Environmental
NOVEMBER 2002
Major Changes To Oil Pollution Prevention Regulations
Position EPA for Increased Enforcement
In a final rule that became effective on August 16, 2002,
the United States Environmental Protection Agency
(“EPA”) revised its Oil Pollution Prevention regulations, codified at 40 C.F.R. Part 112, to completely
revamp the requirements for Spill Prevention, Control, and Countermeasure (“SPCC”) Plans. 67 Fed.
Reg. 47,042. This new rule sets the stage for more
aggressive EPA enforcement of SPCC Plans by establishing mandatory requirements for matters that were
stated as discretionary under the prior rule. The new
rule also alters the scope of facilities and activities subject to the rule and imposes numerous new obligations
on regulated facilities. A copy of the final rule is available at http://www.epa.gov/oilspill/pdfs/40cfr112.pdf.
EPA initially adopted Oil Pollution Prevention regulations on December 11, 1973. 38 Fed. Reg. 34,164. As
part of these regulations, EPA established “guidelines”
for the preparation of SPCC Plans. These guidelines
were codified at 40 C.F.R. § 112.7 and remained unchanged for almost 30 years. EPA’s new rule, however,
recasts all of the SPCC Plan guidelines as “requirements.” This change will significantly strengthen EPA’s
ability to take enforcement actions against facilities
that fail to comply with these regulations.
EPA’s new rule requires facilities with existing SPCC
Plans to update those plans to conform to the new rule
by February 17, 2003, and implement the amended
plans as soon as possible, but not later than August 18,
2003. If your facility operations involve oil of any
type, we recommend that you carefully review the new
requirements to ensure that your facility complies with
the new rule and does not become an EPA enforcement statistic. Persons who fail or refuse to comply
with EPA’s oil pollution prevention regulations can be
subject to administrative penalties of up to $12,000
per day or judicial penalties of up to $31,500 per day
of violation. 33 U.S.C. §§ 1321(6)(B) and (7)(C); see
also 67 Fed. Reg. 41,346.
This Alert is not designed to provide a comprehensive
listing of all of the many changes embodied in EPA’s
new rule. Some of the key changes, however, are summarized below to assist you in understanding the new
rule.
GENERAL APPLICABILITY
Using oil.
EPA’s oil pollution prevention regulations now apply
to facilities that are “using” oil or oil products. Facilities that use oil operationally, including electrical
substations, facilities containing electrical transformers, and facilities with certain hydraulic or
manufacturing equipment, must address these sources
in their SPCC Plans. 40 C.F.R. § 112.1(b); see also 67
Fed. Reg. 47,054-55.
Oil.
EPA has expanded the definition of “oil” to include
“fats, oils, or greases of animal, fish, or marine mammal origin; vegetable oils, including oils from seeds,
nuts, fruits, or kernels; and other oils and greases, including petroleum, fuel oil, sludge, synthetic oils,
mineral oils, oil refuse or oil mixed with wastes other
than dredged spoil.” 40 C.F.R. § 112.2 (emphasis
added; new language shown in italics); see also 67 Fed.
Reg. 47,075-76.
Regulated waters.
EPA’s new rule applies to facilities that could potentially discharge oil to “navigable waters of the United
States or adjoining shorelines” (the areas included in
the prior regulation) and “waters of the contiguous
Kirkpatrick & Lockhart LLP
zone, or in connection with activities under the Outer
Continental Shelf Lands Act or the Deepwater Port Act
of 1974,” as well as to discharges “that may affect natural resources belonging to, appertaining to, or under
the exclusive management authority of the United
States (including resources under the Magnuson Fishery Conservation and Management Act).” 40 C.F.R. §
112.1(b); see also 67 Fed. Reg. 47,059.
Excluded containers.
EPA’s new rule does not apply to aboveground containers with a capacity of less than 55 gallons. EPA
also excludes completely buried tanks from the new
rule, provided that such tanks are subject to all the technical requirements in either EPA’s underground storage
tank regulations (40 C.F.R. Part 280) or EPA-approved
state regulations. As a result of this latter change, EPA
projects that most gasoline service stations will drop
out of the SPCC program. 40 C.F.R. § 112.1(d)(4)
and (5); see also 67 Fed. Reg. 47,044, 47064-67.
