State Innovation  Grant  Program:  Louisiana
                       Louisiana Multimedia Oil and Gas  Production  Environmental Results Program
                       (2006 Competition)
led by state environmental agencies to test innovative approaches for
achieving better environmental results and improved efficiency in permitting
programs. Between 2002 and 2007, the State Innovation Grant program
competition awarded over six million dollars to support 35 state projects that
test permitting innovation for a variety of regulated entities including several
small business sectors. Asummary of the awards by year appears in the table
below.
    State Innovation Grant Program Statistics, 2002-2007
 Competition   Proposals  Proposals     Total Program
    Year       Submitted   Selected       Funding ($)
  2002/2003
                                            $618,000
                                          $1.425 Million
                                          $1.479 Million
 Cumulative
                                          $1.243 Million
                                          $1.611 Million
                                          $6.376 Million
Project  Background:

 Louisiana has over 43,000 active oil and natural gas wells and
 thousands of facilities that produce, process, and transport oil
 and natural gas from these sites. This large number of facilities
 is dominated by small businesses, representing over 70 percent
 of facilities permitted or otherwise regulated by the Air and
 Water  programs  of  the Louisiana  Department of
 Environmental Quality (LADEQ).   Many of these facilities
 may not have permits and operate without proper monitoring,
 record keeping, or best management practices. LADEQ has
 concerns over the effectiveness of current approaches in achieving
 environmental improvement in this sector and the resources
 invested to date in regulating these facilities . This  concern is
 amplified by the impacts of LIurricanes Katrina and Rita on the
 State's economy, resulting in a reduction in the Department's
 resources that will continue for the foreseeable future.  There is
 also strong industry interest in LADEQ's adoption of  a
 comprehensive multi-media approach to environmental
 regulation, and strong community interest in improving facility
 regulation to protect public heath and the environment. In
 light of these concerns and shrinking resources, the State needed
 to develop innovative and effective environmental improvement
 tools.
"Innovation in Permitting" has been the theme of the State Innovation Grant
competition since its inception. In the last three competition cycles states
received awards for projects in the following three categories:
 The Environmental Results Program (ERP) is an innovative
  approach to improving environmental performance based on a system
  of the interlocking tools of compliance assistance, self-certification
  (sometimes, where permissible, in lieu of permitting), and
  statistically-based measurement to gauge the performance of an entire
  business sector. The program utilizes a multimedia approach to
  encourage small sources to achieve environmental compliance and
  pollution prevention. (See: http://www.epa.gov/permits/erp/)
 Environmental Management System (EMS) is a system involving a
  continual cycle of planning, implementing, reviewing and improving the
  processes and actions that an organization undertakes to meet its
  business and environmental goals. EMSs provide organizations of all
  types with a structured system and approach for managing environmental
  and regulatory responsibilities to improve overall environmental
  performance and stewardship.  (See: www.epa.gov/ems/info/index.htm)
 Performance Track is a partnership that recognizes top
  environmental performance among participating US facilities of all types,
  sizes, and complexity, both public and private.
  (See: http://www.epa.gov/performancetrack/)
NCEI has provided awards also for projects testing watershed-based permitting,
and for permit process streamlining in past competitions. For more information
on the history of the programs, including information on solicitations, state
proposals, and project awards, please see the EPA State Innovation Grants
website at htto://www.eDa.aov/innovation/statearants
 Project Description
 LADEQ will replace the traditional permitting process with an
 Environmental Results Program (ERP) and consolidate the air
 and water permitting and regulatory requirements for the oil
 and gas production industry into a multi-media, self-certification,
 compliance assistance, and statistically-based auditing program.
 The ERP program will further the State's goals of improving
 environmental stewardship by participating oil and  gas
 production facilities while reducing the permitting and financial
 burden, and providing regulatory flexibility-.

 To implement the  ERP program for the oil and gas  sector,
 LADEQ will work collaboratively  with the Louisiana
 Department of Natural Resources (LDNR), which also regulates
 many of the same facilities in this sector, to exchange information
 on existing wells and processing facilities.

