[Federal Register Volume 69, Number 101 (Tuesday, May 25, 2004)]
[Notices]
[Pages 29728-29730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11775]


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ENVIRONMENTAL PROTECTION AGENCY

[FRL-7666-7]


Notice Concerning Certain Issues Pertaining to the July 2002 
Spill Prevention, Control, and Countermeasure (SPCC) Rule

AGENCY: Environmental Protection Agency.

ACTION: Notice.

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SUMMARY: The Environmental Protection Agency (EPA) has partially 
settled litigation over the Spill Prevention, Control, and 
Countermeasure (SPCC) rule. This notice provides clarifications 
developed by the Agency during the course of settlement proceedings. It 
also announces the availability of a letter issued by EPA's Office of 
Solid Waste and Emergency Response (OSWER) to the Petroleum Marketers 
Association of America (PMAA) on our website, i.e., http://epa.gov/oilspill">epa.gov/oilspill, 
or by contacting the docket as described below under ADDRESSES.

ADDRESSES: EPA has established a docket for this action under Docket: 
OPA-2004-0002. All documents in the docket are listed in the EDOCKET 
index at http://www.epa.gov/edocket. Although listed in the index, some 
information is not publicly available, i.e., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, is not placed on the Internet and will be 
publicly available only in hard copy form. Publicly available docket 
materials are available either electronically in EDOCKET or in hard 
copy at the EPA Docket Center EPA West, Room B102, 1301 Constitution 
Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 
a.m. and 4:30 p.m., Monday through Friday, excluding legal holidays. 
The telephone number for the Public Reading Room is (202) 566-1744, and 
the telephone number for the EPA Docket is (202) 566-0276.

FOR FURTHER INFORMATION CONTACT: Hugo Paul Fleischman, Oil Program 
Staff, U.S. EPA, at 703-603-8769 ([email protected]); or the 
RCRA/Superfund Hotline at 800-424-9346 (in the Washington, DC 
metropolitan area, 703-412-9810) ([email protected]). The 
Telecommunications Device for the Deaf (TDD) Hotline number is 800-553-
7672 (in the Washington, DC metropolitan area, 703-412-3323). You may 
wish to visit the Oil Program's Internet site at http://www.epa.gov/oilspill.

SUPPLEMENTARY INFORMATION: 

I. General

How Can I Get Copies of the Background Materials Supporting Today's 
Notice or Other Related Information?

    EPA will publish this document, as well as the letter from OSWER to 
PMAA described more fully below, on its Web site, http://epa.gov/oilspill, and has already posted the settlement agreement on that Web 
site. Alternatively, contact the docket as described above under 
ADDRESSES. You may access this Federal Register document electronically 
through the EPA Internet under the ``Federal Register'' listings at 
http://www.epa.gov/fedrgstr.

II. Background

    Authority: 33 U.S.C. 1251 et seq.; 33 U.S.C. 2720; E.O. 12777 
(October 18, 1991), 3 CFR, 1991 Comp., p. 351.

Litigation

    On July 17, 2002, EPA published a final rule (67 FR 47042), 
amending the SPCC regulation. Several members of the regulated 
community filed legal challenges to certain aspects of the rule. See 
American Petroleum Institute v. Leavitt et al., No. 1;102CV02247 PLF 
and consolidated cases (D.D.C. filed November 14, 2002).\1\
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    \1\ Lead plaintiffs in the cases were the American Petroleum 
Institute, Marathon Oil Co., and the Petroleum Marketers Association 
of America.
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    Settlement discussions between EPA and the plaintiffs have led to 
an agreement on all issues except one. In this notice, we are 
publishing clarifications developed by the Agency during the course of 
settlement proceedings (and which provided the basis for the settlement 
agreement) regarding the SPCC regulation to the regulated community and 
other interested parties. We are also notifying the public of the 
availability of OSWER's letter to PMAA referenced above, on our Web 
site, http://epa.gov/oilspill, and through the docket, as described 
above.

III. Clarifications

``Loading Racks''

    Plaintiffs challenged certain statements made in the preamble to 
the July 2002 SPCC amendments (and the response-to-comment document) 
concerning the ``loading/unloading rack'' requirements under 40 CFR 
112.7(h). That provision addresses specific SPCC requirements for tank 
car and tank truck loading and unloading racks, including requirements 
for secondary containment. The preamble language at issue, which 
appears at 67 FR 47110 (July 17, 2002), stated the following:

    This section is applicable to any non-transportation-related or 
terminal facility where oil is loaded or unloaded from or to a tank 
car or tank truck. It applies to containers which are aboveground 
(including partially buried tanks, bunkered tanks, or vaulted tanks) 
or completely buried (except those exempted by this rule), and to 
all facilities, large or small. All of these facilities have a risk 
of discharge from transfers. (Emphasis added.)

