The following materials are not liquid industrial by-products when managed as specified:

    (a) A material that is used or reused as an effective substitute for commercial products, used or reused as an ingredient to make a product, or returned to the original process, if the material does not require reclamation prior to use or reuse, is not directly burned to recover energy or used to produce a fuel, and is not applied to the land or used in products applied to the land.

    (b) A used oil that is directly burned to recover energy or used to produce a fuel if all of the following requirements are met:

    (i) The material meets the used oil specifications of R 299.9809(1)(f) of the Michigan administrative code.

    (ii) The material contains no greater than 2 ppm polychlorinated biphenyls.

    (iii) The material has a minimum energy content of 17,000 BTU/lb.

    (iv) The material is expressly authorized as a used oil fuel source, regulated under part 55, or, in another state, regulated under a similar air pollution control authority.

    (c) A liquid fully contained inside a manufactured article, until the liquid is removed or the manufactured equipment is discarded, at which point it becomes subject to this part.

    (d) A liquid by-product sample transported for testing to determine its characteristics or composition. The sample becomes subject to this part when discarded.

    (e) A liquid that is not regulated under part 615 that is generated in the drilling, operation, maintenance, or closure of a well, or other drilling operation, including the installation of cathodic protection or directional drilling, if either of the following applies:

    (i) The liquid is left in place at the point of generation in compliance with part 31, 201, or 213.

    (ii) The liquid is transported off-site from a location that is not a known facility as defined in section 20101, and all of the following occur:

    (A) The disposal complies with applicable provisions of part 31 or 115.

    (B) The disposal is not to a surface water.

    (C) The landowner of the disposal site has authorized the disposal.

    (f) A liquid vegetable or animal fat oil that is transported directly to a producer of biofuels for the purpose of converting the oil to biofuel.

    (g) An off-specification fuel, including a gasoline blendstock, that was generated in a pipeline as the interface material from the mixture of 2 adjacent fuel products and that will be processed, by blending or by distillation or other refining, to produce a fuel product or fuel products.

    (h) An off-specification fuel, including a gasoline blendstock, that resulted from the commingling of off-specification fuel products or from phase separation in a gasoline and alcohol blend and that will be processed, by distillation or other refining, to produce fuel products.

    (i) An off-specification fuel product transported directly to a distillation or refining facility to produce a fuel product or fuel products regulated pursuant to 40 CFR part 80.

    (j) A liquid or a sludge and associated liquid authorized to be applied to land under part 31 or 115.

    (k) A liquid residue remaining in a container after pouring, pumping, aspirating, or another practice commonly employed to remove liquids has been utilized, if not more than 1 inch of residue remains on the bottom, or, for containers less than or equal to 110 gallons in size, not more than 3% by weight of residue remains in the container, or, for containers greater than 110 gallons in size, not more than 0.3% by weight of residue remains in the container. The liquid residue becomes subject to this part when discarded.

    (l) A residual amount of liquid remaining in a container and generated as a result of transportation of a solid waste in that container.

    (m) A liquid brine authorized for use as dust and ice control regulated under parts 31 and 615.

    (n) Food processing residuals as defined in section 11503, or site-separated material or source-separated material approved by the department under part 115, that, to produce biogas, will be decomposed in a controlled manner under anaerobic conditions using a closed system that complies with part 55.

    (o) A liquid approved by the director for use as a biofuel in energy production in compliance with part 55 that is not speculatively accumulated and that is transported directly to the burner of the biofuel.