 This project consists of three phases:

 (1) Development  of a facility database and stakeholder
 outreach

 LADEQ is developing a database for tracking the identity of all
                           NCEI
                           NATIONAL CENTER FOR
                           ENVIRONMENTAL INNOVATION

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 oil and gas production facilities within the state and their permit
 compliance data. LADEQ and the LDNR are collaborating with
 state and local economic development agencies, local chambers of
 commerce, local community groups, and trade associations to
 complete this task. Each Agency in this collaboration hopes to
 reduce the administrative burden associated with collection and
 management of high-quality compliance data.

 (2) Measurement of baseline compliance and development
 and application of compliance assistance materials

 This phase will last approximately one year  and will initiate
 regulatory inspection of a statistically-based sampliiigof the state's
 oil and gas facilities to establish an initial assessment of compliance
 rates. These initial assessments will not be official enforcement
 inspections, and violations discovered under these assessments
 will be addressed under the enforcement discretion policy developed
 under Phase I.

 Concurrently, the LADEQ is  collaborating with external
 stakeholders  to develop Environmental Business Practice
 Indicators (EBPI), which will provide information on sector
 compliance for use by operators and establish compliance and
 environmental results goals.  In addition, inspectors will educate
 operators and provide facility owners/operators with copies of
 the self-certification workbook, compliance forms, and fact sheets
 for their use in returning to, or maintaining compliance, and self-
 certifying their performance. Training workshops will also be
 provided for facility operators to help them understand and address
 all applicable federal and state environmental regulations, as well
 as requirements of the program, including the adoption of best
 management practices and pollution prevention and waste
 reduction methods.  Owners/operators will be encouraged to
 attend these compliance assistance workshops. A web-based system
 will be implemented to accept and document the submittal of
 self-certification reports  by  the state's oil and gas owners  and
 operators.

 (3) Assessment of compliance improvement through post-
 compliance inspections

 This phase  focuses on implementation of the program and will
 require approximately one year to complete.  During this phase,
 LADEQ will  complete  the web-based information system.
 LADEQ anticipates that, at least initially, it will receive hard copy
 of the self-certifications from participants and LADEQ staff to
 review them for completeness and accuracy before they manually
 enter the information into the database.

 Final compliance assessment inspections will be conducted at a
 statistically selected sample of sites to gather performance measure
 data for the assessment of the accuracy of self-certifications and to
 confirm rates of compliance. LADEQ will compare to post-
 implementation assessment with the baseline compliance data to
 determine  the success  of  the ERP program in improving
 environmental performance.
               The project will be completed by LADEQ in approximately three
               years.


             Connection to  EPA's  Goals
               This ERP focuses on priority environmental issues by targeting
               an industry sector with significant potential for environmental
               releases and emissions.  LADEQ's Oil and Gas  Sector ERP
               Program will address EPA's strategic goals (Goal 1) by improving
               outdoor air quality through the reduction of emissions from oil
               and gas wells, and (Goal 2) by improving water quality through
               increased monitoring and regulation of oil and gas wells. The
               project also supports EPAs strategic goal (Goal 5) of promoting
               compliance and environmental leadership through innovation.


                         Project  Contacts:
               For more specific information on the Arizona State
               Innovation Grant, please contact one of the individuals
               below:

               Melissa Lantz
               Louisiana Department of Environmental Quality
               602 N. Fifth Street
               Baton Rouge, LA 70802
               (225) 219-3618; FAX (225) 219-4083
               melissa.lantz@la.gov

               Annette Smith
               U. S. Environmental Protection Agency  Region 6
               1445 Ross Avenue
               Suite  1200 (MC 6ENXP)
               Dallas, Texas 75202
               (214) 665-2127; FAX (214) 665-7446
               smith.annette@epa.gov

               Scott Fontenot
               U.S. Environmental Protection Agency
               Washington, DC 20460 (MC 1807T)
               (202) 566-2236; FAX (202) 566-2212
               fonteiiot.scott (Siepa.gov

                         Program Contact:

               Sherri Walker
               State  Innovation Grant Program
               U.S. Environmental Protection Agency
               Washington, DC 20460 (MC1807T)
               (202)-566-2186; FAX (202) 566-2220
               walker.sherri@epa.gov
United States
Environmental Protection
Agency
Office of Policy,
Economics and Innovation
(1807T)
  November 2007
EPA-100-F-07-044

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