American Petroleum Institute v. United States Environmental Protection Agency

American Petroleum Institute (plaintiff), along with other petroleum refiners and petrochemical manufacturers, challenged the Environmental Protection Agency’s (EPA) (defendant) regulation of oil-bearing wastewaters under Subtitle C, hazardous waste, of the Resource Conservation and Recovery Act (RCRA). Oil-bearing wastewaters are generated as part of the petroleum refining process and contain a small amount of residual oil. The oil-bearing wastewaters were subject to a three-step treatment process before being ultimately discarded. The first phase of treatment, referred to as the primary treatment, involved the removal of the residual oil from the wastewaters and satisfied Clean Water Act requirements. The primary treatment recovered approximately 1,000 barrels of oil per day, industry wide. The EPA classification applied RCRA hazardous waste regulations to the oil-bearing wastewaters before they entered primary processing, arguing that (1) the wastewaters were discarded by that point, (2) primary processing recovered insignificant amounts of oil per facility, and (3) Clean Water Act compliance was the primary motivation, not oil recovery. American Petroleum challenged, arguing the oil-bearing wastewaters undergoing primary processing were still part of the ongoing petroleum refining process and that oil recovery was the primary goal. American Petroleum asserted oil recovery from primary processing was a necessary part of petroleum refining and therefore would be done even without the Clean Water Act requirements.