[Senate Hearing 109-1017]
[From the U.S. Government Publishing Office]



                                                       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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
                          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.
---------------------------------------------------------------------------
    \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\
---------------------------------------------------------------------------
    \1\ See http://oils.gpa.unep.org/facts/source.htm, and http://
www.offshore-environment.com/oilpollution.html for links to many 
sources.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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 
---------------------------------------------------------------------------
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:
---------------------------------------------------------------------------
    \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.
[GRAPHIC] [TIFF OMITTED] 42267.011

[GRAPHIC] [TIFF OMITTED] 42267.012

[GRAPHIC] [TIFF OMITTED] 42267.013

[GRAPHIC] [TIFF OMITTED] 42267.014

[GRAPHIC] [TIFF OMITTED] 42267.015

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.

[GRAPHIC] [TIFF OMITTED] 42267.005


    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,
[GRAPHIC] [TIFF OMITTED] 42267.006

    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.

[GRAPHIC] [TIFF OMITTED] 42267.007


    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:

     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;
     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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