<DOC>
[109 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:42267.wais]
S. Hrg. 109-1017
THE ENVIRONMENTAL PROTECTION AGENCY'S
SPILL PREVENTION CONTROL AND
COUNTERMEASURE PROGRAM
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
DECEMBER 14, 2005
__________
Printed for the use of the Committee on Environment and Public Works
Available via the World Wide Web: http://www.access.gpo.gov/
congress.senate
__________
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COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
JAMES M. INHOFE, Oklahoma, Chairman
JOHN W. WARNER, Virginia JAMES M. JEFFORDS, Vermont
CHRISTOPHER S. BOND, Missouri MAX BAUCUS, Montana
GEORGE V. VOINOVICH, Ohio JOSEPH I. LIEBERMAN, Connecticut
LINCOLN CHAFEE, Rhode Island BARBARA BOXER, California
LISA MURKOWSKI, Alaska THOMAS R. CARPER, Delaware
JOHN THUNE, South Dakota HILLARY RODHAM CLINTON, New York
JIM DeMINT, South Carolina FRANK R. LAUTENBERG, New Jersey
JOHNNY ISAKSON, Georgia BARACK OBAMA, Illinois
DAVID VITTER, Louisiana
Andrew Wheeler, Majority Staff Director
Ken Connolly, Minority Staff Director
(ii)
C O N T E N T S
----------
Page
DECEMBER 14, 2005
OPENING STATEMENTS
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware.. 34
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma... 1
Jeffords, Hon. James M., U.S. Senator from the State of Vermont.. 10
Murkowski, Hon. Lisa, U.S. Senator from the State of Alaska...... 6
Thune, Hon. John, U.S. Senator from the State of South Dakota.... 15
Vitter, Hon. David, U.S. Senator from the State of Louisiana..... 16
Voinovich, Hon. George V., U.S. Senator from the State of Ohio... 14
WITNESSES
Corbett, James J., Ph.D., assistant professor, Marine Policy
Program, Graduate College of Marine Studies, University of
Delaware....................................................... 31
Prepared Statement........................................... 68
Additional Statement......................................... 79
Responses to Additional Questions from Senator Inhofe........ 85
Coyne, James, president, National Air Transportation Association. 26
Prepared Statement........................................... 54
Responses to Additional Questions from Senator Inhofe........ 60
Cummings, Brent, vice president, Cummings Oil.................... 23
Prepared Statement........................................... 50
Responses to Additional Questions from Senator Inhofe........ 52
Responses to Additional Questions from Senator Jeffords...... 53
Dunne, Thomas P., acting assistant administrator, Office of Solid
Waste and Emergency Response, U.S. Environmental Protection
Agency......................................................... 6
Prepared Statement........................................... 86
Responses to Additional Questions from Senator Baucus........ 103
Responses to Additional Questions from Senator Inhofe........ 91
Responses to Additional Questions from Senator Jeffords...... 94
Response to an Additional Question from Senator Voinovich.... 102
Ott, Riki, Ph.D., author and marine toxicologist................. 29
Prepared Statement........................................... 65
Responses to Additional Questions from Senator Jeffords...... 67
Owen, Richard G., director, CHS, Inc............................. 28
Prepared Statement........................................... 61
Responses to Additional Questions from Senator Inhofe........ 63
Responses to Additional Questions from Senator Jeffords...... 64
Sullivan, Thomas, chief counsel for advocacy, Office of Advocacy,
U.S. Small Business Administration............................. 4
Prepared Statement........................................... 44
Responses to Additional Questions from Senator Inhofe........ 47
Responses to Additional Questions from Senator Jeffords...... 49
ADDITIONAL MATERIAL
Article from Science Magazine: Long-Term Ecosystem Response to
the Exxon Valdez Oil Spill..................................... 104
Report on the EPA's Spill Prevention, Control, and Countermeasure
(SPCC) Rule; Status of Recommendations from 1989............... 108
Statements:
American Feed Industry Association (AFIA)........................ 117
American Society of Civil Engineers (ASCE)....................... 131
E.H. Pechan & Associates, Inc.................................... 142
Earthjustice, the Natural Resurces Defense Council, and the
Sierra Club.................................................... 149
Food Industry Environment Council (FIEC), Dated December 13, 2005 157
Food Industry Environment Council (FIEC), Dated March 26, 2003... 160
Gas Processors Association (GPA)................................. 169
National Oilseed Processors Association (NOPA)................... 172
National Society of Professional Engineers (NSPE)................ 165
Petroleum Marketers Association of America (PMAA)................ 170
Regulatory Analysis for the Proposed Revisions to the Oil
Pollution Provention Regulation (40 CFR Part 112).............. 195
Small Business Administration Office of Advocacy................. 178
Spill Prevention, Control, and Countermeasures Rule Issues of
2002 (SPCC).................................................... 250
USDA, Fuel/Oil Storage and Delivery for Farmers and Cooperaives.. 260
THE ENVIRONMENTAL PROTECTION AGENCY'S SPILL PREVENTION CONTROL
AND COUNTERMEASURE PROGRAM
----------
WEDNESDAY, DECEMBER 14, 2005
U.S. Senate,
Committee on Environment and Public Works,
Washington, DC.
The committee met, pursuant to notice, at 9 o'clock a.m. in
room 406, Senate Dirksen Building, Hon. James M. Inhofe
(chairman of the committee) presiding.
Present: Senators Inhofe, Isakson, Murkowski, Jeffords,
Voinovich, Vitter, Thune, Carper.
OPENING STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM
THE STATE OF OKLAHOMA
Senator Inhofe. Our meeting will come to order. We have a
policy, at least in the 3 years that I have chaired this
committee, that we start on time even if no one else shows,
even including witnesses. You are all here, so I appreciate
that.
We are here to discuss the EPA's Spill Prevention, Control,
and Countermeasures Rule. As many of you know I have been
following this rule for several years and have written to the
Agency numerous times, mainly to express concern with the
direction the program is taking. It is very important that we
look at this program objectively. No one in this room wants
more oil spills. In fact, those who are with us today to
express their concerns about this rule lose money when there
are oil spills. They either sell it as a commodity or have
bought it to run their businesses. All they ask for are
reasonable regulations that address real problems and can be
implemented with minimal but justifiable costs. They don't
think that is too much to ask of the Federal Government.
This program is the worst of the one size fits all
Government. There are certainly measures that should be taken
at large facilities that are equal to the risks associated with
a potential spill from those facilities. Why would we apply the
same standard to a small facility with a very small risk of
spilling? Why would we apply the same standard to completely
different industries?
Part of the problem with the rule is that the EPA is trying
to cover virtually every industry someone can think of with one
rule, and it is making for very bad Government and bad policy.
What is most egregious about the rule is the utter lack of data
to back it up. There is simply no data to defend the inclusion
of farms and the air transport industry under the rule.
Further, there is limited data to justify many of the proposed
changes that affect other industries.
Again, no one here today is seeking to have more spills. We
simply want the Federal regulations to address real,
identifiable, proven problems. The 2002 rule does not do that.
The 1973 rule didn't do it. That is why the EPA has proposed
the rule it did today which is an incomplete but appropriate
step in the right direction.
The rule correctly extends the compliance deadline for
farming operations with a storage capacity of less than 10,000
gallons. However, that extension is limited to the 2002
requirements, leaving in place the onerous 1973 rule for
farmers. The approach to farmers has been the exact opposite of
how our Government should work. We should first identify a
problem, then write a law or a regulation. Instead, the EPA
wrote a regulation to cover farms and is now trying to identify
the problem.
The proposed rule does correctly provide much needed relief
to the air transport industry. The sized secondary containment
requirements do not make sense at airports. They could create
safety and fire hazards and would unnecessarily cause logjams
on runways.
Unfortunately, the rule does little to assist the small oil
producers. First, by reinterpreting its wastewater treatment
exemption, EPA will bring under the rule for the first time
natural gas wells by arguing that produced water is, in fact,
an oil. Second, the 10,000 gallon threshold outlined today does
nothing to help small producers who often have storage
capacities far above that which they have at the present time.
If a producer was producing a lot more oil in the past, then,
of course, they would have containers to take care of that.
However, that may not be appropriate today. In essence, you
would be saying you would have to get rid of a perfectly good
storage tank and replace it with a much smaller one just
because you are not using the full capacity of the big one.
Yet, some might be narrow in incorrectly arguing today that
we are trying to make it easier to have oil spills, but family
farmers do not want oil spills because they live on the land,
and they are paying for a lot of fuel. Brent Cummings from
Oklahoma runs a family owned business with eight employees. He
certainly doesn't want more oil spills. People like Mr.
Cummings lose money when they lose oil.
We simply must have reasonable regulations at reasonable
costs that can be thoroughly defended with sound data. To date,
that has not been the case with the SPCC programs.
I do apologize to you folks today. I just got back from my
tenth trip to Iraq last night, and I am kind of zonked out
still. When you ride around in a C-130 at nighttime up there,
you come back with a cold no matter what precautions you take.
I would say, though, that along that line, I thought we might
wait just a few minutes for some of our members to attend.
It is incredible the successes that are taking place in
Iraq today. It is just not believable. Each time I go, and it
is about once every month or so, I come back just shocked at
how good things are. The Iraqis now are up to 214,000 security
forces. They know what they are doing. Out of that 200, that is
112 divisions. Out of the 112 divisions, 30 of them can stand
alone. They don't need any help. Right now, half of the city of
Baghdad is completely under the control of the Iraqis taking
care of themselves. We are not even supporting them.
We expected to have a spike in the insurgence activities
before the vote. The election is taking place tomorrow. That
didn't happen. We had an election of the Iraqi security forces
on Monday. So I was in Fallujah yesterday observing that, and
it could not have gone better; not one incident occurred. Much
to the chagrin of many politicians who want to use this as
their road to the White House, it ain't gonna work.
Let us go ahead. We will start with our witnesses. Mr.
Sullivan and Mr. Dunne, I appreciate very much your being here.
Mr. Sullivan is the Chief Counsel for Advocacy, the Office of
Advocacy in the U.S. Small Business Administration, and Thomas
Dunne is the Acting Assistant Administrator, the Office of
Solid Waste and Emergency Response for the EPA. We appreciate
both of you being here.
Why don't you start, Mr. Sullivan? This panel, as well as
the next panel, we will keep all of your entire statement and
it will be made part of the record. You may abbreviate it or
try to keep it under about 5 minutes.
[The prepared statement of Senator Inhofe follows.]
Statement of Hon. James M. Inhofe, U.S. Senator from the State of
Oklahoma
Today we are here to discuss the EPA's Spill Prevention Control and
Countermeasure rule. As many of you know, I have been following this
rule for several years and have written to the Agency numerous times,
mainly to express concern with the direction the program was taking. It
is very important that we look at this program objectively. No one in
this room wants more oil spills. In fact, those who are with us today
to express concerns about this rule lose money if they spill oil. They
either sell it as a commodity or have bought it to run their
businesses. All they ask for are reasonable regulations that address
real problems and can be implemented with minimal but justifiable
costs. I honestly don't think that is too much to ask of the Federal
Government.
This program is the worst of one-size-fits all Government. There
are certain measures that should be taken at large facilities that are
equal to the risk associated with a potential spill from those
facilities. Why would we apply the same standard to a small facility
with a very small risk of spilling? Why would we apply the same
standard to completely different industries? Part of the problem with
this rule is that EPA is trying to cover virtually every industry
someone can think of with one rule and its making for very bad
Government and very bad policy.
What is most egregious about this rule is the utter lack of data to
back it up. There is simply no data to defend the inclusion of farms or
the air transport industry under the rule. Further, there is limited
data to justify many of the proposed changes that affect other
industries. Again, no one here today is seeking to have more spills. We
simply want Federal regulations to address real, identifiable, proven
problems. The 2002 rule does not do that. The 1973 rule does not do
that.
That is why the EPA has proposed the rule it did today which is an
incomplete but appropriate step in the right direction. The rule
correctly extends the compliance deadline for farming operations with a
storage capacity of less than 10,000 gallons. However that extension is
limited to the 2002 requirements leaving in place the onerous 1973 rule
for farmers. The approach to farmers has been the exact opposite of how
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our Government should work. We should first identify a problem and then
write a law or a regulation. Instead EPA wrote a regulation to cover
farmers and is now trying to identify the problem.
The proposed rule does correctly provide much needed relief to the
air transport industry. The sized secondary containment requirements do
not make sense at airports. They could create safety and fire hazards
and would unnecessarily cause logjams on the runways.
Unfortunately, the rule does little to assist small oil producers.
First, by reinterpreting its wastewater treatment exemption, EPA will
bring under the rule for the first time natural gas wells by arguing
that produced water is in fact an oil. Secondly, the 10,000 gallon
threshold outlined today does nothing to help small producers who often
have storage capacity far above that because these wells at one time
produced far more oil. I look forward to working with EPA to address
the concerns of the small producers that make up the backbone of the
Nation's energy industry.
Again, some might be narrow in incorrectly arguing today that we
are trying to make it easier to have oil spills. Family farmers do not
want oil spills because they live on the land and are paying a lot for
fuel. Brent Cummings from Oklahoma runs a family owned business with
eight employees. He certainly doesn't want more oil spills. People like
Mr. Cummings lose money when they lose oil. We simply must have
reasonable regulations at reasonable costs that can be thoroughly
defended with sound data. To date, that has not been the case with the
SPCC program.
STATEMENT OF THOMAS SULLIVAN, CHIEF COUNSEL FOR ADVOCACY,
OFFICE OF ADVOCACY, U.S. SMALL BUSINESS ADMINISTRATION
Mr. Sullivan. Thank you, Chairman Inhofe. I will try to
abbreviate my lengthy written statement.
Good morning. Thank you for giving me the opportunity to
appear before the committee. My name is Tom Sullivan. I am the
Chief Counsel for Advocacy at the Small Business
Administration. Because my office is an independent entity
within the U.S. Small Business Administration, and I am charged
with solely representing the views of small business, my
testimony does not necessarily reflect the position of the
Administration or the SBA.
SPCC regulations were initially promulgated by EPA in 1973
as the chairman described in his opening statement. Because of
the complexity and cost of the Spill Prevention and
Countermeasure plans, many small businesses found it difficult
to comply with the 1973 requirements. The regulated community
was particularly surprised by the 2002 revisions, given that
the stated purpose of those amendments was to reduce, not
increase, regulatory burdens.
In response to small businesses' reaction to EPA's 2002
revisions, my office worked with EPA to identify small business
concerns related to the rule. Those concerns were formally
suggested in June 2004, in a letter from my office to Tom
Dunne. Our letter was supplemented by a contractor's report we
commissioned on the subject. EPA's notice of data availability
issued last September and the rule recently proposed by EPA
relied heavily on the report and the recommendations contained
in our June 2004 letter.
My office continues to believe that the overall SPCC
compliance would improve with a simpler, less expensive program
that is tailored to small facilities. In the June, 2004 letter
I sent to EPA, there were four general areas we recommended for
reform. Comments by the small business community were obviously
taken seriously by EPA because many were included in the
proposed rule. The four areas my office focused on were: small
facilities, integrity testing, motive power and oil-filled
equipment, and asphalt and hot-mix cement.
From the small facility recommendations, professional
engineer review and certification in EPA's proposal allows for
model plans to be written by trade associations that can be
readily adapted for small facilities as was successfully done
for the Accidental Release Program under Section 112(r) of the
Clean Air Act. Our June 2004 letter included farms in the
universe of reforms covering small facilities, and my office is
supportive of the EPA's proposal to extend the compliance date
for farms, pending greater analysis of any oil spill risks that
may be associated with the agricultural community.
For integrity testing, my office recommended that EPA allow
visual inspection without the need for obtaining a costly PE
certification for small tanks and containers under specified
conditions. We are pleased with EPA's proposal for additional
flexibility in integrity testing by allowing facilities to
consult and rely upon industry inspection standards for small
facilities without employing a PE.
We expect that small businesses will want to expand EPA's
proposal because an expansion, even to the 10,000 gallon
threshold, will not present additional hazards because all
small facilities would be required to have release barriers and
secondary containment.
For motive power and oil-filled equipment, EPA realized
that it did not make sense for the SPCC rules to cover retail
dealerships selling tractors or to include construction sites
under the rule. The Agency found that it just wasn't practical
to require containment around vehicles that regularly move
about the site. This step in EPA's proposal will provide relief
at thousands of facilities.
My office is also supportive of EPA's proposed reduced
requirements for oil-filled equipment. The proposal moves away
from the more expensive secondary containment requirement and
allows facilities to substitute an oil contingency plan and a
written commitment of manpower to remove any oil that may be
discharged. That provision reflects the fact that such
equipment has a low spill rate.
As a result of substantial concerns raised by the
construction industry, my office advocated for the exclusion of
asphalt cement and hot-mix asphalt from all SPCC-related
requirements in our letter of June, 2004. My office based this
on the observation that asphalt cement and hot-mix asphalt are
solid to semi-solid at normal, outdoor temperature would not
flow very far, and therefore would not pose a risk to navigable
waters.
We are hopeful that more flexible options remain under
consideration in EPA's efforts to further reform SPCC. On
behalf of small business, my office commends EPA for listening
to small business concerns while drafting their amendments.
Congress realized the importance of small businesses when
the Regulatory Flexibility Act and Small Business Regulatory
Enforcement Fairness Act were enacted into law. Under those two
laws that my office oversees, we look for ways to reduce small
business burdens without compromising the regulatory objectives
intended by the regulating Agency. We believe that EPA's
regulatory reform efforts for SPCC can achieve those same
objectives.
Thank you for allowing me to present these views, and I
would be happy to answer any questions.
Senator Inhofe. Thank you, Mr. Sullivan.
Mr. Dunne, before you start, let me ask Senator Isakson and
Senator Murkowski, if either one has an opening statement they
would like to give at this time?
Senator Isakson. Not now, Mr. Chairman. Thank you.
OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM THE
STATE OF ALASKA
Senator Murkowski. Mr. Chairman, I just want to thank you
for holding this hearing on the proposed EPA rule changes on
the oil spill contingency planning. When you keep in mind that
you have had regulations in place for about 34 years, it is
probably timely that we look to updating these spill prevention
rules. Certainly from Alaska's perspective, we have a great
deal of interest in this.
I am pleased to have with us today, at least on the second
panel here, from Alaska, Riki Ott from Cordova, a wonderful
fishing community. She has been very actively involved in oil
spill cleanup over the years in connection with the Exxon
Valdez oil spill in Prince William Sound about 16 years ago. So
we certainly have firsthand experience on this topic.
I welcome the efforts by the EPA to make oil spill
prevention plans more workable and more effective, and I
appreciate the Agency's efforts to really better standardize
the inspection and the enforcement efforts with that.
Mr. Chairman, I appreciate again your holding this hearing
and allowing me a chance to make a statement.
Senator Inhofe. It is hard to believe it has been 16 years
since Exxon Valdez.
Senator Murkowski. Yes, a long time.
Senator Inhofe. Mr. Dunne, you are recognized.
STATEMENT OF THOMAS P. DUNNE, ACTING ASSISTANT ADMINISTRATOR,
OFFICE OF SOLID WASTE AND EMERGENCY RESPONSE, U.S.
ENVIRONMENTAL PROTECTION AGENCY
Mr. Dunne. Thank you, Mr. Chairman and members of the
committee for inviting me today to discuss EPA's Oil Spill
Prevention, Control, and Countermeasure Program.
My testimony will address issues regarding EPA's recent
efforts to streamline SPCC requirements, to extend the
compliance dates for modification and implementation of SPCC
plans, and to provide guidance to EPA inspectors on the SPCC
requirements. I will just summarize my statement and provide
the written statement to you.
First, a little history, the Federal Water Pollution
Control Act of 1970 required the President to issue regulations
that would establish procedures, methods, equipment, and other
requirements to prevent discharges of oil from vessels and
facilities and to contain such discharges. In 1973, EPA
originally promulgated the SPCC regulations under the Clean
Water Act. The regulations established spill prevention
procedures, methods, and equipment requirements for non-
transportation-related, onshore and offshore facilities with
aboveground storage capacity of greater than 1,320 gallons.
Regulated facilities were also limited to those that could
reasonably be expected to discharge oil in harmful quantities
into the navigable waters of the United States or adjoining
shorelines.
The fundamental requirement established by this rule that
has not changed in nearly 30 years is that facilities covered
by these regulations are required to prepare an SPCC plan, and
that plan must be certified by a licensed professional
engineer.
Moving forward several decades, EPA in 2002 published final
amendments to the original SPCC regulations. After publication
of this rule in 2002, several members of the regulated
community filed legal challenges to certain aspects of the
rule. All of these issues raised in the litigation have been
settled except for the definition of navigable waters. Since
then, EPA has extended the dates for revising and implementing
SPCC plans several times.
EPA recently issued a proposal rule to extend the dates by
which facilities will need to amend and implement an SPCC plan
to October 31, 2007. EPA has taken this action to allow time
for the Agency to finalize amendments to the SPCC requirements
that were recently proposed. We also want sufficient time for
facilities to understand these modifications, to review and
understand the guidance we recently issued, and to make
appropriate changes to the facilities and to their SPCC plans
as a result of the rule modifications and the guidance.
EPA also proposed a rule containing substantive revisions
of SPCC requirements. This proposed rule represents our efforts
to strike the right balance between protection of the
environment and our Nation's valuable water resources and
common sense regulatory flexibility. I am certain that we share
the same goal, to safeguard the environment by preventing
spills before they damage the environment. I truly believe that
in this instance, an ounce of prevention is worth a pound of
cure. It is much more costly to clean a spill than to prevent
one, and once a spill occurs, cleanup is difficult and there is
often little we can do to prevent damage to water resources and
wildlife.
I will give a brief summary of some of the different
changes in EPA's proposed rule.
EPA has proposed to provide small facilities, those
handling less than 10,000 gallons of oil, the option to self-
certify their plans. In addition, we are proposing additional
flexibility for these smaller facilities with respect to tank
integrity inspections and facility security.
EPA is also proposing greater flexibility for airport
mobile refuelers which will no longer be subject to sized
secondary containment requirements. All of our airports will
still need to meet general secondary containment requirements.
EPA believes that the general secondary containment
requirements are much more flexible and reflect the kinds of
active and passive fuel spill protection measures already used
by many airports in their fueling operations.
In addition, EPA is proposing to extend the 2002 compliance
dates for all facilities, including farms, until October 31st,
2007, and to extend the 2002 rule compliance dates indefinitely
by farms storing 10,000 gallons of oil or less. EPA is
committed to work with USDA and farm representatives to
determine how to properly address farms under the SPCC
regulation.
Further, EPA is proposing a streamlined regulatory option
for oil filled equipment. A facility owner or operator can
choose to satisfy the SPCC requirements through inspection and
monitoring systems and contingency planning, rather than
through general containment requirements. In doing so, the
proposal provides electric utilities and other industrial
facilities with an additional prevention option for this unique
equipment.
In addition, EPA recognizes that in most cases, the SPCC
requirements are not practical for motive power containers on
onboard vehicles at SPCC regulated facilities. The types of
vehicles and facilities that are potentially subject to the
SPCC requirements, solely because of the oil or fuel contained
onboard the vessels, are buses at terminals or depots,
recreational vehicles parked at dealerships, earth removing
equipment at construction sites, aircraft, and large farming
and mining equipment. Consequently, EPA is proposing to exempt
them from all coverage under SPCC.
Finally, the EPA has issued the SPCC guidance for regional
inspectors, and this guidance is intended to assist regional
inspectors in reviewing a facility's implementation of the
current SPCC rule. The document provides a better understanding
of how the rule applies to various kinds of facilities and to
help clarify the role of the inspector in the review and
evaluation of the performance-based requirements. Another
reason for the guidance is to respond to stakeholders' requests
for consistent National policy on several SPCC-related issues.
As to the oil exploration----
Senator Inhofe. Try to wrap up, if you would, Mr. Dunne.
Mr. Dunne [continuing]. I will. I want to make the point on
oil exploration and production facilities.
We are trying to identify additional areas where regulatory
reform may be appropriate. For the smaller areas and
facilities, we still will give the same breaks as to small
business. Without going into anything more on oil production,
we are willing to work with that sector, Mr. Chairman, on what
other requirements exist to increase compliance and therefore
reduce the amount of oil spilled.
Thank you very much. We hope that we have struck the right
balance. We expect to hear from the regulated community in the
public comment period. You have my commitment and the
Administrator's commitment that we will take the comments that
we see during the public comment period very seriously, and
these comments will guide us to move forward on SPCC problems.
Thank you, Mr. Chairman.
Senator Inhofe. That is good. Well, thank you, Mr. Dunne.
We would expect that, and we will appreciate that very much.
A witness for the next panel claims in her testimony that
the rulemaking weakens the facilities' liability under the
Clean Water Act. It is my understanding that that is already
covered under the Clean Water Act and the Oil Pollution Act. I
will just ask you, Mr. Dunne, in any way do you know that this
rule will weaken the liability?
Mr. Dunne. I don't believe so, unless somebody thinks
because if you are self-certifying in smaller facilities, it
could weaken your liability. I don't. It is not contemplated
under this rule that would be true, and if that is a concern,
we certainly would address that when the comments come in.
Senator Inhofe. As you understand it right now, it would
not?
Mr. Dunne. It would not.
Senator Inhofe. All right.
In the rule, it states that it has heard of spills from
mobile refuelers at airports. I am a little frustrated by this.
I must admit I have some bias on this. I have been an active
pilot for 50 years, and I am pretty familiar with how these
units work. We have made requests for information to show
actually that there is an exposure there from the mobile
refuelers at airports, and when we got the response back, they
talked about the airport facilities. Now this could include a
McDonald's or anything else. Specifically on just the refueling
trucks, we don't have anything, any of the statistics, and
apparently you do because you are writing rules and making
input.
I would like to ask you if you have anything currently that
just identifies the spills from the refueling trucks as opposed
to an airport facility, and if not, when we could get that
information.
Mr. Dunne. Mr. Chairman, I will go back to the data we see
from the National Response Center where we have spills, both
hazardous and oil reported, and see what kind of data that we
have there. I know that there is some anecdotal data from
inspectors that go out and have visited airports. Will provide
whatever we can to you as soon as possible.
Senator Inhofe. What I would like to do is take advantage
of the fact that this is in the hearing and ask that you supply
us with that data in the next 2 weeks if you have it.
Mr. Dunne. Thank you, Mr. Chairman. We will.
Senator Inhofe. All right.
Mr. Sullivan, the OIPA, Oklahoma Independent Petroleum
Association is, in their letter to the EPA regarding the
argument about the 10,000 threshold. You heard me in my opening
statement talk about the fact that we are very sensitive to
this. Our margin of producers in Oklahoma, at one time, having
started in that business myself so I am little bit familiar
with it, where that they had a lot of storage on their site,
and they have 10,000 gallon containers, and yet they may be
only using 1,000 or even less of that.
Now you heard me in my opening statement the problem that I
think is a problem anyway, that if you are producing, you are
storing only a very small amount just because you are storing
it in a container with a larger capacity. That doesn't make any
sense to me. Do you have any comments about that?
Mr. Sullivan. Well, I think in the integrity testing
reforms that the EPA has proposed there is some room for
expansion. I think the visual inspection requirements deserve
another look at whether or not the scenario you lay out does
pose any additional risks. The small businesses that seek my
office's help with this regulation and others----
Senator Inhofe. Are you suggesting maybe it isn't a
problem?
Mr. Sullivan [continuing]. Well, right now, there is the
distinction between 5,000 and 10,000 gallons, and small
businesses would, I think, like the visual inspection component
of integrity testing to be expanded all the way to the 10,000
gallon threshold. I think that that is an area that may cover
some of the scenario that you laid out.
Senator Inhofe. OK, Mr. Cummings is in the audience and
will be on the second panel. I would like to have you give some
thought to that because we may be wanting to pursue that a
little bit. Thank you very much.
We have been joined by our Ranking Member, Senator
Jeffords.
Senator Jeffords, would you have any opening statement you
would like to make?
Senator Jeffords. Yes, I do.
Senator Inhofe. You are recognized.
OPENING STATEMENT OF HON. JAMES M. JEFFORDS, U.S. SENATOR FROM
THE STATE OF VERMONT
Senator Jeffords. Thank you, Mr. Chairman. I welcome this
opportunity today to conduct oversight on the EPA's Spill
Prevention, Control, and Countermeasures Program.
This program was adopted in 1972 with the passage of the
Clean Water Act in the wake of the Torrey Canyon oil spill in
England. Nearly 100,000 gallons of crude oil spilled there,
killing over 20,000 seabirds and contaminating 70 miles of
beaches.
People often say that an ounce of prevention is worth
equals a pound of cure. This program is the epitome of that
saying. According to the EPA, the United States has 250 billion
gallons of oil and petroleum products each year. At every point
in the production, distribution, and consumption process, oil
spills may occur. Oil spills wreak havoc on the environment in
local communities. In the short term, they contaminate drinking
water and cause large deaths of marine life. They foul beaches
and destroy local economies. In the longer term, oil spills
affect the health and the viability of marine animals,
reptiles, birds, animals, and plants. Local fishing economies
may struggle to recover after an oil spill. Recent studies of
the Exxon Valdez spill have demonstrated that oil has
persistent and long term harmful effects in aquatic ecosystems.
I ask unanimous consent to include the record of the study
of this topic which appeared in Science Magazine, 2003.
Senator Inhofe. Without objection.
[The referenced material can be found on page 104.]
Senator Jeffords. Even extremely small spills can cause
serious harm. We must do everything we can to prevent them.
With that introduction, I am concerned about the overall
state of the SPCC program. This program appears to have been
largely neglected since its adoption in 1972. Since that time,
the GAO and others have leveled some serious criticisms of the
program that went unaddressed from EPA in many years. I will be
submitting those materials, as well as an update the GAO
prepared for the record of today's hearing.
[The referenced material can be found in the committee
file.]
In May I asked the GAO to review the current program and
determine if any progress has been made. I look forward to the
results of that review as I consider today's proposed
rulemaking.
In 2002, the EPA overhauled the SPCC program, but since the
Bush administration took office, the Agency has postponed the
effective date of these changes three times for a total of 4
years, making the current effective date 2007. Industry has
since used the 2002 regulations as an opportunity to further
lobby the Administration to roll back Clean Water Act
protections by changing the definition of navigable waters.
Today, the SPCC program stands basically as it was in 1972.
We have surely learned something about oil spill prevention
over the last 35 years.
It is imperative that we have a strong program in place
with good enforcement. It is with this in mind that I will be
listening to today's witnesses and ask: Does the EPA proposed
rule and guidance document take us forward or backward in our
efforts to protect our Nation's waterways from oil
contamination?
Thank you, Mr. Chairman.
[The prepared statement of Senator Jeffords follows:]
Statement of Hon. James M. Jeffords, U.S. Senator from the State of
Vermont
Mr. Chairman, I welcome this opportunity today to conduct oversight
on the EPA's Spill Prevention Control and Countermeasures program.
This program was adopted in 1972 with the passage of the Clean
Water Act, in the wake of the Torrey Canyon oil spill in England.
Nearly 100,000 gallons of crude oil spilled there, killing over
20,000 sea birds, and contaminating seventy miles of beaches.
People often say that an ounce of prevention equals a pound of
cure. This program is the epitome of that saying.
According to the EPA, the United States uses 250 billion gallons of
oil and petroleum products each year.
At every point in the production, distribution, and consumption
process, oil spills may occur.
Oil spills wreak havoc on the environment and local economies. In
the short term, they contaminate drinking water and cause large-scale
deaths of marine life. They foul beaches and destroy local economies.
In the longer term, oil spills affect the health and viability of
marine mammals, reptiles, birds, animals, and plants.
Local fishing economies may struggle to recover after an oil spill.
Recent studies of the Exxon Valdez oil spill have demonstrated that oil
has persistent and long-term harmful effects in aquatic ecosystems.
I ask unanimous consent to include in the record a study on this
topic, which appeared in Science magazine in 2003.
Even extremely small spills can cause serious harm. We must do
everything we can to prevent them.
With that introduction, I am concerned about the overall state of
the SPCC program. This program appears to have been largely neglected
since its adoption in 1972.
Since that time, the GAO and others leveled some serious criticisms
at the program that went unaddressed by EPA for years.
I'll be submitting those materials, as well as an update that the
GAO prepared for the record of today's hearing.
Today I asked the GAO to review the current program and determine
if any progress has been made. I look forward to the results of that
review as I consider today's proposed rulemaking.
In 2002, the EPA overhauled the SPCC program, but since the Bush
Administration took office, the Agency has postponed the effective date
of those changes three times, for a total of four years, making the
current effective date 2007.
Industry has since used the 2002 regulations as an opportunity to
further lobby the Administration to roll back Clean Water Act
protections by changing the definition of navigable waters.
Today, the SPCC program stands basically as it was in 1972. We have
surely learned something about oil spill prevention over the last 35
years. It is imperative that we have a strong program in place with
good enforcement.
It is with that in mind that I will be listening to today's
witnesses and ask, does the EPA proposed rule and guidance document
take us forward or backward in our efforts to protect our Nation's
waterways from oil contamination?
Thank you, Mr. Chairman.
Senator Inhofe. Thank you, Senator Jeffords.
We will continue in our questioning with the early bird
rule. They will be in this order: Senator Isakson, then Senator
Jeffords, then Senator Murkowski, and Senator Voinovich.
Senator Isakson.
Senator Isakson. Thank you, Mr. Chairman.
Mr. Dunne, I have heard from a number of agribusiness
interests in the State and my State's agribusiness council with
regard to the agricultural exemption. They are appreciative of
the farm exemption but are wondering if, and to what extent,
did you look at agribusiness from a standpoint of exemptions
from the rules?
Mr. Dunne. I am not too sure what you mean by agribusiness
as opposed to farms.
Senator Isakson. Well, I would say, for example, a crop
dusting operation, a small crop dusting operation, or other
support operations and businesses that might support farming
but are not directly in the farming business.
Mr. Dunne. I don't think we looked at that as a specific
industry by itself. I think we are looking at farms in general
with the caveat that remembering that since 1973, any facility
that stored 10,000 gallons or more, or over 1,320 gallons was
subject to this rule. It has been true for 32 years. I don't
think we dissected the agribusiness separately.
Senator Isakson. How is the farm exemption explained? How
do you define farming in the rule exemption?
Mr. Dunne. We use the USDA definition where I believe it
says that over $1,000 worth of sales a year. I can send you the
actual definition.
Senator Isakson. If you would, I would appreciate it.
[Information submitted for the record follows:]
``Farm means a facility on a tract of land devoted to the
production of crops of raising animals, including fish, which
produced and sold, or normally would have produced and sold,
$1,000 or more of agricultural products during a year.''
Senator Isakson. Second, and this may show my ignorance,
but on the proposed rule, it is open now for comment. Is that
correct?
Mr. Dunne. That is correct, for 60 days.
Senator Isakson. For 60 days. Going back on the
agribusiness for a second, if there was a sufficient, specific
request for the Agency to consider it, if I filed it during
that 60 days, is it possible for it to be considered for
incorporation within the rule?
Mr. Dunne. Sure.
Senator Isakson. OK, thank you very much.
Thank you, Mr. Chairman.
Senator Inhofe. Thank you, Senator Isakson.
Senator Jeffords.
Senator Jeffords. Mr. Dunne, I understand that in 2004, the
EPA Oil Program Director stated that, FE small quantities of
oil can have profound and longstanding impacts on the waters of
the United States and wetland environments, and small
facilities often cannot afford the cost of responding to a
spill.' In Dr. Corbett's testimony, he points out that the
EPA's 1995 survey data finds that the SPCC compliance reduced
spills and cleanup costs at small facilities. It seems that the
EPA's proposal contradicts your own information.
Can you explain why the Agency proposes to weaken
requirements and increase the risk of oil spills at the very
facilities that your own data suggests they are least equipped
to respond to them?
Mr. Dunne. Senator, could you tell me who made that
statement? I am sorry.
Senator Jeffords. The EPA Oil Program Director.
Mr. Dunne. Who is that?
Senator Inhofe. You are asking who the EPA Oil Program
Director is? You don't know?
Mr. Dunne. Who is the Oil Director? I am not too sure what
individual we are talking about who made this statement.
Senator Inhofe. I think his name is Dave Hudson.
Senator Jeffords. Dave Evans.
Senator Inhofe. Dave Evans.
Mr. Dunne. Dave Evans, he used to be the Oil Program
Director.
I think it is true that you can have small quantities of
oil that can do damage to waterways and to aquatic life. There
is no doubt. I don't think that we are regressing at all.
Actually, we are trying to make it simpler for people who store
small amounts of oil, so they don't have to have PE
certification. I don't see where that is anything more than
trying to help them reduce the burden of reporting and lower
their costs, but it doesn't take anybody off the hook in terms
of whether or not they have to comply with the regulation.
Senator Jeffords. Mr. Sullivan, we have received testimony
that small business will incur increased liability and cleanup
costs if they self-certify a spill prevention plan, and that
there will be a severe economic impact on 86 percent of
engineering firms in the Nation with less than 20 employees, if
EPA's proposal does go forward.
Did you analyze these factors in developing your position
presented today? And how does the Small Business
Administration's Office of Advocacy justify its support of a
regulatory change that is inconsistent with its mission to
promote the goals of small businesses?
Mr. Sullivan. Thank you, Senator Jeffords.
First of all, the self-certification reform of which my
office is very supportive does eliminate the requirement for
professional engineers to certify. So to the extent that you
have built a business model on being a PE to certify small
facilities, then there may be less business.
With respect to the self-certification reform, small
businesses have come into my office and said this is something
that makes sense, really for two reasons. One, the small
businesses believe they are in a good position to make that
certification themselves, and two, from an environmental
compliance perspective, there is widespread acknowledgment that
there aren't enough small facilities in the environmental
compliance program right now, and there is some evidence that a
self-certification program will increase the amount of small
facilities that start paying attention to these issues.
I will use, as an example, the Massachusetts Environmental
Results Program, where they instituted a self-certification
program particular to dry cleaners. Before that self-
certification program came into existence, less than 10 percent
of the dry cleaners were in conversations with the
Massachusetts Department of Environmental Protection. Two years
after the self-certification, 95 percent of the dry cleaners in
my home State were involved in environmental compliance efforts
with the Environmental Protection Program in Massachusetts. So
the self-certification reform, we believe, will result in
greater compliance rates across the board.