Capacity exclusion.
EPA continues to exclude from its Oil Pollution Prevention regulations facilities with a completely buried
oil storage capacity of 42,000 gallons or less and an
aggregate aboveground oil storage capacity of 1,320
gallons or less. Under the new rule, however, completely buried tanks subject to federal or state
underground storage tank programs, as described
above, are excluded from calculation of a facility’s
completely buried storage capacity. In addition, facilities with a single aboveground container with a
capacity ranging from 660 to 1,320 gallons are no
longer disqualified from EPA’s capacity exclusion. 40
C.F.R. § 112.1(d)(2).
DOT/DOI exclusions.
Certain equipment, vessels and facilities subject to the
authority and control of the U.S. Department of Transportation or the U.S. Department of the Interior are
exempt from EPA’s regulations. Likewise, certain offshore oil drilling, production and workover facilities
subject to notices and regulations of the Minerals Management Service are exempt. 40 C.F.R. § 112.1(d)(1)
and (3); see also 67 Fed. Reg. 47,062-64, 47,067.
Exclusion caveat.
The new rule provides EPA with the authority to require a facility that qualifies for exclusion from the
rule, nonetheless, to be required to comply with some
or all of the rule requirements. The regulations establish the procedures that are to be followed in the event
that EPA seeks to invoke this provision. 40 C.F.R. §
112.1(f); see also 67 Fed. Reg. 47,070-71.
2
SPCC PLAN PREPARATION
Plan preparation at new facilities.
If your facility has or will begin operating between August 16, 2002 and August 18, 2003, you must prepare
and implement a plan that conforms to the revised regulations by August 18, 2003. Any facility that becomes
operational after August 18, 2003, must prepare and
implement a plan before beginning operation. 40 C.F.R.
§ 112.3(a) and (b); see also 67 Fed. Reg. 47,082-84.
PE certification.
Under the new rule, a licensed professional engineer
now must attest to the fact that either the engineer or
the engineer’s agent visited the site. In addition, the
engineer now must attest that preparation of the SPCC
Plan included consideration of applicable industry standards and is in accordance with the requirements of
the Oil Pollution Prevention regulations. The engineer also must attest that procedures for required
inspections and testing have been established, and that
the SPCC Plan is adequate for the facility. 40 C.F.R. §
112.3(d); see also 67 Fed. Reg. 47,052-54, 47,084-86.
SPCC PLAN GENERAL REQUIREMENTS
Rule reorganization.
EPA has reorganized the SPCC Plan requirements to include a general section describing the requirements that
all plans must satisfy (40 C.F.R. § 112.7) and specific
sections including additional requirements for various
types of facilities (40 C.F.R. §§ 112.8-112.15). The provisions discussed below are found in the general
requirements section and, therefore, apply to all plans.
Deviations.
In some instances, an SPCC Plan may deviate from the
requirements in the regulations if it can achieve “equivalent environmental protection by some other means.” To
deviate from the regulations, the plan must state the reasons for nonconformance, describe the alternate methods
that will be used, and explain how those methods will
achieve equivalent environmental protection. 40 C.F.R.
§ 112.7(a)(2); see also 67 Fed. Reg. 47,094-95.
Facility diagram.
The new rule requires an SPCC Plan to include a description of the physical layout of the facility, including
a facility diagram. The locations and contents of each
container subject to the regulations (i.e., all containers
with a capacity of 55 gallons or more) must be shown
on the facility diagram. The diagram must also show
completely buried tanks otherwise exempted, transfer
stations and piping. 40 C.F.R. § 112.7(a)(3); see also
67 Fed. Reg. 47,097.
KIRKPATRICK & LOCKHART LLP ENVIRONMENTAL ALERT
General requirements.
Under the new rule, the SPCC Plans must address the
following: the nature of facility containers; discharge
prevention measures; discharge or drainage controls;
countermeasures for discharge discovery, response and
cleanup; methods for disposal of recovered materials;
and contact information for the facility coordinator,
cleanup contractors and agencies to be contacted in
the event of a discharge. For facilities that are not required to submit facility response plans under the oil
pollution prevention regulations, EPA now requires that
certain additional reporting and response information
be included in their SPCC Plans. 40 C.F.R. §
112.7(a)(3)-(5); see also 67 Fed. Reg. 47,097-99.