    The Agency did not intend with the emphasized language to interpret 
the term ``loading/unloading rack.'' Instead, the Agency was responding 
generally to a variety of comments each asking that their specific 
situation not be subject to the 40 CFR 112.7(h) requirements. The 
reasoning of these commenters did not focus specifically on the 
contours of what might be considered a loading/unloading rack, but 
instead focused on

[[Page 29729]]

a variety of other factors relevant to their facilities. See, e.g., 67 
FR 47110 (July 17, 2002) (``Another commenter asked that we clarify 
that only facilities routinely used for loading or unloading of tanker 
trucks from or into aboveground bulk storage tanks are subject to this 
provision.'') Thus, the emphasized language above was meant to be a 
rejection of pleas for exclusions of specific facilities, not an 
interpretation of the term ``loading/unloading rack.''
    In the response-to-comments document for the rule, EPA stated that 
``[w]e intend Sec.  112.7(h) to apply to all facilities, including 
production facilities.'' As discussed more fully below, we interpret 
Sec.  112.7(h) only to apply to loading and unloading ``racks.'' Under 
this interpretation, if a facility does not have a loading or unloading 
``rack,'' Sec.  112.7(h) does not apply. Thus, in stating that section 
112.7(h) applies to ``all facilities, including production 
facilities,'' the Agency only meant that the provision applies if a 
``facility'' happens to have a loading or unloading rack present. The 
Agency did not mean to imply that any particular category of 
facilities, such as production facilities, are likely to have loading 
or unloading racks present.
    Plaintiffs also challenged a change in the language of Sec.  
112.7(h) (formerly codified as Sec.  112.7(e)(4)). Specifically, EPA 
substituted the phrase ``loading/unloading area drainage'' for the 
phrase ``rack area drainage'' in paragraph Sec.  112.7(h)(1). The 
Agency does not interpret this change as expanding the requirements of 
that section beyond activities associated with tank car and tank truck 
loading/unloading racks. After all, the title of Sec.  112.7(h) remains 
``facility tank car and tank truck loading/unloading rack.'' In 
addition, the record for the rulemaking reflects that the Agency 
specifically rejected the idea of enlarging the scope of that section 
to apply beyond ``racks.'' (See response-to-comment document, p. 212, 
rejecting a comment on the proposed rule suggesting that we change the 
title of Sec.  112.7(h) from ``loading/unloading rack'' to ``loading/
unloading area'' because the Agency had not proposed such a change.)
    Like other editorial changes to the rule, many of which were not 
accompanied by specific explanations, the Agency believes the change 
simply serves to make the rule easier to understand. See, 67 FR 47051 
(describing the Agency's use of a ``plain language'' approach in the 
rule). In this case, the change in language made the terminology used 
in the sentence uniform (a basic principle of plain language approaches 
to rule writing). Previously, the rule stated that a facility must 
compensate for lack of specified drainage systems at the ``rack area'' 
with ``a quick drainage system for tank car or tank truck loading and 
unloading areas.'' Obviously, the scope of these two emphasized terms 
was always meant to be identical, and the challenged language change 
only makes that clearer.

``Impracticability''

    Plaintiffs challenged statements made in the preamble to the SPCC 
amendments concerning the meaning of ``impracticability'' under 40 CFR 
112.7(d). As you know, that section provides that where secondary 
containment is ``not practicable,'' a facility may use a contingency 
plan instead. The preamble language at issue, which appears at 67 FR 
47104 (July 17, 2002), stated the following:

    We believe that it may be appropriate for an owner or operator 
to consider costs or economic impacts in determining whether he can 
meet a specific requirement that falls within the general deviation 
provision of Sec.  112.7(a)(2). We believe so because under this 
section, the owner or operator will still have to utilize good 
engineering practices and come up with an alternative that provides 
``equivalent environmental protection.'' However, we believe that 
the secondary containment requirement in Sec.  112.7(d) is an 
important component in preventing discharges as described in Sec.  
112.1(b) and is environmentally preferable to a contingency plan 
prepared under 40 CFR part 109. Thus, we do not believe it is 
appropriate to allow an owner or operator to consider costs or 
economic impacts in any determination as to whether he can satisfy 
the secondary containment requirement. Instead, the owner or 
operator may only provide a contingency Plan in his SPCC Plan and 
otherwise comply with Sec.  112.7(d). Therefore, the purpose of a 
determination of impracticability is to examine whether space or 
other geographic limitations of the facility would accommodate 
secondary containment; or, if local zoning ordinances or fire 
prevention standards or safety considerations would not allow 
secondary containment; or, if installing secondary containment would 
defeat the overall goal of the regulation to prevent discharges as 
described in Sec.  112.1(b). (Emphasis added.)

