April 2004 DOT Pipeline Compliance News

In anticipation of the approaching August 17, 2004 compliance deadline, the EPA held a public meeting in Washington, D.C. on March 31, 2004 with the regulatory community and interested stakeholders to explain Agency efforts to clarify the regulations and facilitate compliance. Approximately 250 were in attendance, representing various oil and other affected industries. The meeting was used to discuss soon-to-be published settlement papers resulting from negotiations with (mainly) API and PMAA. The two settlement papers are already posted at the Oil Program website at www.epa.gov/oilspill.

EPA promised to announce in a few weeks just how they will approach the implementation of the new and strengthened requirements included in the revised SPCC Rule of July 2002. Meanwhile, the previous/existing requirements are maintained. EPA was unable to provide definitive answers to many of the attendees’ questions and frequently deferred to the Professional Engineer as having the responsibility for determining how a specific facility is to meet the requirements of the Rule.

They are currently considering three implementation options for the new and strengthened requirements:

Further extensions of the deadlines.
Selective extensions of contested requirements of the revised rule.
Implement revised rule according to National Priorities.

NO SETTLEMENT WAS REACHED ON THE DEFINITION OF NAVIGABLE WATERS. This issue will be ruled on by the D.C. District Court, and will likely be appealed. EPA will continue to enforce the definition in the SPCC Rule, but will not rely on the migratory bird rule as the basis for jurisdiction over non-navigable, isolated, intrastate waters.

The particular issues that were settled are as follows:

Loading RACKS versus AREAS:
EPA claims it never intended to add “other transfer areas” to the interpretation of the term “loading/unloading racks”. However, it does not define the term either. It is up to the facility to determine whether or not it has a loading/unloading “rack” subject to 40 CFR 112.7(h).
COST as a Factor in Determining IMPRACTICABILITY of Secondary Containment:
EPA claims that it never intended for cost to be rejected as a factor in determining whether or not secondary containment is practicable, in spite of that wording in the preamble. They indicated that “good engineering practice” may include cost as a factor, but that cost cannot be the SOLE reason for determining impracticability.
Dry Gas Production Facility Wastewater Exemption:
In the absence of produced crude oil or condensate, produced water at dry gas production facilities could be excluded under the wastewater treatment exemption.
Facility vs. Production Facility Definitions:
EPA will consider the definition of “facility”, per 112.2, to be used when determining whether a facility “could …reasonably be expected to cause substantial harm…”, per 112.20(f)(1).
Integrity Testing of Shop-built Containers:
EPA will accept appropriate (as determined by the P.E.) visual inspections of a shop-built container with a capacity < 30,000 gal. that has been elevated (e.g., on supports) or that has been placed on a synthetic liner that allows for early detection of a leak. Non-destructive shell testing would not be necessarily required.
Security:
EPA stated that a facility would need to have all of its oil-containing components fenced in, as opposed to just fencing in the main power cut-off switch.

CONCLUSION:

EPA continues to struggle with the concerns raised when the SPCC Rule was revised in July 2002. Much of the burden is placed on the P.E. for developing a SPCC Plan in accordance with “good engineering practice” where prescriptive requirements are not provided. Several issues remain to be resolved. Meanwhile, EPA is enforcing the existing SPCC requirements, particularly for facilities that need but do not yet have an SPCC Plan in place.

RCP has developed SPCC Plans for dozens of clients, large and small, and is qualified to provide that service to your company efficiently and effectively. Please call Rick Hood at 713/655-8080 to discuss any details