Senator Jeffords. Mr. Dunne, in Dr. Ott's testimony, she
points out some of the evolutions that have occurred in the oil
spill science since the 1970's, most notably the toxic
components of oil remain in the environment for an extended
time and can cause significant harm.
How has the EPA incorporated modern day knowledge about oil
spills into the Agency's analysis of the impact on this rule?
Mr. Dunne. Well, I am not too sure I can answer that with
any certainty in terms of the science of it. There is no doubt
there has been some improvement in technology. Remember,
Senator, that the EPA and the Coast Guard every year respond to
oil spills, and we do learn a lot about oil spills in that
regard, in terms of the breadth of having to clean them up, and
how you clean them up, and what the cost is to clean them up. I
will check to see in terms of that particular area, in terms of
scientific research, but I don't believe it had a huge impact
in terms of what we are considering.
Senator Jeffords. Thank you.
Senator Inhofe. Thank you, Senator Jeffords.
We have been joined by Senator Thune from South Dakota and
Senator Vitter from Louisiana, and I ask if you have any
opening statement you would like to make at this time.
Senator Thune.
Senator Thune. Thank you, Mr. Chairman.
I don't have a long statement. I have got statement that I
would like to have included in the record. I do appreciate your
holding today's full committee hearing on an issue that could
have a potential impact on farmers in my State of South Dakota.
Senator Inhofe. Let me interrupt you. I was reminded that
Senator Voinovich, who was here first, had not given an opening
statement.
Senator Voinovich, did you want to?
Senator Voinovich. Mr. Chairman, I----
Senator Inhofe. We have a friendship that goes all the way
back to when we were both mayors of cities about 30 years, and
I don't want that to change now.
Senator Thune. I am glad to hear this doesn't have
something to do with seniority.
[Laughter.]
OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, U.S. SENATOR
FROM THE STATE OF OHIO
Senator Voinovich. Mr. Chairman, I am just glad that you
have called this hearing today to discuss the proposed rules
that streamline the Spill Prevention, Control, and
Countermeasures Program. I think that, from my perspective,
these rules need to be clarified. I thank you for holding the
hearing, and I will wait for my questioning time.
[The prepared statement of Senator Voinovich follows:]
Statement of Hon. George V. Voinovich, U.S. Senator from the State of
Ohio
Thank you, Mr. Chairman. I am pleased to be here today to discuss
the two proposed rules that are aimed at streamlining the Spill
Prevention Control and Countermeasure Program to help clarify some of
the confusion that is felt by those affected by this. I understand this
is clearly an important issue that affects our farmers, as well as our
airports and others. Thus, we are here today to better understand how
this rule will really help our constituents. For instance, I know the
Ohio corn growers were concerned about the effects of the 2002 rule and
how the rule would affect their members and Ohio farmers. By the same
token, they are heartened by some changes that are now being proposed
to the 2002 rule.
Today, we are examining whether those changes are adequate and
equitable. Thank you, Mr. Chairman, for holding this hearing, and I
thank the witnesses for being here. I look forward to your comments.
Senator Inhofe. Senator Thune.
OPENING STATEMENT OF HON. JOHN THUNE, U.S. SENATOR FROM THE
STATE OF SOUTH DAKOTA
Senator Thune. I would just echo what I said before. This
is an issue that has potential impact on a lot of farmers
across this Country and my State of South Dakota. As someone
who has some experience with the Small Business Administration,
I do appreciate EPA's willingness to work with SBA and other
stakeholders in an attempt to provide clarity to a rule that
has caused a great deal of confusion for those who use and
store petroleum products. While I would agree that it is wise
public policy to require spill prevention and countermeasure
requirements for facilities that pose a risk to the
environment, I don't believe it is necessary to require family
farmers to adhere to the same requirements that petroleum
terminals and electric utilities are currently required to
meet.
And thankfully, after a great deal of input from the
regulated community, I am pleased to see that EPA's proposed
rule will not be applied to farms with less than 10,000 gallons
of storage capacity until more data can be collected and
analyzed. I realize, as well, that while the EPA has attempted
to build in a great deal of flexibility when it comes to
compliance with the proposed rule, I also believe more can and
should be done to ensure that this rule is as targeted and
focused as possible.
And so, Mr. Chairman, like you, I have concerns regarding
various aspects of this rule, and in the interest of moving
along with this hearing, I will wait to ask questions when we
have an opportunity as well.
Thank you, Mr. Chairman.
[The prepared statement of Senator Thune follows:]
Statement of Hon. John Thune, U.S. Senator from the State of South
Dakota
Mr. Chairman, I appreciate you holding today's full committee
hearing on an issue that could have a potential impact on farmers in my
home State.
As someone who formerly worked at the Small Business
Administration, I appreciate EPA's willingness to work with the SBA and
other stakeholders in an attempt to provide clarity to a Rule that has
caused a great deal of confusion to those who use and store petroleum
products.
While I agree that its wise public policy to require spill
prevention and countermeasure requirements for facilities that pose a
risk to the environment, I don't believe its necessary to require
family farmers to adhere to the same requirements that petroleum
terminals and electric utilities are currently required to meet.
Thankfully, after a great deal of input from the regulated
community, I am pleased to see that EPA's proposed rule will not be
applied to farms with less than 10,000 gallons of storage capacity
until more data can be collected and analyzed.
While I realize that the EPA has attempted to build-in a great deal
of flexibility when it comes to compliance with the proposed SPCC rule,
I believe more can and should be done to ensure that this rule is as
targeted as possible.
Mr. Chairman, like you I have concerns regarding various aspects of
the SPCC rule and in the interest of moving along with today's hearing,
I will wait to ask additional questions of today's panelists until they
have had an opportunity to give their testimony.
Senator Inhofe. Thank you, Senator Thune.
Senator Vitter.
OPENING STATEMENT OF HON. DAVID VITTER, U.S. SENATOR FROM THE
STATE OF LOUISIANA
Senator Vitter. Mr. Chairman, I will look forward to
questions.
Senator Inhofe. All right, very good. Now we will continue
with our questioning.
Senator Murkowski.
Senator Murkowski. Thank you, Mr. Chairman.
Mr. Dunne, this is in the area of the airports and the
airplanes. In Alaska, as you probably know, we have a host of
small airports, very small airports, where we certainly would
not have storage capacity exceeding 10,000 gallons but probably
over the 1,360 gallons.
What will the effect be on so many of Alaska's very small,
little airports? What are we going to have to do out there in
order to comply with these regulations?
Mr. Dunne. Well, there are a couple things that I think are
worthwhile. The smaller airports are not going to be subject to
the same secondary containment as a larger airport, and they
are going to be able to make a decision in terms of what is the
best way. For instance, you could have a containment pad where
you have the tank and sort of absorb your oil there. Also, if
it is under 10,000 gallons, if that is what they store, they
don't have to have a PE come, and they can make their own
determinations. And, of course, the third thing is whether or
not they are close enough to navigable waters to make a
difference.
So I think there is some consideration and some relief we
have given the airports. We are still going to work with
airports, particularly the small airports and see if there is
more information that could be developed to make sure that we
don't add any more burden to the regulation already.
Senator Murkowski. The concern that we have is you may have
a little strip that serves a community of 35 people, where we
certainly want to do what we can to prevent any spills, but if
you go too far with this, you may not be able to comply and
meet these regulations because you have got to have these
containment areas in an area where you just don't have that
ability.
Let me ask you about the animal and vegetable oils
provision and the rule change there. In Alaska, we have a great
number of fish processors that store fish oil, and this is
again usually in excess of 1,360 but not exceeding the 10,000
gallon capacity.
How will this rule change affect those businesses, these
fish processing business?
Mr. Dunne. Well, basically, it will add the same advantage
that any other small business has or people who have small
amounts of oil that fall into that range between 1,320 and
10,000 gallons. The oil one is a difficult thing to deal with
because there is an interesting argument that oil is not toxic,
and indeed it doesn't have the same toxic characteristic as
petroleum as we generally think of it. Vegetable oil that gets
into water has some of the same effects. It has the same effect
as crude oil in that it will suffocate aquatic life. It can
create havoc in terms of drinking water systems. So I don't see
where we have been able to accomplish a heck of a lot, except
to give the small operators, as you mentioned, some relief in
terms of how they go about writing their plan.
Senator Murkowski. Well, and to that, Mr. Sullivan, maybe
you want to comment on this as well because you were speaking
to Senator Jeffords about this, and this is the allowance for
the self-certification. Now from Alaska's perspective where we
will have so many small business operations, I think that they
will welcome that as an opportunity, but the question really
remains, how we can explain that allowing for the self-
certification is not going to have significant environmental
risk.
Mr. Sullivan. Senator, I think that looking at the whole
set of requirements, in order to take advantage of the self-
certification, deserves some comment in this hearing. In order
to qualify for the self-certification, it is more than just
being a small business. It is, in fact, being a good
environmentally compliant small business because the reforms
strike the balance of recognizing that small businesses do not
have the where-withal to comply with too many rules,
regulations, laws, mandates, and so forth, but also should be
compliant with some level of environmental, work place safety,
and other regulations.
So, in order to qualify for the self-certification, you
have to have had no spills for 10 years. Or if you have been in
business for less than 10 years, you have to have documented
that you have had no spills in the entire time that you have
been in existence. Those same types of reforms that get into
the integrity testing, where small firms will be allowed to
have a visual inspection instead of hiring a PE or have
integrity tests, it is the same type of balance. You have to
have secondary containment. Those tanks have to pass stringent
fire code and FAA requirements in order for those tanks to even
be sold and purchased by those small airports.
So I want to make sure that the record does reflect that
these reforms strike the balance between removing unnecessary
or duplicative requirements, but at the same time, making sure
that there are environmental protections guaranteed.
Senator Murkowski. How much flexibility will actually be
worked into that, though? Because, say you have a company, a
small business that has been in operation in excess of 10 years
and did have a spill, and they handled their spill exactly as
anyone would want and had cleaned it up 100 percent. Do they
get any allowance for that, or is it, sorry, your 10 years has
to be completely untainted?
Mr. Sullivan. Senator, the self-certification reforms
really are about encouraging small facilities to come into the
regulatory system, establish a dialog with EPA and the regional
and district offices, even in Alaska. So if you are in the
scenario that you laid out, you have a small facility that
obviously has a history and a relationship with the local
office, there are enough flexibility in the enforcement regime
that EPA manages to make sure that a small facility that is a
good actor is treated as such.
Senator Murkowski. Thank you, Mr. Chairman.
Senator Inhofe. Thank you, Senator Murkowski.
Senator Voinovich, it will be your turn to ask questions. I
would like to acknowledge that you have made a request, it is a
good time for us to bring this up, of the Administration's
Great Lakes Plan, to have a hearing on that. The answer is yes.
You determine a time that you want to have that hearing, and we
will plan to do it early next year if that is acceptable with
you.
Senator Voinovich. Thank you very much. As you know I have
spent a lot of time on it. The President declared the Great
Lakes a National Treasure. The EPA has worked very hard on it.
I think it is appropo for us to have them in here and see just
exactly what they have done to make sure they are taking the
resources they have and utilizing them and getting the biggest
return on the investment. Also, I am really interested in
finding out, do they now have an orchestra leader, because we
had two hearings, and they didn't have one.
Senator Inhofe. I bet we will find out then.
[Laughter.]
Senator Inhofe. You have been championing that cause for a
long time, and it is time to get to the bottom of a lot of
unanswered questions, and you will have that opportunity.
Senator Voinovich. Thank you very, very much.
First of all, I would like to say, thank you for holding
the hearing. Second, I think it is terrific that the two of
you, that your agencies have worked together. One of the things
that has always bothered me, as a mayor and then as a Governor,
was that it seemed like Federal agencies didn't talk to each
other. On one hand, we are trying to create small business and
help them out, and you have got the EPA over here, doing their
thing. Many times, they were working across purposes. So I
congratulate you for the communication that has gone back and
forth.
Another thing that I would be interested in, just to see
how it works, is that when I was Governor I came to this
committee and worked with the National Governor's Association
to require cost benefit analysis under the Clean Water Act,
peer review, and then look at alternative regulations that
would not be so onerous on the private sector. I would be
interested to see the paperwork that was done on the cost
benefit analysis on these rules. I appreciate your sending them
to my office or the committee.
Mr. Dunne. Sure.
[The referenced Information can be found on page 255.]
Senator Voinovich. I think the real problem that we have
right now, and I am not as familiar with it as the Chairman in
terms of airports and so forth, but in terms of the farm
community, that is really where I have heard most of our
complaints: What in the heck is going on? What are these people
doing. Are they crazy? I will say that our corn growers are
happy with the fact that you seemed to listen, and there are
some changes being made. I think it is really important that we
have as much of a clarification of what all of this means, so
they are not out there getting hot about something that they
shouldn't be getting hot about.
I would just be interested in: What are you doing to try to
communicate just exactly what these rules through the Farm
Bureau and other farm organizations in this Country?
Mr. Dunne. Well, our people who have developed the rule
have met a number of times with people from the agriculture
community. And, Senator, we are committed to work with USDA in
terms of coming up with even more and better data to make sure
that we have struck the right balance in this.
All facilities, including farms, have been covered under
this act since 1973. The fact is I suspect there has not been
good communication since the inception of that legislation or
that rule. A lot of farmers didn't understand what their
responsibilities are. So I think we are going to continue to
look at the farm issue and the farm problem to make sure that
we have struck the right balance of having people stay in
compliance if they are storing large amounts of oil. Certainly
the intention of this rule right now, the 2002 rule and what we
are doing in having an extension, is to reduce burden wherever
possible and to have some kind of balance between environmental
compliance and making sure any business, including farms, don't
suffer disproportionately in terms of the burden that the
Government regulations put on them.
Senator Voinovich. Specifically, one of the things in the
guidance that was addressed is it attempts to clarify the
facility owner or operator as some discretion to define the
facility. However, it goes on to put limitations on the
discretion. It was our understanding that farmers who own
several parcels of land spread over hundreds of acres could
self-define several facilities within that area. However, I am
not sure that it is very clear in the guidance as to how that
would work.
Can you state for the record that farmers and others who
own very large facilities spread out over large amounts of land
will be able to divide up their parcels in a reasonable fashion
to make compliance with the rule more manageable?
Mr. Dunne. I will take a look at that, Senator. I am not
exactly sure how many of these farms we are talking about. I do
understand the point that you are making is that a farmer that
may be doing 10,000 acres of farming would have different
plots, not adjacent or contiguous to each other, and whether or
not they can be considered separately. I think that is a
reasonable observation to make.
Senator Voinovich. The other thing is: Who defines
navigable waters? I know in the pieces of paper that you put
out, I read that.
Mr. Dunne. Well, it is in court right now, Senator.
[Laughter.]
Mr. Dunne. We did have some lawsuits against us, and we
were able to negotiate everything except navigable waters. It
is in the U.S. District Court for hearing right now.
Senator Voinovich. So that once that court decision is
made, that will clarify it?
Mr. Dunne. Sometimes it never does, does it?
[Laughter.]
Mr. Dunne. We will see.
Senator Voinovich. Any information you have got on that, I
would be very interested.
Mr. Dunne. We will send that.
Senator Voinovich. Our people are real interested in that.
Thank you, Mr. Chairman.
Senator Inhofe. While we are defining, let us also define
reasonable expectation of discharge. One of the problems we
have here is a lack of definition that makes it very difficult
for us. It should be evident to both of you and other witnesses
that the seven Senators up here all come from agricultural
States. I know that we have a lot of concern in my State of
Oklahoma, and I am sure they hear just as much as we do.
Senator Thune.
Senator Thune. Thank you, Mr. Chairman.
I would echo some of that. I would love to know the
definition of a navigable waterway because there are a lot of
dry creek beds in South Dakota that I suspect might qualify
which probably have no business being in this. Also, the
expectation of discharge because that, to me too, is
fundamentally what we are talking about.
When I mentioned earlier the whole issue of targeting and
focusing this rule to where it really is effective in capturing
in the net those particular operations that are really the
issue, that, to me, seems what we are after here. This wide net
that applies to so many different operations seems to me to be
extremely inclusive and particularly harmful in terms of the
economic impact it would have on a lot of farm operations. I am
not talking big farm operations; I am talking small and medium
size farm operations.
With regard to inspections, the program covers over 600,000
facilities, I am told. From what I understand, the inspection
rate is extremely low. One of the recommendations made by both
GAO and the Oil Spill Task Force in the late 1980's was that
EPA should establish inspection priorities.
I guess into tying in how this becomes more focused or
targeted, I am interested in knowing what the Agency's view is
on those recommendations, and has anything happened since they
were made?
Mr. Dunne. Well, we do less inspections today than we did
maybe in 1986. I did look at the chart. I think that the 1986
high mark was because of a flurry of oil spills during that
particular time.
I can tell you this, Senator, we are not specifically going
to be targeting small farmers. In fact, I will guarantee you
that we will not be. Particularly, the reason we extended this
rule to October 31, 2007, which is almost 23 months, is to give
everybody a chance to get in compliance. We are not looking at
this as a hammer. We are looking at this as if we can make our
guidance and regulations much clearer in terms of what is
expected. So we are not expecting to go into any small business
and target them, even though they may have been covered for the
last 32 years.
Senator Thune. I am told there are roughly only about 1,100
facilities that are inspected each year, which would suggest
you have a lot better chance of being audited by the IRS than
you have actually of being inspected here.
Then if you could clarify, too, one other question
regarding which farms under 10,000 gallons qualify for the
indefinite extension of the compliance date. I ask that
question, too, because I have heard conflicting interpretations
that it would only apply to farms that are currently in
compliance with the 1973 rule, which is somewhat confusing to
me, seeing that an overwhelming majority of farmers were
unaware that that ruling applied to them until it was amended
in 2002.
Mr. Dunne. I think that is a correct interpretation. If you
were covered by the rule, whether or not you knew it or not,
you should have a plan or you should be developing a plan, or
amending if that is necessary. So the extension of the date is
you get plans up to date to October 31st, 2007, before
implementation. A farm that has not been in compliance is going
to have ample time to get into compliance by 2007.
Senator Thune. The delay would apply widely then. I guess
what I am asking is: Is the EPA's reprieve a very narrow one?
Mr. Dunne. Yes. It is not as broad as all 152,000 farms,
and I think that is an accurate figure that we think are
covered, don't have to do anything between now and October
31st, 2007. If they were covered by the rule before, and they
didn't know it or didn't for any reason, they have to develop a
plan, and they have to do that as soon as possible. The
implementation date when we will take a look at those plans on
whether or not people are in compliance will be after October
31st, 2007.
Senator Thune. The exemption then is going to be very
narrow to those 2002 people.
Mr. Dunne. That is correct. That is correct.
Senator Thune. Well, I am not sure that helps a lot or does
what we need to do for a lot of the farmers who are going to be
impacted.
Let me just make one, I guess, final comment if I might,
Mr. Chairman. I appreciate that clarification. It is probably
not the answer I was looking for. It seems to me, at least,
that the USDA data that I have looked at suggests that this
could be a $4.5 billion cost, projected compliance cost, for
farmers and also very little evidence of oil spills by farmers.
If you break that down on a per operator type basis, you are
talking conceivably, according to USDA's numbers, about almost
$13,000 for an average tank size of 6,700 gallons.
Again farm operations, to be profitable in this day and
age, have to have some economies of scale working for them. In
most cases, your really small farms, it is just hard to make
ends meet. As a consequence, these farmers are getting into
farming 1,000 acres or 2,000, or 5,000 acres anymore. You are
likely to have, as was noted earlier, several different
locations. When you aggregate all these things and add them up,
the compliance costs become very, very significant.
It would seem to me, too, that at a time when we are asking
our farmers to compete in the world marketplace against
countries, many of whom have no such requirements imposed on
their agricultural economies, and we are fighting every 5 years
in a new Farm bill for programs, that it is getting harder and
harder to build political support from some of our colleagues
in other parts of the Country because they say: We want to put
more money. We don't want to subsidize. We want to have these
farm programs in place. Yet, we impose these costly
regulations.
This is the kind of stuff that we have got to be thinking
about. Having an approach that really does identify, and I
think hone in on the real problem, rather than casting a very
wide, broad net that adds exorbitant amount of cost to
production for agriculture in this Country and puts us at a
competitive disadvantage with those that we are trying to
compete with in the global marketplace.
So I think this is a very important issue to address and
have resolved. I, again, appreciate the Chairman's leadership
in calling this hearing and having us examine this issue and
look at what we might do to further clarify and hopefully, in
working with the agricultural community, make this workable in
a way that captures the operations that are really creating the
risk and the danger, and not just putting this enormous cost on
the backs of your average farmer across this Country. It
doesn't seem right.
With that, I yield back, Mr. Chairman.
Senator Inhofe. It is obvious you have heard from the same
people I have.
Senator Vitter.
Senator Vitter. Thank you, Mr. Chairman, and I have, too. I
mostly want to echo those same concerns, and a big part of the
concern is just a concern about lack of clarity.
Senator Voinovich mentioned this very important issue of
non-contiguous parcels. To what extent can those be put
together to define one entity? To what extent can't they be? I
think that is very important to have crystal clear clarity
about.
Just as an example of the lack of clarity I am concerned
about, the guidance document itself says at one point, FE
Inspectors should evaluate the intended activity carefully
because a determination of jurisdiction is not always straight
forward.' For that sentence to be in the guidance document
isn't particularly confidence inspiring in terms of creating
clarity, which is what the guidance document is supposed to do.
So I, first and foremost, want to echo all of those concerns
that are very important.
I also want to ask you quickly about the impact on the
aviation community. I know they have been seeking some changes
to EPA's interpretations since 2002 because of some safety and
operational concerns at airports. To what extent did EPA
consult with the FAA then or now in terms of the proposed
revision?
Mr. Dunne. Our staff did have a number of meetings with the
FAA. I think it is clear that we did provide relief from the
secondary containment issue that makes it much more flexible
for small airports in particular to not necessarily put up big
barriers or big booms around trucks that are parked at night or
storage tanks that they have. I think that is one of the things
which the aviation community had asked for, and we were able to
satisfy it I believe in the regulation.
But we are also committed, as we are on farms, to ensure
that we continue to work with the regulated industry to make
sure that we strike the right balance between the concern of
environmental protection of our waterways and make sure that we
are not placing undue burden on airport operators or farmers.
Senator Vitter. OK, thank you, Mr. Dunne.
And then very quickly for Mr. Sullivan, is this rule part
of a larger reform effort for the manufacturing sector, and can
you describe that larger effort?
Mr. Sullivan. Yes. What the Senator is referring to is the
Office of Management and Budget's call for regulatory reform
nominations. This has been underway for some time, several
years. Two years ago, John Graham who heads the Office of
Information and Regulatory Affairs called for regulatory reform
nominations, particular to the manufacturing sector. There were
three environmental reforms that my office actually has been
working with the EPA and the Office of Management and Budget to
see some progress on. This is one of them, and it is certainly
a high priority for EPA's reforms particular to the
manufacturing sector.
Senator Vitter. Thank you very much. That is all I have,
Mr. Chairman.
Senator Inhofe. Thank you, Senator Vitter.
We thank both of our witnesses very much for the time you
have given us, and we would dismiss you and ask the next panel
to come forward.
The next panel has, from my State of Oklahoma, Brent
Cummings who is in the oil business. One of the things I have
noticed out of the three hearings we have had, Senator
Jeffords, where we have had people from Oklahoma in the oil
business. I think by now they realize these are not giants;
these are just small business people that are scratching out a
living.
We have James Coyne, a dear friend of mine, one with whom I
served in the other house, representing the National Air and
Transportation Association. We park together when we fly our
airplanes up to Oshkosh each year.
Richard Owen, Director of CHS, Incorporated; Dr. Riki Ott,
the Author and Marine Toxicologist; and James J. Corbett. Dr.
Corbett is the Assistant Professor of the Marine Policy Program
at the Graduate College of Marine Studies, University of
Delaware.
We will start in the order that I mentioned with Mr.
Cummings and then go across. I would like to ask you to try to
confine your opening statements to 5 minutes, and your entire
statement will be made a part of the record. If any of you have
brought with you members of your family, feel free to introduce
those, and that will not be taken away from your time.
Mr. Cummings.
STATEMENT OF BRENT CUMMINGS, VICE PRESIDENT, CUMMINGS OIL
Mr. Cummings. Good morning, Mr. Chairman, members of the
Committee. I am Brent Cummings. We have a family crude oil and
natural gas exploration and production company, Cummings Oil
Company, located in Oklahoma City.
I appreciate the opportunity to appear before this
committee today, and I offer my remarks from the perspective of
a small, independent oil and natural gas exploration and
production operator, and on behalf of the Oklahoma Independent
Petroleum Association, an association of more than 1,600 oil
and natural gas producers.
Senator Inhofe. Mr. Cummings, if you could just pause there
for a minute. What I have tried to do is to make sure people
understand that there is a big difference between the giants
and the independents, and sometimes the needs aren't the same.
So I appreciate the fact that you are characterizing what you
have as a family business.
Mr. Cummings. Thank you.
I have a degree in Petroleum Engineering, and I am
responsible for all aspects of our field operations, including
drilling, completion, and production operations. A significant
and continuously increasing part of this responsibility
includes making sure our company is compliant with numerous
Federal environmental requirements under the Clean Water Act,
the Safe Drinking Water Act, the Clean Air Act, SARA Title III,
Federal Emergency Management Agency, U.S. Fish and Wildlife
Service, Historic Preservation, Bureau of Land Management, in
addition to a variety of State requirements.
Oklahoma is a mature energy producing State. A significant
aspect of our production involves the critical role of marginal
wells. The Interstate Oil and Gas Compact Commission defines a
marginal oil well as producing 10 barrels or less of oil per
day, and a marginal gas well as producing 60 million cubic feet
or less of gas per day. Over half of Oklahoma's oil production
comes from marginal wells, which account for approximately 41.4
million barrels of crude oil per year from approximately 48,000
marginal wells.
As Senator Inhofe mentioned, our members explore for and
produce crude oil and natural gas. In contrast to the large
integrated companies, our members do not refine crude oil, and
we do not market gasoline or heating fuels.
A new SPCC rule was finalized and became effective August
16th, 2002. Prior to and since that day, OIPA has raised
significant concerns regarding the adverse impacts of these
regulations on oil and natural gas production in Oklahoma. On
December 2d, 2005, the EPA produced another rule to clarify
some of the issues raised with the 2002 rule, as well as a
guidance document for its inspectors. Unfortunately, none of
our issues are addressed in the proposed rule, and the guidance
document leaves too much to regional inspectors to interpret.
The intent of the SPCC regulation is to prevent release of
oil into waters of the United States The EPA's broad
interpretation of the definition of waters of the United
States, that includes such things as dry arroyos, drainage
ditches, and road bar ditches, is unreasonable. The various
court decisions have complicated this issue as well.
Additionally, the guidance document does not provide any
clarity on what is waters of the United States.
The SPCC's current one size fits all requirements do not
take into consideration the risk of marginal crude oil and
natural gas wells as compared to larger bulk storage facilities
and refineries that have high throughput and large single tank
storage volumes.
As previously stated, the intent of the SPCC rule is to
prevent and control oil discharges, not produced water
discharges. Oil and gas exploration and production equipment
used to treat produced water should be subject to the same
wastewater exemption to the same extent as similar facilities
in other industrial sectors.
At non-exploration and production sites, process equipment
is excluded from the definition of bulk storage containers,
where as at E&P facilities, this type of equipment is
considered bulk storage containers and subject to secondary
containment requirements. The EPA has singled out the E&P oil
and gas water separation facilities for an increased level of
regulation while facilities in other sectors using similar or
nearly identical technologies are allowed to be exempted from
these rules.
The requirement for containment around flow lines and
gathering lines is unrealistic and impractical. A more
reasonable approach would be to allow operators to implement
flexible and reasonable, risk-based flow line inspection and
maintenance programs, not prescriptive corrosion, integrity, or
pressure testing which can be extremely costly for small
operators.
Design, construction, and maintenance of secondary
containment around oil tanks are the most beneficial ways to
prevent spills. Even though the EPA has recently proposed to
streamline the process for smaller facilities in a recent
proposal, the proposed threshold does not address marginal
crude oil levels.
The 2002 SPCC rule includes numerous administrative
changes, taken as a whole, greatly expands and increases the
impact of the rules on the regulated community. All these
changes take away the flexibility of the professional engineer
or the owner-operator to address the various site specific
conditions.
Additionally, we have never seen a cost or energy impact
analysis of the 2002 regulations or data that supports the need
for changes provided in this SPCC rule, affecting the E&P
sector. We are aware that the Department of Energy has recently
initiated a cost impact study and believe that the results will
be very beneficial.
Senator Inhofe. Mr. Cummings, try to wrap it up, if you
would, please.
Mr. Cummings. OK. Finally, the EPA should clarify how it
plans to address the API litigation settlement agreement issues
as it relates to the 2002 SPCC rules. The EPA should follow
through with a rulemaking to clarify these issues.
We urge the EPA to develop a regulatory approach that is
appropriate for our industry. This approach would include a
clear, concise, and reasonable definition of waters of the
United States for the E&P industry and focus on those
facilities that reasonably can be expected to impact those
water, include a benefit/cost analysis of the requirements
being considered and implemented, address the real
environmental risk of domestic exploration where past
experience has demonstrated a true need for the regulation, and
provide a practical, economic regulatory scheme that small
operators can understand.
I appreciate the opportunity to submit these comments.
Senator Inhofe. Thank you, Mr. Cummings.
Mr. Coyne.
STATEMENT OF JAMES COYNE, PRESIDENT, NATIONAL AIR
TRANSPORTATION ASSOCIATION
Mr. Coyne. Mr. Chairman, Senator Jeffords, and members of
the committee. It is a pleasure to be here. My name is James
Coyne. I am the President of the National Air Transportation
Association which represents nearly 2,000 aviation business at
literally thousands of airports across the Country in almost
every corner.
I would also like to mention that I am also not unfamiliar
with some of the important environmental issues that are
important in this decision. Before I joined Congress, I worked
for one of the most distinguished environmental consulting
companies in the Country. I was the individual responsible for
the arrest and conviction of the very first person who was ever
sent to jail for polluting our Nation's navigable waters in
1978. I served on the Environmental Study Conference in
Congress with Senator Jeffords.
Of course after Congress, I was the Washington head for the
Roy Weston Company which is one of the most distinguished
environmental consulting firms in the Country, and I also
served as President of the American Consulting Engineers
Council which represents the professional engineers which
support and service the environmental industry.
But my reason for being with you today is to discuss the
impact of these spill prevention, control, and compliance
measures on the aviation industry and the importance of a
partnership being developed between the EPA, and the FAA, and
industry, and Congress to produce reasonable regulations which
will benefit all Americans.
I have a rather involved testimony here, which I hope you
will submit to the record, but I would like to just briefly
summarize one or two of the points in that testimony for you.
The first question is whether or not fuel spills are a
significant problem at airports from refuelers. We are mostly
concerned with the impact of these regulations on fixed-base
operators and aviation users at airports. While we recognize
that fuel spills are an important issue anywhere in the
Country, we have to ask the question: Are refueling trucks at
airports a significant cause of fuel degradation into our
waterways? The simple fact of the matter is that we see no
evidence that that is the case.
Since I have been with NATA now for nearly 12 years, we
have been intimately involved in the management and the
training of FBOs and aviation professionals to deal with the
management of fuel at airports across the Country. During that
time, we introduced the Nation's leading program for the
management of fuel at airports, something called the Safety
First Program, which is responsible for not only the
environmental protection but also the protection of
individuals, employees, and facilities at airports.
During that program, we have maintained very careful
records of potential fuel hazards at airports, and we do not
have a single example, in the time period that we are talking
about, of an airport refueling truck rupturing in any manner
and causing a fuel spill into the environment. Now that is not
to say there are not other fuel contaminations at airports that
stem from the fuel farms, from airplanes themselves, or others.
With regard to the refuel trucks themselves, we don't have any
evidence that this is a problem.
We have asked the EPA to give us evidence or whether they
have any examples from their reporting data of this being a
problem, not only in the last 5 years but since the invention
of the airplane. And, unfortunately, we have not received back
from them any evidence at all that this is a problem. Of
course, that is not to say it is not theoretically a problem,
but theoretically already our industry is doing a great deal to
respond to the potential risk of a fuel spill.
I have here for you an example of the training document
that we give to every FBO in the Country, so that they go
through a very intensive safety and environmental protection
management program to ensure that fuel is not spilled at an
airport. Frankly, they have a very compelling reason for doing
this, not only the protection of the environment but the simple
economic reality that they are in the business of selling fuel.
And a fuel spill is a tremendously costly event for an
airport, and they want to do everything that they possibly can
to prevent a spill. I submit that the refuel trucks that we
have operating on airports today are the most capable trucks in
the environment anywhere for ensuring that spills do not
happen, and the record has shown that this is the case.
Now the second question to ask is whether there would be
unintended consequences if we impose draconian rules on these
airport locations. I think that is very clear to envision where
you would force airports to put all of their fuel trucks in one
location, obviously making the risk of a significant spill
greater or a significant fire or a terrorist act.
But more than that, you would be increasing dramatically
the amount of truck traffic back and forth across the airport
as every truck goes to and from one distant appropriate spot.
So you would have more pollution; you would have more risk of
accidents on the airport; and you would have a lot more
confusion at the airport as well.
Finally, I would like to just give you an example of the
type of care that our member employees do. This is a daily line
report that is required for our members to do at airports,
where each time they get into the truck each day, they do this
kind of inspection. I would like to submit this for the record
as well to show you that a great deal of care is being taken by
airport managers to ensure that we do not have a spill.
Finally, of course, the most significant effect, if we had
draconian regulations, would be that many airports in America
would simply stop selling fuel because the cost of it would be
too great, the cost of the secondary spill prevention tests,
the construction, and so forth at facilities. These small
airports which might currently only sell a few tens of
thousands of fuel a year are very, very important airports to
the American aviation system. So we have got to preserve access
to them.
Fortunately, the EPA has responded, I think, in an
intelligent way to some of the concerns that we have had. The
new proposal that has just come out seems to address many of
these issues.
Unfortunately, as Senator Thune mentioned in his questions
about agriculture, there still is a great deal of confusion in
this NPRM, especially about the time at which it goes into
effect for the member companies. We feel that we need great
clarity from the EPA on this issue as to when the effective
date of the rule is for the affected businesses across the
Country. We hope that this Committee will have some impact in
persuading the EPA to help clarify that.
Finally, I would just like to thank the members of the
Committee for their interest in this important subject and
their support for better cooperation between the EPA, the FAA,
and the industry.
Senator Inhofe. Thank you, Mr. Coyne.
Mr. Owen and the other two witnesses, feel free to go a
little bit longer since the first ones did.
Mr. Owen.
STATEMENT OF RICHARD G. OWEN, DIRECTOR, CHS, INC.
Mr. Owen. Thank you, Mr. Chairman, members of the
committee. My name is Richard Owen, and I am a third generation
farmer from Central Montana. I raise non-irrigated wheat and
other crops, and I am an elected Director of CHS, Inc., the
Nation's largest farmer cooperative.
I am here today on behalf of the Agriculture Coalition,
representing farmers, cooperatives, and related agribusinesses.
We appreciate EPA's recent efforts to develop a more realistic
approach to its SPCC regulations. However, we are still
concerned about the impact of its 2002 regulation and its
December, 2005 proposal.
Under EPA's existing 2002 regulations, any facility,
including farms and ranches as well as farmer cooperatives and
other agribusinesses, with aggregate storage of 1,320 gallons
of oil must have an amended oil spill prevention plan certified
by a professional engineer by February, 2006, and implement
that plan by August, 2006. This includes building secondary
containment, such as berms or drain basins, constructing
fences, providing lighting, security, and monitoring, and
performing tank integrity testing and other requirements,
according to a recent USDA study which I would like to submit
for the record.
[The referenced report can be found on page 260.]
Senator Inhofe. Without objection, that will be a part of
the record at the conclusion of your remarks and the same with
Mr. Coyne's report. It will be included in the record at the
conclusion of your remarks.
Mr. Owen. Thank you, Mr. Chairman.
The EPA's regulations would cover nearly 70 percent of all
farms as well as many other agribusinesses. For farmers alone,
USDA estimates the total cost at $4.5 billion. These
requirements would apply, even though the same USDA study found
less than 1 percent spill history in the case of production
agriculture. Many of EPA's requirements are extremely
impractical, given the unique characteristic of farming.
Imagine fencing whole farms or running wire to remote sites for
monitoring across many miles to reach other small refueling
sites, especially when you have multiple parcels or fields.
Based on this, we believe a strong case can be made that
farmers and ranchers should be exempt from such requirements.
That said, we have been working with EPA in good faith for the
past 3 years in support of a more workable approach to address
agriculture's concerns. We have also called for a further
extension of existing compliance deadlines.
As part of its December, 2005 proposal, EPA would provide
an indefinite extension for compliance with its 2002
regulations for all farms with aggregate storage capacity of
10,000 gallons or less until more information can be collected
to determine if differentiated SPCC requirements may be
appropriate. For farms and ranches with aggregate oil storage
over 10,000, the EPA has proposed that the compliance dates be
extended to October 31, 2007. We believe that EPA should
exclude all farms, pending such review.
We also want to comment on the new proposed 10,000 trigger.
Although it is a significant improvement over the current 1,320
gallon trigger, it would still hit many farmers. This is
because EPA continues to look at a farm as a single facility
based on a total number of gallons. We continue to urge that
EPA adopt a site-specific approach. An aggregate standard may
make sense for a large terminal but not a farming operation
where you can have many different fields or parcels with
multiple fueling sites and tanks that are sometimes filled only
on a seasonal basis.
Finally, we continue to be concerned over the potential
impact in costs of such regulations on many farmer cooperatives
and other agribusinesses that serve farmers.
Again, on behalf of the Agriculture Coalition, we
appreciate the opportunity to testify before this committee. We
look forward to working with you as well as EPA to address the
concerns of agriculture, while continuing to meet important
environmental objectives.
Thank you very much.
Senator Inhofe. Thank you, Mr. Owen.
Dr. Ott.