Secondary containment.
EPA continues to require that SPCC Plans provide appropriate containment and/or diversionary structures
to prevent discharges from regulated facilities. If such
structures are determined not to be practicable, the new
rule requires that SPCC Plans include an explanation
of this determination. According to EPA, secondary
containment is generally appropriate for most facilities, including manned and unmanned facilities, remote
production facilities, small facilities, mobile facilities,
mining sites, and any other facilities that store or use
oil. 40 C.F.R. § 112.7(d); see also 67 Fed. Reg. 47,101102.
Integrity testing.
For bulk storage containers without containment and/
or diversionary structures or equipment, the new rule
requires SPCC Plans to provide for periodic integrity
testing of the containers and periodic integrity and leak
testing of valves and piping. 40 C.F.R. § 112.7(d); see
also 67 Fed. Reg. 47,101.
Brittle fracture.
The new rule requires that field-constructed
aboveground storage tanks that undergo repair, alteration, reconstruction, or a change in service be
evaluated for risk of discharge or failure due to brittle
fracture or other catastrophe. 40 C.F.R. § 112.7(i);
see also 67 Fed. Reg. 47,111-112.
Other mandatory requirements.
While requirements in the new rule relating to inspections, tests, records, personnel training, security and
loading/unloading facilities generally parallel the previous requirements, the new rule restates each of these
requirements in mandatory terms. 40 C.F.R. §
112.7(e)-(h); see also 67 Fed. Reg. 47,106-110.
NOVEMBER 2002
FACILITY-SPECIFIC REQUIREMENTS
Onshore nonproduction facilities.
The new rule provides specific requirements relating
to facility drainage, bulk storage containers, and facility transfer operations, including piping, that must be
met in addition to the general SPCC Plan requirements
by these facilities. 40 C.F.R. §§ 112.8 (petroleum and
other nonedible oils) and 112.12 (edible oils); see also
Fed. Reg. 47,112-126.
Onshore oil production facilities.
The new rule provides additional specific requirements
relating to facility drainage, bulk storage containers
and facility transfer operations that must be met by
these facilities. 40 C.F.R. §§ 112.9 (petroleum and
other nonedible oils) and 112.13 (edible oils); see also
67 Fed. Reg. 47,126-130.
Onshore oil drilling and workover facilities.
The new rule provides additional specific requirements
relating to location of equipment, containment, and
blowout prevention that must be met by these facilities. 40 C.F.R. §§ 112.10 (petroleum and other
nonedible oils) and 112.14 (edible oils); see also 67
Fed. Reg. 47,130-131.
Offshore drilling, production, or workover facilities.
The new rule provides additional specific requirements
relating to oil drainage collection, sump systems, dump
valves, atmospheric storage or surge containers, pressure containers, corrosion protection, inspection and
testing, surface and subsurface well shut-in valves,
blowout prevention, manifolds, flowlines, and piping
that must be met by these facilities. 40 C.F.R. §§112.11
(petroleum and other nonedible oils) and 112.15(edible oils); see also 67 Fed. Reg. 47,131-134.
EPA ENFORCEMENT
EPA has taken the position that the new rule imposes
few “new” requirements and that most of the changes
are “editorial clarifications” of requirements that have
existed since 1974. See Memorandum from Marianne
Lamont Horinko, EPA Assistant Administrator, Office
of Solid Waste and Emergency Response, dated September 30, 2002, addressing industry questions on the
new rule. This view fails to recognize the significance
of shifting SPCC Plan provisions from recommended
guidelines to mandatory requirements. EPA asserts
that the provisions were always mandatory despite the
use of discretionary language in the regulation. 67
Fed. Reg. 47,051. From an enforcement standpoint,
however, the regulated community previously was able
Kirkpatrick & Lockhart LLP
to challenge an EPA penalty assessment based on failure to comply with an SPCC Plan provision cast in
discretionary terms, i.e., that the provision was simply
a recommendation, not a requirement. That option will
not exist under the new rule. Moreover, because EPA
takes the position that facilities should have been complying with the discretionary provisions in the prior
regulations, EPA is unlikely to be sympathetic to arguments that a facility has not had sufficient time to
achieve compliance with the new regulations.
