gulf of Mexico, and in the frigid waters around Alaska. Offshore drilling produces approximately 1.3 million barrels of oil per day, about 16% of the Nation’s total. Just as one finds a variety of architectural styles in the average suburb, so one finds different types of oil rigs in the offshore neighborhood. Mobile rigs drill from floating barges or hulls. Especially in coastal areas, oil companies drill wells from barges, with production facilities established adjacent to the well on platforms or artificial islands. Yet others are floated into place and then raised on telescoping legs. Stationary rigs, by contrast, sit astride steel platforms resting on the seabed which do justice to Rube Goldberg. The oil companies operate in excess of one thousand offshore facilities, the majority of which are in the Gulf of Mexico. They drill in water ranging from less than 100 feet to over 1000 feet deep. Some wells are within swimming distance while others are located as far as 100 miles from shore. Despite these differences, all oil and gas production facilities share one common trait: EPA regulation of waste discharges. And it is primarily upon that issue that API finds fault with EPA’s final regulations. All oil wells generate wastes. To produce the oil that our energy-hungry nation demands, one must take the bitter with the sweet, the waste water with the black gold. Oil wells produce three basic types of effluent. The first two, deck drainage and sanitary wastes from kitchens and toilets, are not in question here. The third, and inevitable by-product of oil drilling, is “produced water”. The underground reservoirs that contain oil also contain fossil seawater — water that has been in the ground during the time of oil formation. This unsavory mineral water rises to the surface in large quantities with the oil during production. The mixture of oil and water is then processed and separated. The oil goes into a pipeline for further processing, but the water remains, an unwanted commodity. Onshore facilities customarily reinject this produced water underground. Offshore facilities cannot do so. The problem then arises, what to do with the produced water? In most cases, it is treated on the rig. Existing technology furnishes several methods for treating produced water. The goal of all methods is to cause oil that is dissolved in the water to rise to the surface, where it is skimmed off. Following treatment, the water is pumped overboard into the sea from which it came eons ago. In certain areas of Louisiana and Texas, adjacent to bodies of saline water, wells located on terra firma have for many years, with the approval of the relevant state authorities, emptied this produced water into bays, inlets, estuaries, and marshes rather than reinject it. ' Statutory Forest and Regulatory Trees In the Federal Water Pollution Control Act of 1972, predecessor to the Clean Water Act, Congress declared as its ambitious purpose “to restore and maintain the chemical, physical and biological integrity of the Nation’s waters.” Section 101(a). It proposed to eliminate the discharge of pollutants into the Nation’s waterways by 1985 and, where possible, sufficiently to improve water quality by 1983 so as to protect marine life and provide clean water for recreational uses. To accomplish these goals, Congress set two types of limitations on the discharge of pollutants. Section 303 of the Act sets water quality limitations to insure that no source causes the amount of pollution in a body of water to exceed certain minimum standards. Section 301, in a radical departure from earlier Acts, goes further, to establish “technology-based” limitations. These limitations require industry, regardless of a discharge’s effect on water quality, to employ defined levels of technology to meet effluent limitations. Analogous to a strict liability standard, this section mandated technological improvements and imposed stringent pollution restrictions even where the discharge caused no discernible harm to the environment. By July 1, 1977, all sources had to employ the “best practicable control technology currently available” (BPT) to control pollution. 33 U.S.C. § 1311(b)(1)(A). By 1983, those sources must meet even more stringent standards, the “best available technology economically achievable” (BAT). Section 301 of the Act also directed the Administrator of the EPA within one year to publish regulations providing “Guidelines” for use in establishing effluent limitations. These Guidelines, really a form of nationally applicable regulations for different categories of point sources, would identify the degree to which pollutants could be reduced by the application of BPT. See E. I. duPont de Nemours & Co., Inc. v. Train, 430 U.S. 112, 128, 97 S.Ct. 965, 975, 51 L.Ed.2d 204, 217 (1977). EPA would apply these standards uniformly to all'sources unless they qualified for a variance under BPT regulations. Section 304(b)(1)(B) specifies a range of factors which the Administrator must take into account in establishing the BPT limitations. They include: [T]he total cost of application of technology in relation to the effluent reduction benefits to be achieved from such application, and [also] the age of equipment and facilities involved, the process employed, the engineering aspects of the application of various types of control techniques, process changes, non-water quality environmental impact (including energy requirements), and such other factors as the Administrator deems appropriate.... Section 402 of the Act, 33 U.S.C. § 1342, created the National Pollutant Discharge Elimination System. Under NPDES, the EPA can issue a permit which magically renders legal a discharge that would otherwise be unlawful. A permit thus “transforms ‘generally applicable effluent limitations . . . into obligations (including a timetable for compliance) of the individual dis-charger.’ ” EPA v. California Ex Rel. State Water Resources Control Board, 426 U.S. 200, 205, 96 S.Ct. 2022, 2025, 48 L.Ed.2d 578, 583 (1976). Rounding out the statutory framework, §§ 301(a) and 309 provide stringent criminal and civil penalties for discharges in excess of those allowed by an NPDES permit. EPA by the Horns Try as EPA might, the task of specifying Guidelines for innumerable point source categories proved, not surprisingly, impossible to complete within a year. The judiciary intervened, substituting its own timetable in place of the failed statutory deadline. National Resources Defense Council, Inc. v. Train, 510 F.2d 692 (D.C.Cir.1975). On September 15, 1975, EPA published what it euphemistically but contradictorily labelled “interim final” Guidelines for the offshore oil and gas industry. Approximately one year later, the Agency published regulations for the onshore segment of the oil and gas category. EPA’s efforts to comply with the congressional mandate actually began in 1974 with a study of oil and gas platforms operating in the estuarine, coastal and Outer Continental Shelf areas. The study led to a preliminary report entitled “Best Practicable Control Technology and Effluent Limitations for Offshore Oil and Gas Operations.” The preliminary report identified the major sources of pollution from the platforms and analyzed the pollution control technology that offshore operators used. It took note of the distinction between treatment in offshore areas and on land-based platforms. In onshore areas, the discharge of produced water is forbidden because it is salt water while the receiving waters are fresh. Thus, operators must reinject the produced water underground. While the salt/fresh water dichotomy creates no problem for the offshore operators, the discharge of produced water there is equally impermissible. Yet reinjection of produced water on offshore platforms is virtually impossible because space restrictions limit the feasibility of installing the necessary equipment. Relying upon the conclusions of the preliminary report, EPA in late 1974 published a “Draft Development Document for Effluent Limitations Guidelines and New Source Performance Standards for the Oil and Gas Extraction Point Source Category” (Draft Development Document). The Document selected the treatment systems that constituted BPT and then proposed appropriate effluent limitations. For onshore areas, BPT allowed for no discharge of produced water. Offshore, a platform could discharge produced water providing it installed treatment systems to remove oil and grease from the water before dumping it overboard. EPA OKs API BPT EPA circulated this Draft Development Document to interested parties and, after reviewing their comments, published interim final regulations for the offshore segment. Onshore regulations followed in October 1976. Once again, EPA solicited and received comments. Representatives of the oil and gas industry expressed their concerns and made suggestions for improvements. The industry also filed these petitions for review of EPA’s actions in this and the Ninth Circuit. In the interim, the record grew as the parties composed their differences by parcel post. In an encouraging spirit of cooperation, industry representatives wrote to EPA offering criticisms, suggestions and commentary, and EPA responded in kind. Out of this exchange of information, much good has come. EPA took some changes to heart and entered into Stipulations of Final Settlement in the Ninth Circuit regarding the offshore regulations and in this Circuit for the onshore regulations. EPA promulgated the final Guidelines on April 13, 1979. Effluent Guidelines and Standards, Oil and Gas Extraction Point Source Category, 44 Fed.Reg. 22069. They apply to the offshore, onshore, coastal, and wildlife use subcategories in the oil and gas extraction industry and incorporate the Stipulations of Partial Settlement with the changes agreed upon by the parties. Combining both segments in one Guideline, this new set superceded the earlier, interim final Guidelines, The Guidelines combined the far offshore and near offshore subcategories into a single, offshore subcategory. They revised the description of the coastal subcategory, as a result of which the Texas and Louisiana wells located on land but which traditionally had discharged produced water into coastal waters could no longer do so. The Guidelines made some changes in the “stripper” subcategory definition, but once again deferred setting effluent limitations due to a lack of information. Perhaps most important, despite strenuous objection by petitioners API and the oil and gas producers, EPA declined to incorporate upset and bypass provisions in the Guidelines themselves. EPA explained that such provisions “should be included in NPDES permits” (Respondent’s brief at 24), adding that the upset and bypass issue “should be dealt with in the context of permit issuance,” 44 Fed.Reg. at 22075. As the Guidelines noted, “in the course of negotiations on these cases, stipulations were entered in which the Agency agreed to promulgate certain of the regulations contained in this Notice.” 44 Fed.Reg. at 22069. The parties’ commendable willingness to negotiate their differences should not, and does not, go unnoticed by this Court. Nor do we hesitate to say that, as a result of these stipulations, the issues before us today are four in number, but narrow in scope. Issues and Answers Upset and Bypass. This issue lies at the heart of the parties’ continuing disagreement. “Upset” refers to the problem where, for reasons beyond the operator’s control, waste treatment equipment fails to operate at the level required by EPA regulations. Examples of upsets include equipment malfunctions, changes in the nature and rate of flow of water through the treatment system, chemical changes or reactions, and routine platform operations that affect the treatment system. As both parties acknowledge, upsets are an inherent part of current technology. API and EPA diverge, however, on the question of the appropriate treatment of upsets within the Guidelines’ format. “Bypass” refers to the necessity, from time to time, to route wastes around all or portions of treatment systems so that operators can perform maintenance. Even in our era of technological derring-do, equipment from time to time requires cleaning, overhauling or routine repair. Given the cost of treatment equipment and space limitations on platforms, operators cannot carry spares; when such maintenance becomes necessary, some pollutants must inevitably be discharged. On this issue, too, API and EPA have failed to reach an agreement. API insists that upset and bypass provisions be included within the Guidelines themselves. EPA, it points out, based BPT limitations upon surveys that expressly excluded upset and bypass discharge figures from the data base. As a result, BPT figures are skewed — they reflect ideal operating conditions rather than reality. Moreover, BPT is based upon standards that the model wells could meet only 99% of the time. In other words, not even the technologically superior wells upon which EPA based BPT limitations can meet the requirements of those limitations all the time. If EPA does not include upset and bypass provisions within the Guidelines, then, API asserts, all wells will of necessity be in violation of EPA’s standards — through no fault of their own — at least 1% of the time. Recategorization of Coastal Discharge. API also attacks EPA’s recategorization from the coastal subeategory to the onshore subcategory of those onshore wells that historically have discharged produced water into coastal waterways. The coastal subcategory, as initially defined, described a fixed geographical area in Louisiana and Texas, where state