STATEMENT OF RIKI OTT, Ph.D., AUTHOR AND MARINE TOXICOLOGIST
Ms. Ott. Thank you for inviting me to testify on the oil
spill prevention standards.
My name is Riki Ott, and I have a Master's and a Doctorate
in Marine Toxicology with a focus in oil pollution. I come from
a small fishing community that is still trying to recover from
the long term economic, social, and environmental harm from the
Exxon Valdez oil spill, 16 years ago.
I would like to share three lessons from our tragedy with
this committee and explain how each relates to the SPCC
proposed ruling. These lessons are: One, oil is far more toxic
than we thought; two, prevention is critical; and three, better
safer cleanup products need to be used.
A paradigm shift in the scientific understanding of oil
toxicity has occurred since the passage of the Clean Water Act
and the Oil Pollution Act of 1990. The 1970's science holds
that the oil components, toxic oil components, dissipate
quickly, and sublethal effects are limited to invertebrates and
occur at exposure levels of parts per millions. This science
underpins the risk assessment assumptions used by EPA in its
proposed rule change.
The collapse of pink salmon and Pacific herring stocks in
Prince William Sound, well after the Exxon Valdez spill, was a
tipping point for science. Now scientists link long term harm
to fish and wildlife with a particularly toxic fraction of
crude oil called polycyclic aromatic hydrocarbons or PAHs. PAHs
were largely ignored by the 1970's science.
Scientists now realize that crude oil is 1,000 times more
toxic than previously thought and that levels of 1 to 20 parts
per billion PAHs impair reproduction, disrupt cellular
function, and generally decrease overall fitness of
individuals, resulting in declines of populations of birds,
fish, and mammals. I've attached an article summarizing the new
oil toxicity paradigm (Peterson et al., Science 2003).
[The referenced article was not submitted at the time of
print.]
Further, these effects are still happening in areas once
heavily oiled. This was completely unanticipated by the 1970's
science, that we would have still relatively fresh toxic oil on
our beaches and that it would still be bioavailable.
I have a sample collected from a beach in Prince William
Sound this past summer that I would like to pass around for the
committee. Make sure that you take the lid off to get the full
effect.
Findings in the medical field show that low levels of PAHs
also harm public health. The upshot of all this new level of
understanding on oil toxicity is that in 1999 the U.S. EPA
added 22 PAHs in crude oil to its list of persistent
bioaccumulative and toxic pollutants. This list includes lead,
dioxin, mercury, PCBs, and DDT.
After 34 years, I agree with my Senator that it is time to
update some old laws, but we need to update the old laws so
that they match with the new science. I was shocked to hear the
EPA representative declare that the science has no effect on
this proposed rulemaking. The 1990's oil toxicity science
supplants the 1970's science and changes the risk assessment
equation. Since oil exposure causes greater known risk to the
public and the environment, we need to increase, not decrease,
spill prevention standards to reduce the likelihood of spilling
oil.
EPA's proposal to reduce spill prevention standards
essentially guarantees that small facilities will have more
spills. Why? Because industry observers, including the Coast
Guard, the National Research Council, and the EPA attribute
reduced spillage to strong prevention standards and increased
financial liability.
Reducing oil spills and oil pollution is a matter of
holding operators accountable before and after spills. Oil
companies are experts at externalizing costs to society and the
environment. Facility owners should be held responsible for
spill prevention, not exempted from it, thus passing the risk
to the public.
The third problem with reduced spill prevention standards
is that it virtually ensures more chemical products will be
used because this is industry's preferred method of cleanup.
Chemical products often contain industrial solvents to dissolve
oil and grease, and thus are environmental hazards. One
dispersant that was used during the Exxon Valdez cleanup, and
that is currently stockpiled in Alaska, California, Washington,
Hawaii, Texas, Florida, and New York contains an OSHA human
health hazard and a warning to ``Prevent liquid from entering
sewers, watercourses, or low areas. Contain spilled liquid.''
Why is this allowed?
The EPA maintains a schedule of chemical products for use
in spill cleanups. However, the EPA only screens products for
effects on wildlife and the environment, not humans. Yet, it is
not just the environment that is at risk when chemical products
are used. It is spill responders, and the public in places of
multiple use and where drinking water or land may become
contaminated. There are no guarantees that the products are
safe for the environment either, as pointed out in a paper by
EPA staff which I have attached. (Nichols 1999).
[The referenced paper was not submitted at the time of
print.]
Other problems with the product schedule that should
concern this Committee are a loophole in Subpart J which allows
crude oils to be blended for product testing, no formal
delisting process in Schedule C, and no requirement to test
stockpiled product periodically to ensure effectiveness.
In summary, much of what I have discussed is covered in my
book, ``Sound Truth and Corporate Myth$: The Legacy of the
Exxon Valdez Oil Spill,'' which I would like to leave with this
Committee. I urge this Committee to maintain high spill
prevention standards for all operators, and to insist that EPA
incorporate its new oil toxicity science, and weigh the
increased risk to all Americans against the benefits to the few
from cost savings on oil spill prevention measures.
Thank you for this opportunity to testify.
Senator Inhofe. Thank you, Dr. Ott.
Dr. Corbett.
STATEMENT OF JAMES J. CORBETT, Ph.D., ASSISTANT PROFESSOR,
MARINE POLICY PROGRAM, GRADUATE COLLEGE OF MARINE STUDIES,
UNIVERSITY OF DELAWARE
Mr. Corbett. Good morning, Mr. Chairman and members of the
committee.
I am James Corbett. I am an Assistant Professor in the
College of Marine Studies at the University of Delaware. The
College of Marine Studies is an interdisciplinary unit that
conducts research and education regarding fundamental and
applied problems in environmental science and policy. My
research develops and applies tools and analyses to help reveal
and evaluate technology policy alternatives related to energy,
environment, and transportation.
Additionally, I have experience as a practicing
professional engineer who helped facilities comply cost
effectively by certifying Spill Prevention, Control, and
Countermeasures Plans, and I have experience as an operating
engineer of facilities and ships that store, transport, and
handle oil.
SPCC plans protect businesses, both small and large, from
direct cleanup costs and liability for damages. Oil spills and
discharges from routine operations impair our Nation's fertile
land, the water network that gives it life, the living
ecosystems impacted by oil toxicity, and the public health. The
costs of preparing SPCC plans afford businesses the benefits of
fewer spills, better control of routine discharges, and
countermeasures that may contain spills within the facility
instead of polluting a facility's neighboring communities and
environment.
In other words, SPCC plans are recognized successes at
minimizing the burden of oil spills to business and society
because they reduce the risk, both the likelihood and the
consequences of oil spills.
From a policy perspective, good environmental regulation
reduces impacts and costs of pollution that are external to the
facility's normal operation. This remains an explicit purpose
of the original SPCC plan requirements and objectives. In this
regard, a good SPCC plan is more cost effective through
prevention, control, and countermeasures within a facility than
the direct and indirect costs of responding after a spill.
EPA's proposed revisions raise the question whether it is
more beneficial to act to prevent an event or to respond
afterwards. EPA uses a rationale that argues it is better for
small facilities to bear the greater burden of liability
without adequate spill prevention measures.
Specifically, I have three major policy concerns. No. 1,
preventing spills appears in the revised rule to be less
important for small facilities. Without any risk-based
justification, this provision implies that only facilities
large enough to afford spill prevention plans should be asked
to do them, while leaving smaller facilities exposed to the
risk of higher cleanup and liability costs. More frequent yet
smaller volume spills and discharges can occur from smaller
facilities contrary to EPA's summary statements.
This is No. 2. The rule indefinitely allows agricultural
facilities to avoid SPCC plan compliance even though spill
prevention may better protect rural farming areas of our
Nation. PE expertise, in fact, can help farmers whose job is
feeding America by providing the expertise for alternative
prevention measures.
And No. 3, the proposed revisions weaken certification
requirements by relying less on independent professional
expertise. Justifying self-certification of SPCC plans on the
basis that no spills occurred in the last decade is like
allowing me to write prescriptions for my child, instead of
requiring a physician's educated examination and judgment,
because my child hasn't had a serious illness in the last 10
years. It provides no public guarantee or sufficient
requirement that the person certifying the plan possesses
education, professional qualification, and the commitment to
public safety that the professional engineer license does
require.
I think what I will do at this point is let the rest of my
testimony be submitted in written form and welcome any
questions that you may have.
Senator Inhofe. Well, thank you, Dr. Corbett.
We will have a series of questions. It is my understanding
that both Senators Carper and Voinovich will be coming back,
and they will join us in the questions if they do make it back.
Mr. Coyne, as you know, I am very familiar with how
airports operate, and I think of a berm and what that would do
in terms of safety. Well, let me ask you this way. I notice at
almost every airport I go in and out of, the drains are there.
I assume that might be local jurisdiction, or it might be
State, or is that a Federal law? And why would that not take
care of the risk that would be there in the case of an oil
spill the same as a berm would?
Mr. Coyne. I think that the only thing you can really say
about airports across the Country is that every one is
different. Some of them are owned, of course, by private
entities; some of them are owned by the local Governments; some
of them are owned in conjunction with something like the Port
Authority. So they have a wide group of regulations. And,
obviously, the location of the airport affects a lot of the
drainage requirements as well, the State requirements.
But I think your point is quite accurate that there are
very significant local and Federal and State regulations that
affect drainage that exists at airports. Now these rules
typically are managed by the FAA in conjunction with EPA and
local and State Government. One of the things that has been
troubling about this process over the last 4 years since 2002
is that the EPA and the FAA really didn't have very good
communications between the two of them until very recently.
But I think you are absolutely right. The drainage
alternative is clearly much preferable to the whole question of
berms because berms at an airport are almost impossible to
envision in a practical sense. You have got issues that would
be involved with water collecting on the berms and turning into
ice and becoming a hazard. You have got issues related to snow
removal. You have got issues related to aircraft moving around.
Especially also you have the issue of many airports, as you
know, have two or three or four or five or six FBOs providing
fuel. From all of those trucks, from all the different sides of
an airport, to be told to go to one location because it is
bermed, you would have trucks driving back and forth across
runways, across ramps and so forth, all to go to one particular
location, tremendously increasing the amount of truck activity
at an airport, increasing air pollution, increasing the risk of
an accident.
It is much more logical to have those trucks parked close
to where the planes are going to be coming in and allowing them
to be ready. As you know, a plane can arrive at any time 24
hours a day. So you have got to be ready to deal with that
uncertainty.
So we feel that requiring all of the trucks to go to a berm
location at an airport would be almost totally unworkable,
which is why we are happy, frankly, that the EPA has in their
draft proposal suggested that they, too, finally understand
that that is not workable.
Senator Inhofe. That is a good answer. A lot of people are
not aware of the activity that takes place in a GA airport, as
you and I are.
Mr. Cummings, the OIPA has done a series of white papers on
the issue related to this rule, and without objection, I will
make those a part of the record in this hearing.
[The referenced material can be found on page 255.]
Senator Inhofe. In its guidance document, the EPA
reiterates a settlement agreement reached between the API and
others on whether produced water from dry natural gas wells was
covered by wastewater treatment exemption. Can you explain to
the Committee why the produced water from oil wells should be
exempt as it had been under 1973 or prior to the 2002 rule
changes.
Mr. Cummings. Yes. The produced water is stored in a
separate tank. It is not a crude oil storage tank; it is a
separate tank that is just for the produced water.
Occasionally, they will have a thin film of oil or perhaps a
sheen, but that volume is typically very, very small, less than
one barrel, and does represent a significant risk to the
environment.
Senator Inhofe. All right. The following is a statement by
the American Society of Civil Engineers, and I am going to read
this and then ask you a question. I will have this as a part of
the record.
``The plan to allow owners, who have had more than 30 years
to adjust to the PE certification program, to verify for
themselves that their facility complies with the SPCC rules is
particularly ill-advised. Typically, these facility owners are
not technically competent enough to make,' they are talking
about you now.
[Laughter.]
Senator Inhofe. ``They are not technically competent enough
to make the complex calculations necessary to certify
compliance with the SPCC's program requirements.' Do you agree
that you are not competent enough to do this?
Mr. Cummings. No, I believe I am competent enough to do
this. The calculations are fairly simple volumetric
calculations, taking into consideration the tank size, the
freeboard for rain, the daily production of oil. These are all
very simple, straight forward, volumetric calculations that
most people learn in their high school years.
Senator Inhofe. All right.
[Laughter.]
Senator Inhofe. Let me go ahead, and we will have a second
round. I have a couple other questions.
Senator Carper has joined us. Would you like to make an
opening statement, and then we will go to Senator Jeffords for
his questioning, if that is all right?
OPENING STATEMENT OF HON. THOMAS R. CARPER, U.S. SENATOR FROM
THE STATE OF DELAWARE
Senator Carper. Thanks, Mr. Chairman and to my colleagues,
and to our witnesses, especially those from Delaware. Any
spouses who might be in the audience, we welcome you today. I
appreciate the chance to say a few words this morning.
On the one hand, we have a need, I think, to be responsive
and sensitive to the concerns raised by small businesses, by
farms, by farmers with respect to developing the ability to
respond to spills from their storage operations, and to use
some common sense.
I apologize for not having a chance to hear from our other
witnesses. I just got a quick summary of your testimony here
from my staff.
What I understand is that back in the 1970's, a policy was
adopted. Correct me if I am wrong here, my colleagues. My
understanding is a policy was adopted in the 1970's that said
pretty much if you have petroleum, oil, or something like that
stored in fairly large quantities that you had to had an
engineer certify that you had the capability to clean up a
spill that might occur.
I understand that a couple years ago, someone came in and
suggested, maybe it was the Small Business Administration, but
someone has come in on behalf of small businesses to say that,
rather than having an engineer come in and certify that the
cleanup structure is in place, that it might be all right to
just self-certify for those storage tanks that are less than
10,000 gallons.
I have some concerns about that. I am anxious to have a
change to ask some questions of our colleagues. So I think it
is timely that we are doing this, and hopefully we will get to
the bottom of it and get some answers. Again, to our visitors,
our guests, thanks for joining us and for sharing your insights
with us.
Thank you.
Senator Inhofe. Thank you, Senator.
Senator Jeffords, you are recognized for questions.
Senator Jeffords. Dr. Ott, based on your knowledge about
the behavior of oil in aquatic environments, if smaller water
bodies such as small streams or wetlands were subjected to the
uncontrolled release of petroleum products, how would those
ecosystems be affected, and would those effects be felt in
receding waters of such streams?
Ms. Ott. Thank you for your question.
Based on my experience and the new science, we need to be
more careful. We found that a lot of these waterways do
connect, and what happens upstream is reflected downstream.
There is a growing concern that in the 1970's, we understood
vaguely, scientifically speaking, that water quality was
connected to environmental health. Now with the new science on
oil pollutants and other chemicals, our understanding is much
more sophisticated, and we are able to very much hone in on how
water quality and extremely low levels of chemicals definitely
affects wildlife.
So, yes, upstream affects downstream.
Senator Jeffords. Thank you.
Dr. Corbett, can you describe what the mechanism is in the
existing SPCC program for the public to obtain some degree of
assurance that actions are being taken to prevent oil spills,
how the EPA's projected rule alters that process, and what role
enforcement plays in that process?
I will repeat that if you want.
Mr. Corbett. I want to make sure. Just repeat the first
part because I was writing on the second two, so I wouldn't
forget.
Senator Jeffords. Can you describe what the mechanism is in
the existing SPCC program for the public to obtain some degree
of assurance that actions are being taken to prevent oil
spills, how the EPA's proposed rule alters that process, and
what role enforcement plays in that process?
Mr. Corbett. Thank you very much. That allows me to sort of
add to some of the dialog regarding whether facilities
managers' competencies are called into question in absolute
sense or not. I don't dispute the competence of the managers
that I worked under when I worked in facilities that stored and
managed oil.
In many, many cases, what I think the rule does in the
original form is it ensured the public that there was an expert
reviewer on their behalf of the plans that were in place. For
well-run facilities, PE certification is a simple matter,
reinforcing and confirming the good operational judgment of
good managers.
What the proposed changes seems to have done is to
disconnect that expertise from the individual certifying, and
essentially say that a facility that has been spill-free for 10
years can have whatever the current manager is, regardless of
their expertise and experience, certify the plan. That is sort
of like saying that if my car hasn't been in an accident in the
last 10 years, anybody can drive it expertly, and I don't
believe that that is true.
The other thing, the last part of your question is one I
think is a more thoughtful part of it. My first reaction is
that the role of enforcement would likely be increased by a
self-certification system because these plans currently are not
submitted for public review and comment. They are not held in
EPA regional offices. They are available only onsite for
inspection when the plan is written the first time or when
there is a substantial change to a facility's infrastructure
and operations. That is the trigger that brings the PE into the
system to ensure that the plan is cost effective for the
business and protects the public health and environment
according to the regulations.
Senator Jeffords. Dr. Ott, can you comment on Mr. Dunne's
statement that the evolution of science regarding oil spills
did not have a major impact upon their proposed rule?
Ms. Ott. I completely disagree with that comment. I think
it shows a lack of understanding of the new science. The new
oil toxicity science is like Columbus discovering suddenly that
the world is round. It shifts everything. The new science
completely changes the risk assessment equation. There is new
risk to public health and the environment, now we know oil is
more toxic. This is new risk. That new risk needs to be
factored into the cost-benefit analysis to weigh against the
supposed benefits or cost savings from inadequate oil spill
preparation. So, it really does completely change the formula.
I wanted to do one follow-up comment. There has been a lot
of discussion about navigable waters and what waters exactly
does the Clean Water Act protect. It seems to me here we need
to use a little bit of common sense about the Clean Water Act:
it is supposed to be protecting waters for all Americans.
I just want to reflect on what happened with the wolves
when they were introduced into Yellowstone. Scientists found
that populations of songbirds increased. Scientists had no idea
that the songbirds were connected to the wolves. The pathway
was that the wolves increased the predation on deer. Deer were
stripping the foliage off the bushes. So by decreasing the deer
population, increased habitat for songbirds.
This is the kind of thing that is going on with waterways.
They are all connected. Right now in Alaska, we are fighting to
prevent industry from having mixing zones in spawning streams
of salmon. Industry is arguing that they can put pollutants
directly into salmon spawning streams and not have an effect.
This is crazy. We know better than this now.
So there is increased risk, and we need to have better
standards to prevent spills as a result of this increased risk.
Senator Jeffords. Thank you.
Senator Inhofe. Senator Carper.
Senator Carper. Thank you.
Let me just ask my colleagues: When were you elected to the
House of Representatives?
Senator Inhofe. 1986
Senator Carper. 1986.
Senator Jeffords. 1974.
Senator Carper. Yes, it has been a while. I was elected in
1982. I recall, and I remember this because when I hired a
woman to be my Legislative Director, her name was Janet St.
Amand, she had previously worked, I think, maybe as the
Legislative Director for then Congressman Jim Coyne, and it is
just very nice to see you again. I think you and Peter
Kostmeyer, I recall, kept swapping seats.
[Laughter.]
Senator Carper. I think every 2 years, we would have a
merry-go-round there.
Mr. Coyne. It was a close district, yes.
Senator Carper. It sure was. It is great to see you again.
Mr. Coyne. Thank you.
Senator Carper. Thanks. I kid people, and I say I enjoyed
working for Janet St. Amand as my Legislative Director. So you
know what I mean. It is good to see you again.
Let me just kind of go down the line. I have some
questions, especially for Dr. Corbett. Since I missed your
testimony, I want to ask each of you to just give me like a 30-
second takeaway. What would you have me take away, basically?
If I don't remember anything else from you said here today,
what would you have me take away?
Mr. Cummings. That secondary containment for oil tanks is
the primary preventive measure and the requirements for
integrity testing, certified plans, etcetera are not going to
stop any spills; secondary containment for oil tanks is the
thing that will stop spills and provide the most benefit.
Senator Carper. All right, thank you.
Congressman Coyne.
Mr. Coyne. Senator, I would like you to take away the
thought that at airports where mobile refuelers were originally
subject to this SPCC, the EPA has come up with an NPRM which is
going to provide, I think, a more reasonable solution. However,
the solution in their proposed rule is still somewhat awkward
and unclear, and we need some clarification.
Also, we need the EPA to work more closely with the FAA
because, as you know, at airports as opposed to everybody else
you are listening to here, the businesses at airports are the
most heavily regulated by the Federal Government entity there
is. I mean all sorts of Federal regulators come to them
everyday, and it is much more important for that regulation to
be developed with close coordination with the FAA to deal with
the other issues, so that we don't have unintended consequences
from EPA acting by itself.
Senator Carper. OK, thank you.
Mr. Owen.
Mr. Owen. Senator, the Agriculture Coalition thinks that
farmers should be exempt from the SPCC rules based on the data
that has been submitted.
Senator Carper. Good, thank you, sir.
Dr. Ott.
Ms. Ott. Oil is more toxic than we thought 34 years ago,
and this should be reflected now in all of our laws that have
anything to do with regulating oil pollution. The new science
on oil toxicity shows increased risk to public health and the
environment.
Senator Carper. All right, good, thanks.
And Dr. Corbett, I have a couple more specific questions I
want to ask of you. I understand your wife is here with you
today, Beth.
Mr. Corbett. Yes, thank you.
Senator Carper. I want to welcome her to these hallowed
halls. It is great of you to come. Thanks for bringing your
husband and allowing him to speak. I can just barely see your
lips move when you speak, so it is pretty clever the way you
two do that.
Mr. Corbett. I had to practice a lot on that.
[Laughter.]
Senator Carper. Dr. Corbett, can you explain your
experiences with the Spill Prevention, Control, and
Countermeasures plans? If you could, could you explain the role
of professional engineers in the certification process and the
costs that are involved in that process?
Mr. Corbett. Yes, I can. My own experience was working for
another very well respected, but no longer in existence,
environmental consulting firm that competed with Mr. Coyne's.
In my work, we would have staff and licensed engineers on a
team, preparing plans for facilities. Most of these were larger
commercial facilities or military installations.
However, included in the facilities, that we wrote Spill
Prevention, Control, and Countermeasures plans for, were
facilities that leased many, many, many acres to farmers. There
was an agricultural operation within the bounds of some of
these facilities. So, I had the opportunity to evaluate the
measures, write the plan, and certify plans that successfully
protected agricultural lands.
What is involved in that, in general, is that the
preparation of the plan is something that managers can do
largely themselves, or assist directly in. For the PE, the
certification requirement essentially means that the engineer
has to review the plan, assure that it is facility-specific,
and assure that it complies with the regulatory requirements.
Often, however, the professional engineer provides
additional value to the small business by suggesting more cost
effective ways to store, manage, or handle the oil, so that
they can minimize the costs of compliance, and in fact can make
some of the tough choices where, in practicality, an equivalent
measure may be most feasible for that facility.
The point I want to make with regard to that is that with
the PE's involvement, we did not produce one size fits all. We
produced plans that were thoughtful, specific to the
facilities, and expertly tuned, so that they not only complied
with regulations but they complied with regulations within the
operating and infrastructure conditions of that facility.
Senator Carper. All right, thank you. I think my time has
expired.
Senator Inhofe. We will have another round.
Senator Carper. That is great, OK. Thanks very much.
Senator Inhofe. Thank you, Senator Carper.
Senator Voinovich, Mr. Owen, had a question that I am going
to try, and you may want to respond to it for the record. In
terms of the compliance with the 10,000 rule, it is my
understanding that when we came out with the rule just the
other day, that that exempted only those farmers who were
exempt under the 1973 rule? Is this your understanding?
Mr. Owen. Yes, that is the way I understand it.
Senator Inhofe. All right. Would you kind of explain the
problems in conjunction with that.
Mr. Owen. Well, if you have a facility on your farm or
ranch or whatever that is compliant, the way I understand it,
under the new proposal for 2005, if you are compliant with the
1,320 gallon rule that was in force back in the 1970's, then
you will be able to get the extension. If you did not comply
with that, if you did not have the plan in effect that has been
certified by a PE, then you are not able to get the extension
on the new rule.
Senator Inhofe. OK, that is good. I appreciate that.
Now you mentioned just a few minutes ago that the cost of
this, in terms of farmers, at $4.5 billion I think you said. Is
that correct?
Mr. Owen. That is correct.
Senator Inhofe. How is it calculated? What components went
into that calculation?
Mr. Owen. The USDA and the Agriculture Coalition that did
the survey, based on a certain amount of survey, they felt they
got a very good representation from farmers. During that
survey, they used a lot of numbers. They specified it in the
back, actually. It would take me a long time to dig through and
go through all the numbers.
Senator Inhofe. OK.
Mr. Owen. Based on the number of farms that would be
affected and a number that USDA came up with that it felt.
Senator Inhofe. The reason I asked that is I want to kind
of get that into an Oklahoma perspective for my own benefit. So
I will, and if you can help me on that respect, I would
appreciate it.
Mr. Cummings, in a letter of the OIPA, that is the Oklahoma
Independent Petroleum Association, submitted during the comment
period on EPA's notice of data availability, it suggested a
threshold or recommended a threshold of 42,000 gallons. Without
objection, that study or that portion of the study would be
made a part of the record.
Senator Inhofe. Can you explain to the committee why the
10,000 gallon threshold proposed by the EPA doesn't work for
small producers?
Mr. Cummings. Yes. The majority of facilities, small
marginal well facilities, will have two tanks, typically 210
barrel or 300 barrel tanks. Typically, you would produce into
one tank until you had a volume of saleable quantity. Then, you
would prepare that for sale and the produce into the other tank
while you were waiting for the truck to actually come and
actually pick up the 1st tank.
The 42,000 gallon volume was derived from 1,000 barrels
which would cover the typical small marginal well tank volumes
that are on location. Now that wouldn't typically be a single
tank of that size, but because most locations have more than
one tank, we came up with that level to try to take care of
both tanks, although any single tank would not be near that
size.
Senator Inhofe. To help us resolve a little disagreement we
are having with my staff, you used the 10 barrels a day as the
level for marginal production. It used to be 15 barrels a day.
Do you remember when that changed?
Mr. Cummings. I am not sure. There are different entities
that describe the levels at different volumes. I think in
Federal legislation stripper wells are 15 barrels per day or
less, but according to the Interstate Oil and Gas Compact
Commission, marginal wells are 10 barrels a day or less. So it
depends on whose definition and exactly which term you use.
Senator Inhofe. Yes, I was clearly right.
[Laughter.]
Senator Inhofe. Dr. Corbett, in your testimony, you seem to
argue that the fear of liability is not sufficient to work to
prevent oil spills. Then Dr. Ott, in her testimony, said, and I
think I am quoting this, that the fear of liability is what
works best. Which is it?
Mr. Corbett. I am first a trained engineer, and so I am
afraid of everything.
[Laughter.]
Mr. Corbett. What I think is I think that the purpose of
the rule is not to force that calculus. That allowing
businesses to individually calculate whether they should be
prepared, preventative, and control their spills within their
facilities, so that their neighboring communities and
environment are not spoiled, should be the requirement of the
rule. That is the way I understand the rule.
What I see the revisions, the proposed revisions doing is
setting up a situation that may perversely motivate people to
do that calculus, disseminate and distribute their oil storage
among facilities that do not meet the thresholds under the new
proposed guidance and put more of our environment at greater
risk.
With regard to some perspective, I have lived in only five
States, not yours yet, but all of those have been agricultural
States, and my father was a veterinarian serving ranches and
farms in California. From what I can see in the EPA's own data,
there are around two million farms in the United States, and
only about, I think Mr. Dunne said about 150,000 are subject to
his rule.
So I think that if we look at where those are distributed,
and the USDA has fine map on its web site that show us where,
in fact, those are, you will see that the farms around the
United States are located along the watersheds and waterways up
and down the Mississippi and the major rivers and in the West
on the west side of the Sierras.
Senator Inhofe. All right, thank you very much.
Dr. Ott, you say in your testimony that by lowering the
threshold for spill planning and prevention, that the EPA has
lessened the liability. It has been my understanding that it
has really no effect on the liability at all, but you contend
that it does. Is that correct?
Ms. Ott. I think we are just arguing over semantics. I am
at the receiving end of oil spills. From the perspective of my
community, if additional measures are taken before a spill,
that costs money. We have all heard today that these prevention
measures cost money. I equate that with liability. So I think
it is just semantics.
What I am saying is that the money spent up front is going
to be way less and way better spent than the money spent
afterward.
Senator Inhofe. All right, thank you.
Mr. Owen or Mr. Cummings, do you have any response to that,
any thoughts? All right, thank you.
Senator Jeffords.
Senator Jeffords. Dr. Corbett, can you elaborate on your
comments regarding the fact that the EPA's proposed rulemaking
does not consider the consequences from agricultural spills to
rural ecosystems may be greater than the consequences of a
commercial sector spill in more urban regions?
Mr. Corbett. In my research and teaching of my students
with regard to policy analysis, I often use spatial
information, maps, etcetera to understand whether a rule, or a
regulation, or a policy, proposed or existing, does what it
says it will do. In making this proposed rulemaking, EPA
provides very little information about where these facilities
are with regard to the environments that they are protecting.
Because of that, it is impossible really to judge whether the
risks and consequences to the environment are greater, are made
greater or lessened from the proposed rule.
However, independently looking at where we know farm
facilities are, and I would love to find locations where some
of these other facilities are, we could then do the risk
assessment of what would those facilities pose in terms of
potential consequences if they were not using prevention,
control, and countermeasures best practices.
And so, I am not sure that I understand whether they have
done that at all. It is not accessible in the rule, and I
couldn't find it in some of their other public documents.
Senator Jeffords. Thank you.
Dr. Ott, given your experiences with the ability of well
funded, technologically advanced companies to effectively
cleanup oil spills, what is your reaction to the EPA's proposal
to eliminate the requirement for smaller facilities to have a
professional engineer certify oil spill prevention plans and
depend more heavily on response?
Ms. Ott. I shudder at this proposal. We, in Alaska at
least, our experience is that it is very, very difficult to
clean up an oil spill. It just, it really cannot be done. It
damages. It causes incredible damage. Actually, this was the
experience of Washington State as well. They just had, as you
might recall last year, a thousand gallon spill in Puget Sound
that caused a lot of harm.
I think, like I said before, money spent up front for
prevention is far preferred than having to rely on response. We
just cannot. I know the technology is supposed to be
sophisticated, but the fact of the matter is it just does not
work very well yet.
Senator Jeffords. Thank you.
Senator Inhofe. All right, thank you.
Senator Jeffords. Am I finished?
Senator Inhofe. Yes.
Senator Carper.
Senator Carper. Thanks, Mr. Chairman.
Dr. Corbett, did you say your father had been a
veterinarian?
Mr. Corbett. Yes, he is a veterinarian.
Senator Carper. Does he still practice?
Mr. Corbett. He is retired now.
Senator Carper. Where, in California?
Mr. Corbett. Yes.
Senator Carper. OK. The question I have is I guess you
spent a fair amount of time on farms.
Mr. Corbett. I grew up, helping my dad on ranches and ranch
farm combinations, yes.
Senator Carper. OK. In California, I guess, right?
Mr. Corbett. Yes.
Senator Carper. I understand that a small percentage of
farms are required to have these Spill Prevention, Control, and
Countermeasures plans.
Mr. Corbett. Yes.
Senator Carper. I have no idea what percentage. Is it a
few? Is it 10 percent, 50 percent?
Mr. Corbett. The EPA has information from a 1991 survey and
from a 1995 survey, and then they summarize what they consider
to be the current profile. Consistently throughout each of
those, it has been around 8 percent of farms that EPA suggests
are subject to these regulations.
Senator Carper. My question is: Do you believe it is
necessary to do as the proposed rule suggests, and that is to
exempt 8 percent of the farms from this requirement?
Mr. Corbett. No. No I don't. The EPA's survey data also
lists the numbers of spills that have occurred in each of the
sectors, and agriculture ranks third among the number of spills
that have occurred among all the sectors that are subject to
this rule.
Senator Carper. OK. These 8 percent of the farms, how are
the 8 percent selected?
Mr. Corbett. Well, again, the EPA's rulemaking is silent on
that, but my presumption is that those are the ones that are
subject to the storage requirements. That, I think is clear in
the rule. What that suggest to me is that these may be not the
small farms that I was used to going to as I grew up but the
larger farms that are serving and feeding the Nation. So that
is what I presume. I think I would like to know that data
better myself.
Senator Carper. Mr. Owen, do you want to make just a brief
comment on that line of questioning for me, please?
Mr. Owen. I don't know anything about the data that the EPA
has about the 8 percent in California. All I know is that in
Montana, and I know a lot of farmers, spills are very, very
rare, almost non-occurring.
During the underground storage tank removal period back in
the early 1080's, a lot of us pulled up tanks. We had no
problems with that. We were compliant. A lot of us are being
very careful about how we handle that fuel because it is
getting quite expensive. No one likes a spill, not even a
little puddle. Things can happen, but it is just not that big
of a problem that we see.
Senator Carper. OK, good. Thanks.
Another question, if I could, for you, Dr. Corbett. I
understand the proposed rule seems to indicate that it is cost
prohibitive for these small oil storage facilities to comply
with the Spill Prevention, Control, and Countermeasures plans.
I guess my question to you is: Do you believe that that is an
accurate statement of small facilities' capabilities?
Mr. Corbett. I don't believe that it is a generally
accurate statement. I also believe that there may be conditions
where prevention and countermeasures plans are impractical. As
in the current rule, the rules have allowed licensed engineers
to make those judgments and to look for alternatives.
I think also there is an opportunity for innovation perhaps
to further reduce the burden of these facilities in terms of
compliance by evaluating ways to better co-locate and better
manage and better distribute oil discharges in the service of
the functions of those industries for small facilities.
Senator Carper. Do you want to elaborate just a little bit
more on that? I think you may have opened up a line of thought
that certainly hadn't occurred to me.
Mr. Corbett. Well, when I did reviews of locations and
plans, we sometimes knew that berming an area was prohibitive
to access and would create problems. So, we would look at
alternatives, spill and overflow protection, other sorts of
maybe some monitoring options. We would be able, as a licensed
engineer, to make those tough calls and not use a one-size-
fits-all approach.
Senator Carper. Anybody on the panel want to kind of react
to what he has just said?
Mr. Owen. Senator, in Montana where I am from, licensed
engineers are very hard to come by, and they are very
expensive. If we could pass the cost onto somebody else or if I
had the money, I would be building million dollar facilities
right now, but that is just not the case. So we are talking
about what can we afford and what can we not afford, and where
are we going to get the best value out of this SPCC rule.
Senator Carper. Thank you.
Congressman Coyne.
Senator, in aviation, there are many examples, many, many
examples of self-certification where the FAA grants to the
pilot, or to a maintenance professional, or to others the
ability to certify that a plane is fixed properly, that
training has been done, all in the interest of aviation safety
regulations. So we have a long history of self-certification
that has been widely acknowledged as having been successful in
aviation.
And we think self-certification for environmental issues at
airports where the business at the airports, the airport
management which is typically a public entity, and the
association which can also provide guidance to our members,
would be a much more effective way of dealing with the unique
issues of airports rather than to expect every single person,
every time to go out and hire a professional engineer who,
frankly, may not be as familiar with the issues of aviation
fuel containment at an airport as someone who has been in that
business for 20 or 30 or 40 years.
Senator Carper. Mr. Cummings, I think my time has expired,
but just briefly, if you would. Thanks.
Mr. Cummings. I was just going to reiterate, as I said
earlier, the calculations for spill containment are relatively
simple. Many of the things in our oil and gas E&P industry are
much more serious problems, i.e., blowout prevention. Personnel
are trained in week long courses and do not require a
professional engineer to certify they are blowout trained.
Senator Carper. Thanks to each of you. Dr. Corbett, great
to see you and your wife. Congressman Coyne, great to see you
again as well. Welcome to all of you. Thanks for your input.
Thank you, Mr. Chairman.
Senator Inhofe. Thank you very much.
Let me just make a comment that when Dr. Corbett, you were
quoting EPA when you said that only 8 percent of the farms
would be affected. The USDA, I think they have a position that
70 percent of the farms would be affected. For the record,
since we are going to conclude the meeting right now, I would
like to have anyone who wants to comment on that to do it for
the record in writing and submit that.
Thank you very much, all of you, for being here today. We
appreciate it, particularly my FE-no, not you, Congressman
Coyne FE-but my friend from Oklahoma, Mr. Cummings.
Mr. Cummings. Thank you.
Senator Inhofe. All five of you, thank you very much.
[Whereupon, at 11:17 a.m., the committee was adjourned.]
[Additional statements submitted for the record follow:]
Statement of Thomas Sullivan, Chief Counsel for Advocacy, Office of
Advocacy, U.S. Small Business Administration
Chairman Inhofe, and members of the committee, good morning and
thank you for giving me the opportunity to appear before you today. My
name is Thomas M. Sullivan and I am the Chief Counsel for Advocacy at
the U.S. Small Business Administration (SBA). Congress established the
Office of Advocacy under Pub. L. No. 94-305 to advocate the views of
small business before Federal agencies and Congress. Because the Office
of Advocacy is an independent entity within the U.S. Small Business
Administration (SBA), the views expressed here do not necessarily
reflect the position of the Administration or the SBA.
In 2004, the Office of Management and Budget (OMB) and Federal
agencies undertook a process designed to reduce the regulatory burden
on United States manufacturers through 76 targeted regulatory reforms,
including several reforms recommended by the Office of Advocacy. More
than half of these reforms involved rules issued by the U.S.
Environmental Protection Agency (EPA).\1\
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\1\ The 2004 initiative to improve manufacturing rules is the most
recent in a series of regulatory reform efforts initiated by this
Administration since 2001. OMB called for public nominations of rule
reforms in the May 2001 and March 2002 Draft Reports to Congress. OMB
received 71 and 316 nominations from the public, respectively. OMB did
not issue a public call for nominations in 2003. OMB's latest report
can be found at http://www.whitehouse.gov/omb/inforeg/2005 cb/final
2005 cb report.pdf.
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At present, EPA is pursuing some 42 suggestions for reform of
environmental rules affecting manufacturers. The Committee has
requested the Office of Advocacy's views on progress made by EPA on one
of these reforms, the Spill Prevention, Control, and Countermeasure
(SPCC) Rule.
spcc background
SPCC regulations were initially promulgated by EPA in 1973 pursuant
to the Clean Water Act to prevent oil discharges into water. Generally,
a facility that stores oil of any type in quantities above certain
threshold levels is required to abide by a Spill Prevention, Control,
and Countermeasure Plan.