To illustrate the significance of the shift from discretionary to mandatory language, here are a few
requirements that were included in prior rules, but take
on new significance for regulated facilities with the
mandatory language in the new rule.
■
■
■
■
■
You must provide containment for all containers
55 gallons or more at your facility unless not practicable, in which case you must provide an
explanation in your SPCC Plan and meet other testing and contingency planning requirements, where
applicable (40 C.F.R. § 112.7(c) and (d));
combines visual testing with another testing technique for all containers at your facility that are 55
gallons or more (40 C.F.R. § 112.8(c)(6); 67 Fed.
Reg. 47,119-120).
Fortunately, EPA does allow deviation from many of
its mandatory requirements, including most of the provisions above, provided that your SPCC plan
documents your reasons for nonconformance, the alternate methods you are using, and how these methods
provide “equivalent environmental protection.” 40
C.F.R. § 112.7(a)(2).
We recommend that you review EPA’s new mandatory
requirements carefully and ensure that your SPCC Plan
complies with the new requirements or, where deviations are allowed, adequately documents those
deviations.
If you have questions about any of the specific provisions of the new oil pollution prevention regulations
or need assistance in evaluating your facility’s compliance with these regulations, please contact us.
CRAIG P. WILSON
cwilson@kl.com
717.231.4509
KIMBERLY A. HUMMEL
khummel@kl.com
717.231.4807
You must maintain records of all the inspections
and tests required by the new rule with your plan
for a period of three years (40 C.F.R. § 112.7(e));
You must inspect the drains on all vehicles loading and unloading oil at your facility and, if
necessary, ensure that they are tightened, adjusted,
or replaced to prevent discharges (40 C.F.R. §
112.7(h)(3); 67 Fed. Reg. 47,111);
If your facility is an onshore facility that does not
produce oil, you must collect drainage from all
undiked areas of your facility with a potential for
oil discharge (e.g., where piping is located outside
containment walls or where tank truck discharges
may occur outside the loading area) in a pond, lagoon or catchment basin designed to retain oil or
return it to the facility (40 C.F.R. § 112.8(b)(3));
If your facility is an onshore facility that does not
produce oil, you must conduct integrity testing that
FOR MORE INFORMATION about this Alert or Kirkpatrick
& Lockhart’s environmental practice, please contact the authors or one
of the K&L office contacts below. You may also visit our website at
www.kl.com.
Roger C. Zehntner
Stephen A. Kennedy
R. Timothy Weston
Frederick J. Ufkes
Daniel A. Casey
William J. Hyatt, Jr.
Warren H. Colodner
Thomas J. Smith
Edward P. Sangster
Barry M. Hartman
Boston
617.261.3149
Dallas
214.939.4917
Harrisburg
717.231.4504
Los Angeles 310.552.5079
Miami
305.539.3324
Newark
973.848.4045
New York
212.536.3912
Pittsburgh
412.355.6758
San Francisco 415.249.1028
Washington 202.778.9338
rzehntner@kl.com
skennedy@kl.com
tweston@kl.com
fufkes@kl.com
dcasey@kl.com
whyatt@kl.com
wcolodner@kl.com
tsmith@kl.com
esangster@kl.com
bhartman@kl.com
®
Kirkpatrick & Lockhart LLP
Challenge us. ®
www.kl.com
BOSTON
■
DALLAS
■
HARRISBURG
■
LOS ANGELES
■
MIAMI
■
NEWARK
■
NEW YORK
■
PITTSBURGH
■
SAN FRANCISCO
■
WASHINGTON
.........................................................................................................................................................
This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein
should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer.
KIRKPATRICK & LOCKHART LLP ENVIRONMENTAL ALERT
4
© 2002 KIRKPATRICK & LOCKHART LLP.
ALL RIGHTS RESERVED.