law permitted the discharge of produced water into brackish or saline surface waters. EPA has now concluded that coastal means coastal and onshore means onshore, and the twain, presumably, shall not meet. Accordingly, it requires those wells previously denominated coastal but which sit on dry land to adhere to the “no discharge of produced water” standard applicable to onshore wells that have always reinjected the water underground. API asserts that this change will prove “devastating”, forcing well operators to the Hobson’s choice of incurring tremendous costs of reinjecting the produced water or ceasing operation altogether. Stripper Wells. Stripper wells are those wells that produce less than ten barrels per day of crude oil although operating at the maximum feasible rate of production. The EPA guidelines for strippers merely describe the subcategory, reserving the limitations for a later date. They apply only to stripper oil wells and nowhere mention marginal wells producing natural gas. API asserts that the criteria upon which EPA relied to describe the stripper subcategory for oil wells apply equally to marginal gas wells, and that the Agency’s exclusion of the gas wells from the subcategory was arbitrary and capricious. Thicket in Overton Park Before proceeding, we must specify the standard of review that we follow. That is no mean task. As the EPA’s promulgation of regulations governing effluent limitations amounts to “rulemaking” for the purposes of the Administrative Procedure Act, we first turn for guidance to the appropriate section of that Act, 5 U.S.C. § 706: Scope of review To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall— (1) compel agency action unlawfully withheld or unreasonably delayed; and (2) hold unlawful and set aside agency action, findings, and conclusions found to be— (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (B) contrary to constitutional right, power, privilege, or immunity; (C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (D) without observance of procedure required by law; (E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or (F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court. In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error. These terms have meant different things to different courts. They are “far from being entirely discrete as a matter of the ordinary meaning of language, and, indeed, are in some respects cumulative rather than differential in their applicability.” Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1024 (D.C.Cir.1978). Less than fully illumined by the statutory language, we turn to the Supreme Court’s authoritative pronouncement in Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). Overton Park requires a reviewing court “to engage in a substantial inquiry.” An agency decision “is entitled to a presumption of regularity. But that presumption is not to shield [the agency’s] action from a thorough, probing, in-depth review.” 401 U.S. at 415, 91 S.Ct. at 823 [citations omitted]. In assessing the decision, a court must consider “whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” Although the review of the facts “is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.” 401 U.S. at 416, 91 S.Ct. at 823. In attempting to understand and apply the Overton Park rule, the Courts of Appeals have also struggled to define the scope of review. We are to determine whether the agency’s actions are “the result of reasoned decision-making.” Hooker Chemicals & Plastics Corp. v. Train, supra, citing American Meat Institute v. EPA, 526 F.2d 442, 452 (7th Cir. 1975). EPA’s interpretation of the governing statutes “is to be given considerable deference.” ASARCO, Inc. v. EPA, 578 F.2d 319, 325 (D.C. Cir. 1978). We must even “uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.” American Meat Institute, supra at 453, citing Bowman Transportation, Inc. v. Arkansas-Best Freight Systems, Inc., 419 U.S. 281, 286, 95 S.Ct. 438, 442, 42 L.Ed.2d 447, 456 (1974). Yet what the Courts have given, they can also take away. Judicial review “must be based on something more than trust and faith in EPA’s experience.” Appalachian Power Co. v. Train, 545 F.2d 1351, 1365 (4th Cir. 1976) (Appalachian II). “This is not to say, however, that we must rubber-stamp the agency decision as correct. To do so would render the appellate process a superfluous (although time-consuming) ritual.” Ethyl Corp. v. EPA, 541 F.2d 1, 34 (D.C. Cir. 1976) (en banc), cert. denied sub nom. E. I. duPont de Nemours & Co., Inc. v. EPA, 426 U.S. 941, 96 S.Ct. 2662, 49 L.Ed.2d 394 (1976). Courts require that “administrative agencies ‘articulate the criteria’- employed in reaching their result and are no longer content with mere administrative ipse dixits based on supposed administrative expertise.” Appalachian Power Co. v. EPA, 477 F.2d 495, 507 (4th Cir. 1973) (Appalachian I). In summary, we must accord the agency considerable, but not too much deference; it is entitled to exercise its discretion, but only so far and no further; and its decision need not be ideal or even, perhaps, correct so long as not “arbitrary” or “capricious” and so long as the agency gave at least minimal consideration to the relevant facts as contained in the record. Our first feat is to plunge into the record, which in this case hardly deserves that appellation. Bereft of testimony or factual findings, it consists of 23,243 pages of charts, graphs, tables, computer printouts, and scientific studies helpful only in that many contradict one another. Moreover, since APA labored under a judicial order to produce regulations before it was prepared to do so, it in effect developed the record after it issued the regulations. We must, therefore, work backwards from EPA’s final Guidelines to the mass of material in the record. Notwithstanding the possibility of judicial omniscience, we of necessity heed Judge Griffin Bell’s admonition. “While the Overton Park mandate does require that we base our review on the entire record before the agency, we do not interpret it to require that we plunge into the record unaided by the parties.... Lest we make of this ease a career, we must generally restrict our consideration to the parties’ specific citations.” Texas v. EPA, 499 F.2d 289, 297 (5th Cir. 1974) (Bell, J.), cert. denied sub nom. Exxon Corp. v. EPA, 427 U.S. 905, 96 S.Ct. 3191, 49 L.Ed.2d 1199 (1976). And so in this case. How do you spell relief? That EPA’s Final Effluent Regulations must adequately provide for upsets and bypasses, no one denies. The record proves that upsets and bypasses are as much a part of BPT as modern equipment and technological data. Despite best efforts at compliance, even a facility employing the best available equipment will occasionally exceed discharge limitations. Relying on the language of the Clean