Because of the complexity and cost of the SPCC program, many small
businesses find it difficult to comply with the 1973 requirements and
the new requirements adopted in 2002. For example, EPA requires covered
facilities to prepare spill prevention plans that are certified by a
professional engineer. The Office of Advocacy believes that this is a
costly and unnecessary expense for firms with small-capacity storage
tanks, and EPA's new proposal addresses this. EPA recognized that small
volume tanks do not generally pose the same environmental risks that
larger volume tanks do, nor do they often require complex plans.\2\
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\2\ According to a 1995 EPA survey, facilities with total storage
capacities of 5,000 gallons or less account for an estimated 48 percent
of all facilities, but only 0.2 percent of oil discharged. In its own
analysis of the 1995 survey, EPA noted that ``facilities with larger
storage capacity are likely to have a greater number of oil spills,
larger volumes of oil spilled, and greater cleanup costs.'' U.S. EPA,
Analysis of the Relationship Between Facility Characteristics and Oil
Spill Risk (1996).
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The stringency of some of the 2002 SPCC requirements prompted the
agricultural community, electrical industry, airport community,
construction industry, oil and gas producers, manufacturers, and others
to raise issues regarding the adverse impacts of these regulations. The
regulated entities were particularly surprised by the 2002 revisions,
given that the stated primary purpose of the amendments was to reduce,
and not increase regulatory burdens. In response to small business'
outcry, the Office of Advocacy has worked extensively with EPA and the
regulated communities to identify small business concerns related to
this rule since shortly after the amendments were published in July
2002. The Office of Advocacy suggested reforms to the SPCC requirements
in June 2004, including allowing facilities with an oil storage
capacity below certain thresholds to use streamlined, less expensive
requirements.\3\ We believe that overall SPCC compliance would improve
with a simpler, less expensive program that is tailored to small
facilities.
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\3\ The June 2004 letter is located at http://www.sba.qov/advo/
laws/comments/epa04 0609.pdf.
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On September 17, 2004, EPA issued a Notice of Data Availability
(NODA) requesting public comments on the Office Advocacy's suggested
approach for facilities that handled oil below certain threshold
amounts.\4\
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\4\ See 69 Fed. Reg. 56,182 (September 17, 2004). EPA also issued a
NODA relating to a suggestion to modify the oil-filled equipment
requirements. Id. at 56184.
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EPA staff has worked to meet the challenge of reinventing a SPCC
rule that has suffered from widespread confusion and dissatisfaction
about its regulatory requirements. The Office of Advocacy supports
EPA's efforts and is pleased with the improvements EPA made to SPCC
requirements through guidance and the proposed revised regulatory
requirements. Several of our June 2004 suggestions were used to
formulate this proposal.
epa proposes to amend spcc plan requirements
After studying the criticisms of the regulations, and the responses
to the two recent notices of data availability, EPA is proposing new
amendments to the SPCC Rule. We welcome EPA's proposal to amend the
SPCC requirements, and the Office of Advocacy is supportive of the
specific provisions for small facilities, airports, motive power, and
oil-filled equipment. These amendments will provide relief for small
businesses, while improving environmental protection by facilitating
compliance by smaller firms.
small facility proposal
SPCC regulations require that all SPCC Plans be certified by a
professional engineer (PE) who attests that the plan has been prepared
in accordance with good engineering practice.
Based on EPA's proposed amendment, SPCC Plan requirements will now
allow hundreds of thousands of small firms to self-certify their SPCC
plan in lieu of expensive PE review and certification. Facilities with
oil storage of under 10,000 gallons that can provide adequate
protection against discharges can now prepare and implement a SPCC Plan
without the involvement of a PE. Model plans can be written by trade
associations that can be readily adapted for a small facility, as was
successfully done for the accidental release program under section 112
(r) of the Clean Air Act.
integrity testing
Another key issue addressed by EPA in the new proposal involves the
integrity testing requirements for tanks and containers. Industry
experts believe that integrity testing for small shop-built tanks and
drums is unnecessarily expensive, and is not technically feasible for
drums. At an Environmental Roundtable held by the Office of Advocacy in
May 2004, the National Paint and Coatings Association noted that
integrity testing just for their industry's tanks would cost $20
million over a 10 year period. The Office of Advocacy recommended that
EPA allow visual inspection without the need for obtaining a costly PE
certification for small tanks and containers under specified
conditions.
The Office of Advocacy is pleased with EPA's proposal for
additional flexibility in integrity testing by allowing facilities to
consult and rely upon industry inspection standards for small
facilities (under the 10,000 gallon threshold) without employing a PE.
Using the Steel Tank Institute SP001 industry standard, visual
inspection will be allowed for all small facilities with tanks of up to
5,000 gallons. As discussed in the preamble to the proposal, EPA seeks
comment on an alternative to extend this SP001 provision to all small
facilities (under the 10,000 gallon threshold). We expect small
businesses will support this provision and it will not present
additional hazards because all small facilities are required to have
release barriers and secondary containment.
motive power
We also welcome EPA's proposed elimination of ``motive power''
equipment from the scope of the SPCC rule. The Agency decided that it
did not intend to cover tanks that are used to provide motive power to
tractors, forklifts, mobile cranes, and other mobile equipment. EPA
realized that it did not make sense for the SPCC rule to cover retail
dealerships selling tractors, or to include construction sites under
SPCC. The Agency found that it was not practicable to require
containment around vehicles that regularly move about the site. This
step will provide relief at thousands of facilities.
airports
Owners and operators of airports objected to the burdensome and
potentially dangerous requirements of secondary containment of mobile
refuelers which operate at airports. The airport community has objected
that such requirements raise serious safety and security concerns. EPA
responded to this objection by proposing that the ``sized secondary
containment'' (the catchment basin must be large enough to contain the
capacity of the largest container) requirements be replaced by
``general secondary containment'' (no sized requirement). The Agency
has posed an alternative for comment that would limit SPCC requirements
to active refueling operations, which EPA states is the most common
source of airport spills. My office will continue to work with EPA on
flexible alternatives.
farms
The Office of Advocacy supports the proposed indefinite extension
of the compliance date for farms pending additional study by EPA. With
an estimated hundreds of thousands of farms subject to this rule (the
largest universe of firms subject to SPCC), both the U.S. Department of
Agriculture and EPA have expressed interest in a specific examination
of the number and type of oil tanks, the spill history, the proximity
to U.S. waters, and other relevant issues to determine the appropriate
course of action.
oil and gas production facilities
While the proposed small facility rule provides relief for hundreds
of thousands of small facilities, the 10,000 gallon threshold does not
provide relief for thousands of independent oil and natural gas
producers. A large number of these producers and their associations
supplied comments on the November 2004 notice of data availability,
expressing support for a separate approach for these facilities that
face unique SPCC problems. Issues unique to oil and natural gas
production include the cost and impracticality of secondary containment
around flowlines, and the lack of a wastewater exemption for produced
water tanks.\5\ Small businesses in that industry are asking for EPA to
propose additional changes for the oil and gas producers through
rulemaking.
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\5\ Produced water tanks contain water that was extracted from the
oil/water mixture is recovered from the ground using an oil/water
separator.
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asphalt
As a result of substantial concerns raised by the construction
industry, we advocated for the exclusion of asphalt cement and hot-mix
asphalt from all SPCC- related requirements in our June 2004 letter.
The Office of Advocacy based this on the observation that both asphalt
cement and hot-mix asphalt are solid-to semi-solid at normal outdoor
temperatures, and would not flow very far before becoming solidified.
This behavior was confirmed by an industry analysis of spill data
provided to EPA in August 2004.\6\ Another approach would be for EPA to
draft guidance that would advise facilities to rely on active measures
to stop any spill from reaching navigable waters, based on the most
likely spill scenarios as determined using sound engineering judgment,
in lieu of the more expensive passive measures, such as secondary
containment.\7\ We are hopeful that these options remain under
consideration.
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\6\ The National Response Center-Analysis of Data 2000-2003,
National Asphalt Pavement Association, August 31, 2004.
\7\ An active measure requires an action by the facility to prevent
a spill from reaching navigable waters, and a passive measure involves
a permanent structure designed to prevent spills from reaching such
waters.
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oil-filled equipment
The Office of Advocacy is supportive of EPA's proposed reduced
requirements for oil-filled equipment. The proposal moves away from the
more expensive secondary containment requirement and allows facilities
to substitute an oil contingency plan and a written commitment of
manpower, equipment and materials to expeditiously control and remove
any oil that may be discharged. This provision reflects the fact that
such equipment, unlike storage tanks, has a low spill rate. Such
equipment rarely requires oil transfers, is generally corrosion-
protected, and is frequently monitored and inspected for leaks.
the office of advocacy is committed to working with epa to complete
spcc regulatory reforms
On behalf of small business, my office commends EPA for listening
to small business concerns while drafting these amendments.
The Office of Advocacy has worked closely with EPA and other
entities to implement needed regulatory reforms. Our involvement has
included holding roundtables to receive suggestions on needed reforms,
working with small business representatives to hear their views, and
completing a report in June 2004\8\ addressing small facility issues.
Congress realized the importance of small business when the Regulatory
Flexibility Act (RFA) and the Small Business Regulatory Enforcement
Fairness Act (SBREFA)\9\ were enacted into law. Under the RFA and
SBREFA, we look for ways to reduce small business burdens without
compromising the regulatory objectives intended by the regulating
Agency. We believe that EPA's regulatory reform efforts can achieve
those same objectives.
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\8\ Proposed Reforms to the SPCC Professional Engineer
Certification Requirement: Designing a More Cost Effective Approach for
Small Facilities, (June 2004) by Jack Faucett Associates for the Office
of Advocacy under contract SBAHQ-00-D-006.
\9\ Codified at 5 U.S.C. Sec. Sec. 601-612.
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Thank you for allowing me to present these views. I would be happy
to answer any questions.
______
Responses by Thomas Sullivan to Additional Questions from Senator
Inhofe
Question 1. Concerns have been raised about allowing facilities to
self-certify their SPCC plans. Several associations representing
engineers oppose the provisions arguing that those operating these
facilities do not have the technical expertise to determine how to
prevent spills at their facilities. Can you describe for the Committee
the types of facilities you encountered while developing your proposal
on which EPA based its December 2005 proposed rule? Would you also
please explain for the committee why SBA recommended this approach and
if there are other similar Federal programs that also contain planning
requirements without a PE certification. Finally, please also discuss
for the Committee why your office believes self-certification will
result in more compliance with the SPCC rule and therefore fewer oil
spills?
Response. There are several hundred thousand farms, car dealers,
construction sites and other small facilities with small amounts of oil
storage. Such facilities are unlikely to need the services of a
professional engineer, at a cost of up to $7,000 to prepare a SPCC plan
for a small facility. During 2003 and early 2004, Advocacy met with a
wide variety of small business groups, including car dealerships,
construction, chemical, paint and other manufacturing, agricultural
groups, and utilities. Advocacy believed that small facilities with
simple layouts and tanks that are not interconnected (e.g., farms, car
dealerships or construction sites) did not require site visits, nor the
help of a professional engineer (PE). The types of facilities subject
to SPCC requirements are described in detail in the November 2005 EPA
Economic Analysis of the small facility proposal.
In September 2003, the Office of Advocacy (Advocacy) provided EPA
with a report, developed for Advocacy by Jack Faucett Associates (JFA),
outlining potential regulatory revisions to small facilities with
storage of less than 10,000 gallons. Advocacy supported several
revisions discussed in the JFA report that replaced blanket PE-
certification requirements with set requirements based on volume
thresholds. Advocacy recommended that EPA establish a 10,000 gallon
threshold for small facilities in place of the PE certification
requirement. In January 2004, a coalition of 10 small business groups
wrote EPA endorsing this three-tier self-certification scheme. The
industries represented in that letter are: Agricultural Retailers
Association, American Bakers Association, American Forest and Paper
Association, American Trucking Association, Automotive Oil Change
Association, Independent Lubricant Manufacturers Association, National
Automobile Dealers Association, National Association of Fleet
Administrators, National Cotton Council of America, and the Synthetic
Organic Chemical Manufacturers Association.
We followed this with a June 2004 letter, accompanied by the June
2004 JFA report, that described the small facility concept in more
detail.
EPA has rules in place for underground storage tanks, hazardous
waste generators, and storm water pollution prevention that affect
hundreds of thousands of facilities, mostly small firms. These
programs, that have been in effect since the 1980's and 1990's appear
to be working well, and do not require the services of a professional
engineer. EPA has issued guidance materials for the regulated entities,
such as ``Understanding the Small Quantity Generator Hazardous Waste
Rules: A Handbook for Small Business'', a 32-page booklet issued in
September 1986. This booklet was effective in communicating the
applicable requirements. This program was supplemented by outreach
through trade associations.
Given the fact that SPCC affects hundreds of thousands of
facilities, predominantly small business facilities, affecting a large
diversity of industries, there is a large opportunity to increase
compliance rates. The March 2005 USDA survey found that 61 percent of
farmers were unaware of the applicability of the SPCC requirements to
farms. If this survey figure were representative of all farms, the
amount of farm noncompliance would exceed 61 percent. Thus, there is
substantial room for improving such a low rate of compliance. We agree
with EPA's Economic Analysis to the December 2005 proposal that
streamlining the SPCC requirements would create the opportunity for
increasing the compliance rate and improving environmental protection.
EPA stated ``to the extent that the rule increases the compliance rate
by lowering compliance costs, the proposal will have a positive impact
on environmental quality''.9 The self-certification approach is simpler
and less costly, and will enable small firms to more readily come into
compliance.
Question 2. The Oklahoma Independent Petroleum Association (OIPA),
in their letter to EPA regarding the NODA argued that the 10,000
threshold proposed was not sufficient because many of their wells once
produced significantly greater amounts of oil than they currently do.
Therefore, the wells have on site storage capacity far in excess of
what is actually used. Further, they must accumulate greater amounts of
oil to make these wells profitable and their smallest facilities are
not helped by the 10,000 threshold. Do you have any thoughts on their
concerns? Can you please comment on whether the size threshold in the
NODA is sufficient for small oil producers?
Response. While the proposed small facility rule provides relief
for hundreds of thousands of small facilities, the 10,000 gallon
threshold does not provide relief for thousands of independent oil and
natural gas producers. More than 90 percent of these producers are
small businesses. A large number of these producers and their
associations supplied comments on the September 2004 notice of data
availability, expressing support for a separate approach for these
facilities that face unique SPCC problems. We agree with these concerns
and believe that EPA should examine regulatory revisions for this
industrial sector.
These commenters noted that hundreds of thousands of facilities
with marginal and non-marginal wells of up to 50,000 gallons could be
appropriately exempted from the professional engineering certification
requirement. Such production facilities, and particularly the marginal
well operations, operate at very small profit margins like other small
facilities subject to the 10,000 gallon threshold. The industry
commenters also noted that historical evidence shows that the smaller
oil and gas production facilities do not pose a significant oil spill
risk to navigable water.
Question 3. Dr. Corbett argues that we should provide any
flexibility to affected stakeholders and that EPA has not proven such
flexibility is needed. Do you agree that compliance rates would likely
increase significantly if the rule provided the regulated community
with some compliance options as well as being a rule they could afford
and understand while believing too that it was necessary?
Response. Given the fact that SPCC affects hundreds of thousands of
facilities, predominantly small business facilities, affecting a large
diversity of industries, there is a large opportunity to increase
compliance rates. The March 2005 USDA survey found that 61 percent of
farmers were unaware of the applicability of the SPCC requirements to
farms. If this survey figure were representative of all farms, the
amount of farm noncompliance would exceed 61 percent. Thus, there is
substantial room for improving the rate of compliance. We agree with
EPA that the self-certification approach is simpler and less costly,
and will enable small firms to more readily come into compliance. The
availability of an affordable compliance option and a rule that is
easily understood should lead to increased compliance rates. Over the
past 2 years, we listened to small business groups express doubt about
the necessity of these overly burdensome requirements for small
facilities. Thus, we believe that compliance with this program would
improve if facilities believed that the requirements reasonably
addressed their own situation.
______
Response by Thomas Sullivan to Additional Questions from Senator
Jeffords
Question 1. During the hearing, I asked you whether or not your
office analyzed the impact of the EPA proposal on the Nation's
engineering firms, 86 percent of which have less than 20 employees. You
did not provide a response. Please describe the results of the analysis
that your office performed with regard to the effect of the EPA
proposal on small engineering firms. If you did not perform an
analysis, please explain why, and whether you plan to perform such an
analysis at this point in time. If you do not plan to perform an
analysis, please provide a description of the criteria that the SBA
Office of Advocacy uses to determine which small businesses will
receive your support and which will not.
Response. The Office of Advocacy primarily makes sure that Federal
agencies, including EPA, consider appropriate regulatory alternatives
to alleviate burdens on small businesses, as required by the Regulatory
Flexibility Act. Federal courts have found that agencies must meet
their RFA responsibilities by considering the direct impacts of Federal
rules on small entities, and not the indirect impacts. In this case,
the professional engineers are not directly regulated by the SPCC rule.
Since engineering firms do not fall under the category of entities
directly impacted by EPA's proposal, the Office of Advocacy did not
perform an analysis of how they would fare under EPA's proposal.
Question 2. During the hearing, you stated that, ``--small
businesses believe they are in a good position to make that
certification themselves--'' Did your office collect any actual
information from any of the small businesses that visited your office
to determine the basis for this ``belief'' and its validity? For
example, did you survey small businesses that met with you to determine
what qualifications they would require the people performing these
certifications to have? What were the results of this or other similar
surveys?
Response. The Office of Advocacy meets with the small business
trade and membership organizations and representatives on a regular
basis to exchange information. In addition, we use contractors to
perform detailed analyses. The June 2005 JFA report is an outgrowth of
hundreds of hours working with the Office of Advocacy and the industry
sectors directly affected by this rule. During 2003 and 2004, we
organized several Environmental Roundtables where we hosted discussions
between the EPA staff and small business representatives. We also met
frequently with EPA staff to discuss SPCC issues.
The self-certification option was first presented by small
businesses to EPA in a January 2004 letter to EPA by a coalition of 10
small business associations. The industries represented in that letter
are: Agricultural Retailers Association, American Bakers Association,
American Forest and Paper Association, American Trucking Association,
Automotive Oil Change Association, Independent Lubricant Manufacturers
Association, National Automobile Dealers Association, National
Association of Fleet Administrators, National Cotton Council of
America, and the Synthetic Organic Chemical Manufacturers Association.
We listened to small business, which lead to our June 2004 letter
to EPA accompanied by the June 2004 JFA report.
Question 3. During the hearing, you stated that, ''there is a
widespread acknowledgement that there aren't enough small facilities in
the environmental compliance program right now, and there is some
evidence that a self-certification program will the increase the amount
of small facilities that start paying attention to these issues.''
-On what statement, letters, reports, or other data are you
basing your statement that there is ``widespread
acknowledgement'' that small facilities are not in the
``environmental compliance program''? Please provide copies of
any relevant materials to the Committee.
-Can you define what you mean by ''environmental compliance?''
Do you mean compliance with the SPCC rule, with environmental
regulations in general, or with any other specific
environmental rules please explain?
-You state that there is ``some evidence'' that a self-
certification program will increase the number of small
facilities that start paying attention to these issues. I have
two questions. First, please summarize the evidence, other that
the single example you referred to in Massachusetts, that you
are referring to and provide copies of any relevant data to the
Committee. Second, your answer seemed to suggest that small
facilities in general are out of compliance and in fact,
ignoring environmental regulations.
-Based on your experience in the SBA Office of Advocacy, can
you give the Committee an idea of the percentage of small
businesses that you have found ignore the environmental
regulations?
Response. In my response, I was referring to the compliance rates
achieved by small firms with respect to the SPCC program. EPA staff has
informed us about their anecdotal compliance experience in the field
that there is a high level of noncompliance with SPCC requirements
among smaller facilities. A March 2005 USDA survey shows a high
noncompliance rate among farms (report attached). In addition, the
Pechan 2006 analysis estimates a noncompliance rate of 61 percent for
farms (based on USDA) and a 30 percent estimate for nonfarms (based on
half the observed farm rate of 61 percent).
With regard to other self-certification programs, we identified the
Massachusetts example to benefit your Committee's evaluation. While I
did not research other examples, I expect your staff's expertise on
rules and programs that deal with underground storage tanks, hazardous
waste generators, and storm water will provide you with evidence on how
self-certification affects industry's attention to their compliance
responsibilities.
Based on my experience as a government official, I have not found
that small businesses purposefully ignore environmental regulations.
Question 4. Mr. Sullivan, the Small Business Administration want
EPA to allow greater flexibility for integrity testing by expanding the
scope of the consensus industry standard for small-built tanks. Under
the National Technology Transfer Advancement Act, EPA would be required
to justify any divergence from accepted industry standards. What data
has the Small Business Administration provided EPA to support deviation
from the consensus industry standards for integrity testing? Please
provide a copy to the committee.
Response. The Office of Advocacy recommendation is simply the
replacement of a 5,000 gallon threshold for a 10,000 gallon threshold
permitting visual inspection in lieu of an integrity test which is
found in the Steel Tank Institute standard for aboveground tank
inspections, SP001. The explicit purpose of the SPCC regulation, unlike
the standard, is to prevent discharges into navigable waters, not
discharges that are contained onsite. It was our technical judgment
that it is highly unlikely that a tank, with a continuous release
detection system and secondary containment can discharge oil, leading
to oil escaping the containment area and reaching navigable waters. The
oil spill data acquired by a 1995 EPA survey was used by our contractor
to demonstrate only 2 percent of total spill volume is accounted for by
small facilities with less than 10,000 gallons aggregate storage (see
Pechan, 2006 analysis), which further supports our view that periodic
visual inspection of tanks, that are inside secondary containment and
have a continuous release detection system, is very likely to prevent a
discharge from reaching navigable waters. The Office of Advocacy
comments on the SPCC proposal that were sent today are enclosed along
with the February 2006 Pechan report that contains supporting data.
______
Statement of Brent Cummings, Vice President, Cummings Oil Company
Good morning Mister Chairman, members of the committee, my name is
Brent Cummings. We have a family crude oil and natural gas exploration
and production (E&P) company, Cummings Oil Company located in Oklahoma
City. We operate and have ownership in numerous wells in Oklahoma, and
have ownership in wells located in Oklahoma, Kansas and New Mexico that
are operated by other companies. I appreciate the opportunity to appear
before this committee today. I offer my remarks from the perspective of
a small independent oil and natural gas exploration and production
operator and on behalf of the Oklahoma Independent Petroleum
Association (OIPA) which is an association of more than 1,600
independent oil and natural gas producers.
Our company has 8 full time employees and a number of contract
associates. I have a degree in Petroleum Engineering and I am
responsible for all aspects of our field operations including drilling,
completion and production operations. A significant and continuously
increasing part of this responsibility includes making sure our company
is compliant with numerous Federal environmental requirements under the
Clean Water Act, the Safe Drinking Water Act, the Clean Air Act, SARA
Title III, Federal Emergency Management Agency, U.S. Fish and Wildlife
Service, Historic Preservation, Bureau of Land Management, and a
variety of state requirements.
Prior to addressing our concerns with the Spill Prevention Control
and Countermeasure (SPCC) rule, I would like to describe the crude oil
and natural gas exploration and production in Oklahoma and the nature
of OIPA's membership. Oklahoma is a mature energy producing state. A
significant aspect of that production particularly in the context of
the effects of regulations involves the critical role of ``marginal''
wells. The Interstate Oil and Gas Compact Commission, defines a
marginal oil well as producing 10 barrels or less per day of crude oil
and 60 million cubic feet (mcf) or less of gas per day. Oklahoma ranks
2nd in the production of crude oil and natural gas from marginal wells.
Over half of Oklahoma's oil production comes from marginal wells which
accounts for approximately 41.4 million barrels of crude oil per year
from approximately 48,000 marginal wells.
Although our membership includes some publicly traded companies,
the majority of our members are small, family owned businesses similar
to small family farms. Our members explore for and produce crude oil
and natural gas. In contrast to the large integrated companies, our
members do not refine crude oil and we do not market gasoline or
heating fuels.
Now to address the SPCC rule, the Environmental Protection Agency
(EPA) proposed revisions to the SPCC rule in 1991, 1993, and 1997. A
new SPCC rule was finalized and became effective August 16, 2002. Prior
to and since 2002, OIPA has raised significant concerns regarding the
adverse impacts of these regulations on oil and natural gas production
in Oklahoma. On December 2, 2005, EPA proposed another rule to clarify
some issues raised with the 2002 rule as well as a guidance document
for its inspectors. Unfortunately, none of our issues are addressed in
the proposed rule and the guidance document leaves too much to regional
inspectors to interpret.
The intent of the SPCC regulation is to prevent the release of oil
into the waters of the United States. The EPA's broad interpretation of
the definition of ``waters of the United States'' that include things
such as dry arroyos, drainage ditches, road bar ditches is
unreasonable. Smaller independent operators often do not have the time
or the resources to prove they are not subject to the SPCC rules. This
ambiguity has lead operators to develop costly plans and procedures
when they may not be necessary. The various court decisions have
complicated this issue as well. The guidance document does not provide
any clarity on what is ``waters of the United States.''
The SPCC's current ``one size fits all'' requirements do not take
into consideration the risk of marginal crude oil and natural gas wells
as compared to larger bulk storage facilities and refineries that have
high throughput and large single tank storage volumes.
As previously stated, the intent of the SPCC rule is to prevent and
control oil discharges, not produced water discharges. The EPA has not
presented data demonstrating there is a significant history of
documented spills of oil into ``waters of the United States.'' from
produced water storage tanks. Oil and gas exploration and production
equipment used to treat produced water should be subject to the
wastewater exemption to the same extent as similar facilities in other
industrial sectors.
At non-exploration and production sites, process equipment is
excluded from the definition of bulk storage containers, whereas at E&P
facilities, this type of equipment is considered bulk storage
containers and subject to secondary containment requirements. The EPA
has singled out E&P oil and gas water separation facilities for an
increased level of regulation while facilities in other industry
sectors using similar or nearly identical technologies and treatment
goals are allowed to be exempted from these rules.
The requirements for containment around flow lines and gathering
lines are unrealistic and impractical. Installing secondary containment
or retrofitting all existing flow lines and gathering lines (such as
double-walled piping) is cost prohibitive. A more reasonable approach
would be to allow operators to implement flexible and responsible,
risk-based flow line inspection and maintenance programs, not
prescriptive corrosion, integrity or pressure testing which can be
extremely costly for small operators.
Design, construction and maintenance of secondary containment
around oil tanks are the most beneficial ways to prevent spills. Even
though EPA has recently proposed to streamline the process for smaller
facilities in its recent proposal, the proposed threshold does not
address marginal crude oil wells.
The 2002 SPCC rule includes numerous administrative changes that,
taken as a whole, greatly expands and increases the impact of the rules
on the regulated community. These changes include a new definition for
a facility, requiring a plan prior to beginning any operations at an
E&P site and changing the terminology from ``shoulds and shalls'' to
``musts or implied musts''. All these changes take away the flexibility
that a Professional Engineer and/or an operator should have to address
the various site specific conditions. We are disappointed to see that
our issues with the 2002 regulation were not directly addressed in the
recently announced proposed rule.
We have never seen a cost and energy impact analysis of the 2002
regulations or data that supports the needs for changes provided in the
2002 SPCC rule affecting the E&P sector. We are aware that the
Department of Energy has recently initiated a cost impact study and
believe that the results will be very beneficial. At a time when
domestic oil and natural gas production is being challenged to meet
critical domestic demand, understanding these consequences will be
essential to rulemaking decisions.
Finally, the EPA should clarify how it plans to address the API
litigation settlement agreement issues as it relates to the 2002 SPCC
rule. EPA should follow through and make rule changes to clarify these
issues. And while the API settlement agreement appears to address
containment at crude oil loading areas, recent site inspection
violations in Oklahoma show EPA inspectors taking a different approach.
On December 2, 2005, EPA Administrator Stephen L. Johnson signed a
proposed amendment to extend the SPCC compliance deadline for all
facilities. OIPA supports the EPA's proposed extension as we believe it
will give us time to work with EPA to resolve our ongoing issues. We
believe it is logical and appropriate to extend the compliance deadline
to account for future rulemakings that could result in changes that
would make expenditures under the 2002 regulations costly and
unnecessary.
We urge the EPA to develop a regulatory approach that is
appropriate for our industry. This approach would include a clear,
concise and reasonable definition of ``waters of the United States.''
for the E&P industry and focus on those facilities that reasonably can
be expected to impact those waters, include a benefit/cost analysis of
the requirements being considered and implemented, address the ``real''
environmental risks of domestic exploration and production of oil and
natural gas sites and focus on those areas where past experience has
demonstrated a true need for regulation, and provide a practical and
economic regulatory scheme that small operators can understand. Such an
approach would encourage marginal well crude oil and natural gas
operators to comply, assure that industry's funds are spent where it
can provide the most benefit, and maintain viability domestic
production supplies.
I appreciate the opportunity to submit this testimony on OIPA's and
our behalf.
______
Responses by Brent Cummings to Additional Questions from Senator Inhofe
Question 1. How much oil is produced in the state of Oklahoma and
of that oil, what percentage of it has actually been spilled?
Response. The Oklahoma Corporation Commission tracks the amount of
oil and condensate produced on a yearly basis. The total oil and
condensate production in Oklahoma for the following calendar years is:
Calendar Year 2000 - 69,018,135 barrels
Calendar Year 2001 - 68,725,026 barrels
Calendar Year 2002 - 66,030,455 barrels
Operators are required to report oil spills that reach waters of
the United States to the National Response Center (NRC). The NRC's data
was evaluated to determine the amount of spills that have occurred at
production sites (excluding spills that were associated with downstream
activities such as gathering, transmission and refining). Using the
National Response Center data for Oklahoma, the percentage of crude oil
and condensate spilled that reached waters of the United States during
2000 to 2002 in comparison to the amount of crude oil produced is as
follows:
Calendar Year 2000--843 barrels - .00122 percent
Calendar Year 2001--891 barrels - .00130 percent
Calendar Year 2002--830 barrels - .00126 percent
This clearly shows that spills from production sites to waters of
the United States present a low risk to the environment, there is no
need for more onerous SPCC requirements at crude oil production sites,
and that reduced requirements for these sites are warranted.
Question 2. In EPA's 1996 report entitled ``Analysis of the
Relationship between Facility Characteristics and Oil Spill Risk'', it
states that ``the overwhelming majority of facilities in both the farm
and institutional industry sectors are small, storing less than 10,000
gallons of oil. Most facilities in the facilities in the production
industry sector store between 10,000 and 50,000 gallons of oil'' EPA
seems to imply that these production facilities are not ``small''
businesses when in fact these are the small businesses of the oil
production industry and should be afforded the same flexibility given
to other small businesses in the December 2005 rule. Do you agree?
Response. Yes, Cummings Oil Company employs 8 full time employees.
Our company certainly is a small business and typically we have storage
capacity approaching 42,000 gallons of crude oil at our production
sites.
Question 3. Further, EPA's 1995 data and Dr. Corbett's testimony
state that there are small oil production facilities that fall below
the 1,320 gallon threshold that triggers the SPCC requirements. Are you
aware of any such facilities?
Response. No. It would be extremely rare to find an oil production
facility in Oklahoma that would have less than 1,320 gallons (i.e.
approximately 31 barrels) of total oil storage. Production facilities
in Oklahoma where crude oil is produced typically have at least two oil
storage tanks (one to produce in and one where oil is stored in
preparation for sale to the purchaser). The purchaser's transport load
size is approximately 180 barrels. This combined with the producing
capability of the well explains why the typical oil storage tank has a
nominal capacity of 300 barrels or 210 barrels. There is a volume below
the load level in a tank for heavy impurities to settle, and it is not
practical to attempt to fill tanks to the top. However, the shell
capacities of all oil containers are required by EPA to be included in
the total facility storage volume. Additionally, there is often a
produced water tank of similar size to the oil storage tanks,
separation equipment, flow lines and piping at the facility that have
to be included in the total facility storage volume (minus those
containers that hold less than 55 gallons).
______
Responses by Bret Cummings to Additional Questions from Senator
Jeffords
Question 1. Mr. Cummings, in your testimony, you mention that you
are concerned that EPA inspectors may not be taking actions consistent
with the recent settlement agreement. Have you reviewed the EPA
guidance for regional inspectors, issues on December 2, and do you
believe such guidance is or is not adequate to resolve your concerns?
Response. We have reviewed the guidance document and found that it
merely follows the 2002 SPCC rule. It provides no clarification on
issues such as waters of the United States, produced water tanks,
containment around flow lines, delayed implementation of SPCC plans at
new oil production facilities, etc. We do not believe that our issues
associated with production operations were addressed in the guidance
document or the recently proposed rule.
The guidance document is not an ``enforcement'' document and an EPA
inspector has the discretion to use the document or not. We do not
believe a guidance document should be used to explain SPCC requirements
in lieu of a rulemaking. For example, the API settlement agreement
issues should be clarified in a rule.
Question 2. What is the total amount of petroleum products located
within the boundaries of an average ``marginal well'' site?
Response. Produced crude oil is the petroleum product located at a
marginal well site that typically meets the threshold requirement for
SPCC plans. It is important to note that by nature oil well production
rates decline over time. Many wells ultimately become marginally
productive. However, the production and storage equipment is sized to
meet the initial production capability of the well. Typically, it is
not practical or economical to resize equipment. Additionally, although
a well's production rate may currently be only a few barrels per day,
there is need for larger storage capacity to accumulate enough oil to
make it economical for an oil purchaser to transport.
Marginal production sites in Oklahoma where crude oil is produced
commonly have at least two oil storage tanks (one to produce in and one
where oil is stored in preparation for sale to the purchaser). The
purchaser's transport load size is approximately 180 barrels. This
combined with the initial producing capability of the well explains why
the typical oil storage tank has a nominal capacity of 300 barrels or
210 barrels. There is a volume below the load level in a tank for heavy
impurities to settle, and it is not practical to attempt to fill them
all the way to the top. However, the EPA requires the shell capacities
of all oil containers are to be included in the total facility storage
volume. Additionally, there is often a produced water tank of similar
size to an oil storage tank, separation equipment, flow lines and
piping at the facility (minus those containers that are less than 55
gallons). Depending on site characteristics, the total facility volume
of petroleum hydrocarbons on a facility can be from 800 to 1000
barrels. It is important to note that this is not a single tank or
piece of equipment that stores this volume of oil as compared to crude
oil storage tank farms or refineries. The risk of is extremely low for
all tanks and equipment at a typical oil production facility to fail at
the same time. Although, we feel the requirements for most production
sites are overly stringent. These types of facilities certainly warrant
less stringent requirements and a more streamlined SPCC process.
______
Statement of James Coyne, President, National Air Transportation
Association
Chairman Inhofe, Senator Jeffords, and Members of the Committee:
Thank you for this opportunity to appear before you today to
discuss the Environmental Protection Agency's recently released
revisions to the Spill Prevention, Control and Countermeasure (SPCC)
rule. My name is James K. Coyne, and I am president of the National Air
Transportation Association (NATA). I ask that my full statement be
submitted for the record.
NATA, the voice of aviation businesses, is the public policy group
representing the interests of aviation businesses before the Congress,
Federal agencies, and state governments. NATA's 2,000 member companies,
own, operate and service aircraft and provide for the needs of the
traveling public by offering services and products to aircraft
operators and others such as fuel sales, aircraft maintenance, parts
sales, storage, rental, airline servicing, flight training, Part 135
on-demand air charter, fractional aircraft program management, and
scheduled commuter operations in smaller aircraft. NATA members are a
vital link in the aviation industry providing services to the general
public, airlines, general aviation, and the military.
As you are well aware, over the past few years, a number of
aviation-fuel providers have been notified by the U.S. Environmental
Protection Agency that their fuel trucks are subject to regulation
requiring so-called ``secondary containment'' while the trucks are
parked. The EPA contends that these trucks are mobile or portable
storage facilities subject to existing regulations that have been
covered since the rules' inception in the early 1970s. Earlier this
month, the EPA finally issued two Notices of Proposed Rulemaking
(NPRMs) on revisions to the SPCC rule, which governs secondary
containment. The new deadline for implementation of these regulations
has been extended to October 31, 2007.
The NPRMs put forth by the EPA present a much better solution than
those proposed earlier by the Agency, although the rules contain some
contradictions and still leave many questions unanswered. Most notably,
the proposed amendments do away with the requirements of ``sized
secondary containment'' for mobile refuelers, which posed the largest
challenges to the industry. Refueling vehicles will no longer be
required to build costly containment areas to hold the trucks when they
are not in service. Vehicles are still subject to ``general
containment'' provisions, which are far more reasonable.
The EPA's new proposals still, however, leave some lingering
questions regarding the SPCC requirements. The NPRMs do not
specifically state whether the extension for compliance to October 2007
applies to aviation industry regulations as the industry asserts.
Second, general containment is loosely defined in the documents, which
gives more discretion to individual EPA inspectors responsible for
auditing airport environmental operations. Additionally, other non-
aviation vehicles and equipment subject to SPCC requirements are given
exemptions due to their excellent history of handling fuel spills,
while the aviation industry, which has a comparable if not better
record, isn't provided these exemptions. Overall, NATA is supportive of
the efforts made by the EPA to mitigate the impact the SPCC rules could
have on the aviation industry, and looks forward to working with the
Agency to further clarify some key issues that currently remain
unresolved.
history
Regulations providing for secondary containment to prevent fuel
spills have been in effect since 1974, with the passage of the Clean
Water Act. In July 2002, the EPA issued proposed revisions to its oil
spill prevention programs in a proposed rule known as the Spill
Prevention, Control and Countermeasure (SPCC) rule. Included in the
SPCC rule was a clarification in the definition of a mobile fuel truck
used for refueling aircraft at an airport. The new rules classified
mobile refueling vehicles as ``mobile or portable storage containers''
which would make them subject to SPCC regulations.