    The Agency did not intend with the language emphasized above to 
opine broadly on the role of costs in determinations of 
impracticability. Instead, the Agency intended to make the narrower 
point that secondary containment may not be considered impracticable 
solely because a contingency plan is cheaper. (This was the concern 
that was presented by the commenter to whom the Agency was responding.) 
As discussed above, this conclusion is different than that reached with 
respect to purely economic considerations in determining whether to 
meet other rule requirements subject to deviation under Sec.  
112.7(a)(2). Under that section, as stated above, facilities may choose 
environmentally equivalent approaches (selected in accordance with good 
engineering practices) for any reason, including because they are 
cheaper.
    In addition, with respect to the emphasized language enumerating 
considerations for determinations of impracticability, the Agency did 
not intend to foreclose the consideration of other pertinent factors. 
In fact, in the response-to-comment document for the SPCC amendments 
rulemaking, the ``Agency stated that ''* * * for certain facilities, 
secondary containment may not be practicable because of geographic 
limitations, local zoning ordinances, fire prevention standards, or 
other good engineering practice reasons.'' For more examples of 
situations that may rise to the level of impracticability, see, e.g. 67 
FR 47102 (July 17, 2002) and 67 FR 47078 (July 17, 2002) (pertaining to 
flow and gathering lines).

Produced Water

    The Agency has been asked whether produced water tanks at dry gas 
facilities are eligible for the SPCC rule's wastewater treatment 
exemption at 40 CFR 112.7(d)(6). A dry gas production facility is a 
facility that produces natural gas from a well (or wells) from which it 
does not also produce condensate or crude oil that can be drawn off the 
tanks, containers or other production equipment at the facility.
    The SPCC rule's wastewater treatment exemption excludes from 40 CFR 
part 112 ``any facility or part thereof used exclusively for wastewater 
treatment and not used to satisfy any requirement of this part.'' 
However, for the purposes of the exemption, the ``production, recovery, 
or recycling of oil is not wastewater treatment.'' In interpreting this 
provision, the preamble to the final rule states that the Agency does 
``not consider wastewater treatment facilities or parts thereof at an 
oil production, oil recovery, or oil recycling facility to be 
wastewater treatment for purposes of this paragraph.''
    It is our view that a dry gas production facility (as described 
above) would not be excluded from the wastewater treatment exemption 
based on the view that it constitutes an ``oil production, oil 
recovery, or oil recycling facility.'' As discussed in the preamble to 
the July 2002 rulemaking, ``the goal of an oil production, oil 
recovery, or oil recycling facility is to maximize the

[[Page 29730]]

production or recovery of oil. * * *'' 67 FR 47068. A dry gas facility 
does not meet this description.
    In verifying that a particular gas facility is not an ``oil 
production, oil recovery, or oil recycling facility,'' the Agency plans 
to consider, as appropriate, evidence at the facility pertaining to the 
presence or absence of condensate or crude oil that can be drawn off 
the tanks, containers or other production equipment at the facility, as 
well as pertinent facility test data and reports (e.g., flow tests, 
daily gauge reports, royalty reports or other production reports 
required by state or federal regulatory bodies).

``Facility''

    In the July 2002 SPCC amendments, the Agency promulgated 
definitions of ``facility'' and ``production facility.'' These 
definitions, which appear in 40 CFR 112.2, apply ``for the purposes 
of'' part 112. The Agency has been asked which of these definitions 
governs the term ``facility'' as it is used in 40 CFR 112.20(f)(1) when 
applied to oil production facilities. 40 CFR 112.20(f)(1) sets criteria 
for determining whether a ``facility could, because of its location, 
reasonably be expected to cause substantial harm to the environment'' 
(emphasis added). It is the Agency's view that, because, among other 
things, that section consistently uses the term ``facility,'' not 
``production facility,'' it is the definition of ``facility'' in 40 CFR 
112.2 that governs the meaning of ``facility'' as it is used in 40 CFR 
112.20(f)(1), regardless of the specific type of facility at issue.

Notice of Availability

    With this notice, EPA is announcing the availability of a letter 
issued by the Assistant Administrator for OSWER to PMAA addressing 
certain matters pertaining to the SPCC rule's requirements for 
integrity testing, security, and loading racks. This letter is 
available on EPA's website at http://epa.gov/oilspill">epa.gov/oilspill or by contacting the 
docket as described above.

    Dated: May 17, 2004.
Marianne Lamont Horinko,
Assistant Administrator, Office of Solid Waste and Emergency Response.
[FR Doc. 04-11775 Filed 5-24-04; 8:45 am]
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