Water Act, 33 U.S.C. § 1314(b)(1)(A), API argues persuasively that current BPT includes occasional upsets and bypasses. The statutory language specifically requires consideration of such factors as “the age of equipment and facilities involved”, “engineering aspects” and “process changes”. EPA cannot regulate by whim; it must take into account both the technological potential and existing limitations when it sets BPT standards. Without some absolution for the oil and gas producers from the harsh penalties that the Act imposes on “exceedances”, EPA’s final regulations would indeed suffer from serious infirmities. We do not understand EPA to dispute this contention. Their answer, quite simply, is that the Regulations, not the Guidelines, take care of this problem. The final Regulations contain upset and bypass provisions which largely satisfy API’s concerns. Not yet content, API desires they be expressly included in the Guidelines. It contends that to leave the matter in the hands of the permit issuer amounts to a grant of discretion, with no guarantee that a facility will receive upset and bypass relief when it needs it. API refers us to two cases to buttress its argument. Marathon Oil Company v. EPA, 564 F.2d 1253 (9th Cir. 1977), a case remarkably similar to the present action, involved a challenge to EPA effluent limitations. The oil company insisted that the use of “confidence intervals” and BPT necessitated upset and bypass provisions. EPA refused, promising to exercise prosecutorial discretion. API argued that discretion did not satisfy the statute. The Court agreed. To confirm that we understand its decision, we must look carefully at what the Court did and did not say. The issue raised by petitioners is whether a formal “upset provision” must be written into the permits. The EPA has refused to insert an “upset provision” into petitioners’ permits, arguing that excursions can be adequately dealt with informally. Petitioners argue that this is not enough: that the permits must formally provide that upsets beyond the control of the permit holder are not violations of the permit standards. We agree. The Federal Water Pollution Control Act requires point sources of pollution to utilize the “best practicable control technology currently available” prior to 1983. The EPA cannot impose a higher standard without violating the Control Act. And yet the permits as currently written do exactly that. The permits on their face require petitioners to meet the standards 100 percent of the time. But platforms using BPCTCA can only be expected to achieve the effluent standards 97.5 percent of the time in the case of deck drainage and 99 percent of the time in the case of produced water. We, therefore, remand to the EPA with instructions to insert upset provisions into the permits. It is not an adequate response that the EPA will informally take BPCTCA into account in deciding whether or not to prosecute “violators.” First, there is no guarantee that the EPA will choose to exercise this discretion. And once a prosecution is brought, the courts have no authority to dismiss the complaint on the grounds that the permit holder could not have avoided the violation. The Ninth Circuit’s holding is of no avail to API. The Court required EPA to furnish a more reliable and certain means of upset and bypass relief than its promise to be nice. It did not obligate EPA to insert the provisions in the applicable Guidelines. Marathon supports the proposition that EPA must afford the oil companies some means of upset and bypass forgiveness, but it does not require the Agency to insert those provisions in the Guidelines under review. FMC Corp. v. Train, 539 F.2d 973 (4th Cir. 1976), is to the same effect. FMC sought to set aside effluent limitations guidelines for the plastics industry. The company argued that EPA’s failure to provide for “excursions” was arbitrary, since the data upon which it based its decision demonstrated that even proper treatment facilities would occasionally violate the standards. Judge Rives of this Court, sitting by designation, agreed. “Plant owners should not be subject to sanctions when they are operating a proper treatment facility,” he declared. “[T]his Court sees no reason why appropriate excursion provisions should not be incorporated in these water pollution regulations.” 539 F.2d at 986. Although the Court did mention regulations, the clear tenor of the opinion is to the effect that EPA must somewhere provide for excursion. That opinion does not require EPA to place the upset and bypass language in the Guidelines if it chooses not to. API further points out that the logical repository of provisions tailored to the needs and characteristics of the oil industry is in the oil and gas Guidelines rather than in generic regulations applicable to an assortment of unrelated industries. While we are inclined to agree, API has cited — and, we suspect, could find- — no support for the notion that under the Administrative Procedure Act an Agency must follow the most logical or sensible course of action open to it. The potential ramifications of such a requirement are beyond the judicial imagination. EPA retorts that API has lost sight of the forest and the trees as well. It avers that upset and bypass provisions properly belong in the generic NPDES regulations and that such inclusion more than suffices to dispel the industry’s fears. The upset and bypass provisions are contained in 40 C.F.R. § 122.60, entitled “Additional Conditions Applicable to All Permits”, which expressly states: The following conditions, in addition to those set forth in § 122.7, apply to a¡1 NPDES permits: * * * (g) bypass . . . (h) upset . .. (emphasis added). These provisions “are required to be included in all proposed permits issued by EPA.” Respondent’s brief at 34 (emphasis in original and added). All NPDES permits, whether issued by EPA or by a state, must incorporate these provisions. If, as EPA assures us, these provisions do apply to all gas and oil NPDES permits, whether issued by the EPA or the states, then our conclusion furnishes the assurance that in defense of enforcement proceedings, these provisions are as much included as though spelled out in the formal •Guidelines. EPA explains its preference for including the provisions within the NPDES permits as follows. This method allows the oil companies an affirmative defense to any prosecutions under the Clean Water Act without shifting the burden .of proof to EPA. Such an approach seems proper: given Congress’ intent to clean up the Nation’s waters, certainly a polluter should bear the burden of justifying an “exceedance” rather than force EPA to prove that it was not permissible. Courts have generally upheld EPA’s discretion in issuing point source effluent limitations regulations. Hooker Chemicals & Plastics