There has been considerable debate as to whether this
classification of a mobile fuel truck as a storage container is a new
or existing regulation. The EPA contends that mobile refuelers in use
at airports have always been classified as portable facilities and have
thus been covered under the SPCC regulations since the original 1974
rule. The EPA makes this claim despite the fact that the Agency has
never taken any enforcement action against a mobile refueling truck
until recently. The aviation industry asserts that the revisions to the
SPCC rule in 2002 constituted a reinterpretation of existing
regulations. Such a reinterpretation should be subject to a separate
rulemaking process, with the appropriate opportunities for industry
groups to comment on the proposed changes. To the EPA's credit, the
NPRMs released earlier this month provide the opportunity for all
affected to comment on the proposed rule.
Prior to the release of the SPCC NPRMs on December 2, the aviation
industry was extremely concerned with the EPA's lack of communication
with officials at the Department of Transportation and Federal Aviation
Administration regarding the matter. While the EPA and DOT operate
under a series of agreements regarding jurisdiction over certain parts
of the airport, the industry found it alarming that the two agencies
were not relying on the expertise each other had in drafting rules that
would not impede airport operations. While we have received word that
the FAA was consulted very late in the rulemaking process, the industry
feels that the FAA and EPA should have been working together from the
beginning.
To discuss the economic and logistical effects of the proposed SPCC
rules, NATA teamed with other aviation industry stakeholders to bring a
collective message to the EPA regarding the rule. A coalition
comprising representatives from NATA, the Air Transport Association of
America (ATA), the American Association of Airport Executives (AAAE),
and the Airports Council International--North America (ACI-NA) was
formed to advocate before the EPA and Congress the consequences of the
SPCC rules.
After several aviation-fuel providers were visited by their local
EPA regional offices and threatened with fines for non-compliance of
the SPCC rule (while negotiations with the EPA were ongoing), the
aviation coalition began taking their message to Capitol Hill. To date,
approximately a dozen U.S. Representatives and Senators have written
the EPA questioning the necessity of requiring mobile refuelers to be
parked in special secondary containment areas. Just last month, in
legislation to fund the Department of Transportation for the 2006
fiscal year, Congress included language encouraging the EPA to work
with the DOT ``to establish reasonable methods of compliance for the
[SPCC] requirements as they relate to on-airport mobile refuelers.''
are fuel spills a significant problem?
Mobile refuelers in use at airports currently adhere to a strict
inspection regimen designed to ensure the integrity of the fuel tanks
to prevent them from leaking or spilling fuel onto the ground. The
design and construction of all mobile refuelers follow DOT guidelines
and are tested to certify compliance with environmental emissions
standards. Moreover, virtually all mobile refueling vehicles are
equipped with a number of safety devices to prevent fuel spills and
leaks, and also to minimize the risk of fire. Airport refuelers are
equipped with systems including emergency cut-off switches, interlock
systems to prevent movement of the vehicle without the proper stowage
of equipment and over-fill prevention valves. Refueling vehicles also
contain protections such as ``dead-man'' switches, over-pressure cut-
off valves and the capability to isolate individual system components.
In addition to the numerous safety precautions and redundancies in
use on a mobile refueler, there is also a strong economic incentive for
operators to conserve as much fuel as possible. Fuel is the most
profitable and sometimes only commodity for an airport business, and it
makes no sense for a fuel provider to not care about protecting fuel
from leaks and spills. With the price of jet fuel having increased
dramatically in recent years, it makes even more sense that the
provider make sure that every gallon of fuel he or she has purchased
makes it into the aircraft rather than spilled onto the airport tarmac.
Over the last few years, NATA has implemented a program encouraging
ramp safety for its member companies. The program, known as NATA Safety
1st, encourages standardized training and procedures for line service
personnel employed on airport operating areas. The objective of the
program is to teach personnel proper and safe procedures for ground
servicing and refueling, towing and handling of general aviation
aircraft and helicopters. Employees are trained to have a professional
``safety first'' attitude. The program has been an overwhelming
success, with more than 8,000 line service technicians of NATA
companies attending seminars and participating in safety training.
The aviation industry as a whole has also worked together to guard
against fuel spills. The Air Transport Association has specifications
regarding quality control for fuel handling, titled ``Spec. 103:
Standards for Jet Fuel Quality Control at Airports,'' that are required
of any airport in the United States seeking to sell aviation fuel. Fuel
distributors are required to include the specification as part of their
handling manual. The specifications call for daily inspection of the
mobile refueler for problems including cracks, leaks, or any other
damage. Every aspect of the refueling vehicle is covered, including
tires, hoses, fire prevention equipment, and brakes. It is mandated
that a mobile refueler undergo this rigorous inspection each day before
coming into contact with any aircraft.
The FAA released an Advisory Circular in 2004 accepting a number of
industry publications as a means of complying with FAA regulations
pertaining to fire safety in the safe storage, handling, and dispensing
of fuels used in aircraft. A copy of the AC is attached to my
testimony. The FAA included publications from the National Fire
Prevention Association (NFPA), the American Petroleum Institute (API),
and NATA. NATA's ``Refueling and Quality Control Procedures for Airport
Service and Support Operations'' is listed as an acceptable means of
compliance with FAA regulations. A copy of the publication is attached
to my testimony as well.
While it is clear that airport refuelers take extraordinary steps
to minimize the potential for damage caused by fuel spills, the EPA
continues to believe that these trucks are highly susceptible to fuel
spills and leakage, even when not in use. We contend that the EPA is
proposing a solution to a problem that does not exist. Across the
entire aviation industry, we do not have one documented case of a fuel
truck spontaneously rupturing or spilling fuel while the truck is not
in service, which is what many of the SPCC provisions guard against. In
the rule and accompanying guidance released this month, the EPA
contends again that they have documented cases of aviation fuel trucks
spilling. However, the Agency has failed to share these cases with the
industry at any time during our discussions on the rule. I think it
would make for much better public policy if the EPA were to share their
documented cases with the industry so we can review the cases and amend
industry standards, if necessary. We have always welcomed the
opportunity to work with the EPA to review the causes of such spills
and to come together to reach solutions to help prevent similar
incidents in the future.
traditional compliance with spcc regulations
An SPCC plan is a written site-specific spill prevention plan that
details a facility's operating procedures to prevent spills, control
measures to prevent spills from reaching navigable waters, and
countermeasures to contain, cleanup, and mitigate the effects of an oil
spill that reaches navigable waters. The key elements of an SPCC plan
include an identification of the source of possible spills, an
identification of strategies to preclude fuel spillage, the
installation of methods of spill containment and product recovery, and
the audition and review of programs to determine that spill prevention
programs are effective.
SPCC plans are necessary for owners or operators of a non-
transportation-related fixed facility that could reasonably be expected
to discharge oil into or upon the navigable waters of the United States
or adjoining shorelines. SPCC regulations also apply to facilities that
have an aboveground storage capacity of more than 660 gallons in a
single container, have an aboveground storage capacity of more than
1,320 gallons, or have a total underground buried storage capacity of
more than 42,000 gallons. Some facilities may not fall under
regulations if, due to their location, they are not reasonably expected
to discharge oil into navigable waters.
An aviation business' SPCC plan must meet a number of criteria. The
plan must have full management approval, be kept onsite, and be
reviewed and certified by a Professional Engineer (PE) who has examined
the facility. The plan must address both spill history and spill
prediction, i.e. the direction of flow. SPCC plans must be reviewed by
management every three years and be revised within six months (and
recertified by a PE) if the facility is modified.
Specifically, an SPCC plan must contain measures to prevent fuel
spills, including drainage control, bulk storage tanks, facility
transfer operations, and spill control equipment. A facility layout and
surface drainage diagram must also be included in the plan.
the epa's new revisions to the spcc rule
The new NPRMs released by the EPA in early December represent a
major change from earlier EPA policy regarding mobile refuelers and
other vehicles operating on airport runways. The removal of the
requirement of ``sized secondary containment'' is a great step in the
right direction and demonstrates the EPA's willingness to listen to the
industry regarding the impracticability of certain EPA regulations.
With the current comment period still open, NATA hopes to further work
with the EPA to discuss some of the outstanding issues and questions we
have concerning the new rules and how to best resolve them in both a
sensible and environmentally sound manner.
The NPRMs address several aspects of airport operations, and a
summary of some of the provisions and how they relate to aviation
businesses is listed below:
Mobile Refuelers
The EPA defines airport mobile refuelers as vehicles found at
airports that have onboard bulk storage containers designed for or used
to store and transport fuel for transfer into or from an aircraft or
ground service equipment. The troublesome provisions for refuelers
prior to this month's NPRMs read as follows:
112.8(c)(2): Construct all bulk storage container
installations so that you provide a secondary means of
containment for the entire capacity of the largest single
container and sufficient freeboard to contain precipitation.
You must ensure that diked areas are sufficiently impervious to
contained discharged oil. Dikes, containment curbs and pits are
commonly employed for this purpose. You may also use an
alternative system consisting of a drainage trench enclosure
that must be arranged so that any discharge will terminate and
be safely confined in a facility catchment basin or holding
pond.
112.8(11): Position or locate mobile or portable oil storage
containers to prevent a discharge as described in 112.1(b).
You must furnish a secondary means of containment, such as a
dike or catchment basin, sufficient to contain the capacity of
the largest single compartment or container with sufficient
freeboard to contain precipitation.
The new EPA proposal effectively exempts airport mobile refuelers
from both of the above provisions. These provisions were the most
contentious in our discussions with the EPA, as they would have cost
tens of thousands of dollars for airport businesses and required fuel
providers to construct specialized areas of the airports to park the
fuel trucks when they were not in service. Such areas would have
reduced the already constrained space on the airport operating area
(AOA) and many airports have no space at all in which to construct
these facilities. Furthermore, the increased traffic of having fuel
trucks driving back and forth to these areas increased the likelihood
of safety incidents during daily airport operations. Also, having
trucks loaded with fuel parked in relative proximity to each other
would provide an inviting target for terrorists seeking to cripple the
aviation system in the United States.
The NPRM took these concerns into account and did away with the
sized secondary containment requirements that caused so much alarm in
the industry. We are very appreciative of the EPA's efforts to listen
to and address the industry's concerns on this important matter.
Although the requirements of sized secondary containment have been
eliminated, the NPRMs do not exclude mobile refuelers from general
containment requirements listed in Sec. 112.7(c) and Sec. 112.8(c) of
the SPCC rule as they relate to bulk storage and transfers to the
vehicles. General secondary containment requirements include, as noted
in Sec. 112.7(c), ``Provide appropriate containment and/or diversionary
structures or equipment to prevent a discharge'' The rule states that
``at a minimum, you must use one of the following prevention systems or
its equivalent dikes, berms, or retaining walls sufficiently impervious
to contain oil; curbing, culverting, gutters, or other drainage
systems; weirs, booms or other barriers (such as drain plugs); spill
diversion ponds; retention ponds; or sorbent materials.'' Other general
provisions in the regulation require integrity testing of aboveground
storage tanks, and training and response plans in the event of an oil
discharge.
As you can see, the SPCC regulations offer a number of options for
mobile refuelers to comply without resorting to the sized containment
area. Many refuelers already use some of the prevention systems
described in the regulation. The revisions proposed in the NPRMs are
far more reasonable than those originally proposed by the EPA in 2002.
While the requirements of ``general secondary containment'' do
provide a variety of ways to comply, the broadness of the provision
also leaves many unanswered questions. We support the flexibility in
having so many different compliance mechanisms, but are eager to hear
more from the EPA on how the Agency will enforce these regulations. The
guidance for EPA regional inspectors issued by the Agency to accompany
the NPRMs is vague and leaves many of the terms undefined. We have
concerns that without more structured guidance for EPA inspectors, the
inspectors will have more autonomy to enforce the regulations at their
will. We have already dealt with problems where EPA regulations are
enforced differently depending upon in which region an airport is
located and, without more defined guidance to EPA inspectors, we expect
this practice to continue.
Small Facilities
One of the chief concerns regarding the SPCC regulations was their
disproportionate detrimental effect on smaller businesses and smaller
airports. These businesses were ill equipped to comply with some of the
costlier provisions of the SPCC rule. The Small Businesses
Administration (SBA) Office of Advocacy has remained a loyal advocate
for the small businesses affected by this rule, especially those in the
aviation industry. We commend the SBA Office of Advocacy for its
tireless support of NATA businesses during this process.
After listening to the SBA and other representatives of small
businesses, the EPA has now issued proposals that seek to offer relief
for smaller facilities that are under the jurisdiction of the SPCC
rule. The new proposal allows a ``qualified facility'' to self-certify
its SPCC plan in lieu of certification by a Professional Engineer (PE).
A ``qualified facility'' is a facility subject to the SPCC requirements
that (1) has a maximum total facility oil storage capacity of 10,000
gallons or less; and (2) has had no reportable oil discharge as
described in Sec. 112.1(b) of the SPCC rule during the 10 years prior
to self-certification. If the facility has been in operation for less
than ten years, then it must have had no reportable oil discharge
during its entire tenure.
The EPA states that in addition to the smaller fuel storage
capacity, a discharge history is a ``reasonable indicator of a facility
owner's or operator's ability to develop an SPCC plan for the facility
without the involvement of a PE.''
This provision will save small facilities thousands of dollars in
consultant fees and certification costs by allowing them to avoid the
use of a PE. Such a proposal is reasonable and alleviates many of the
concerns held by smaller airports and aviation businesses prior to the
release of the NPRM. However, the facilities are offered no exceptions
to any SPCC regulations if they decide to use this option. Facilities
self-certifying themselves cannot claim exemption from SPCC rules for
impracticability reasons or any other factor.
Oil-Filled Equipment
The EPA defines oil-filled equipment as ``equipment which includes
an oil storage container (or multiple containers) in which the oil is
present solely to support the function of the apparatus or the device.
Oil-filled operational equipment is not considered a bulk storage
container, and does not include oil-filled manufacturing equipment.''
Examples of oil-filled operational equipment include, but are not
limited to, hydraulic systems, lubricating systems, gear boxes,
machining cooling systems, heat transfer systems, transformers, circuit
breakers, electrical switches, and other systems containing oil to
enable the operation of the device. Mobile refuelers are not considered
oil-filled equipment under the SPCC rule.
The EPA's proposal offers many exemptions to the SPCC rule for oil-
filled equipment. The Agency states that the operators of such
equipment, mainly used in utilities, have strong economic incentives to
prevent power outages, to discover and respond to an outage, and to
correct the conditions that produced the outages (an oil leak) as
quickly as possible. In addition, the Agency stated that oil-filled
operational equipment is often subject to routine maintenance and
inspections to ensure proper operations, and is designed, constructed,
and maintained according to specifications for its particular
operation, and that construction materials are corrosion-resistant.
The NPRMs provide several alternatives for owners of oil-filled
equipment to comply with the SPCC regulations. Owners and operators of
facilities where qualified oil-filled equipment is located have the
alternative of preparing an oil spill contingency plan and a written
commitment of manpower, equipment and materials, without having to
determine that secondary containment is impracticable on an individual
equipment basis. Additionally, owners and operators of facilities where
qualified oil-filled equipment is located may establish and document an
inspection or monitoring program for this equipment to detect equipment
failure and/or discharge in lieu of providing secondary containment for
qualified oil-filled operational equipment. The proposal also
eliminates the current requirement for individual impracticability
determinations for oil-filled equipment at a facility that has had no
reportable discharges during the 10 years prior to the plan
certification date or since becoming subject to the SPCC requirements
if the facility has been in operation for less than 10 years.
These changes to the original SPCC proposals again represent a
reasonable approach by the EPA to provide methods of compliance that do
not place an undue burden on the industry, yet provide sensible,
environmentally sound procedures. All airports use some oil-filled
equipment in some capacity, and these revisions alleviate many concerns
among those in the industry.
Motive Power
Certain motive power containers are exempted from the SPCC rule as
well. Motive power containers are defined as onboard bulk storage
containers used solely to power the movement of a motor vehicle (i.e.
fuel tanks), or ancillary onboard oil-filled operational equipment
(i.e. hydraulics and lubrication systems) used solely to facilitate its
operation. This exemption from the SPCC regulations does not apply to a
bulk storage container mounted on a vehicle for any purpose other than
powering the vehicle itself (i.e. a tanker truck or mobile refueler).
The EPA defines a ``motive power container'' as an integral part of the
motor vehicle, providing fuel for propulsion or providing some other
operational function, such as lubrication of moving parts or for
operation of onboard hydraulic equipment. Examples of motive power
vehicles include, but are not limited to, buses, recreational vehicles,
some sport utility vehicles, construction vehicles, aircraft, farm
equipment, and earthmoving equipment. Other airport equipment,
including snowplows, deicing vehicles, and aircraft tugs are not
addressed in the proposed amendments.
While motive power is not addressed specifically in the SPCC
regulation, some vehicle fuel containers may fall under the definition
of a ``bulk-storage container'' in Sec. 112.2, while the onboard
lubrication system may be considered oil-filled operational equipment.
The EPA states that it recognizes that the requirements of the rule,
especially specifically sized containment, are not practicable in most
cases, and in fact the Agency never intended to regulate motive power
containers. The EPA noted that although the equipment is exempt, oil
transfer activities occurring within an SPCC-covered facility would
continue to be regulated. The example provided by the EPA is when an
airport mobile refueler transfers oil to a motive power tank, it is
subject to the general secondary containment requirements because it
does not occur across a loading/unloading rack.
The aviation industry greets the exemption of motive power from the
SPCC regulations with a sigh of relief. Earlier EPA statements offered
up the possibility that all motive power, including large aircraft,
would be subject to SPCC rules. This clarification and exemption of
motive power is most helpful to the industry.
Extension of Compliance Deadlines
Originally, the amendments to the SPCC rule first published in 2002
had set 2006 as the final deadline for SPCC compliance. Facilities
subject to the rule would have to incorporate a plan developed by
February 2006 and have the plan fully implemented by August 2006. The
new NPRMs extend the deadlines for compliance until October 31, 2007.
All affected facilities must have a plan certified and implemented by
then.
It is unclear, however, whether the extension applies to the
aviation industry and to mobile refuelers specifically. In claiming
that mobile refuelers have been subject to SPCC rules since the 1970s,
the EPA is hinting that there will be no additional time for refuelers
to comply and that EPA inspectors are free to immediately begin
auditing airport operations. The aviation industry has long disputed
the claim that mobile refuelers have always been covered, noting that
the 2002 revisions constituted a reinterpretation of the definition of
a mobile refueler.
It is imperative that the EPA grant aviation businesses the
opportunity to take the time to develop a comprehensive SPCC plan that
takes into account the new guidance issued by the Agency. It takes a
significant amount to time for airports to complete the certification
process and then implement their plans. The EPA should absolutely cease
any enforcement until airports have the opportunity to develop and
implement an SPCC plan.
contradictions in epa policy
While the new SPCC rules on the surface seem reasonable, the NPRMs
do contain a number of contradictions in EPA policy regarding mobile
refuelers. For instance, the EPA offers exemptions to certain
facilities from SPCC rules based on the facilities' history of oil
discharges, exempting those that have not had any spills in the last
decade. While those facilities are offered exemptions, the aviation
industry, which has an exemplary record of handling fuel spills, is not
offered the same exemptions. Shouldn't the EPA at least consider
expanding the ``history test'' when examining the necessity for
secondary containment regulations?
Additionally, the EPA asserts that the utility industry's oil-
filled equipment is ``subject to routine maintenance and inspections to
ensure proper operation, and is designed, constructed, and maintained
according to specifications for its particular operation and
construction materials are corrosion-resistant.'' The Agency also
states that the utilities have an ``economic incentive'' to prevent an
oil spill. Here, the EPA fails to recognize that aviation businesses at
airports have the same economic incentives and similar design,
construction and maintenance stringencies regarding mobile refuelers.
While NATA is encouraged by the EPA's overall approach to the SPCC
rule, these are questions we feel need to be asked of the EPA in regard
to its policies on oil spills and prevention.
conclusion
After years of discussion with the EPA and appeals to Members of
Congress and other Administration officials, we are pleased that the
Agency has listened to our concerns and released a proposed rule that
appears practical and thoughtful. Although several questions remain and
the rule appears to offer contradictory reasoning for its policies,
these NPRMs are much closer to the aviation industry's goals than
proposals of years past. We commend the EPA for taking our positions
into account in drafting this rule. As the comment period moves forward
and the Agency seeks comments on the proposed amendment, we will be
happy to continue to address our thoughts and concerns with the EPA. We
are hopeful that this rule will help reopen a dialogue between the
industry and the EPA on how to reach the best possible policy. In the
meantime, we hope that the Agency opts to include aviation facilities
in the extension to 2007 offered by the rule. Such an extension will
provide the appropriate opportunity for all affected airports to
design, certify and implement an environmentally rigorous spill
prevention plan.
The aviation industry is committed to maintaining the environmental
integrity of airports throughout the country. We recognize the
sensitive environmental concerns that both the government and the
public share regarding the role of the airport in the community. We
feel that the best way to achieve a policy that benefits all
stakeholders is to strengthen the government-business relationship.
Such a relationship offers many opportunities for both parties to make
our aviation system even better than it is today.
I thank you for the opportunity to testify, and would be happy to
answer any questions you may have.
______
Responses by James Coyne to Additional Questions from Senator Inhofe
Question 1. In your statements during the hearing, you discussed
the need for flexibility in airport management in moving mobile
refuelers around a facility, the concern about having all such trucks
go to a berm location. You also mention that the EPA suggested in their
proposal that this is not workable. It seems that your issues regarding
mobile refuelers should be resolved with the EPA proposal. Can you
clarify?
Response. The EPA proposal issued on December 2 of last year is a
great step forward in the right direction. Removing the requirements of
``sized secondary containment'' for airport mobile refuelers was the
largest point of contention between the aviation industry and the EPA.
However, there are still some questions that remain with the EPA's
proposal. The NPRM does not specifically state whether the extension
provided to qualified facilities until October 31, 2007, applies to the
aviation industry. The industry asserts that such an extension should
apply, noting that the original 2002 revisions to the SPCC program
issued by the EPA constituted a reinterpretation of the definition of a
mobile refueler. Allowing aviation fuel providers an extension until
October 2007 will also result in more environmentally sound solutions
to preventing oil spills, as facilities will have more time to budget
properly and develop SPCC plans that focus on the long-term
environmental health of the airport, rather than a short-term solution
to meet an immediate deadline.
Additionally, while refuelers are exempted from ``sized
containment'' requirements, they are still subject to ``general
containment,'' which is far more reasonable, although the term is
loosely defined. While NATA appreciates the flexibility offered by the
loose definition of general containment, the association does have
concerns that the vagueness of the term may give individual inspectors
more power in deciding whether a facility has properly complied with
the SPCC program.
NATA would also like the EPA to consider applying exemptions
provided to other equipment that share many of the same characteristics
as mobile refuelers to the aviation industry's mobile refuelers. For
example, certain facilities are exempted from SPCC rules based on the
facilities' history of oil discharges. Those that have not had any
spills in the
last decade are exempted. The aviation industry, which has an
exemplary record of handling spills, is not offered those same
exemptions. Other equipment is exempted from SPCC rules due to the
``economic incentive'' of conserving fuel. Aviation fuel providers
should be considered for a similar exemption, given the fact that fuel
is a precious commodity and aviation businesses cannot afford to lose
large amounts of fuel due to spillage.
Question 2. Mr. Coyne, in your testimony, you seem to suggest that
it would be appropriate for small facilities, which may or may not have
any technical expertise on hand regarding oil spill containment, to
make technical judgments regarding ``impracticability'' or
``environmental equivalence.'' You heard the testimony stating that the
self-certification option adds a significant liability to small
business. Has NATA evaluated the liability impacts for small airports
of the self-certification option as proposed and the self-certification
option as you believe it should be drafted, and if so, what were the
results?
Response. To date, NATA has not conducted a study examining the
liability impacts for small airports and operators that choose to self-
certify. Prior to the publication of the NPRM in December 2005
governing the SPCC program, there was no indication from the Agency
that self-certification for small facilities would be an option.
NATA appreciates the flexibility offered by the EPA in allowing
small airports and operators to self-certify their SPCC plans if they
so choose, but encourages all the association's members who qualify
under the regulations to employ the services of a Professional Engineer
(PE). Given the already high insurance rates faced by most airports and
operators following the 9/11 attacks, the association is confident that
most operators will use a PE to certify their facilities rather than
incur the increased liability from self-certification.
Question 3. In your testimony you reference letters of support sent
by several members of Congress. Can you please provide the committee
with copies of these letters?
Response. Copies of the letters have been sent to the committee by
both fax and e-mail.
______
Statement of Richard Owen, Director, CHS, Inc
Mr. Chairman, members of the committee, I am pleased to be here
today representing the Agriculture Coalition on Spill Prevention
Control and Countermeasure (SPCC). My name is Richard Owen, and I am a
third-generation wheat farmer from central Montana. I farm 2200 acres
of non-irrigated wheat, feed barley, malt barley, waxy barley and
safflower in rotation. I also serve as a director for CHS, the
country's largest farmer-owned cooperative, which is headquartered in
St. Paul, Minnesota, and includes over 325,000 farmer owners.
The Agriculture Coalition, which includes organizations
representing farmers, cooperatives, and related businesses, welcomes
the Environmental Protection Agency's (EPA) continued efforts to
address the concerns of agriculture as part of its December 2005,
proposed rulemaking. However, we continue to have concerns with both
EPA's existing regulations as well as this latest proposal.
In reviewing the history, we do not believe that the original EPA
regulations, which became effective in 1974, were ever intended to
apply to farms and ranches. Many farmers and ranchers in fact only
became aware of such requirements when EPA issued its amended
regulations in 2002.
Under EPA's existing 2002 regulations, any facility, including
farms and ranches, as well as farmer cooperatives other agribusinesses,
with aggregate storage of 1,320 gallons of oil (which is defined as oil
of any kind) is required to:
(A) Have an amended oil spill prevention plan, certified by a
professional engineer, by February 17, 2006; and
(B) Implement that plan by August 18, 2006. This includes: (1)
develop an oil spill plan, and have it certified by
professional engineer, (2) build secondary containment - such
as berms or drain basins, (3) construct fences, (4) provide
lighting, (5) employ monitoring devices, and (6) perform tank
integrity testing and meet several other requirements. Imagine
fencing whole farms or running wire to remote sites for
monitoring across many miles to reach other small refueling
sites.
According to a recent USDA study, which I would like to submit for
the record, such requirements would impact nearly 70 percent of all
farms and many farmer cooperatives and other agribusinesses. For
farmers alone, the cost would be approximately $4.5 billion. For many
farmers, the burden of such additional costs would be devastating.
Moreover, such requirements are extremely impractical in many cases
given the unique characteristics of farming in general. This is
especially true for farms which are made up of multiple parcels and
include lands that are noncontiguous and nonadjacent, and where you may
have several tank sites. As part of its study, USDA found that 47
percent of the farms that responded in the survey have multiple sites,
on average 6, which are located an average of 4.1 miles, not feet or
yards, away from the main fueling sites. In addition, many agricultural
fuel tanks do not stay full year-round as do industrial tanks for which
this rule was originally designed. For example, fuel tanks for
irrigation pumps stand empty many months of the year and during pumping
operations are constantly being drawn down.
Finally, the same USDA study also found there is little
justification for such requirements in view of the fact that
agriculture has a spill history of less than 1 percent.
In my case, these regulations would also apply to me since the
storage on my farm consists of 3,000 gallons of diesel fuel and 1,200
gallons of gasoline, which triggers EPA's current aggregate threshold
of 1,320 gallons.
Given this history, the potentially huge cost, the difficulty with
compliance due to the nature of agriculture and farming, and the lack
of data to indicate there is a problem, we continue to believe a strong
case can be made that farmers and ranchers should be exempt from such
requirements. That said we have been working with the EPA in good faith
for the past 3 years in support of a more workable and realistic
approach to address the concerns of agriculture under the 2002 rule.
Specifically, we have recommended a separate definition for farms
and ranches relating to the term ``facility'' be established - one that
reflects their unique characteristics. A farm or ranch, including those
comprised of multiple parcels and/or noncontiguous or nonadjacent
lands, should not be considered a single facility under the
regulations. Each field or parcel where tanks are located should be
considered separately and not simply combined and aggregated.
We have also suggested to EPA a tiered approach to compliance,
based on whether the amount of oil storage on a site specific basis
exceeds a threshold trigger. Applying a single, inflexible concept of
an ``aggregated facility total'' to trigger compliance may make sense
for a large terminal, but it makes no sense in the case of a farm or
ranch that may have multiple fueling sites spread out across several
miles.
We have also urged EPA to further delay implementation of its SPCC
regulation given the fact that it would be impossible in most cases for
farmers to meet the existing February and August 2006 deadlines for
compliance.
As part of its December 2005, proposal, EPA has announced an
indefinite extension for compliance with its 2002 regulations for all
farms with an aggregate storage capacity of 10,000 gallons or less
until more information can be collected and analyzed to determine if
differentiated SPCC requirements may be appropriate. For farms and
ranches with aggregate oil storage over 10,000 gallons, EPA has
proposed that the compliance dates be extended to October 31, 2007.
While the 10,000 gallon trigger is a significant improvement over
the current 1,320 gallon trigger, we are concerned that farms would
still be subject to compliance based on the establishment of an
``aggregate'' trigger for the entire farm rather than on a site by site
basis. In addition, given the huge cost as well as impracticality of
its SPCC regulations in many cases, we believe EPA should exclude all
farms from its requirements pending further review and that it adopt a
more flexible and workable approach that fully addresses the concerns
of agriculture as we have outlined.
In addition, we continue to be concerned over the potential impact
and cost of such regulations on many farmer cooperatives and other
agribusinesses that serve farmers.
Again, on behalf of the Agriculture Coalition, we appreciate the
opportunity to testify before the committee on this important and
costly issue. We look forward to working with you as well as EPA to
address the concerns of agriculture, while continuing to meet important
environmental objectives.
Thank you.
______
Responses by Richard G. Owen to Additional Questions from Senator
Inhofe
Question 1. USDA conducted a survey of farmers on the SPCC rule.
Can you explain to the Committee, based on the USDA's information, how
many farmers are impacted by the SPCC rule and how many farms have
spilled a reportable quantity of oil?
Response. USDA's 2005 study, entitled ``Fuel/Oil Storage and
Delivery for Farmers and Cooperatives,'' indicated that over 70 percent
of all farms surveyed and many farmer cooperatives and other
agribusinesses will be impacted by the current SPCC rule. Based on the
survey results, USDA estimated that 487,343 farms nationwide would be
impacted at a total cost of $4.5 billion based on an average cost of
$9,215. While this by itself represents a huge cost, the Agriculture
Coalition believes this may be conservative.
The USDA study found little justification for these SPCC
requirements in view of the fact that agriculture has a spill history
of less than 1 percent.
Question 2. According to EPA's 1995 survey data, farms have on
average less than 10,000 gallons of throughput volume. EPA further
estimates that for facilities with approximately 10,000 gallons
throughput, 0.03 gallons of oil spill. EPA's data also found that the
average quantity of oil discharged from a farm (a total of 50
incidents) was just over 1,000 gallons with all but 7 gallons being
contained within secondary containment. The discharges mostly reached
land and soil, not navigable waters.
Further, in his analysis of EPA's data, Dr. Corbett argues that
``--the total petroleum usage by the agriculture sector indicates that
farms store, transfer, and use about the same quantity oil products as
the Nation's commercial sector, or about half as much oil as the
electric power industry.'' However, his own charts show that in fact
while oil production and farms make up the greatest percent of SPCC
regulated facilities, they actually have fewer spills when one compares
their percent of SPCC related oil spills to the number of SPCC related
facilities. Farms, according to his chart, make up about 37 percent of
the regulated community and have about 10 percent of its spills.
Whereas most other industries have a greater percent of SPCC spills
than they do SPCC facilities. For instance, manufacturing has nearly 45
percent of the spills but only 5 percent of the facilities.
Based on this data, do you think EPA should extend any flexibility
it offers in the December 2005 rule to all farms?
Response. Yes. While the 10,000 gallon threshold proposed by EPA in
their December 12, 2005 proposal is a significant improvement over the
current 1,320 gallons, this tankage threshold number is not necessarily
applicable to farms. While the Agriculture Coalition on SPCC supports
EPA increasing the threshold in the proposed rule, we have concerns
with the 10,000 gallon trigger because it was established only to
remain consistent with those in other EPA regulations related to oil
discharges, like the National Oil and Hazardous Substances Pollution
Contingency Plan (National Contingency Plan or NCP) and does address
the typical dispersion of storage tanks in agriculture. The NCP was
developed in 1968 as a response to a massive oil spill from the oil
tanker Torrey Canyon off the coast of England. Revisions to the NCP, of
which the most recent was finalized in 1994, were again in response to
a massive spill, this time the Exxon Valdez. Given its unique fuel
dispersion characteristics and lack of any significant spill history,
the agriculture industry cannot be compared to the spills of huge oil
tankers. Before any rule is applied to our industry, EPA must evaluate
the threat (if any) we present and establish rules applicable to the
industry, which includes appropriate triggers.
EPA's 2005 Proposed Rule grants farms with 10,000 gallons or less
of storage AND a spill plan, an indefinite extension of compliance
deadlines. Farms with 10,000 gallons or less with no plan and farms
with more than 10,000 gallons of storage will not be afforded the
indefinite compliance extension deadline. The relief provided by this
indefinite extension is minimal as most farming facilities were unaware
that the SPCC rule even applied to them. Also, the Coalition maintains
that if EPA, in its own words, ``believes that the unique
characteristics of farms pose particular challenges to SPCC compliance
and that further consideration of the requirements as they relate to
farms is warranted,'' that consideration and further investigation
should be applied to all farms of any size. I am also disturbed that
EPA's 1995 survey data upon which so much of the analyses are based is
by its own admission in the proposed rule, very poor.
The more recent 2005 USDA study sharply contradicts EPA's earlier
analysis. Again, it also indicates there is less than a one percent
spill history with regard to agriculture. In addition, a survey
conducted by the Agricultural Retailers Association (ARA) in 2005 of
agricultural retail dealers and distributors showed data similar to
that collected by USDA.
In addition, EPA's 10,000 gallon trigger as applied to agriculture
is based on an aggregate measure of all storage tanks and their
capacity on a farm (which often include multiple parcels of land that
are nonadjacent and noncontiguous, sometimes separated by roads, etc.
and multiple tank locations at a significant distance from each other).
Accordingly, any threshold trigger should be established on a site-by-
site basis.
______
Responses by Richard G. Owen to additional Questions from Senator
Jeffords
Question 1. The 1973 SPCC regulations were applied purely on a
threshold basis any type of facility meeting the threshold for quantity
of petroleum products on site was regulated. On what basis do you
assert that the 1973 regulations were never intended to apply to farms?
Response. Neither the 1973 EPA Regulation or the 1971 Memorandum of
Understanding between the U.S. Department of Transportation (DOT) and
EPA upon which the 1973 regulation followed, contains any specific
reference to farm or farming operation. Nor do they include any
reference to the term farmer or agricultural producer. There is no
record as far we can determine of any action at that time to apply such
regulations to farms. In fact, as USDA's report indicated, the majority
of farmers surveyed were unaware of such regulations.
Question 2. Can you describe in more detail the type of storage on
your property for example, do you hold fuels in one location? Are they
located in separate tanks separated by large distances? For what
purpose are you storing such significant quantities of fuel?
Response. With regard to my farming operation, storage of fuel is
in two different sites, the largest amount of fuel being 3000 gallons.
It is uncommon that more than one or two thousand gallons are stored
for a long period of time because of use soon after the tank is filled.
The second set of two tanks is 100 feet away from the larger one and is
currently used to store aviation gasoline. No more than 600 gallons are
typically stored for a long period of time. The fuel tanks are all
aboveground and in excellent condition with the area kept clean at all
times. There has never been a spill.
Significant quantities are stored when producers try to purchase
fuel when prices are low. Some producers save as much as two or three
thousand dollars at a time because they are capable of buying larger
amounts at relatively lower prices.
Question 3. What is your opinion of the mobile equipment exemptions
included in the EPA's proposed rule?
Response. The Agriculture Coalition on SPCC fully supports the
EPA's proposal to exempt motive power and the proposal that these
motive power containers do NOT count towards the aggregate facility
capacity. We would fully support EPA extending a similar exemption to
home heating oil storage located at a farm facilities main site, but
which is used for the residential property at the site.
Question 4. You did not speak at all in your testimony to
environmental risk. Can you describe why fuel stored at agriculture
sites would pose any less risk than fuel stored at another site? Are
there protections inherent to farms that you believe reduce the risk to
waters, which are often located adjacent to farms?
Response. According to USDA's analysis, there is very little
environmental risk associated with agriculture. In fact, USDA's survey
of farmers indicates there is less than a 1 percent spill history in
excess of 1,320 gallons.
There are a number of factors that help contribute to agriculture's
low risk with regard to potential oil spills. Farmers have a strong
vested interest in protection and prevention efforts, as well as
environmental stewardship, because they (1) reside on the land and (2)
they are dependent on the land for their current and future livelihood.
They also can ill afford the cost and disruption of their farming
operation as a result of any tank rupture or spill. Storage tanks are
also subject to regular and constant inspection, are often separated
and dispersed (an average of 4.1 miles apart as noted on page 12 of the
USDA study) rather than concentrated in one location, and are not
generally as heavily utilized because of the seasonal nature of
production agriculture. Geographic location and concentration in rural
areas, along with the dispersed nature of tank locations, also reduces
risk. It's also highly unlikely that multiple tanks that are widely
dispersed are going to rupture simultaneously; this also means there is
less likelihood of a concentrated spill in the remote case of a
potential rupture and even less chance of any health risks.
Question 5. Are you aware of any analysis that evaluates the degree
of change in the amount of risk to the food supply should oil-
contaminated water be used for irrigation purposes?
Response. No.
______
Statement of Riki Ott, Ph.D., Author and Marine Toxicologist
Thank you for inviting me to testify on oil spill prevention
standards.
My name is Riki Ott. I have a masters and doctorate in marine
toxicology with a focus in oil pollution. I was on the scene before,
during, and after the infamous Exxon Valdez oil spill. I am a 20-year
resident of Cordova, Alaska. At the time of the oil spill, I was a
commercial salmon fisherman in Prince William Sound. After the pink
salmon and herring populations collapsed, unexpectedly, in 1992 and
1993--along with Cordova's economy, I retired from fishing to focus on
helping rebuild my community.
I have since co-founded three nonprofit organizations to deal with
lingering social, economic, and environmental harm from this spill
(www.alaskaforum.org, www.copperriver.org, www.orafoundation). I've
also written a book on the legacy of the Exxon Valdez oil spill (Ott
2005).
The lessons from our tragedy apply to spills of any size as well as
public health and the environment. I would like to share three lessons
with this committee and explain how each relates to the SPCC proposed
rule. These lessons are:
-Oil is far more toxic than we thought.
-Prevention is critical.
-Better, safer cleanup products need to be used.
1. oil is far more toxic than we thought.
A paradigm shift in the scientific understanding of oil toxicity
has occurred since passage of the Clean Water Act (CWA) and the Oil
Pollution Act of 1990 (OPA 90). It is important to realize the
limitations of the 1970s science. This science is based on standard
laboratory bioassays, using single species, exposed for 96 hours to
only the Water Soluble Fraction of crude oil. Based on these studies,
scientists thought toxic components of oil evaporated quickly and sub-
lethal effects were limited to invertebrates, and occurred at exposure
levels of parts per million. This 1970s science underpins the risk
assessment assumptions used by the EPA in its proposed rule change.
The collapse of pink salmon and Pacific herring stocks in Prince
William Sound was a tipping point for science, because the reality of
what was occurring in the Sound--that is, long-term harm from the 1989
spill--did not match the 1970s understanding that oil only caused
short-term harm.
To determine what was going on in Prince William Sound,
interdisciplinary teams of scientists conducted four ecosystem studies
from 1993 to 2001. These complex studies were conducted in the field,
using lab tests to interpret and/or validate field findings. The
ecosystem studies used multiple species over multiple generations and
focused on a particularly toxic fraction of crude oil called polycyclic
aromatic hydrocarbons or PAHs. PAHs were largely ignored by the 1970s
science.
As a result of the ecosystems studies, scientists now realize that
crude oil is 1,000 times more toxic than previously thought. In many of
the birds, fish, and mammals studied, 1-20 parts per billion PAHs were
found to impair reproduction, disrupt immune system function, and
generally decrease overall fitness (health) of individuals, resulting
in declines of localized populations (Bodkin et al. 2002; Carls et al.
1999, 2002; Esler et al. 2000, 2002; Golet et al. 2002; Matkin et al.
1999; Thomas and Thorne 2003; Trust et al. 2000).
Further, these effects are still happening in areas once heavily
oiled. Only 7 of 28 species are listed as fully recovered by the Exxon
Valdez Oil Spill Trustee Council (EVOSTC 2002). After 16 years, there
is relatively fresh, toxic oil still on the beaches, and it is still
bioavailable (Carls et al. 2001; Short et al. 2004), much to the
amazement of scientists and disappointment of residents. I have a
sample collected this past summer that I'll pass around when I'm done.
The emerging paradigm is summarized in an article in Science in
December 2003 (Attachment 1: Peterson et al. 2003)
Findings in medical science support the new paradigm and show that
low levels of PAHs also harm public health. For example, medical
doctors link low levels of PAH exposure with asthma, depression, and
chemical sensitivities (Ashford and Miller 1998). In 1999 the EPA added
22 PAHs in crude oil to its list of persistent, bioaccumulative, toxic
pollutants. This list includes lead, dioxin, mercury, PCBs, and DDT and
now PAHs (U.S. EPA 2000).
This relates to today's hearing because the 1990s science on oil
toxicity supplants the 1970s science and changes the risk assessment
equation. Oil is more toxic than we thought. Since oil exposure causes
greater known risk to the public and the environment, we need to
increase, not decrease, spill prevention standards to reduce the
likelihood of spilling it.
2. prevention is critical.
Another reason to maintain strong standards for spill prevention is
industry's general inability to contain and clean up spilled oil. The
public has witnessed, time and again, industry's inept fumbling ever
since England's Torrey Canyon spill (in 1968). Even one of the most
technologically sophisticated companies in the world only managed to
recover a small fraction of what was spilled in Prince William Sound
(Ott 2005; Spies et al. 1996).
The size of the spill doesn't matter. The 1,000-gallon spill in
Puget Sound, Washington, (2004) oiled hundreds of miles of coastline,
while the massive Exxon Valdez oiled thousands.
This relates to today's hearing because the EPA's proposal to lower
the threshold for spill planning and prevention essentially guarantees
the small facilities will have more spills. Why? Because less liability
equates to more spilled oil.
The National Research Council found that for tankers, oil spillage
dropped off significantly after 1991, following passage of OPA 90
(2002). Industry watchers attribute the reduced spillage to
preventative measures and increased industry concerns over escalating
financial liability (de Bettencourt et al. 2001). As one senior U.S.
Coast Guard officer put it, the ``requirement for some ships to assume
a higher level of financial liability for spilling oil has likely had a
greater impact on reducing the amount spilled than the plethora of
'command and control 'regulations that (preceded or) followed OPA 90''
(Elliott 2001, 31).
Reducing oil spills and oil pollution is a matter of making the
polluter pay. Oil companies are experts at externalizing costs to
society and the environment. Spill cleanup involves high costs to
society because taxpayers foot the bill and because cleanup workers
risk their health to deal with hazardous waste cleanups, including oil
spills. Facility owners should be held responsible for spill prevention
not exempted from it.
3. better, safer cleanup products need to be used.
The third reason for maintaining strong oil spill prevention
standards is that, when oil does spill, industry's preferred method of
cleanup is chemical products. This often creates more problems than is
solves, because cleanup products often contain industrial solvents to
dissolve oil and grease and, thus, are environmental hazards.
One dispersant that was used during the Exxon Valdez cleanup is
Exxon's Corexit 9527, which contains an OSHA human health hazard called
2-butoxyethanol. Exxon's Material Safety Data Sheet for Corexit 9527
states: ``Prevent liquid from entering sewers, watercourses, or low
areas. Contain spilled liquid--'' (Exxon 1992). This product was
sprayed on water and beaches during Exxon's cleanup. It is currently
stockpiled in Alaska, California, Washington, Hawaii, Texas, Florida,
New York, and Puerto Rico and likely other places.
How is this allowed? The EPA maintains a schedule of chemical
products for use in the National Oil and Hazardous Substances Pollution
Contingency Plan. The EPA only screens products for effects on animals
and the environment-not humans. Yet, it's not just the environment
that's at risk when chemical products are used, it's spill responders
and the public in places where drinking water or land may become
contaminated. Evidence of sick workers from the Exxon Valdez cleanup
suggests it's time to include effects on humans in product assessment
(Ott 2005).
There are no guarantees that the products are safe for the
environment either (Attachment 2: Nichols 2001). Products are designed
for specific purposes; however, the EPA admits its system is rife with
abuse: ``misuse . . . may cause further harm to the environment than
the oil alone'' (ibid., 1481).
For example, during the Exxon Valdez cleanup, dispersants designed
for open water use were applied directly on beaches, despite voluntary
guidelines adopted by the Alaska Regional Response Team (1989) through
a consensus process with stakeholders that dispersant use was not
recommended on beaches and in nearshore areas.
Other problems with the Product Schedule that should concern this
committee are:
-A loophole in subpart J, which allows South Louisiana crude to be
mixed 50:50 with Prudhoe Bay crude so dispersants will meet the EPA's
minimum 45 percent effectiveness threshold for product listing (Nichols
2001). This creates an illusion that dispersants work and eliminates
industry incentive to develop ones that actually do.
-No formal de-listing process in Schedule C, requiring the
manufacturer to notify the EPA when products are no longer
manufactured, and to provide a written explanation for the de-listing.
This is like discovering a product is dangerous, but never publicly
announcing its recall, or the reasons for the recall, so the public is
unaware of any health risk from use or exposure.
-No requirement to test stockpiled product periodically to ensure
effectiveness.
This relates to today's hearing because it is cheaper for industry
to throw chemical products at spilled oil than to prevent the spill
from happening in the first place. Reducing spill prevention standards
is another example of externalizing costs to the public because it
virtually ensures more cleanup products will be used.
To summarize, I've addressed three reasons for maintaining strong
oil spill prevention standards, based on direct experience in dealing
with an oil spill. First, oil is more toxic than we thought; second,
oil is nearly impossible to contain and cleanup once it does spill; and
third, the chemical cleanup products introduce more risk for spill
responders, the public, and the environment. All of what I've discussed
is covered in my book (Ott 2005), which I would like to leave with this
committee.
I urge this committee to reject the EPA's proposed rulemaking to
lower standards for spill prevention for small facilities.
Thank you for the opportunity to testify.
______
Responses by Riki Ott to Additional Questions from Senator Jeffords
Question 1. Can you describe your reaction to the proposal by some
in industry that the Clean Water Act's definition of navigable waters
should be narrowed, thereby limiting the facilities that would be
required to have an SPCC plan, as well as removing general Clean Water
Act protections from many wetlands, tributaries, and streams? Is it
appropriate for a change of this magnitude to be negotiated as part of
a settlement with a single party?
Response. Industry would like to dismantle the Clean Water Act and
has grown quite bold under this Administration. Wetlands, tributaries,
and streams provide critical habitat for many sensitive species.
Wetlands also filter water, providing a critical cleaning function that
could easily be overwhelmed. Think of trying to dredge a wetland to
clean it of deposited pollutants like occasionally must be done in
harbors! The CWA was designed to protect critical habitat and habit
function for all Americans. It would be tragic and a blow to the public
trust if something as basic as clean water protection was `sold down
the river' for one party in a settlement.
Question 2. Can you respond to Mr. Cummings suggestion that despite
the fact that secondary containment is the best protection for spills
from oil tanks, marginal crude oil wells should receive differential
treatment under the SPCC rule?
Response. Marginal oil wells should NOT receive differential
treatment under the SPCC rule. This is a problem we encounter all the
time in Alaska when oil wells end their peak production years and start
to wind down or, conversely, when new ``marginal'' fields are first
developed. It seems one of the first cost cuts in ``marginal'' fields
is environmental costs such as spill prevention measures. An oil spill
from a ``marginal'' field costs the same to the public and the
environment as a spill from a productive field! If the field is too
``marginal'' to do business in an ``environmentally sound manner'' as
the industry likes to claim it does, then the company should do
business elsewhere. Some costs, such as environmental and public
protection, cannot be cut and must be a part of doing business.
Question 3. Can you describe again your thoughts regarding the
EPA's testimony that they did not consider the evolution of the science
regarding oil spill impacts and clean-up when making this SPCC
proposal?
Response. I was literally shocked when the EPA stated that they had
not considered the new science when making their ruling. As a member of
the public, I certainly assume that the EPA is following, knows about,
and uses the most current science in its proposals and rule-makings.
EPA's rules and proposals are only as good as the science and models
that these decisions are based upon.
The risk assessment model is deeply flawed enough--with its
outdated reliance upon only one chemical at a time and exposure to a 70
kg person (presumed male). In fact, the question of whether the
regulatory system is too lax was covered in a four-part series in the
Wall Street Journal last year! (P. Waldman 2005, ``Common industrial
chemicals in tiny doses raise health issues. Advanced tests often
detect subtle biological effects; Are standards too lax?'' 7/25/05,
A1.) Lax standards allow activities that are dangerous to the public
health and the environment--but this problem is certainly compounded by
not using the most current science to boot! As you know, the cost-
benefit analysis, then, factors in the ``cost'' of public health and
the environment against the benefit the industry will provide. The
cost-benefit analysis relies on the risk assessment to provide accurate
costs.
In this case, the new oil toxicity science adds significantly to
the risk side of this equation as the science shows that oil is much
more toxic than we thought from the 1970s science. Therefore, this
added risk needs to be factored into the cost-benefit analysis for the
SPCC proposal. The added risk to the public and the environment means
that the industry (or party) must show much more benefit in order to
counter balance this added risk. I certainly didn't see enough benefit
to justify gutting the Clean Water Act.
______
Statement of James J. Corbett, Ph.D., Assistant Professor, Marine
Policy Program, Graduate College of Marine Studies, University of
Deleware
Good morning, Mr. Chairman and members of the committee. I am James
J. Corbett, Jr., Assistant Professor in the College of Marine Studies
at the University of Delaware. The College of Marine Studies is an
interdisciplinary unit that conducts research and education regarding
fundamental and applied problems in environmental science and policy.
The college mission is to provide better understanding of oceanic,
geologic and atmospheric systems and to inform society about human
impacts on the environment. My research develops and applies tools and
analyses to help reveal and evaluate technology-policy alternatives
related to energy, environment, and transportation. Additionally, I
have experience as a practicing professional engineer (PE) who
certified Spill Prevention, Control, and Countermeasures (SPCC) plans,
and experience as an operating engineer of facilities and ships that
store, transport, and handle oil. The opinions I offer to you today are
based on my review of the proposed regulations, on research studies
showing that policies aimed primarily at one aspect of a situation
often produce unintended consequences, and on how multiple stakeholders
focus technology-policy debate on issues of central importance.
summary of concerns with proposed changes
Spill Prevention Control and Countermeasures (SPCC) Plans serve to
protect the public and our environment from oil discharges and spills.
Landside runoff and discharges currently release significant amounts of
oil into our waterways and their tributary streams, watersheds and
groundwater connections.\1\
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\1\ See http://oils.gpa.unep.org/facts/source.htm, and http://
www.offshore-environment.com/oilpollution.html for links to many
sources.
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SPCC Plans also protect businesses, both small and large, from the
direct cleanup costs and liability for damages. Oil spills and
discharges from routine operations impair our Nation's fertile land,
the water network that gives it life, the living ecosystems impacted by
oil toxicity, and the public health. The costs of preparing SPCC plans,
including the costs of maintaining their certification through training
and periodic review, afford businesses the benefits of fewer spills,
better control of routine discharges, and countermeasures that may
contain spills within the facility, instead of polluting a facility's
neighboring communities and environment. In other words, SPCC plans are
recognized successes at minimizing the burden of oil spills to business
and society, because they reduce the risk--both the likelihood and the
consequences--of oil spills.
From a policy perspective, good environmental regulation reduces
impacts and costs of pollution that are external to a facility's normal
operation--this remains an explicit purpose of the original SPCC plan
requirements. The EPA's SPCC regulations (and OPA 90) successfully
required that facilities internally cover the costs of protecting the
environment and public from oil spills, because businesses must bear
the costs of a certified SPCC plan and bear the costs of spill cleanup
if the plan fails. In this regard, a good SPCC plan is more cost
effective through prevention, control, and countermeasures within a
facility than the direct and indirect costs of responding after a
spill.
EPA's proposed revisions raise the question whether it is more
beneficial to act to prevent an event or to respond afterwards [U.S.
Environmental Protection Agency, 2005]. In fact, some of the proposed
changes appear to reduce or defer indefinitely the burden of spill
prevention for some facilities. EPA's proposed SPCC revisions use a
rationale that argues it is better for small facilities to bear the
greater burden of liability without adequate spill prevention measures.
Specifically, I have three major policy concerns:
1. Preventing spills appears in the revised rule to be less
important for smaller facilities. Without a risk-based justification,
this provision implies that only facilities large enough to afford
spill prevention plans should be asked to do them, while leaving
smaller facilities exposed to the risk of higher cleanup and liability
costs. The proposed rule does not consider properly that higher overall
risk to public health and the environment may be associated with
facilities exempted in the revision. More frequent (if smaller volume)
spills and discharges can occur from smaller facilities, contrary to
EPA's summary statements.
2. The rule indefinitely allows agricultural facilities to avoid
SPCC plan compliance, even though spill prevention may better protect
rural, farming areas of our Nation that are more connected to our
environment and our food supply than many commercial facilities that
must complete SPCC plans. If agricultural oil storage and handling
facilities are among the smallest, most distributed facilities
addressed by the SPCC rule, they are also among those that may impact
most our groundwater, irrigation networks, wetlands, and navigable
waterways.
3. The proposed revisions weaken certification requirements by
relying less on independent, professional expertise. The justification
appears to be that SPCC plans can be obtained by industry at lower
cost, without a convincing argument that the public receives equivalent
protection from the risk of spills, or any other public benefit in
tradeoff. Justifying self-certification of SPCC plans on the basis that
no spills occurred in the past decade is like allowing me to write
prescriptions for my child, instead of requiring a physician's
examination and judgment, because she hasn't had a serious illness in
the past ten years. It provides no public guarantee, or sufficient
requirement, that the person certifying the plan posesses education,
professional qualifications, and the commitment to public safety that
professional engineering licensure requires.
The remainder of my testimony discusses these points in greater
detail.
exempting small facilities reduces protection without reducing costs
It is not clear that EPA is correct in its claim that it
significantly reduces ``the burden imposed on the regulated community
in complying with the SPCC requirements, while maintaining protection
of human health and the environment.'' EPA claims that a key limitation
in their recent analysis is lack of data on regulated facilities.
However, EPA uses its own 1995 survey data [U.S. Environmental
Protection Agency, 1996a; U.S. Environmental Protection Agency, 1996b],
collected for the specific purpose of reviewing the efficacy of the
SPCC regulation. These data provide significant evidence that SPCC
plans effectively reduce the burden of spill liability for facilities
and that SPCC plans may protect small facilities more than larger ones.
EPA's survey analysis ``revealed that compliance with the SPCC
provisions reduces the number of spills, spill volume and the amount of
oil that migrates outside of the facility's boundaries. It also
indicated that compliance with one SPCC provision serves as a general
indicator of a facility's awareness of the importance of other spill
prevention and control measures'' [U.S. Environmental Protection
Agency, 1996a; U.S. Environmental Protection Agency, 1996b]. This
reduces the liability small businesses face if a spill occurs.
EPA's proposed rule quotes their SPCC survey report claiming that
facilities with larger storage capacity are likely to have a greater
number of oil spills, larger volumes of oil spilled, and greater
cleanup costs.\2\ Indeed, actual data from the SPCC survey shows
significantly different costs on a per gallon spilled basis. EPA data
show that with an SPCC plan, small facility spills cost less per gallon
to clean up than large facility spills.
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\2\ This conclusion appears not to be based on predicted total
costs from a statistical regression, which presented very similar
cleanup costs per gallon, usually ranging between $0.16 and $0.21 per
gallon.
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EPA survey data shows that an SPCC plan reduces cleanup costs and
that smaller facilities face lower cleanup costs than larger
facilities, even on a per gallon spilled basis. This is because with an
effective SPCC plan, spills are smaller, less frequent, and better
contained within the facility. In exempting small facilities from plan
requirements, the proposed rule states that ``small facilities no
longer required to have SPCC plans are still liable for cleanup costs
and damages.'' Strangely, this justification suggests that exposing
small facilities to the direct and liability costs of larger spills is
better than requiring SPCC plans to protect the public and the
environment through prevention of spills, or through controls and
countermeasures to minimize them and confine them to the facility.
EPA's rationale argues that society and businesses are better off
paying for the consequences of spills from small facilities rather than
preventing them.
delaying agricultural facility compliance is inadequately justified
Quoting from a current report by USDA\3\ [U.S. Department of
Agriculture, 2004]:
---------------------------------------------------------------------------
\3\ : Chapter 5: Energy Use in Agriculture, http://www.usda.gov/
oce/gcpo/ghginventory.html,.
``Energy is used directly in agriculture for a range of purposes,
including operating vehicles and irrigation pumps, and controlling
indoor temperatures of greenhouses, barns, and other farm buildings.
Crop production requires a large amount of liquid fuel for field
operations. Most large farms use diesel-fueled vehicles for tilling,
planting, cultivating, disking, harvesting, and applying chemicals.
Gasoline is used for small trucks and older harvesting equipment
primarily. Smaller farms are more likely to use gasoline-powered
equipment, but as farms get larger they tend to use more diesel fuel.
In addition, energy is used in some operations to dry crops such as
grain, tobacco, and peanuts; and livestock operations use energy to
---------------------------------------------------------------------------
operate various types of equipment.''
EPA's own ``survey data indicate that two industries (Farms and Oil
Production) constitute about 80 percent of the SPCC-regulated universe.
Manufacturing, Transportation, and Gasoline Stations/Vehicle Fueling
constitute the next 12 percent of facilities. All other industries
combined make up the remaining 8 percent.'' EPA also notes that ``while
farms may comprise a sizable portion of the SPCC-regulated universe,
[farms that would require SPCC plans] represent only a small percentage
(8 percent) of the farms in the United States. Farms in general have
smaller storage capacity, fewer tanks, and lower throughput levels than
other types of facilities'' [U.S. Environmental Protection Agency,
1996a; U.S. Environmental Protection Agency, 1996b].\4\ One may presume
that these represent the 8 percent of farms at highest spill risk, or
at least that these store, transfer, or use the most oil. This
information is summarized in Figure 1.
---------------------------------------------------------------------------
\4\ See http://www.epa.gov/oilspill/spccref.htm, specifically
http://www.epa.gov/oilspill/pdfs/pap--risk.pdf.
[GRAPHIC] [TIFF OMITTED] 42267.008
Figure 1 suggests that farms may not be disproportionately burdened
compared to other industries. However, such a conclusion should
consider the oil spill risk from agricultural SPCC facilities compared
to SPCC facilities in other sectors. My estimate in Table 1 of the
total petroleum usage by the agriculture sector indicates that farms
store, transfer, and use about the same quantity oil products as the
Nation's commercial sector, or about half as much oil as the electric
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power industry.
[GRAPHIC] [TIFF OMITTED] 42267.009
More directly, the 1996 Survey data can be used to compare SPCC
facilities by sector as part of the set of all facilities covered by
SPCC requirements. This is shown in Figure 2, which plots the percent
of regulated facilities and the percent of reported spills by sector.
In this figure, farms appear to be ranked third among SPCC-facility
spills by sector, behind only manufacturing and oil production. Based
on the survey data, EPA may be deferring indefinitely the compliance
requirements for those farms where an SPCC plan made the most positive
difference. Survey data indicate that less than 2 percent of all
agricultural spills in facilities with SPCC plans escape secondary
containment; this demonstrates that control and countermeasures in SPCC
plans for farms are nearly as effective as SPCC plans are for the
electric power sector.
[GRAPHIC] [TIFF OMITTED] 42267.010
Is the indefinite deferment of compliance requirements justified
for facilities in one sector, but not for other sectors with similar
oil consumption and/or spill rates? Potential spill consequences from
agriculture may directly damage our crop lands, water irrigation
networks, groundwater aquifers, and associated wetlands and waterways.
EPA's proposed rulemaking doesn't consider that consequences from
agricultural spills to rural ecosystems may be greater than
consequences of commercial sector spill in more urban regions.
professional engineer certification versus self-certification
Exempting some facilities from PE certification of an SPCC appears
counter to the justifications for other exemptions from PE
certifications, such as industry exemptions for mechanical and
electrical engineers. Moreover, exempting PE certification from SPCC
plans on the basis of cost (or regulatory burden) may increase the risk
of spills from self-certifying facilities where managers without
engineering training and/or technicians do not possess a standard
professional knowledge base, ascribe to a professional code that places
public protection highest, or share individual legal liability for
their judgments.
Self-certification of SPCC plans for smaller facilities appears
similar to an industry exemption for other engineering documents and
plans, but it is not. Industry exemptions have been generally provided
to unlicensed, practicing engineers who are directly employed by the
company for which they provide engineering services.\5\ Such exemptions
have been justified for the following reasons:
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\5\ Mechanical Engineer magazine http://www.memagazine.org/
backissues/may99/features/tolicense/tolicense.html.
1. Engineering services provided within a company for the company's
benefit (e.g., revenue and profit) do not present a conflict of
interest between an engineer's independent judgment and his/her loyalty
to the company.
2. The business assumes direct responsibility as employer for the
quality of the unlicensed engineer's work; this provides the company
with motivation to hire and train well-qualified engineering employees.
3. Therefore, when the best engineering judgment of the employee
engineer is exercised, there is reasonable assurance that both the
company's and individual's interests are served.
Unlike engineering services provided by an unlicensed employee
under the industry exemption, required SPCC plans serve the public goal
of protecting the environment. EPA appears to misapply the logic behind
industry exemptions or they ignore the real and potential conflicts of
interest inherent in their self-certification proposal. Unlicensed
employees are not protected if they attempt to ``protect the public''
in opposition to their employer's economic motivations. (Licensed
professional engineers within the same company may face similar
potential conflicts, but may be less influenced by virtue of their
license and code of conduct requirements ``to protect and safeguard the
health, safety, welfare, and property of the public.'')
The possibility that an owner/operator without proper engineering
skills will self-certify a facility presents even greater concern. In
this case, the possibility of a conflict of interest that puts the
public at risk is compounded because the public has no assurance that
judgments made to self-certify the SPCC plan are founded in the
qualifications and training of the individual owner/operator. Many
owner/operators may make adequate judgments based upon experience or
because their facility has avoided spills in the recent past. However,
the proposed rule provides no way of assessing an manager's
contribution to a spill free past at a facility; in short, the proposed
revision cannot assure the public that the environment is protected
from oil spills.
further analysis is merited for proposed spcc requirements
There is a need for better risk-based analysis before EPA relieves
the burden of regulation (i.e., costs) to oil storage and transfer
facilities without considering properly how this burden shifts to the
public. Environmental consequences may not be primarily influenced by
spill size, but by spill impacts. The SPCC Facility Survey Analysis
presents graphs of simplified statistical relationships that may be
misleading, given that the statistical regressions for small facilities
appear systematically biased. More importantly, these data appear to
only represent costs of spills from facilities with certified SPCC
plans; spill costs from SPCC-exempt facilities could be much greater
than facilities where certified SPCC plans helped minimize the
frequency and size of spills--and therefore the liability and clean-up
costs to those facilities.
This is partly acknowledged within the EPA analysis of their survey
data; the report states ``if small facilities, for example, are assumed
to be less aware of the NRC and the Clean Water Act reporting
requirements (due to limited resources for example), then these
facilities would be less likely to have spill records in ERNS and the
results of the comparison described above would be biased downward.''
However, underreporting is not the only threat to validity of EPA's
conclusions. The survey data summarized in the analysis reveals bias in
the derived statistics for smaller facilities. In fact, it appears from
the data that some smaller facilities have more and larger spills than
the simplified statistics predict. Using actual versus predicted data
reinforces that exempting smaller facilities may be inconsistent with
the goal to reduce the risk of spills.
An analysis of the data summarized in EPA's survey confirms a more
important fact about oil spills. Plotting EPA's survey data for costs
of clean up per gallon and per spill reveals that the cost of cleaning
up most oil spills is not proportional to the gallons of oil spilled or
number of spills; rather, costs are more related to cleanup efforts and
restoring the impacted environment. In other words, where a small
amount of spilled oil fouls a local environment and impacts water,
soil, and living ecosystems, a larger spill may cause proportionally
less damage and can cost less per gallon to clean up. This general fact
is not new, and is not limited to land-based oil facilities covered
under OPA 90 and the Clean Water Act; a similar conclusion was reached
by a study for the National Academy of Sciences in Special Report 259
[Tikka et al., 2001], which simulated physical impacts from various
volumes of spilled oil under a variety of oil tanker spill scenarios.
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Addittional Statement of James J. Corbett, Jr., P.E., Ph.D., Assistant
Professor, University of Delaware
In December 2005 testimony to the U.S. Senate Committee on
Environment and Public Works http://epw.senate.gov/hearing
statements.cfm?id=249640.1 provided initial comments on the potential
problems with the proposed SPCC rule amendments. I attach my testimony
here, and submit additional comments that suggest a more effective
strategy to meet the small business administration goal to relieve
regulatory burden without weakening the public protections that SPCC
requirements provide. These additional comments are based on a thorough
review of limited data obtained since that testimony, but may not
include all the information available to EPA or other stakeholders.
the proposed rule provides significantly fewer benefits to small
agricultural operations than epa proposed rule and others estimate.
Since my testimony before the U.S. Senate Committee on Public Works
and Environment, I reviewed a copy of the survey analysis prepared for
the National Council of Farm Cooperatives (NCFC) submitted as part of
senate testimony by Mr. Richard G. Owen, Director, CHS, Inc.; he refers
to this as the USDA study and I will refer to this as the NCFC survey
analysis [Crooks et al., 2005]. My motivation was to help address
Senator Inhofe's question at the end of the hearing about whether EPA's
data or the USDA survey data were correct regarding the percent of
farms that may be subject to SPCC requirements due to their oil storage
volumes. The survey sample obtained by the NCFC survey is useful, but
needed to be adjusted to remove sample bias and better represent the
overall farm population; this was Not done in the survey report or
analysis. Essentially both conclusions seem wrong: 1) More than 8
percent farms will be subject to SPCC rules than the 1996 EPA data
suggest, and 2) Far fewer farms will be benefited than the USDA Survey
conclusions that nearly 70 percent of farms will have to comply.
The percent of farms subject to current SPCC rules is less than 70
percent. As shown in Table 1, the total number of farms according to
USDA greatly exceeds the total number of farms considered by the NCFC
survey as the population potentially subject to SPCC regulations.
Footnote 3 of their survey analysis implies that the more than 766,000
farms they excluded from their survey may not be subject to SPCC rules
because they may be ``hobby farms.'' I am not convinced that this is
true; but if true and if "hobby farms'' generally store less than 1,320
gallons, then the maximum percent of farms subject to the rule would be
64 percent. And since only those agricultural facilities storing more
than 1,320 gallons but less than 10,000 gallons would ``benefit'' from
the delayed compliance, the proposed rulemaking clearly affects fewer
than 70 percent of farms.
Somewhere between 23 percent and 35 percent of farms appear to be
subject to the SPCC requirements (storing more than 1,320 gallons).
Using standard techniques to weight survey results for population
demographics, the survey data obtained by NCFC can be corrected to
estimate the number of farms that actually store oil in quantities that
make them subject to current SPCC regulations. The actual percentage
will depend on how closely farmers harvesting rice, corn, soybeans,
wheat, and cotton are representative of all other farmers. (Note that
the NCFC analysis clearly states that its survey sample did NOT include
all farms with harvested crop land, and no livestock ranches. The NCFC
analysis used a list from USDA's Farm Service Agency that included ONLY
rice, corn, soybeans, wheat, and cotton farmers.) The lower bound
conforms to the implicit assumption in the USDA analysis (footnote 3)
that only the 1.36 million farms with harvested crop land would require
SPCC plans; I would not recommend this assumption for a best estimate
without additional data on those farms and ranches that the USDA survey
ignored. Clearly, more farms appear to be subject to SPCC rules than
the 8 percent estimated by earlier EPA studies. The population-weighted
summary in Table 2 makes the assumption that farms outside the survey
population are similar to those surveyed, suggesting that 33 percent of
all farms may require SPCC plans; this represents my best estimate
without better survey data.
In other words, most farms (between 65 percent -77 percent) are not
subject to current rules, at all. Moreover, since those farms storing
more than 10,000 gallons of oil would not be exempt or deferred from
any requirements under the proposed changes, EPA's proposed rulemaking
will relax SPCC requirements for less than 33 percent of farms (using
Table 2 and Figure 1). If the NCFC survey assumption implicit in
footnote 3 is valid (that ``hobby farms'' are not subject to SPCC rules
because they are not commercial or because they generally store less
than 1320 gallons), then the proposed rulemaking relaxes SPCC
requirements for less than 19 percent of farms.
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Fewer than 28 percent of farms would be able to defer spill
prevention requirements under the proposed rule changes. Ignoring
whether deferment applies only to a subset of farms storing less than
10,000 gallons but more than 1320 gallons, the NCFC survey data can be
used to estimate the number of farms potentially subject to the
deferment provisions in the proposed rulemaking. As shown in Figure 1,
there is clearly a relationship between the size of farm and quantity
of oil stored. While all farm sizes surveyed identified some farms that
stored less than 1320 gallons, farms less than 200 acres are more than
three times more likely than larger farms to be exempt from current
rules already. More to the point, fewer than 410,000 of farms (<28
percent) store between 1320 gallons and 10,000 gallons. (Ignoring what
NCFC refers to as ``hobby farms'' reduces the estimated percent of
farms that could defer SPCC requirements to only 19 percent of all
farms.) Even assuming that decreased spill prevention afforded these
farms some potential ``benefit'' from indefinite deferment under
proposed rule changes, more than half of these farms are larger than
200 acres and may not be small businesses.
The proposed rule may delay compliance for less than 19-28 percent
of all farms. According to the question exchange between Senator Thune,
of south Dakota, and Mr. Thomas Dunne, Acting Assistant Administrator,
Office of Solid Waste and Emergency Response, US EPA, farms that are
not yet in compliance would not qualify for the deferment from SPCC
planning requirements. My impression is that very few farmers have
achieved compliance with current SPCC regulations; therefore even fewer
farms may be ``benefited'' if the question exchange between Mr. Dunne
and Senator Thune was accurate. I would request that EPA provide
information clarifying this,
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Some states may realize much greater impact from the proposed rule
changes than others, and farms in some important agricultural states
may be much less affected than claimed. Using the same standard survey
techniques to re-weight biased survey samples for their populations, a
state-by-state picture of the potential impact of the proposed
rulemaking is possible. This would require that the national (and
regional) survey data was representative at each state level-a
condition not in evidence in the NCFC survey analysis. However, for
illustration purposes, I used the national summary of the NCFC survey
data to consider expected differences among a few agricultural states
(the four most discussed during the Senate Hearing). Figure 2 shows
that the NCFC survey data (national average) poorly represents three of
the four states considered. Specifically, the NCFC data underestimates
smaller farms in California and Delaware, and overestimates the number
of smaller farms in Montana. (Coincidentally, the national-level NCFC
survey data respectively underestimates and overestimates these states
by about 20 percent those farms smaller than 200 acres.) The NCFC
national-level most closely represents farms in Oklahoma, and
underestimates USDA farm populations for smaller farms by about 10
percent.
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The avoided costs calculated as ``benefits'' in the NCFC survey
analysis are not easily reproduced, contain apparent error, and are
based on survey responses that cannot be verified through independent
estimates. It appears that only costs of Professional Engineering (PE)
certification should be considered for smaller (non-farm) facilities,
since the SPCC plan and all ofits other requirements would still apply
(albeit without independent verification or enforcement value).
Potential reduction in PE certification costs may only apply to the 19
percent-28 percent of all farms that store between 1320 and 10,000
gallons if they fully prepare SPCC plans but self-certify. This
percentage is an upper bound, since some of these farms likely comply
already with SPCC requirements and would not need recertification
unless they change their facility design or operation. The number of
farms with reduced compliance costs may be fewer still, since those
farms are not yet in compliance, and (according to Mr. Dunne's answers
to Senator Thune's questions) these farms would not qualify for the
deferment from SPCC planning. I would like to get more information
clarifying this. In any case, the NCFC survey estimates appear to be
calculated inappropriately from data on total SPCC plan costs for all
farms, and the survey sample biases are not corrected for the
population of farms.
Because of the non-uniformity of farms storing quantities that may
qualify for indefinite deferment, the risk of spills from deferred
farms may pose greater threats to waterways, and other environmentally
sensitive areas. The farms most likely to ``benefit'' from the proposed
rulemaking need to be considered geo-spatially on a risk basis. Simply
using the illustration in Figure 2, one can immediately recognize the
potential for coastal watersheds in California and Delaware to be at
greater risk than Montana and Oklahoma, since these states are likely
to have more farms that qualify for the indefinite deferment of SPCC
requirements. In other words, there are likely to be inequities among
the protections required by farms in some states and these will likely
increase risk to some watersheds; without a risk-based analysis at
least state by state, the proposed rule changes may asymmetrically
shift the environmental risk of oil spills to those most costly to
remediate and most important to prevent. (NOTE: One cannot directly
assign oil storage capacities to these data from the NCFC survey
without the assumption that the survey respondents were representative
of each state; given only regional survey results reported in the NCFC
study, no attempt is made here to extend those results to the state
level.)
Further analyses of other industrial sectors are needed to support
any revisions to current SPCC regulations, and these need to be risk-
based and better designed than the proposed rulemaking. Similar to the
efforts focused on agriculture that are discussed above, other sectors
should be explicitly studied before the assumption is made by EPA that
simply reducing compliance requirements meets the intent of SPCC
regulations and their originating legislation. These analyses should be
geo-spatial to demonstrate that any inequities arising from less
stringent requirements do not pose greater risk to human health or the
environment. Regulatory impact assessments need to consider not only
avoided costs of compliance, but potential increased costs of response
to oil spills (both direct and indirect). Small business advocates
should consider these carefully for other non-farm sectors before
advocating a set of changes that may not relieve the small business
burden.
I am concerned that support of self-certification for SPCC plans
may be based on misplaced confidence in specific industry sectors that
receive significant oversight and attention in many dimensions (e.g.,
like the oversight air transport receives regarding security,
environment, passenger comfort, etc.) or it appears based on a mistaken
belief that industry self regulation is universally effective across
all externalities. With regard to the air transport sector, I think
issues of passenger safety and reliability off light operations may be
fundamentally consistent with limited self regulation in these domains.
As I said in my testimony, there is an important difference between
industry exemptions (or self regulation) where the internal interests
of the industrial organization are clearly aligned with the goals of
individual managers and the public. In the case of oil spill
prevention, these environmental concerns are often (but not always)
external to the normal operational mission of the organization and its
people. In other words, there is no reasonable expectation that the
market will internalize the external costs of oil spill prevention to
protect the public and our environment; that is why environmental
performance improvement is often labeled an economic externality.
EPA should provide updated guidance that allows Professional
Engineers better enable the industry to work with licensed
professionals to identify innovative and flexible solutions to
impracticable defaults on an individual equipment basis. For example,
clear guidance can assist the air transport sector and other sectors in
ways that may support a PE's finding that secondary containment is
impracticable on an individual equipment basis, since the current rule
already allows for this. The current regulations are not one-size-fits-
all. Importantly, there is no requirement under current SPCC
regulations that prohibits facility personnel from preparing their own
SPCC plans; if well-run facilities routinely outsource their SPCC plan
preparation to engineering firms (e.g., in air transport and other
highly visible sectors), then that may be evidence that external
expertise for basic plan preparation is less costly. Indeed, the only
cost that would be avoided under the proposed changes is the cost of PE
review and certification, perhaps the least costly part of many
facilities' SPCC plans.