Corp. v. Train, supra, considered and rejected claims similar to those of API. There, a chemical manufacturer objected to EPA’s promulgation of effluent limitations by regulations. The company wanted EPA to work on an industry-by-industry basis rather than deal with a variety of industries under one broad set of regulations. The Second Circuit upheld EPA’s action as a reasonable interpretation of a statute “devoid of plain meaning”, 537 F.2d at 627, citing American Iron & Steel Institute v. EPA, 526 F.2d 1027 (3rd Cir. 1975), modified, 560 F.2d 589 (1977), cert. denied 435 U.S. 914, 98 S.Ct. 1467, 55 L.Ed.2d 505 (1978), and E. I. duPont de Nemours & Co., Inc. v. Train, 528 F.2d 1136 (4th Cir. 1975) (duPont I), affirmed, 430 U.S. 112, 97 S.Ct. 965, 51 L.Ed.2d 204 (1977). In E. I. duPont de Nemours & Co., Inc. v. Train, 541 F.2d 1018 (4th Cir. 1976) (duPont II), aff’d in part and rev’d in part, 430 U.S. 112, 97 S.Ct. 965, 51 L.Ed.2d 204 (1977), chemical producers challenged EPA’s authority to issue effluent limitations by regulations under § 301 of the Clean Water Act. Criticizing the “vague, uncertain and inconsistent” Act as “unworkable”, the Court, in effect, threw up its hands in despair and approved the Agency’s action as “reasonable” and “within the performance of [its] functions.” 541 F.2d at 1027. Accord, Appalachian II, supra. In American Petroleum Institute v. EPA, 540 F.2d 1023 (10th Cir. 1976), cert. denied sub nom. Exxon Corp. v. EPA, 430 U.S. 922, 97 S.Ct. 1340, 51 L.Ed.2d 601 (1977), petitioners herein challenged EPA’s authority to promulgate effluent limitations by regulations. The Tenth Circuit, citing duPont II, concluded, “the promulgation of the limitations was a reasonable exercise of a congressionally delegated power. That action is reasonable and we accept it.” 540 F.2d at 1030. The conclusions that we draw from these cases tend to support EPA’s actions. Although none dealt with exactly this issue— the earlier cases involved EPA’s right to issue regulations at all — the Circuits deferred to EPA’s presumed expertise. So do we. While we confess to some puzzlement over EPA’s obstinate refusal to include the upset and bypass provisions in the Guidelines in order to conserve a few paragraphs in the Federal Register, an alteration that counsel in oral argument conceded would make little or no difference to the Agency, we hesitate to declare the Agency’s action arbitrary or capricious. EPA has categorically declared that the otherwise acceptable upset and bypass provisions contained in the generic regulations afford API and the oil companies the safe harbor they seek. Upon these assurances, while acknowledging API’s concerns, we affirm with some misgivings EPA’s use of discretion. Bypass: the Heart of the Matter API also challenges the wording of the bypass provisions. It asserts that confusion in the description of those circumstances in which the oil companies may lawfully bypass results in their being left “adrift on a sea of uncertainty”, Joint Reply Brief at 11, and requests the Court more precisely to chart a course between illegal and legal conduct. When water treatment facilities must be repaired or replaced, oil producers may have to bypass all or part of the equipment. As a result, effluent discharge may temporarily exceed EPA limitations. Sometimes, the operators’ only alternative to exceeding the limitations is to “shut in” the well. Shutting in means ceasing production. Operators must shut in wells for safety reasons, e. g., during violent storms, but they avoid doing so except when absolutely necessary because of the substantial costs and uncertainty involved. Once a well is shut in, no one knows whether or not it will return to production. The risk that a well will cease to produce, or produce at a lower level, always exists. The current regulations state that permit holders may bypass to avoid loss of life, personal injury or severe property damage. They define severe property damage as follows: substantial physical damage to property, damage to the treatment facilities which causes them to become inoperable, or substantial and permanent loss of natural resources which can reasonably be expected to occur in the absence of a bypass. Severe property damage does not mean economic loss caused by delays in production. 40 C.F.R. § 122.60(g)(l)(ii). API characterizes the wording as unconstitutionally vague. Joint Reply Brief at 10. Looking to the plain meaning of the language, we disagree. If there is one universal concept in our jurisprudence, it is the notion of “reasonable expectations”. The regulations here impose upon the oil companies the burden of showing that they entertained a reasonable belief that shutting in a well would result in a loss of natural resources. Such a showing seems almost prima facie —any shut-in apparently creates such a risk. The oil company must then also demonstrate that it had no feasible alternative to shutting in, such as bypassing only part of the equipment. In other words, it bears the burden of presenting proof as to these two facets of a shut-in. This requirement, of course, accords fully with the congressional intent that polluters, not EPA, have the duty of justifying pollution, see supra. Once it makes such a reasonable showing, a permit for the bypass must issue unless EPA can prove that the operator could have avoided the bypass through some feasible alternative. The burden thus shifts to EPA at that point to refute an oil company’s proof that bypassing was necessary and the only feasible course. As the record shows that bypasses occur during a very small fraction of total operating hours, we believe that no problems will likely arise. API cites the Marathon case to support its argument. Marathon, however, involved a different definition of “severe property damage”. The Ninth Circuit found that that definition was possibly “vague” and “may be seen as ambiguous.” 