It is the expertise of the individuals involved in preparing,
reviewing, and certifying an SPCC plan that ensures the public that a
facility without a spill for the past decade will remain spill free
during the next. The purpose of the legislation behind the SPCC
regulations is one of public protection, fundamentally. The fundamental
and obvious flaw in EPA's proposed rule with regard to self-
certification is that it does nothing to ensure this expertise in the
individuals, falsely assuming that a spill-free facility will always
remain so. As I said in my oral response to Senate questions, this is
like suggesting any individual without a license can safely drive or
repair a car that has been accident free for ten years. I am aware of
dozens of examples where such flawed logic has been exposed through
tragedy.
Better strategies are available to assist farms (in particular) and
other small businesses.
Risk of oil spills exists where significant quantities of oil are
stored, transported, and used, and liability remains with the polluter.
However, the risk of a spill event is not uniform; according to EPA
data [U.S. Environmental Protection Agency, 1996a; U.S. Environmental
Protection Agency, 1996b], the risk is higher when facilities do not
have a valid SPCC plan and/or are not following its recommendations for
secondary containment and operator training, etc.
Clean Marina programs offer a better model than the proposed rule
changes for reducing the burden of compliance. To consider PE costs for
small facilities, I looked into the innovative Clean Marina programs
for Delaware, Maryland, Connecticut, and New jersey (at least), where
an SPCC template was developed specific to these similar facilities
(for links to these programs, see http://cleanmarinas.noaa.gov/
marinalinks.htmfl. I found that a PE certification for a small facility
that develops its own plan may range between $1,000 and $5,000 per plan
(about 1-2 days work for a small firm or independent PE). Maryland
negotiated lower rates with an engineering firm and directly covers the
cost for PE certification on behalf of Clean Marina members (http://
www.dnr.state.md.us/boating/cleanmarina/): Delaware has followed the
template, but doesn't subsidize the PE certification (http://
www.dnrec.state.de.us/DNREC2000/P2/Marina/): New Jersey has some
information showing significant improvement in compliance for marinas
through outreach (http://www.state.nj.us/dep/njcleanmarina/).
Agricultural facilities (and small facilities in other industry
sectors) may demonstrate substantial similarities in their oil storage
facilities and handling practices. As has been observed for marinas,
facilities differ substantially in their primary purposes (e.g.,
sailboats, fishing vessels, etc., at marinas; or crop farming versus
livestock ranching). However, there appear to be significant
similarities in the quantities of oil stored and handled at different
facilities. This suggests that a template developed with various
industry sectors and with PE involvement could reduce significantly the
cost of compliance, and may attract subsidies or assistance from
Government agencies or industry groups. A counter argument that each
facility within an industry sector is unique in its oil storage would
provide additional justification for PE certification (e.g., if wheat
farmers stored fuel differently than soybean farmers or cotton
farmers). I discussed similar ways to assist farms through USDA
assistance with Senate staff in December; flexibility clearly exists
under the current SPCC requirements for a PE to help farms comply
without undermining the benefits of SPCC plan protections.
These proposed rule changes could encourage reconsideration of
storage volumes near 10,000 gallons, and could result in more
facilities storing oil to avoid meeting the 10,000 gallon threshold.
For example, a farm with crop land on two sides of a public road may
try to designate each orchard, field, or vineyard as a separate
facility; this could expose more of our fertile land, irrigation
systems, wetlands, and waterways to the risk of spills. Under the
proposed changes, there is no mechanism to prevent facilities from
working to classify facilities in discrete terms that enable the wider
dispersion of oil storage in units less than 10,000 gallons each. The
definition of a facility must be made clearer (or remain consistent
with earlier interpretations), and EPA should prevent a situation in
which businesses may freely redefine facilities into smaller parcels to
avoid proper planning for handling, transfer, and storage of oil. EPA
guidance on facility definition should conform to definitions used in
normal business practices for financial, emergency planning, and other
purposes.
To increase flexibility and reduce costs to small businesses, PE
certification burden for farms and other sectors may be further reduced
by allowing adjacent or collated facilities (e.g., separate farms
within a county or watershed) to share the certification costs if their
facilities store and handle oil similarly. In my experience, larger
military installations chose to consider all oil stored with their
boundaries in aggregate to determine whether a plan was required.
Separate site plans were provided for each location in the SPCC plan
that independently met the threshold, and these were grouped by type of
operation. This approach allowed military bases to contain in one plan
facilities for on-base restaurant concessions, retail and military
gasoline stations, air transport operations, and leased agricultural
lands. This approach reduces significantly the cost of PE certification
by distributing it among cooperating facilities. Additional guidance
would be required from EPA that emphasized the SPCC requirements for
site-specific annual training, and would likely require that copies of
plans be distributed to each facility (and/or site) within the larger
plan. This flexible approach prevents the disaggregating of facilities
to avoid spill prevention planning on the one hand, but enables small
businesses to share the common burden of plan preparation. In general,
there appear to be no competitive reasons that would motivate oil
handling at storage in one facility to differ from other facilities
within a business sector; this would therefore help EPA achieve best
SPCC practices within sectors.
The USDA Cooperative Services or other publicly funded industrial
advocates should consider subsidizing resources need by farms to
prepare better SPCC preparation guidance services, including partial or
complete funding of expert review of plans by licensed Professional
Engineers. This should also be considered for other industrial sectors
through other Federal or state agencies, as appropriate. This would
help small businesses in more tangible ways than the current purposed
rules. It would also bring many non-complying facilities that are
unaware of their status the help they need to prevent spills, which is
the purpose of SPCC regulations and its legislative mandate.
references
Crooks, A.C., E.E. Eversull, and B.L. Rotan, Fuel/Oil Storage and
Delivery for Farmers and Cooperatives, edited by Cooperative Services,
Rural Development of the United States Department of Agriculture,
National Council of Farmer Cooperatives, Washington, DC, 2005.
U.S. Environmental Protection Agency, Results of 1995 Survey of Oil
Storage Facilities (July 1996), United States Environmental Protection
Agency, Washington, DC, 1996a.
U.S. Environmental Protection Agency, SPCC Facility Survey Results
and Analysis, United States Environmental Protection Agency,
Washington, DC, 1996b.
______
Response of James J. Corbett to Additional Questions from Senator
Inhofe
Question 1. Can you comment on Mr. Coyne's proposal that
individual, small companies, be permitted to self-certify to some of
the more flexible requirements of the SPCC rule such as impracticality
and environmental equivalence rather than depend upon the expertise of
a professional engineer?
Response. In general, I think Mr. Coyne's summary of the air
transport sector's concerns are thoughtful and clearly described. In
this regard, I may agree with Mr. Coyne when he affirms ``the EPA's
willingness to listen to the industry regarding the impracticability of
certain EPA regulations.''
Mr. Coyne clearly understands the fuel and oil handling practices
and storage facilities for air transport operations. While I have
certified these types of facilities in military installations as a
licensed Professional Engineer, he may have more immediate familiarity
with spill prevention measures for commercial air transport.
However, I am concerned that his support of self-certification for
SPCC plans may be based on his confidence in an industry sector that
receives significant oversight and attention in so many dimensions from
security to environment to passenger comfort, or based on a belief that
industry self regulation is universally effective. With regard to the
air transport sector, I think issues of passenger safety and
reliability of flight operations may be fundamentally consistent with
limited self regulation in these domains. As I said in my testimony,
there is an important difference between industry exemptions (or self
regulation) where the internal interests of the industrial organization
are clearly aligned with the goals of individual managers and the
public. In the case of oil spill prevention, these environmental
concerns are often (but not always) external to the normal operational
mission of the organization and its people. In other words, there is no
reasonable expectation that the market will internalize the external
costs of oil spill prevention to protect the public and our
environment; that is why environmental performance improvement is often
labeled an economic externality.
More to Mr. Coyne's point, I would join him in encouraging the EPA
to provide updated guidance that allows Professional Engineers to work
with the air transport sector in ways that may support a PE's finding
``that secondary containment is impracticable on an individual
equipment basis,'' and enable the industry to work with licensed
professionals to identify innovative and flexible solutions to
impracticable defaults on an individual equipment basis. Importantly,
there is no requirement under current SPCC regulations that prohibits
facility personnel from preparing their own SPCC plans; if well-run air
transport facilities routinely outsource their SPCC plan preparation to
engineering firms, then that may be evidence that external expertise
for basic plan preparation is less costly. Indeed, the only cost that
would be avoided under the proposed changes is the cost of PE review
and certification, perhaps the least costly part of many facilities'
SPCC plans.
However, the purpose of the legislation behind the SPCC regulations
is one of public protection, fundamentally. It is the expertise of the
individuals involved in preparing, reviewing, and certifying an SPCC
plan that ensures the public that a facility without a spill for the
past decade will remain spill free during the next. The fundamental and
obvious flaw in EPA's proposed rule with regard to self-certification
is that it does nothing to ensure this expertise in the individuals,
falsely assuming that a spill-free facility will always remain so. As I
said in my oral response to Senate questions, this is like suggesting
any individual without a license can safely drive or repair a car that
has been accident free for ten years. I am aware of dozens of examples
where such flawed logic has been exposed through tragedy.
Question 2. Can you describe what the mechanism is in the existing
SPCC program for the public to obtain some degree of assurance that
actions are being taken to prevent oil spills, how the EPA's proposed
rule alters that process, and what role enforcement plays in that
process?
Response. The only mechanisms in place are Professional Engineering
certification and the very limited SPCC enforcement functions funded by
EPA. The PE certification is by definition a public assurance, due to
the professional expertise, testing, and oath of a licensed
Professional Engineer. While this assurance resides in a private sector
relationship between the facility and the PE, it is founded on the
public licensure process. This is a parallel process to bar certified
lawyers, to board certified surgeons, and to state certified teaching
professionals.
The EPA's proposed rule undermines the process entirely for
facilities storing 1320 to 10,000 gallons. This represents the majority
of farm facilities subject to the SPCC rule and presumably may remove
most facilities in other sectors from any oversight in the public
interest by a licensed PE. Most importantly, it replaces a PE
certification with no publicly trusted substitute that is clearly
qualified and dedicated to the public good. The substitute is not even
a corporation or supervising person who must demonstrate design and
review expertise; the only substitute is the facility itself, without
regard for the individual expertise of management or potential facility
deterioration with age.
Enforcement was discussed in general during the hearing, and I
recall that Mr. Dunne said in questioning that the EPA does fewer
inspections today than they did in the 1980s. I believe that Senator
Thune suggested that some 1,100 facilities are inspected each year,
remarking that the chances of being audited by the IRS were greater
than the chances of an enforcement inspection of a regulated SPCC
facility. If the proposed rulemaking removes the PE certification
requirement, then increased EPA enforcement would be required to
compensate or the public and environment will be at even greater risk.
This will increase the public costs of EPA enforcement, require
additional federal budget, and shift what is currently a cooperative
and privately internalized cost of PE certification to an adversarial
and taxpayer burden for federal agencies.
Question 3. What effect does the EPA's proposed rule have on the
basic principle of ``polluter pays'' as it applies to oil spill
prevention and clean-up?
Response. I am not sure that the proposed rule changes the basic
``polluter pays'' principle, because current and proposed SPCC
regulations do not relieve a facility of the cost of responding to and
mitigating damage from an oil spill. However, the proposed rule clearly
shifts the requirement that a facility fully prepare plans to prevent
spills, to contain them within a facility, and to prepare the best
countermeasures to minimize impacts of a spill. In fact, these proposed
rule changes could less effectively avoid higher costs to a polluter of
an unplanned or poorly planned spill response.
Question 4. Do you believe the EPA's proposal would create an
incentive for larger facility managers to disperse their oil storage
facilities and potentially create more risk for spills?
Response. I hope that the operating efficiencies of current oil
storage facilities would make such a perverse calculus economically
infeasible for most industries. However, there is no mechanism to
prevent facilities from working to classify facilities in discrete
terms that enable the wider dispersion of oil storage in units less
than 10,000 gallons each. In fact, I am not sure that any study has
ever evaluated whether the upward shift to a 1,320 lower threshold
created more locations with small tanks in some or many sectors; it
could be that we could already observe such behavior on a smaller
scale. In my experience, larger military installations chose to
consider all oil stored with their boundaries in aggregate to determine
whether a plan was required. These proposed rule changes would
certainly encourage a reconsideration of storage volumes near 10,000
gallons, and could result in more facilities storing oil to avoid
meeting the 10,000 gallon threshold. For example, a farm with cropland
on two sides of a public road may try to designate each orchard, field,
or vineyard as a separate facility; this would expose more of our
fertile land, irrigation systems, wetlands, and waterways to the risk
of spills.
______
Statement of Thomas P. Dunne Acting Assistant Administrator Office of
Solid Waste and Emergency Response U.S. Environmental Protection Agency
Mr. Chairman and members of the committee, I am Thomas Dunne,
Acting Assistant Administrator for the Office of Solid Waste and
Emergency Response at the Environmental Protection Agency (EPA). Thank
you for inviting me to appear here today to discuss EPA's Oil Spill
Prevention, Control and Countermeasure (SPCC) program. My testimony
will address issues regarding EPA's recent efforts to streamline the
SPCC requirements for a number of industry sectors, to extend the
compliance dates for modification and implementation of SPCC Plans, and
to provide guidance to EPA inspectors on the SPCC requirements.
background
The Federal Water Pollution Control Act (FWPCA) of 1970 required
the President to issue regulations that would establish procedures,
methods, equipment, and other requirements to prevent discharges of oil
from vessels and facilities and to contain such discharges. The
President delegated the authority to regulate non-transportation-
related onshore facilities to EPA. A Memorandum of Understanding (MOU)
between the U.S. Department of Transportation (DoT) and EPA in 1971 set
out the definitions of transportation- and non-transportation-related
facilities and Agency responsibilities. Among other things, this MOU
identified that the regulatory authority for all oil storage and
transfers of oil within a non-transportation-related facility rests
with EPA. Another MOU between EPA, the U.S. Department of Interior
(DoI), and DoT in 1994 re-delegated the responsibility to regulate
certain offshore facilities from DoI to EPA.
In 1973, EPA originally promulgated the SPCC regulations under the
CWA. The regulation established spill prevention procedures, methods,
and equipment requirements for non-transportation-related onshore and
offshore facilities with aboveground storage capacity greater than
1,320 gallons (or greater than 660 gallons in a single container), or
completely buried oil storage capacity greater than 42,000 gallons.
Regulated facilities were also limited to those that because of their
location could reasonably be expected to discharge oil in harmful
quantities into the navigable waters of the United States or adjoining
shorelines. The fundamental requirement established by this rule that
has not changed in nearly 30 years is that facilities covered by these
regulations are required to prepare an SPCC Plan and that Plan must be
certified by a licensed Professional Engineer (PE).
Since the original regulations were promulgated, EPA has proposed
amendments to the SPCC requirements a number of times to reduce
reporting burdens and to clarify certain requirements, to make
technical modifications, and to add elements like a response plan
requirement for facilities without secondary containment, updated
integrity testing requirements, prevention training, and an evaluation
of tank brittle fracture conditions (brittle fracture is a
metallurgical term for tank side wall failure under certain
conditions). Some of these proposed amendments were driven by the
catastrophic storage tank failure at the Ashland Oil facility in
Pennsylvania and a subsequent task force and GAO report in which
recommendations were presented to EPA to improve oil spill prevention.
In 2002, EPA published final amendments to the original SPCC
regulations. These amendments included a number of relief and
clarification provisions, such as raising the threshold quantity for
applicability, increasing the de minimus container size, exempting
certain underground storage tanks, offering the flexibility of the
environmental equivalence option, and introducing a flexible SPCC Plan
format. New provisions included certain tank integrity testing
requirements and brittle facture evaluation considerations.
After publication of this rule in 2002, several members of the
regulated community filed legal challenges to certain aspects of the
rule. All of the issues raised in the litigation have been settled
except the definition of navigable waters (this issue is currently
before the U.S. District Court for the District of Columbia). The
Agency published in the Federal Register the results of the settlement
discussions; the results also are included as an attachment to my
testimony.
Since then, EPA has extended the dates for revising and
implementing SPCC Plans several times primarily to provide the
regulated community with sufficient time to understand the 2002 revised
rule and clarifications that resulted from the litigation. EPA has made
a dedicated effort to listen to the concerns of the regulated community
and to take action to address these concerns while at the same time
maintaining protection of public health and the environment by
preventing the discharge of oil to navigable waters.
why do we care about oil spills?
EPA has information from the National Response Center database that
shows that from 1980 to 2001 thousands of oil-related spills occurred
annually into inland navigable waters. These spills result in
considerable environmental, response and socio-economic costs. As you
know, oil spills contaminate drinking water, impact fisheries,
agriculture, tourism and recreation, cause natural resource damage, and
harm wildlife. EPA believes that the SPCC program is working, with oil
spills from regulated facilities decreasing even though oil consumption
has increased.
It costs far less to take reasonable steps to prevent an oil spill
than it does to clean it up. And, as demonstrated in the actions
described below, EPA has worked to establish flexible and appropriate
oil spill prevention requirements for the wide variety of industries
and facilities that produce, store, or use oils. These proposed actions
to tailor the SPCC requirements are an effort to improve compliance
with the oil spill prevention rules, which EPA believes will lead to
increased oil spill prevention and protection of the Nation's water
resources from the threats posed by oil spills.
actions by epa on spcc
Following settlement of the litigation, EPA met with trade
associations and other members of the regulated community who raised
concerns about various provisions in the SPCC requirements. It is well
known that the SPCC requirements apply to a significant number of
industry sectors and that ``performance-based'' requirements are much
preferred to ``command and control'' or ``one-size-fits-all''
approaches. The SPCC requirements are designed to be performance based,
offering a range of flexibility so that appropriate requirements can be
tailored to particular industry sectors. Despite our past efforts in
this regard, we acknowledged and welcomed opportunities to meet with
the regulated community to discuss their particular issues and to
consider whether additional modifications or clarifications of the rule
requirements were necessary. The remainder of my testimony will
generally describe the input we received and how we are responding to
those concerns.
extension of compliance dates
EPA has issued a proposed rule to extend the dates by which
facilities will need to amend and implement an SPCC Plan to October 31,
2007. EPA is taking this action to allow time for the Agency to
finalize amendments to the SPCC requirements that were recently
proposed (and which I will describe below). We also want to provide
sufficient time for facilities to understand these modifications, to
review and understand the guidance we recently issued, and to make
appropriate changes to their facilities and to their SPCC Plans as a
result of the rule modifications and the guidance. Finally, the Agency
is concerned that the effects of the recent hurricanes on many industry
sectors might adversely impact their ability to meet the upcoming
compliance dates if no extension is provided.
small business
EPA has participated in several Small Business Administration (SBA)
Roundtable Meetings to hear feedback from not only SBA but also from a
variety of industry sectors such as the food, construction, electric
utility, aviation, and automotive industry. As a result of these
meetings, EPA embarked on an effort to streamline, focus, and clarify
the SPCC requirements and to provide guidance to EPA inspectors to
illustrate the flexibility built in to the regulations. In the fall of
2004, EPA published two Notices of Data Availability (NODAs). The first
NODA made available and solicited comments on submissions to EPA
suggesting more focused and streamlined requirements for facilities
subject to the SPCC rule that handle oil below a certain threshold
amount of oil. The second NODA made available and solicited comments on
whether alternate regulatory requirements would be appropriate for
facilities with oil-filled and process equipment. Comments submitted on
these NODAs informed our development of the recent proposed rule to
modify the SPCC requirements.
As a result of the Roundtable sessions and comments on the NODAs,
we learned that the major concern for small businesses is the
requirement for certification of SPCC Plans by a licensed Professional
Engineer (PE). Consequently, after consideration of options, we
developed the approach in the proposed rule that would provide small
facilities (those handling less than 10,000 gallons of oil) the option
to self-certify their plans. In addition, we are proposing additional
flexibility for these smaller facilities with respect to tank integrity
inspections and facility security.
airports
In meetings with, and correspondence from, airport trade
association representatives and an airport coalition, EPA learned about
the concerns of airport facility operators with the SPCC requirements
and Federal Aviation Administration (FAA) standards for airport mobile
refuelers. The 1971 MOU with DoT vests regulatory authority for all oil
storage and transfers of oil within a non-transportation-related
facility with EPA. We recognize the unique circumstances regarding
these mobile refueling vehicles and the difficulty associated with
providing sized secondary containment while the vehicle is moving,
engaged in transferring fuel, or parked. Given these unique
circumstances, EPA agrees that airport owners and operators should have
greater flexibility in fuel spill prevention and has proposed to modify
the regulations to make airport mobile refuelers subject to the general
secondary containment requirements, rather than the sized secondary
containment requirements. EPA believes the general secondary
containment requirements are more flexible and reflect the kinds of
active and passive fuel spill prevention measures already used by many
airports in their fueling operations.
For example, some large airports have elaborate drainage systems
that can capture runoff from all paved areas. The runoff is contained
and measures are taken to ensure that any oil or fuel that might be
contained in this runoff is separated from water before the runoff is
discharged to a waterway. This is a reasonable approach to oil spill
prevention and it satisfies the requirements of the SPCC regulations.
For smaller airports that may not have such a system, under the general
containment requirements the airport owner and operator would determine
the likely amount of fuel that could be spilled from the mobile
refueler, where it would spill from and when (e.g., a leak from a
hose), and institute appropriate active or passive measures and
response capability (such as diversions or absorbent materials) to
ensure that the fuel does not get discharged to a waterway.
agriculture
Through the SBA Roundtables and in separate meetings and
correspondence with agricultural representatives and the U.S.
Department of Agriculture (USDA), EPA has learned of the concerns of
farmers with respect to compliance with the SPCC requirements. EPA
recognizes that the number of farms covered by the SPCC regulations is
significant and that the unique characteristics of farms pose unique
challenges to SPCC compliance. Consequently, EPA is taking several
steps: initially, farmers will have the option to take advantage of the
flexibility offered by the small facility proposal and the exemption
for motive power described below. Further, EPA is proposing to extend
the 2002 rule compliance dates for all facilities including farms until
October 31, 2007; and to extend the 2002 rule compliance dates
indefinitely for farms storing 10,000 gallons of oil or less. Finally,
EPA has committed to work with USDA and farm representatives to
determine how to properly address farms under the SPCC regulation.
edible oils
EPA has also met with and received correspondence from the food
industry regarding animal fats and vegetable oils (AFVO) and the SPCC
requirements. This sector has long maintained that food oils are not
the same as petroleum oils and therefore should have different
regulatory requirements that reflect these technical differences.
Indeed, the Edible Oil Regulatory Reform Act (EORRA) of 1995 required
most Federal agencies to differentiate between, and establish separate
classes for, various types of oil, specifically, between animal fats
and oils and greases, and fish and marine mammal oils and oils of
vegetable origin, including oils from seeds, nuts, and kernels; and
other oils and greases, including petroleum. In our current proposal,
EPA is requesting input on whether specific provisions in the SPCC
requirements need to be modified to account for differences between
AFVO and petroleum oils.
EPA has previously reviewed this issue and determined that many
animal fats and vegetable oils can be harmful to the environment.
Although we might enjoy consuming various food oils in small amounts, a
large spill of oil into a waterway could contaminate drinking water
supplies and cause oxygen depletion, fish kills and other aquatic
impacts. At the same time, EPA does recognize that there are some
requirements in the SPCC rules that are not appropriate for AFVO--for
example, the requirements for onshore oil production facilities--and we
are proposing to remove those requirements.
electrical utilities and other oil filled equipment users
Regarding the oil-filled operational equipment issue, EPA met with
and received correspondence from several stakeholders about the SPCC
requirements and the nature of oil-filled operational equipment in
comparison to other bulk oil storage containers. Oil-filled operational
equipment includes transformers, hydraulic equipment and lubrication
systems. In light of these issues raised and the unique nature of this
kind of equipment, EPA is offering in the current proposal a
streamlined regulatory option. A facility owner or operator can choose
to satisfy the SPCC requirements through inspection and monitoring
systems and contingency planning rather than through general
containment requirements. In doing so, the proposal provides the
electrical utilities and other industrial facilities with an additional
prevention option for this unique equipment.
motive power
In contrast to the airport mobile refuelers described above, a
``motive power container'' is an integral part of a motor vehicle
(including aircraft) that provides fuel for propulsion or some other
operational function, such as lubrication of moving parts or for
operation of onboard hydraulic equipment. Motive power containers on
vehicles used solely at non-transportation-related facilities fall
under EPA jurisdiction and are subject to the SPCC regulation. The
types of vehicles and facilities that are potentially subject to the
SPCC requirements solely because of the oil contained on-board the
vehicles are: buses at terminals or depots; recreational and some sport
utility vehicles parked at dealerships; heavy earthmoving vehicles at
construction sites; aircraft; and large farming and mining equipment.
EPA recognizes that, in most cases, the SPCC requirements are not
practical for motive power containers on-board these types of vehicles
at SPCC regulated facilities. Consequently, EPA is proposing to exempt
them from coverage under the rule. However, transfers between bulk
storage containers and these vehicles remain subject to the SPCC
requirements.
oil exploration and production
The oil exploration and production industry has raised concerns
about the SPCC requirements. Such concerns include requirements
applicable to produced water, the costs and practicality of certain
compliance requirements (particularly those related to secondary
containment), and potential impacts on the Nation's marginal wells.
Although our current proposal was originally intended to address only
certain targeted areas of SPCC requirements, EPA is working to identify
additional areas where regulatory reform may be appropriate. For these
additional areas, the Agency expects to issue a proposed rule in 2007.
In the current proposal, EPA requests comments from stakeholders on the
scope of potential future rulemakings. Additionally, EPA in conjunction
with the Department of Energy will be conducting an energy impact
analysis of the SPCC requirements, and will consider the results of
this analysis to inform any future rulemaking.
While EPA is not taking any specific action with respect to the oil
exploration and production industry at the present time, this sector
can take advantage of the small facility and oil-filled operational
equipment flexibility offered by EPA's proposed rule and can examine
the additional flexibility offered by other provisions as described in
the SPCC guidance described below. EPA is willing to work with this
sector to determine whether other appropriate requirements exist to
increase compliance and thereby reduce the amount of oil lost to water.
guidance
Finally, EPA has issued the SPCC Guidance for Regional Inspectors.
This guidance is intended to assist regional inspectors in reviewing a
facility's implementation of the current SPCC rule. The document is
designed to foster a better understanding of how the rule applies to
various kinds of facilities and to help clarify the role of the
inspector in the review and evaluation of the performance-based SPCC
requirements. Another reason for the guidance is to respond to
stakeholder requests for consistent national policy on several SPCC-
related issues.
The guidance is available on our website both to owners and
operators of facilities that may be subject to the requirements of the
SPCC rule and to the general public. EPA welcomes comments on this
guidance; it is a living document and will be revised, as necessary, to
reflect any relevant future regulatory amendments. EPA believes it is
important for all stakeholders to review, understand and make use of
this guidance. The guidance should clarify many of the recent issues
raised by the regulated community.
c0nclusion
EPA has made a concerted effort to address the concerns of various
sectors of the regulated community regarding the SPCC regulations while
maintaining an environmentally protective SPCC program. In fact, EPA
estimates that, overall, the proposed amendments would reduce annual
compliance costs by $98 million. EPA estimates that the proposed rule
would lower compliance costs by $24 million for facilities with less
than 10,000 gallons of oil storage capacity. The most important
consideration, however, is that EPA is working to make compliance
easier thereby leading to greater oil spill prevention and protection
of public health and the environment.
______
Responses by Thomas P. Dunne to Additional Questions from Senator
Inhofe
Question 1. Can you please clarify for the committee which farms
are covered by the indefinite compliance extension proposed in the
December 2005 rule? Does it apply to only those farms that are in full
compliance with the 1973 regulation and that have less than 10,000
gallons storage capacity?
Response. The proposed indefinite compliance date extension for
farms would apply to farms that have a total oil storage capacity of
10,000 gallons or less as follows:
<bullet> a farm that was in operation on or before August 16, 2002,
would have to maintain its Spill Prevention, Control and Countermeasure
(SPCC) Plan during the indefinite extension, but would not be required
to amend that Plan in accordance with the 2002 revisions until a new
compliance date is established;
<bullet> a farm that came into operation after August 16, 2002
would not be required to have a Plan during the indefinite extension
until a new compliance date is established.
[Note that the Agency has extended the compliance date before
(i.e., January 9, 2003 (68 FR1348), April 17, 2003 (68 FR 18890) and
August 11, 2004 (69 FR 48794)) and has just extended the compliance
date again until October 31, 2007. In all of these instances,
facilities, including farms that were in operation on or before August
16, 2002, were required to maintain their SPCC Plan.]
Question 2. In the cost analysis for the 2002 rule, EPA argues that
its change from ``should'' in the rule to ``shall'' does not constitute
regulatory requirements and therefore had no cost impact on the
proposal. EPA argued that `should' always meant that the actions were
requirements not recommendations. However, in a 1989 GAO report, EPA
attorneys and program officials stated that they considered these
provisions guidelines or recommendations-not requirements. Further in
the Oil Spill Task Force's 1988 report one of its recommendations is
that the ``shoulds'' be changed to ``shalls'' because ``these changes
to the regulations will require certain practices rather than only
encouraging them.''
How do you account for the obvious discrepancy between statements
of the attorneys working on the program in 1989 and the Agency's
contention in 2002 that many of these provisions were always
requirements? If in fact there was any doubt as to whether or not these
provisions were required, should EPA have considered that uncertainty
in the 2002 cost analysis?
Response. Since EPA's SPCC regulation was promulgated in December
1973, an owner and operator of a facility has always been required to
have an SPCC Plan that was certified by a Professional Engineer as
adhering to good engineering practices (see 40 CFR Sec. 112.3(a-
d)(1973-2002); 40 CFR Sec. 112.3(a-d)(2003-2005)). See, for example, 38
FR 34165-34166 (December 11, 1973) where it states,
``112.3(a) Owners or operators of onshore and offshore facilities
in operation on or before the effective date of this part that have
discharged or could reasonably be expected to discharge oil in harmful
quantities, as defined in 40 CFR Part 110, into or upon the navigable
waters of the United States or adjoining shorelines, shall prepare a
Spill Prevention Control and Countermeasure Plan (hereafter ``SPCC
Plan"), in accordance with Sec. 112.7. Except as provided for in
paragraph (f) of this section, such SPCC Plan shall be prepared within
6 months after the effective date of this part and shall be fully
implemented as soon as possible, but not later than one year after the
effective date of this part--(d) No SPCC Plan shall be effective to
satisfy the requirements of this part unless it has been reviewed by a
Registered Professional Engineer and certified to by such Professional
Engineer. By means of this certification, the engineer, having examined
the facility and being familiar with the provisions of this part, shall
attest that the SPCC Plan has been prepared in accordance with good
engineering practices. Such certification shall in no way relieve the
owner or operator of an onshore or offshore facility of his duty to
prepare and fully implement such Plan in accordance with Sec. 112.7, as
required by paragraph (a), (b) and (c) of this section.'' (emphasis
added) EPA's position consistently has been that the regulation imposes
a mandatory requirement to have an SPCC plan, recognizing that the
regulation also contains some appropriate flexibility as to the actual
contents of that plan. The United States has taken that position in
litigation when the regulatory requirement to have an SPCC Plan was
unsuccessfully challenged in Federal court. See United States v. Texaco
Exploration & Production, Inc., et al., Case Nos. 2:98-CV-0213S & 2:98-
CV-0220S (D. Utah May 26, 1999)(Mobil Oil tried to dismiss a Federal
enforcement case involving this issue). The judge in this case stated:
``Mobil also asks this court to dismiss the Government's claim for
violation of 40 C.F.R. Sec. 112.7 because that section sets forth only
discretionary `guidelines' that `should' be included in SPCC plans--
``The Government explains that its claim is actually brought under
Sec. 112.3(b) which is a mandatory provision. It states that the owner
or operator of an onshore facility `shall' prepare an SPCC plan in
accordance with Sec. 112.7 and that each plan `shall be a carefully
thought out plan' which `shall follow the sequence--and include a
discussion of the facility's conformance with the appropriate
guidelines.' Section 112.3(b)----
``The defendant's motions to dismiss are therefore denied.''
EPA understood, however, that the 1973 regulations' efforts to
provide owners and operators with maximum discretion in meeting the
requirements of Section 112.3 had unfortunately led a number of owners
and operators to mistakenly view every spill prevention responsibility
in Section 112.7 as voluntary. This was noted by the Oil Spill Task
Force 1988 Report's finding that ``Compliance with many aspects of the
SPCC regulations is currently performed on a discretionary basis.''
Nevertheless, as the Mobil court understood in 1999, even discretion
has its limits, and the limits imposed by the 1973 regulations were
expressed in 40 CFR Sec. 112.3.
Owners and operators, no matter how they handled many specific
details, needed an SPCC plan that was certified by a Professional
Engineer that met the requirements of Part 112 by effectively,
preventing oil spills through the use of good engineering practices in
all relevant aspects.
To resolve the potential for misunderstanding, EPA changed
``shoulds'' in 40 CFR 112.7 to ``musts'' in the 2002 SPCC regulatory
amendments, noting that ``we have always interpreted and enforced our
rules as mandatory requirements'' (see 67 Federal Register 47052, July
17, 2002).
At the same time that EPA made this change, it also explicitly
permitted Professional Engineers to make ``environmental equivalence''
demonstrations for all but secondary containment requirements (40 CFR
Sec. 112.7(a)(2)). Any owner or operator, before or after August 2002,
could satisfy the ultimate requirements of 40 CFR Sec. 112.3 by either
following the various listed relevant provisions of 40 CFR part 112, or
by adopting another ``environmental equivalent'' measure where allowed
by the rule. There was no increase in regulatory burden by this 2002
change, only a more clearly written rule.
Question 3. Can you also detail the history of the wastewater
treatment exemption including any documentation with regard to produced
water and the wastewater treatment exemption?
Response. The wastewater treatment exemption was not promulgated
until July 2002 and is based on a comment from General Motors
(submitted to an SPCC rule making proposal published in October, 1991).
GM suggested that ``Sec. 112.1 exceptions should be expanded to include
facility storage and treatment tanks associated with `non-contact
cooling water systems' and/or `stormwater retention and treatment
systems.''' The commenter said that the concentration of oil in the
water ``would be insignificant.'' The commenter believed that the
``cost to contain these structures could be better spent on other SPCC
regulatory requirements.''
Pursuant to the 2002 rulemaking, EPA agreed that certain wastewater
treatment facilities or parts thereof should be exempted from the rule,
if used exclusively for wastewater treatment and not used to meet any
other requirement of part 112. Typically, a wastewater treatment plant
treats large quantities of water contaminated with very small or
insignificant quantities of oil. Conversely, produced water may contain
significantly greater quantities of oil than in wastewater. Therefore,
EPA did not consider treatment facilities or parts there of that treat
produced water at an oil production, oil recovery, or oil recycling
facility to be wastewater treatment for purposes of the rule. In the
preamble of the 2002 rule, EPA explained why the wastewater treatment
exemption does not include oil production, oil recovery or oil
recycling facilities. ``These facilities generally lack NPDES or state-
equivalent permits and thus lack the protections that such permits
provide.
Production facilities are normally unmanned and therefore lack
constant human oversight and inspection. Produced water generated by
the production process normally contains saline water as a contaminant
in the oil, which might aggravate environmental conditions in addition
to the toxicity of the oil in the case of a discharge.'' (67 FR 47068)
EPA's rationale in promulgating the 2002 rule was that the goal of an
oil production, oil recovery, or oil recycling facility is to maximize
the production or recovery of oil, while eliminating impurities in the
oil, including water, whereas the goal of a wastewater treatment
facility is to purify water for discharge back into the environment.
Neither an oil production facility, nor an oil recovery or oil
recycling facility treats water; instead they treat oil.
For purposes of this exemption, produced water was not considered
wastewater and treatment of produced water was not considered
wastewater treatment. The EPA requires containment around oil and gas
process vessels. For fired vessels such as heater-treaters, this can
present a serious safety hazard, and containment is impractical for
pressurized vessels. EPA's rules are inconsistent in regards to
process/operating equipment among the different industrial sectors. At
non-exploration and production sites, it is excluded from the
definition of bulk storage containers, whereas at E&P facilities, this
type of equipment is considered bulk storage containers and subject to
secondary containment requirements. The purpose of oil and gas process
equipment such as heater treaters is to process oil/water mixtures, and
is not used as a storage container. Why does EPA treat oil and gas
process equipment differently and what data does EPA have to support
this action?
Response. Since the SPCC rule was promulgated in 1973, separation
and treating facility installations (also referred to as tank battery
and central treating plant installations) at production facilities have
been required to have secondary containment in accordance with the bulk
storage container provisions for production facilities. Separation and
treating facility installations include heater-treaters, gun barrels
and other types of oil/water separators.
EPA has always viewed, production facilities as unique from other
oil handling and processing facilities in that they are continuously
operating, may generate a constant flow of oil, are normally unmanned,
and lack regular human oversight and inspection to prevent spills. At
other types of SPCC-regulated industrial facilities, the oil-filled
manufacturing equipment is subject to the general secondary containment
requirements of the rule.
Even though production facilities are treated differently, the July
2002 rule does provide flexibility in the type and design of secondary
containment and allows for the use of, for example, drainage systems to
prevent oil discharges from becoming a safety hazard. Finally, a
facility may determine that secondary containment for these bulk
storage containers is impracticable and may choose to comply with the
requirements of Sec. 112.7(d) in lieu of secondary containment. The
Plan must clearly must clearly explain why such measures are not
practicable; for bulk storage containers, conduct both periodic
integrity testing of the containers and periodic integrity and leak
testing of the valves and piping; and, unless the facility has
submitted a response plan under 40 CFR 112.20, provide in the SPCC Plan
the following:
(1) An oil spill contingency plan following the provisions of 40
CFR Part 109;
(2) A written commitment of man power, equipment, and materials
required to expeditiously control and remove any quantity of oil
discharged that may be harmful.
Question 4. In the preamble to the rule EPA states that ``there are
factors concerning the physical layout of a farm that make this sector
unique within the universe of SPCC-regulated facilities. For example,
farms vary considerably in design and size--Further, the environment in
which farms operate varies considerably from other industries. Farmers
often own and/or farm lands that are non-continuous and may be
separated by roads and other obstacles. Oil is generally not centrally
stored and oil containers may be widely dispersed.'' The Agency goes on
to list several other issues that affect farms and justify the
extension of the compliance dates for the 2002 rule.
However, when the Agency finalized the 2002 rule, it argued that it
would simplify compliance and provide flexibility to the regulated
community. Given that EPA has long maintained that the 2002 rule simply
clarified the requirements of the 1973 program and made few substantive
changes and in fact streamlined the process, it is illogical to then
conclude that farmers cannot comply with the more streamlined program
but can with the more complicated and onerous 1973 program. Can you
please explain this inconsistency?
Response. The preamble discussion cited in this question was not
intended to explain why the Agency believes that farms cannot comply
with the 2002 final rule but, rather, why the Agency is considering
development of tailored or streamlined requirements specific to farms
that store below a certain amount of oil.
In the December 2005 notice, the Agency proposed streamlined
requirements for ``qualified facilities'' (i.e., facilities that store
10,000 gallons or less of oil and meet other qualifying criteria) .
Those streamlined requirements also would be available to farms (i.e.,
those that store 10,000 gallons or less) that meet the qualifying
criteria. However, at the time of the proposal, the Agency was not
convinced that those particular streamlined requirements were
appropriate or always necessary for farms that stored 10,000 gallons of
oil or less. The Agency believes that such farms can be distinguished
from other facilities that store 10,000 gallons of oil or less based on
a number of characteristics, some of which were described in the
preamble and, because of those unique characteristics, requirements
specific to farms maybe appropriate. The Agency, therefore, proposed to
extend the compliance dates for farms that store 10,000 gallons of oil
or less indefinitely to allow time for the Agency to consider
streamlined requirements specific to the needs of such farms. The
unique characteristics of farms described in the preamble would be
among those the Agency would consider in developing such streamlined
requirements.
______
Responses by Thomas P. Dunne to additional Questions from Senator
Jeffords
Question 1. Please explain the effect of oil in water. Include a
description of the effect of small quantities and large quantities of
oil in water on waterways, ecosystems, and aquatic life. Include a
description of the effects of animal fats and oils, vegetable oils,
etc.
Response. When oil of any kind, including animal fats and vegetable
oil (AFVO), is spilled into water, it may pose serious threats to fresh
water and marine environments. It affects surface resources and a wide
range of subsurface plants and animals that are vital to ecosystem
health.
Spilled oil can harm the environment in several ways, including the
physical damages that directly impact wildlife and their habitats (such
as coating birds or mammals with a layer of oil), adversely impacting
water quality, and the toxicity of oil itself or components in the oil,
which can poison exposed organisms or contaminate drinking water
supplies. Even small quantities of oil spilled into shallow, sensitive
water bodies such as wetlands can cause substantial harm to indigenous
species.
Petroleum and non-petroleum oils, including AFVO, share common
physical properties and produce similar environmental effects. Common
properties such as solubility, specific gravity,and viscosity are
responsible for the similar environmental effects of petroleum and
vegetable oils and animal fats. Petroleum oils and AFVO can enter all
parts of an aquatic system and adjacent shoreline, and similar methods
of containment, removal and cleanup are used to reduce the harm created
by spills of petroleum oil and AFVO. For more information, please refer
to the denial of a petition to amend the Facility Response Plan (FRP)
rule published October 20, 1997 (62 FR 54508) in which the Agency
addressed several issues related to AFVO, including the petitioner's
claims that AFVO are non-toxic and biodegradable.
Question 2. How does the Agency believe that removing the PE
certification requirements for small facilities will change the
likelihood of a spill?
Response. First, it should be noted that the Agency is proposing
self-certification by the owner and operator of its SPCC Plan as an
alternative to the existing requirement. That is, a qualified facility
may decide, based on facility specific circumstances, to continue to
have a PE certify its Plan. However, the Agency has received numerous
comments stating that smaller oil storage facilities have difficulty
complying with the SPCC rule because of the high cost associated with
the PE certification of SPCC Plans. The Agency believes that allowing
the owner and operator of a facility to self-certify as opposed to
obtaining a PE certification of its SPCC Plan for a qualified facility
will increase options for compliance, provide flexibility, reduce the
regulatory burden for Plan development and thus encourage owners and
operators of facilities to develop and implement SPCC Plans. Further,
these smaller facilities are likely to be simple and less complex and
involve straight forward oil spill prevention practices. As a result,
we expect an increase in compliance with the rule requirements,
reducing the likelihood of a spill.
Question 3. In response to my question during the hearing about the
evolution of modern science as it relates to oil spills and the fact
that toxic components remain in the environment for an extended time
period, you responded that this did not have an impact on the EPA
proposal. It seems that information regarding the severity of the
impact of oil spills would be a critical piece of information in
determining to what extent facilities should go to prevent such spills.
Is EPA aware of the article published in Science magazine on this
topic that I submitted for the record, and is it in fact true that the
Agency did not consider this information when proposing changes to the
SPCC rule?
Response. The Agency has considered the impact of oil spills on the
environment in developing its regulatory actions, and continues to
review new science as it is developed. EPA is obliged to conduct cost/
benefit analyses in support of regulatory actions, and there is no
better way to show environmental benefits than by using the most recent
scientific thinking that incorporates lessons learned and illustrates
the impact of harmful oil spills. EPA is aware of the article you cite
but did not specifically use the findings for development of the
proposed amendments because these amendments are focused on tailoring
and streamlining requirements to make the SPCC regulation more
effective, not at changing the basic premise that an SPCC Plan is
warranted for facilities that handle oils to prevent spills and/or
minimize the environmental consequences if one should occur.
Question 4. In response to a question from Senator Murkowski, you
stated that, ``The smaller airports are not going to be subject to the
same secondary containment as a larger airport, and they are going to
be able to make a decision in terms of what is the best way.'' This is
inconsistent with my understanding of the regulation proposed by EPA.
In the summary of the Federal Register notice, EPA states, ``The EPA is
today proposing to amend the SPCC Plan requirements to reduce the
regulatory burden for certain facilities by:--exempting airport mobile
refuelers from the specifically sized secondary containment
requirements for bulk storage containers.'' In reading through the
entire proposal, the EPA proposes to exempt airport mobile refuelers
from only specifically sized secondary containment requirements.
Secondary containment still applies. In addition, there is no mention
of a proposal to exempt small airports. Does the Agency intend to
exempt small airports? If so, on what basis and where in the EPA
proposed rule is this issue addressed? In addition, please respond to
Senator Murkowski's question for the record--what will the effect be on
Alaska's very small airports--what will they have to do to comply with
the SPCC regulations as proposed by EPA?
Response. In the December 12, 2005 notice, EPA proposed that the
general secondary containment requirements at 40 CFR Part 112.7(c)
would apply to airport mobile refuelers versus the sized secondary
containment requirements in Sec. 112.8(c)(2) and 112.8(c)(11)]. This
proposed approach applies to all airports, regardless of size,
including Alaska's airports. The existing general secondary containment
provisions under the SPCC rule provide considerable flexibility to an
owner/operator as to what secondary containment option is best for the
particular airport or even specific fueling operations and logistics at
an airport. Thus, an oil spill containment practice at a large hub
airport (e.g., large-scale drainage system with oil/water separators
coupled with related storm water structures) may not be appropriate for
a general aviation airport (e.g., attachment basin). In addition,
airports, particularly small airports like those that maybe in Alaska,
may choose to take advantage of the qualified facility option which
would allow the airport to self-certify its SPCC Plan. In the hearing,
Mr. Dunne wanted to communicate that airports will have more
flexibility under the proposed approach to choose a secondary
containment option more suitable and cost effective for a given
airport's size and configuration. Please note that we did not propose
to exempt any airports from the SPCC requirements at 40 CFR 112; the
proposal specifically applies to mobile refuelers at all airports that
store above 1,320 gallons of oil which due to its location could
reasonably be expected to discharge oil into or upon the navigable
waters of the United States or adjoining shorelines, as well as other
waters as described in 40 CFR 112.1(b) in quantities that maybe
harmful.
Question 5. I want to ask a few questions about airports and mobile
refuelers. Mobile refuelers are significant sources of petroleum
products. At Reagan National Airport alone, there are 18 mobile
refuelers carrying up to 100,000 gallons at any one time. This is not a
small quantity of fuel. I am concerned that the Agency appears to be
willing to consider exempting all mobile refuelers from general
secondary containment requirements if they are in compliance with
National Fire Protection standards. How do these standards ensure that
as spilled fuel is moved rapidly away from parked aircraft, it is not
moved away from aircraft and into aquatic environments? Do these
standards apply to all sizes of airports, including general aviation?
What is the compliance mechanism of these fire protection
standards, for example, are there third party audits or other external
verification procedures?
Response. While the proposed rule indicates that the Agency is
considering whether National Fire Protection Association (NFPA) codes
and standards could serve to prevent oil spills to the environment, EPA
did not move forward with such a proposal. EPA understands that an
airport could potentially satisfy both fire code requirements and
prevent fuel discharges if the system is properly designed and
implemented. EPA understands that the NFPA codes require that drainage
systems be designed to carry away combustible or flammable liquids into
a safely located, approved containment. The purpose of soliciting
comment on this in the proposed rule is to test this hypothesis and
collect information from the public and the aviation industry about the
compliance mechanisms; range of applicability, and designs associated
with fire protection and airport mobile refuelers.
Question 6. During the hearing, you mentioned fire codes and some
FAA requirements that apply to tanks as protection measures applying to
fuel tanks. In the EPA proposal, the Agency states that: ``The Agency
did not propose this approach because NFPA 407 and NFPA 415 are
designed for fire protection rather than environmental protection; a
properly designed drainage system that meets the intent of NFPA 407 and
NFPA 415 might not adequately prevent fuel from being discharged in
quantities that maybe harmful. In addition, EPA has no information on
the degree of compliance with, alternatives to, or applicability of
NFPA 407 and NFPA 415 to all airport facilities.'' Are these the fire
codes you were referring to, and is the Agency in possession of new
information obtained since the publication of your proposed rule that
would lead you to believe that they would offer some level of
protection from oil spills? Please describe the information you have
collected, if any. If not, on what do you base your testimony? Does the
Agency plan to collect information on this topic? If so, please
describe the information you believe you need to make a determination
and your acquisition plan for this data.
Response. Yes, these are the fire codes Mr. Dunne referred to in
his testimony. As stated in the previous question and answer, depending
on the design and applicability, these codes may play a role in
preventing oil spills from reaching waters of the United States. As
stated in the proposal, we are not moving forward with an approach that
would rely on the fire code measures as an oil spill prevention
mechanism until more information is collected and understood. We expect
to work with the Federal Aviation Administration (FAA) and to learn
from public comments submitted on the proposed rule. EPA would need to
know the extent that these codes apply to all airports and whether the
design of such drainage systems meet oil spill prevention requirements.
Question 7. Senator Thune asked during the hearing whether the
Agency had responded to the GAO recommendation that inspection
priorities for the SPCC program be established. Has the Agency
established inspection priorities, and if so, what are they? In the
hearing you stated that, ``I can tell you this, Senator, we are not
specifically going to be targeting small farmers. In fact, I will
guarantee you that we will not be.'' Please describe the basis for this
statement and provide a copy of any correspondence or documentation
that you have exchanged with OECA to establish this policy.
Response. EPA typically uses the following factors/resources to
target facilities for SPCC inspections:
-Quantity of oil stored
-Geographic location, proximity to sensitive environments and water
bodies
-State, Federal and local referrals, public complaints, and
counties with high spill histories
-State permit databases
-Age of infrastructure
-Industry sector
EPA Regional Offices include input from State and local authorities
on inspection priorities and target inspections in response to spill or
complaint referrals. Regions routinely receive informationn from state
and local authorities about facilities that should be targeted for
inspections. When EPA conducts Facility Response Plan (FRP) inspections
at high volume storage facilities, we will often conduct an SPCC
inspection. EPA headquarters and Regional oil program staff coordinate
regularly on inspection priorities and program implementation.
With regard to SPCC inspections of farms, EPA has informed the
public and the regulated community that it intends to address concerns
raised by the farming sector about the SPCC requirements and consider
further differentiation of requirements for farms during the proposed
indefinite extension. Because there is such a large number and a wide
variety of industrial facilities subject to the SPCC requirements that
handle oil in storage capacities greater than 110,000 gallons, in light
of the factors noted above for targeting facilities for inspection, a
farm inspection is typically a very low priority. In addition, EPA
believes that the farm sector will needd the time provided by the
extension to better take advantage of the guidance recently published
and any further amendments that are promulgated as a result of the
recent proposed amendments.
Question 8. Please explain the agriculture exemption in the EPA
proposal. Does it apply to all farms for all requirements of the SPCC
program or only those requirements that would have been added by the
2002 rule and the 2005 proposed rule?
Response. The Agency did not propose an exemption for agricultural
facilities; rather we proposed an indefinite compliance date extension
for certain farms. The proposed extension for farms would affect those
farms that have a total oil storage capacity of 10,000 gallons or less
as follows:
a farm that was in operation on or before August 16, 2002, would
have to maintain its SPCC Plan (as required by the 1973 regulation)
during the indefinite extension, but would not be required to amend
that Plan according to the 2002 rule until a new compliance date is
established; for farms that came into operation after August 16, 2002,
they would not be required to have a Plan according to the 2002 rule
and the 2005 proposed modifications until a new compliance date is
established
Question 9. Regarding the indefinite exemption of agriculture sites
from the requirements of the rule. Farms that meet the size
requirements, having an equivalent of 24, 55 gallon drums onsite, have
been required to have a spill prevention plan in place for close to 35
years. In Dr. Corbett's testimony, he points out that agriculture uses
almost the same percentage of petroleum as the commercial sector. What
analysis have you conducted to justify this change and what were your
findings?
Response. As noted above, the indefinite extension applies to
certain farms as defined in the proposed rule, not to all agricultural
facilities. EPA believes that farms with a total oil storage capacity
of 10,000 gallons or less, as described in the proposed rule, have
unique characteristics that distinguish them from other agriculture,
food oil or petroleum oil facilities. These differences are described
in the preamble of the proposed rule (see 70 FR 73524 at 73542).
EPA is currently working with the U.S. Department of Agriculture to
gather data regarding possible streamlined or tailored requirements for
these facilities.
Question 10. For qualified facilities, generally those facilities
with a storage capacity of 10,000 gallons or less and no discharges
during the past decade, EPA's proposal allows owner and operators to
make their own security and integrity testing decisions without
consulting with a professional engineer provided industry standards are
met. Please explain why EPA limited flexibility in this way and why
flexibility should not be extended for environmental equivalency and
impracticability requirements.
Response. EPA considers the proposed 10,000 gallon threshold to be
a reasonable volume that addresses the concerns of facilities with
relatively smaller volumes of oil at simpler, less complex facilities,
while balancing the public health and welfare given the potential for
environmental damage for a spill of that magnitude. EPA believes that
in general, without the advantage of the expertise and knowledge that a
Professional Engineer (PE) brings to the development of an SPCC Plan,
deviations based on environmental equivalence and contingency measures
in lieu of secondary containment may not be adequate or appropriate.
Because we have not extended these performance-based provisions to
qualified facilities, EPA is proposing that qualified facilities have
additional flexibility in the security and tank integrity testing
provisions. EPA believes that qualified facilities, because of their
smaller oil storage quantity and likely simpler operations, should be
provided with a stream lined set of basic security measures and
integrity testing requirements. The flexibility in these proposed
exceptions would be analogous to the flexibility provided under the
environmental equivalence provision (Sec. 112.7(a)(2)), which allows
for deviations from the security requirements (Sec. 112.7(g)) and tank
integrity testing requirements (Sec. 112.8(c)(6)) that would not be
available to qualified facilities because a PE is not certifying the
Plan.
Question 11. As a basis for proposing these changes to the SPCC
requirements, did the EPA conduct a risk analysis that evaluated
potential impacts on human health and the environment, and what factors
did the EPA consider?
Response. EPA did not do a classic risk assessment or risk
evaluation. Instead, based on a qualitative potential for environmental
harm, EPA determined that the changes we are proposing work to maintain
appropriate protection while streamlining the requirements for certain
facilities, equipment types, and sectors.
Question 12. Can you explain how the provisions of 2002 rule will
be enforced? In other words, the Agency has delayed the implementation
of that rule through 2007. Therefore, the requirements of the rule
stand as published in 1973. Will the Agency be enforcing the current
program, and, if you have an alternative approach in mind, can you
explain the legal basis for this approach?
Response. The Agency expects to enforce the 2002 rule, which allows
owners and operators who have received an extension to 2007 to maintain
their SPCC Plans that incorporate 1973 rule requirements . It should be
noted that on February 10, 2006 the EPA Administrator signed a final
rule extending the compliance date by which all facilities must prepare
or amend and then implement their SPCC Plans. This extension affects
only requirements of the July 2002 final SPCC rule that impose new or
more stringent compliance obligations than did the 1973 SPCC rule. Any
provision in the July 2002 rule that provides regulatory relief is not
affected by these compliance date extensions because such provisions
are not ones for which it would be ``necessary'' to amend existing
Plans ``to ensure compliance with'' the July 2002 amendments (see
Sec. 112.3). This issue was discussed by the Agency in two previous
extension notices on April 17, 2003 (see 68 FR 18890, at 18892-3), and
on August 11, 2004 (see 69 FR48794, at 48796).
Question 13. What flexibility has EPA provided to qualified
facilities in this proposal and how does it differ from the 2002
requirements?
Response. The 2002 rule already provides some flexibility for
owners and operators to comply with the SPCC requirements. In the
December 2005 proposal, EPA is proposing to provide an additional
option for compliance and other flexibility to qualified facilities.
The owner/operator would have the option to self-certify the SPCC Plan
in lieu of a review and certification by a Professional Engineer (PE).
The cost of a PE certification has been the major concern for small
businesses. In addition, facilities that qualify and choose this option
have greater flexibility on oil storage area security requirements and
tank integrity testing than that offered by the 2002 rule. The 2002
rule includes specific security requirements, while the 2005 proposal
asks that facility owners and operators develop their own security
measures suitable to their situation. On tank integrity testing, the
2005 proposal allows facility owners and operators to satisfy this
requirement through the use of industry tank inspection standards
rather than the more specific requirement in the 2002 rule.
Ultimately the decision to use the ``qualified facilities'' option
is up to the facility owner and operator. Some facilities may have
developed plans in accordance with 2002 amendments and may choose to
maintain that plan which provides the flexibility provided by a PE
certified plan. Conversely, a facility may choose to develop a self-
certified plan, forgo the cost of PE certification because the facility
operations are simple and the flexibility provided by a PE certified
plan is not required. The owner and operator decision will be driven by
the costs, site specific factors and the overall complexity of the site
operation. Many smaller capacity ``end users'' of oil may find the
``qualified facilities'' proposal a cost effective option for
compliance with the rule requirements.
Question 14. The universe covered by the SPCC requirements is large
and varied. I understand that EPA has inspected less than 2 percent of
the facilities covered by these regulations. By allowing self-
certification, how can EPA ensure adequate consideration has been given
by a qualified professional when it comes to oil spill preparedness?
Response. On average, a full SPCC inspection is conducted at about
1,100 facilities per year. In addition, EPA personnel will review SPCC
and Facility Response Plans (FRP) and respond to hundreds of oil spills
each year at a variety of other facilities.
EPA's proposal for self-certification at smaller oil storage
capacity facilities with a demonstrated clean spill history is based on
the likelihood that these facilities are simple and less complex than
larger storage facilities. EPA also believes that the owner or operator
of such a facility who chooses to self-certify will be competent and
able to certify that his facility is in compliance with the SPCC
requirements and that his Plan works to prevent oil discharges,
especially since the owner or operator will himself have to certify to
the following: (1) that he is familiar with the requirements of the
SPCC rule; (2) that he has visited and examined the facility; (3) that
the Plan has been prepared in accordance with accepted and sound
industry practices and standards and with the requirements of the SPCC
rule; (4) that procedures for required inspections and testing have
been established; (5) that the Plan is being fully implemented; (6)
that the facility meets the qualification criteria for qualified
facilities; (7) that the Plan does not include any environmental
equivalence measures or determinations of impracticability; and (8) the
Plan and the individuals responsible for implementing the Plan have the
full approval of management and the facility has committed the
necessary resources to fully implement the Plan. In fact, EPA believes
that this simpler approach to the SPCC requirements will trigger
increased compliance without a PE having to certify every Plan and
without EPA having to inspect every covered facility.
Question 15. In 1995, the GAO found that EPA had not taken action
on any of their recommendations for the SPCC program made in 1989.
Please summarize how the EPA has responded to the GAO findings in their
1989 and 1995 reports?
Response. In the conclusions section of the 1995 GAO report, GAO
noted that ``EPA generally agreed with the seven recommendations in the
1989 report on the regulation and inspection of above ground storage
tanks (ASTs), and it has taken some steps to implement them. In 1994,
EPA partially implemented the GAO recommendation on contingency
planning, and by 1996 it expects to implement three more
recommendations (on inspection procedures and documentation, training
for inspectors, and penalties for noncompliance). EPA is uncertain when
the other three recommendations (on tank construction and design and on
targeting inspections) will be implemented.'' Since this GAO report was
issued, EPA has completed the following actions:
recommendation: above ground oil storage tanks should be built and
tested in accordance with industry or other specified standards
In response to this recommendation, EPA strengthened the
Professional Engineer (PE) certification requirements in the SPCC rule
by adding this statement: ``the Plan has been prepared in accordance
with good engineering practice, including consideration of applicable
industry standards.'' EPA also elaborated on relevant industry tank
construction and inspection standards in the preamble to the 2002 SPCC
rule. In addition, the Agency routinely coordinates with industry
standards setting organizations in the development of relevant
standards, such as the Steel Tank Institute's (STI) SP001 Standard
Revision Committee.
recommendation: facilities should have a plan for how to react to a
spill that overflows their boundaries.
The Facility Response Plan (FRP) rule, issued in July 1994 and
amended in June 2000, requires facility owners and operators to prepare
plans for responding to a worst-case discharge of oil and to a
substantial threat of such a discharge, as well as small and medium
discharges of oil. The FRP rule also requires facility owners and
operators to have a program of response drills and exercises that
follows the National Preparedness for Response Exercise Program (PREP).
The general requirements for an SPCC Plan were amended in 2002 to
require certain spill response and reporting planning requirements.
recommendation: storm water drainage systems should be designed and
operated to prevent oil from escaping.
In the 2002 SPCC amendments, the layout of the SPCC rule was
reorganized with specific sectionss entitled ``Facility Drainage'' in
relevant subparts of the rule to highlight the need to prevent oil
discharges from storm water drainage systems.
recommendation: develop, in coordination with state and local
authorities, a system of inspection priorities on the basis of a
national inventory of tanks.
EPA often targets inspections in response to spills or complaint
referrals. We also use information received from State and local
authorities. EPA typically uses the following factors/resources to
target facilities for SPCC inspections:
-Quantity of oil stored
-Geographic location, proximity to sensitive environments and water
bodies
-State, federal and local referrals, public complaints, and
counties with high spill histories
-State permit databases
-Age of infrastructure
-Industry sector
recommendation: develop instructions for performing and documenting
inspections
A national guidance for SPCC inspections was issued in December
2005 (SPCC Guidance for Regional Inspectors, available at www.epa.gov/
oilspill) . This guidance includes checklists for Regional personnel to
use in documenting inspections. Updated guidance for FRP coordinators
and inspectors is currently being developed with respect to substantial
harm determinations, plan review, inspections and the conduct/
evaluation of Government-initiated unannounced exercises.
recommendation: define and implement minimum training needs for
inspectors
EPA has developed and implemented a comprehensive 40-hour program
for inspector training that includes a mock facility inspection. From
1996 through 2000, the 40-hour training course was conducted in 8
regions, with staff from all 10 regions attending. EPA provides SPCC
refresher training at the yearly On-Scene Coordinator (OSC) readiness
training program. Three training refreshers on the 2002 rule amendments
have been held and we are currently updating the 40-hour course for
delivery this year. In addition, the Agency recently completed a train-
the-trainer program on the inspector guidance document for senior
inspectors.
recommendation: establish a national policy for fining violators
EPA's Office of Enforcement and Compliance Assurance (OECA) has
developed a national enforcement policy document. The document is
available at http://epa.gov/compliance/resources/policies/civil/cwa/
311pen.pdf.
Question 16. One of the outstanding elements in the litigation on
the 2002 rule deals with the definition of navigable waters. This is an
extremely controversial issue with broad implications for the Clean
Water Act. Do you intend to address this issue through settlement in
the lawsuit on the SPCC program filed by the American Petroleum
Institute?
Response. The issue of the definition of navigable waters was not
included in the settlement agreement which EPA reached with plaintiffs
who challenged the 2002 rule. The issue is still being litigated in the
U.S. District Court for the District of Columbia.
Question 17. Can you describe about how many facilities you believe
will receive regulatory relief as a result of each of the proposed
changes to the SPCC rules?
Response. EPA estimates that a total of about 618,000 facilities
are currently subject to the SPCC regulations. The following provides
the proposed change and our best estimate of the facilities that would
receive regulatory relief if these proposed changes were adopted:
Qualified Facility: As proposed, the qualified facility (10,000
gallons or less of oil storage capacity and it meets other
qualification criteria) approach is optional and depends on
circumstances at a particular facility. A facility may find that it
needs to use a Professional Engineer (PE) for an impracticability or
environmental equivalence claim in its Plan. EPA does not know how many
facilities would meet the criteria and choose to take advantage of the
``Qualified Facility'' option. Therefore, EPA examined the impact of
the ``Qualified Facility'' option under 3 scenarios: 25 percent, 50
percent, and 75 percent of facilities would likely meet ``Qualified
Facility'' status and decide to implement this approach. EPA estimated
that 84,000 facilities would choose to take advantage of this option
under the 25-percent scenario; 167,000 facilities under the 50-percent
scenario, and 251,000 facilities under the 75 percent scenario.
Qualified Oil-filled Operational Equipment: EPA focused its
economic analysis on the electric utility sector for the, qualified
oil-filled operational equipment option in the proposed rule. We
recognize, however, that many more facilities outside of the electric
utility sector with oil-filled operational equipment may choose this
option. As above, since this is an optional approach, some facilities
may choose not to take advantage of this flexibility. EPA estimates
that the total number of new facilities with oil-filled operational
equipment that would elect to use the flexibility in this approach
would be approximately 2,040 in the first year. Over the next 10 years,
approximately 2,450 new facilities are expected to be added annually on
average.
Motive Power: EPA has no empirical data on the number of facilities
with motive power containers with oil storage of 55 gallons or greater.
To estimate the number of facilities affected by the `Motive Power'
proposed rule, EPA examined 3 scenarios: 10 percent, 25 percent,and 50
percent of the facilities in sectors likely to have motive power
containers may be affected by the proposed regulatory option. EPA
estimated that 29,000 facilities have `motive power' oil storage under
the 10 percent scenario; 72,000 facilities under the 25 percent
scenario; and 143,000 facilities under the 50 percent scenario.
Airport Mobile Refuelers: EPA estimated the total number of
airports that will benefit from the proposed modification at 479 in the
first year. EPA assumed one to three mobile refuelers per airport, or
approximately two per airport on average.
Question 18. Can you explain how and why the proposed rule
differentiates between mobile vehicles that use petroleum products for
propulsion or for the function of the equipment and mobile vehicles
that carry large tanks of fuel?
Response. The 1971 Memorandum of Understanding between EPA and the
Department of Transportation (DOT) states that ``highway vehicles and
railroad cars which are used for the transport of oil exclusively
within the confines of a non-transportation-related facility and which
are not intended to transport oil in interstate or intrastate
commerce'' are considered non-transportation-related, and therefore
fall under EPA's regulatory jurisdiction. For example, some oil
refinery tank trucks and fueling trucks dedicated to a particular
facility (such as a construction site, military base, or similar large
facility) fall under this category. Vehicles used to store oil,
operating as on-site fueling vehicles at locations such as construction
sites, military, or civilian remote operations support sites, or rail
sidings are generally considered non-transportation-related. In a
sense, the container on the vehicle is a mobile oil storage tank and
would be subject to SPCC requirements at a regulated facility.
However, there are certain motor vehicles (including aircraft) that
contain oil solely for the purpose of providing fuel for propulsion, or
solely to facilitate the operation of the vehicle. The concept of
``motive power'' is not addressed in the SPCC regulations, but the EPA-
DOTMOU in Appendix A to 40 CFR Part 112 specifically refers to the
transportation of oil, not to transportation in the general sense. As a
result, oil storage containers with a capacity greater than 55 gallons
used for motive power technically fall under the SPCC rule where
secondary containment and other SPCC requirements would apply. EPA
never intended to regulate motive power containers under the SPCC rule;
moreover, attempting to comply with the SPCC rules for motive power
containers would be extremely challenging. Therefore, the Agency
proposed to exempt motive power containers such as those on buses,
sport utility vehicles, small construction vehicles, aircraft and farm
equipment, or at facilities or locations such as heavy equipment
dealers, commercial truck dealers, or certain parking lots that maybe
subject to the SPCC requirements (including secondary containment,
inspection, and over fill protection) solely because of the presence of
motive power containers.
Question 19. Can you explain the history of the applicability of
the SPCC regulations to the aviation industry?
Response. Since 1974 (with subsequent amendments in 2002), any
facility, including an airport, with a total oil storage capacity
greater than 1,320 gallons and with a reasonable expectation of a
discharge to navigable waters and adjacent shorelines, must comply with
the SPCC regulations. Airports, especially large facilities, are likely
to have large stationary on site bulk storage containers of aviation
fuel (an oil) making them subject to the SPCC requirements. In
addition, many airports have vehicles equipped with onboard bulk
storage containers that receive fuel from the stationary onsite bulk
storage containers and subsequently transfer fuel from the onboard bulk
storage containers to aircraft; essentially a ``tank/container on
wheels.'' These vehicles generally carry the fuel in a large tank/
container and are often called ``mobile refuelers'' because they
provide fuel to the aircraft or other airport equipment. The mobile
refuelers engage in fuel transfers to aircraft but when not fueling
aircraft serve as a bulk storage container storing the remaining fuel
until the next transfer occurs. EPA has always regarded these trucks as
``mobile or portable bulk storage containers'' subject to the SPCC
requirements.
In addition, in 1971, EPA and the Department of Transportation
(DOT) jointly signed a Memorandum of Understanding (MOU) that vests
regulatory jurisdiction for all oil storage and transfers within an
SPCC facility with EPA, including airports and aviation facilities. An
airport or other aviation facility unfamiliar with the MOU might
conclude that because an airport is involved in transportation, it is
not subject to the SPCC rule. However, the MOU divides jurisdiction
based on the movement/storage of ``oil'' within and between facilities
and not the act of transportation associated with aviation itself (in
which ``aircraft'' move within or between facilities). As stated above,
the memo, which has been included as an appendix to the SPCC rule since
1973, clearly outlines these principles. Thus, the activities within an
airport related to movement and storage of oil are non-transportation
and subject to EPA jurisdiction and the SPCC requirements.
Question 20. What level of funding would the EPA need to annually
inspect 30 percent of the facilities subject to the SPCC program?
Response. To inspect 30 percent of the facilities subject to the
SPCC program annually (about 200,000 facilities), EPA would need an
increase in funding which would be used partly to increase the number
of trained inspectors. However, we would also note that while it is
important for EPA to maintain an enforcement, inspection, and
compliance assistance effort and presence in the field, we also believe
it is important to establish simple, flexible regulatory requirements
that encourage increased compliance and good prevention practices
without EPA having to inspect every regulated facility.
Question 21. The proposed rule states that it does not have
federalism implications as defined in Executive Order 13132. However,
the proposed rule would preempt State engineering licensing laws
because it allows small facilities to make engineering judgments. How
does EPA justify this Federal preemption of State law that would allow
non-engineers to engage in the practice of engineering without a
license?
Response. In the current SPCC' requirements, the Professional
Engineer (PE) certifies that the SPCC Plan ``has been prepared in
accordance with good engineering practice, including consideration of
applicable industry standards and the requirements of 40 CFR part 112;
that procedures for required inspections and testing have been
established; and that this Plan is adequate for the facility.'' EPA is
proposing that the owner or operator of a qualified facility can self-
certify, among other things, that ``the Plan has been prepared in
accordance with accepted and sound industry practices and standards.''
This is merely a statement that the owner or operator is satisfied that
his facility meets this requirement. A facility owner or operator may
need to rely on licensed professional engineering services for the
design and construction of equipment according to accepted and sound
industry practices and standards. However, EPA is only proposing that
the owner or operator certify that this requirement is met. In
addition, EPA is not proposing to allow owners or operators of
qualified facilities to use certain provisions (environmental
equivalence and impracticability) because these provisions require an
evaluation by a PE. Finally, we note that in the preamble, EPA makes
clear that these rules, if adopted, would not pre-empt State
requirements that are more stringent; see, for example, ``Under CWA
section 311(o), States may impose additional requirements, including
more stringent requirements, relating to the prevention of oil
discharges to navigable waters. EPA encourages States to supplement the
Federal SPCC program and recognizes that some States have more
stringent requirements. 56 FR 54612 (October 22, 1991).''
Question 22. In drafting your proposal, did EPA evaluate whether
the changes for smaller sites creates an incentive for facility
managers to disperse their oil storage facilities, thereby increasing
the opportunities for spills, and what did you find?
Response. While EPA did not explicitly consider the possibility
that the proposal might lead persons to disperse facilities and thereby
increase the opportunities for spills, an owner or operator determines
the aggregate oil storage capacity at the facility to determine if he
is subject to the SPCC requirements (quantity greater than 1,320
gallons) and whether he can take advantage of the qualified facility
option at the 10,000 gallon threshold. Consequently, it doesn't matter
if an owner or operator has one, 10,000 gallon tank on the facility or
5, 2,000 gallon tanks; in this case the aggregate oil storage capacity
of the facility is 10,000 gallons. However, EPA does recognize that
there maybe sites (e.g., farms) where tanks are located on separate,
non-contiguous land parcels. In this case, the facility owner or
operator may choose to document that each separate, non-contiguous
parcel is a separate facility and only the oil storage capacity located
on the single parcel needs to be aggregated. For example, a farm might
consist of two or more separate land parcels each with its own 1,000
gallon oil storage tanks. In this case, the farmer could choose not to
aggregate the, tank storage capacity as allowed by the SPCC definition
of facility. The definition of facility in the SPCC rule (Sec. 112.2)
provides factors an owner or operator may use to make this facility
determination as described above.
Question 23. Please provide a comprehensive list of the
agricultural commodities that are included in the term, ``animal fats
and oils or greases.''
Response. Please see the following web site for a list of the major
known agricultural commodities that would be included in the term
``animal fats and oils or greases'': http://www.usc.miUvrtp/faq/
oil.shtml (U.S. Coast Guard list of oils).
______
Response by Thomas P. Dunne to an additional questions from Senator
Voinovich
Question 1. My farmers in Ohio have had justifiable concerns about
how they are impacted by the Spill Prevention Control and
Countermeasure program. It is important to fully and fairly clarify how
entities are subject to this ruling, and I need to be able to explain
this to my constituents. Prior to the Environment & Public Works
hearing we just held, it was my understanding that-in general-farmers
with fewer than 10,000 gallons of petroleum on site can take advantage
of the indefinite extension of the deadlines. However, subsequently, it
was brought to my attention thatsuch farmers can only take advantage of
this indefinite extension if they are already in compliance with the
1973 regulations, which would essentially mean few farmers would be
able to take advantage of this new proposal as few farmers knew they
were subject to this rule prior to 2002. I did not believe this was the
case. Please clarify this point for me and my constituents.
Response. Under the proposed indefinite compliance extension, a
farm with a total oil storage capacity of 10,000 gallons or less that
was in operation on or before August 16, 2002, would need to maintain
its SPCC Plan during the indefinite extension period. However, farms
that came into operation after August 16, 2002 would not be required to
develop or implement a Plan during the indefinite extension period
until a new compliance date is established.
With regard to SPCC inspections of farms, EPA has informed the
public and the regulated community that it intends to address concerns
raised by the farming sector about the SPCC requirements and consider
further differentiation of requirements for farms during the proposed
indefinite extension. Because there is such a large number and a wide
variety of industrial facilities handling quantities of oil greater
than 10,000 gallons subject to the SPCC requirements, in light of the
factors noted above for targeting facilities for inspection, a farm
inspection is typically a very low priority. In addition, EPA believes
that the farm sector will need the time provided by the extension to
better take advantage of any further amendments to the SPCC rule that
are promulgated as a result of the recent proposed amendments.
______
Responses by Thomas P. Dunne to additional questions from Senator
Baucus
Question 1. Does the EPA have an inspection/monitoring program to
ensure regulated facilities adhere to the proposed rule?
Response. Yes; on average, a full SPCC inspection is conducted at
about 1,100 facilities per year. As we discuss in the answer to the
next question and in response to question No. 7 under the Questions
from Senator Jeffords, the Agency has various criteria in determining
which facilities should be inspected/visited. In addition, EPA
personnel will review SPCC and Facility Response Plans (FRP) and
respond to hundreds of oil spills each year.
Question 2. The regulated community under the SPCC rule is quite
large. Does the EPA prioritize facilities to ensure that those large
facilities, which pose the greatest risk to the environment, are
inspected before small, family owned facilities? Please describe your
efforts in this area.
Response. Capacity of oil storage is certainly one factor among
many that the Agency considers when prioritizing inspections of SPCC-
regulated facilities. For example, EPA inspects facilities that are
required to submit Facility Response Plans (FRP). These facilities
(which by definition are also SPCC facilities) generally store greater
than one million gallons of oil and meet certain applicability criteria
which identifies that they have the potential to cause substantial harm
to the environment by discharging oil into or on navigable waters or
adjoining shorelines. In an effort to maximize inspection resources and
travel funding, regional inspectors of 10 conduct both SPCC and FRP
inspections when visiting these facilities. The Agency also considers
other factors in determining priorities for inspections such as spill
history, geographic location and proximity to navigable waters. [See
also response to Question No. 7 from Senator Jeffords.]
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<all>