564 F.2d at 1274. Accordingly, it remanded to the Agency “to clarify that the shutting in of a well, under given circumstances, can constitute ‘severe property damage’ and, if the only alternative, that such shutting in can permit the bypassing of the pollution control system.” Id. at 1274-1275. We believe that the current dispute is one largely of semantics; the current statutory language and the Marathon dictate will protect API’s interests by defining the shutting in of a well as an instance of severe property damage which excuses bypassing. On that understanding, we affirm. The Coastal Subcategory Reclassification As we have noted, API challenges EPA’s action in reclassifying certain wells from coastal to onshore as a violation of the Administrative Procedure Act and of the Clean Water Act, § 304(b)(1)(B). We will deal with those issues in order. Uttering its battle cry “arbitrary and capricious”, API attacks EPA’s decision to reclassify as onshore those oil and gas wells that discharge into coastal (i. e., saline) waters. For support, API clings to the interim final Guidelines which had placed those wells in the coastal category. The primary reason for the coastal/onshore distinction was that onshore wells would discharge into fresh water if not required to reinject their produced water. The wells in question, however, discharge into salt water. Therefore, API triumphantly con-eludes, the reclassification, placing those wells in the category that EPA had created to prevent discharge into fresh water, is illogical, and thus arbitrary and capricious. While on first blush API’s complaint seems well-taken, a moment’s reflection reveals the flaw. Granted that EPA originally placed the wells in question in the coastal category, the simple fact is, the Agency changed its mind. Nothing in the Administrative Procedure Act prohibits an agency from changing its mind, if that change aids it in its appointed task. Here, EPA concluded that water quality and the environment would benefit from a prohibition of produced water discharge. Such a decision falls squarely within EPA’s discretion as well as the statutory purpose, and we are loathe to disturb it on appeal. Having found that the EPA did not violate the Administrative Procedure Act, we now turn to API’s challenge under the Clean Water Act. API contends that the Agency failed to take into account the cost of compliance when it made the recategorization. § 304(b)(1)(B) of the Act requires the Agency to consider “the total cost of application of technology in relation to the effluent reduction benefits to be achieved from such application.” Courts have viewed this requirement in different ways. “[W]hile it is clear that the Administrator must consider cost,” the Third Circuit reasoned, “some amount of economic disruption was contemplated as a necessary price to pay in the effort to clean up the Nation’s waters, and the Administrator was given considerable discretion in weighing costs.” American Iron & Steel Institute v. EPA, supra at 1052. The Fourth Circuit held: “While EPA must take seriously its statutory duty to consider cost, courts of review should be mindful of the many problems inherent in an undertaking of this nature and uphold a reasonable effort made by the Agency.” FMC Corp. v. Train, supra at 979. The question, explains the Tenth Circuit, is whether “EPA made a serious, careful, and comprehensive study of the costs which compliance will impose on the industry.” American Petroleum Institute v. EPA, supra at 1038. The legislative history of the Clean Water Act casts but pale light on our problem. A singularly unhelpful source of information, legislative history always contains self-serving statements that support either side of an argument and most points between. So it is here. Senator Muskie, one of the bill’s chief sponsors, at one point called it a “limited cost-benefit analysis”; yet comparison of BPT regulations with BAT regulations indicates that Congress did intend a more substantial review of costs in the former case. To calculate the economic impact of the EPA’s revised regulations, EPA hired Arthur D. Little, Inc., a management consulting firm (ADL). The ADL study concluded that “the reinjection requirement is not expected to close any on-land, non-stripper wells in Louisiana and Texas . . . . ” It estimated the investment required to install reinjection equipment at $80 million and the amount of oil foregone as a result at 3 million barrels, approximately 1.8% of “the projected remaining lifetime production of the impacted [s/e] wells.” The average increase in production costs as a result of the reinjection requirement would total $.34 per barrel. The ADL figures mask an important methodological flaw. At the time of the study, the wells in question were in the coastal subcategory. EPA based its conclusion that reinjection would have no dramatic effect on cost or energy production on the fact that most onshore wells already were reinjecting produced water. Yet EPA forgot to add the wells whose status it sought to revise to the onshore subcategory before making that determination. In other words, the ADL study ignored the very wells in question. Before estimating the number of affected wells and the cost figures, ADL should have grouped the coastal wells in question in the onshore category. The sizeable amount the wells would have to spend to comply, EPA, in effect, overlooked. Believing that EPA had “grossly underestimated the economic impact” of the change, API employed H.- J. Gruy & Associates, Inc., an engineering consultant firm (Gruy), to analyze the ADL study. Its results differed, to say the least. Gruy actually performed two surveys. In the first, it found 21 wells in Louisiana and 430 in Texas for which “neither (i) the injection facility capital costs and/or the additional injection operating cost nor (ii) the expense of hauling produced water for off-site disposal could be economically justified.” R. at 1250. Gruy estimated the volume of production foregone at 9,771,000 barrels. While ADL had ignored gas wells, the Gruy study determined that 39,152 million cubic feet of natural gas would be lost. Moreover, the new reinjection equipment would consume approximately six million barrels of fuel annually. Gruy set the total cost of compliance at $357.5 million. At EPA’s request, API commissioned Gruy to prepare an addendum to the study, excluding stripper wells from the data. Gruy concluded that, even with stripper wells excepted, 7.6 million barrels of oil and 32 billion cubic feet of gas would be lost, at a total cost of compliance of $307.3 million. On a second front, API questions the Agency’s finding that “deregulation of domestic oil and gas will drastically affect [the Gruy] predictions,” that “it is unlikely that any significant loss of oil will actually occur.” Respondent’s Brief at 64 (emphasis in original). EPA offers no explanation and no support for these conclusions. It ignores the fact that only “high-cost natural gas”, as the Natural Gas Policy Act, 15 U.S.C. § 3301 et seq., defines the term, is deregulated. The price of all other natural gas remains subject to regulation at least until January 1, 1985. The natural gas described in those categories was deregulated on November 1, 1979. The earliest that any other categories of natural gas could be deregulated is January 1, 1985. 15 U.S.C. § 3331(a). The Gruy reports were prepared prior to the enactment of the NGPA and thus do not state which, if any, wells would qualify for the high-cost category. Nothing in the record indicates that EPA made any effort to determine which wells would be affected by the Act. We have no way of knowing whose study is more correct, nor do we regard that as an appropriate matter for judicial inquiry. What is clear is that the parties’ figures differ radically. Although EPA has made an effort to calculate the total cost, as required by the Act, the discrepancy between the ADL and Gruy studies, a discrepancy unexplained by EPA, leads us to conclude that EPA has not satisfactorily fulfilled its obligation of cost analysis. Its failure necessitates a remand for the purpose of comparing and explaining the differences. Stripper Wells API aims the last bow in its quiver at EPA’s failure to include stripper gas wells within the regulations applicable to stripper oil wells. Although it seems ironic that API would contest EPA’s failure to regulate, in fact that failure has serious repercussions. The deregulation of the price of natural gas, as EPA has pointed out, created substantial incentives for the producers to crank up their wells. Yet without EPA guidelines, operators of stripper gas wells presumably are subject to the full panoply of Clean Water Act restrictions and penalties — a harsh load indeed, one that might well deter gas production. Relying on the Gruy studies, EPA explains that “marginal wells were not a large problem” and that “there was not sufficient data to justify including marginal gas wells in the stripper subcategory.” Respondent’s Brief at 71. It also points out that “the marginal gas well issue was not raised by Petitioners until early 1978 and was apparently an afterthought.” Id. at 69. Afterthought or no, early 1978 was three years ago, and EPA has yet to speak to the issue. API now regards the problem as worthy of our consideration. It cites Federal Energy Regulatory Commission data that lists 12,-429 stripper gas wells with an estimated annual production of about 103 billion cubic feet. Such figures belie EPA’s contention that there exists nothing to regulate. The number of wells to which API has drawn our attention indicates that EPA should examine once again the problem of stripper gas wells and consider adding them to the final Guidelines for stripper oil wells. While we of course express no opinion as to whether or not EPA must include stripper gas wells in the stripper subcategory regulations, we agree with API that EPA should at least consider the problem again in the light of this new information. Should the Agency conclude as before that stripper gas wells do not belong in the Guidelines, then API and EPA may climb into the ring yet again. Accordingly, we remand this issue to the EPA for further proceedings. Recapitulation and Grand Finale Aware that the length of this opinion may have caused the drowsy reader to lose track of our conclusions, we repeat them here. The EPA upset and bypass provisions are affirmed. As to the recategorization of coastal wells and the failure to regulate stripper gas wells, we reverse and remand to EPA for further consideration. AFFIRMED IN PART, REVERSED IN PART AND REMANDED. ANNEX A ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 435 Effluent Guidelines and Standards, Oil and Gas Extraction Point Source Category AGENCY: Environmental Protection Agency. ACTION: Final and Interim Final Rules. SUMMARY: Final effluent limitations guidelines establishing “best practicable control technology currently available” (BPT) are hereby promulgated for the offshore, onshore, coastal and agricultural and wildlife water use subcategories in the oil and gas extraction industry. These final regulations combine the near and far offshore subcategories of the offshore segment of the industry into a single offshore subcategory. The beneficial use subcategory is renamed the agricultural and wildlife water use subcategory. Finally, the definition of the stripper subcategory is clarified. However, the Agency does not yet have sufficient technical data to promulgate effluent limitations for this subcategory, and, thus, those sections remain reserved. Additionally, this regulation promulgates, as interim final, changes in the descriptions and applicability of the coastal and agricultural and wildlife water use subcategories. Comments on these interim final changes are solicited. The limitations are based upon the application of BPT as defined in section 304(b) of the Clean Water Act of 1977, (PL 95-217, 33 U.S.C. 1251 et seq.) (The Act). DATES: The effective date of these regulations is April 13, 1979. Comments on the interim final regulations must be received on or before June 12, 1979. ADDRESS: Comments should be directed to: John M. Cunningham, Effluent Guidelines Division (WH-552), Environmental Protection Agency, 401 M Street, S.W., Washington, D.C. 20460, (202) 426-7770. FOR FURTHER INFORMATION CONTACT: John M. Cunningham, (202) 426-7770. SUPPLEMENTARY INFORMATION: Background On September 15, 1975 (40 Fed.Reg. 42543) and October 13, 1976 (41 Fed.Reg. 44942), EPA promulgated interim final effluent limitations based on the application of “best practicable control technology currently available” (BPT) for the offshore and onshore segments of the Oil and Gas Extraction point source category. Concurrently, the Agency also proposed effluent limitations based on the application of “best available technology economically achievable” (BAT), pretreatment standards and standards of performance for new sources. After promulgation of these interim final regulations, members of the oil and gas industry filed Petitions for Review of the interim limitations for both the onshore segment, American Petroleum Institute, et al., v. EPA (No. 76-4497, 5th Cir.) and offshore segment; American Petroleum Institute, et al. v. EPA (No. 75-3588, 9th Cir.) In the course of negotiations on these cases, stipulations were entered in which the Agency agreed to promulgate certain of the regulations contained in this notice. These include, among others, the limitations on deck drainage in the offshore subcategory, changes to the Agricultural and Wildlife Water Use subcategory, and with certain reservations, the description of the coastal subcategory. The regulations set forth below incorporate comments received after publication of the interim final regulations and the Agency’s stipulated agreements based on those comments. These regulations deal only with BPT limitations. No changes in the proposed BAT, new source, or pretreatment regulations issued on those same dates are made by the regulations set forth below. Based on comments received to date, the Agency believes that further technical and economic study is required prior to promulgation of those regulations. Legal Authority These regulations are promulgated pursuant to sections 301(b) and 304(b) of the Act. Section 301(b)(1) requires the attainment of effluent limitations based upon the application of “best practicable control technology currently available” by July 1, 1977. Section 304(b) provides for the promulgation of regulations defining a technology as “best practicable control technology currently available” and specifies the factors to be taken into account in defining BPT. Summary and Basis of Regulations Effluent limitations for oil and grease are established for all subcategories with the exception of the stripper subcategory. The major source of waste waters generated by facilities in this industrial category is produced waters. These produced waters vary from 0 to 99 percent of the total volume of fluids produced. This extreme fluctuation of flow volumes of produced waters depend on natural phenomena and is not subject to process controls. Consequently, the effluent limitations for produced water are concentration based rather than based upon mass per unit of production. No limitations have been established for several other waste water pollutants identified in field surveys. These decisions were made either because technology is not presently available to control the pollutant discharge or available data indicate they are normally reduced incidently with the removal or reduction of another pollutant parameter. Additionally, facilities subject to these regulations may be required to prepare and implement spill prevention control and countermeasure (SPCC) plans under section 811(j) of the Clean Water Act. These requirements are set forth at 40 CFR Part 112. A report entitled “Development Document for Interim Final Effluent Limitations Guidelines and Proposed New Source Performance Standards for the Oil and Gas Extraction Point Source Category” was prepared in support of the initial interim final BPT limitations. This document discussed the oil and gas industry, available waste treatment technology and the results of the technical study which resulted in the limitations contained in these regulations. Additionally, a supplementary report on the possible economic impacts of the regulations was issued at that time. Since publication of interim final regulations, interested parties have submitted comments and new data for consideration by the Agency. The changes made in this notice are based on an analysis of those comments and data. In largest part, these revisions merely clarify the interim final regulations. However, in some cases these regulations do alter the anticipated impact of the original regulations. This notice contains a discussion of those revisions and evaluation of those impacts. Copies of the development document, supplementing economic analysis and public comments are available for inspection and copying at the EPA Public Information Reference Unit, Room 2922 (EPA Library), Waterside Mall, 401 M Street, S.W., Washington, D.C. Copies of the interim final documents were sent to numerous persons or institutions affected by the regulation or who have placed themselves on a mailing list for this purpose (See EPA’s Advance Notice of Public Review Procedures, 38 Fed.Reg. 21202, August 6, 1973). An additional limited number of copies of the Development Document are available from the Distribution Officer (WH-552), Effluent Guidelines Division, Environmental Protection Agency, Washington, D.C. 20460. Summary of Public Participation As a result of comments received following publication of the interim final regulations, the limitations originally established have been reevaluated. A summary of public participation in this rulemaking, public comments, and the Agency’s consideration and response is contained in Appendix B of this preamble. Summary of Changes A number of changes are being made to the interim final regulations. A detailed discussion of those changes and their technical basis can be found at Appendix A to this preamble. Offshore Subcategory — Applicability and Description Because the BPT limitations for the old near offshore subcategory (subcategory A) and the far offshore subeategory (subeategory B) were identical, and because some confusion existed into which subeategory some facilities should be placed, the two subcategories are combined into a single offshore subcategory. Coastal Subcategory — Applicability and Description The coastal subcategory is red.efined on a descriptive rather than geographic basis. This subcategory will include facilities operating over water or wetlands located landward of the inner boundary of the territorial sea. This area encompasses certain coastal bays and all inland lakes and wetlands. Agricultural and Wildlife Water Use Subcategory — Applicability and Description The beneficial use subcategory is renamed to avoid confusion with the term in western water rights law. Additionally it is redefined to include facilities operating west of the 98th meridian which have produced water that is used for agricultural or wildlife watering purposes. Deck Drainage Limitations — Offshore and Coastal Subcategories The oil and grease limitations for deck drainage in the offshore and coastal subcategories were originally established based on data derived'from the treatment of deck drainage and produced water in combination. Although the Agency presently has only limited information concerning the technological capability for treating deck drainage separately, there is substantial data that sources in these subcategories are able to achieve the limitation established under the oil discharge regulations promulgated pursuant to section 311 of the Clean Water Act. Consequently, pending further acquisition of data, a limitation of “no discharge of free oil,” comparable to that established under section 311, is being promulgated for this parameter. Agricultural and Wildlife Water Use SubCategory — Effluent Limitations It has come to the Agency’s attention that some of the data used to establish the oil and grease limitation for this subcategory could not be verified as having been analyzed by an EPA approved method. Consequently, those data had to be removed from the data base. Removing those data points resulted in the maximum daily oil and grease concentration being reduced from 45 mg/1 to 35 mg/1. Economic Analysis The Agency has made a study of the economic and inflationary impacts of these regulations. Since changes made by these final regulations should not increase costs beyond those projected for interim final regulations, the impacts are estimated to be the same as those of complying with the interim final regulations. It is estimated that the capital cost of complying with the limitations, based on the best practicable control technology currently available, will be between $112.4 and $206.7 million, and the total annual operating costs, including amortization, operating and maintenance expense, to be between $14.1 and $23.6 million. The costs and impacts associated with the regulations are detailed in the economic analysis documents. Additionally, data has been received which suggests that the interim final revision of the description of the coastal subeategory could