Aboveground Oil Storage Tanks: Observations on EPA's Economic
Analyses of Amendments to the Spill Prevention, Control, and
Countermeasure Rule (27-JUL-07, GAO-07-763).
Oil in aboveground tanks can leak into soil and nearby water,
threatening human health and wildlife. To prevent certain oil
spills, the Environmental Protection Agency (EPA) issued the
Spill Prevention, Control, and Countermeasure (SPCC) rule in
1973. EPA estimated that, in 2005, about 571,000 facilities were
regulated under this rule. When finalizing amendments to the rule
in 2002 and 2006 to both strengthen the rule and reduce industry
burden, EPA analyzed the amendments' potential impacts and
concluded that the amendments were economically justified. As
requested, GAO assessed the reasonableness of EPA's economic
analyses of the 2002 and 2006 SPCC amendments, using Office of
Management and Budget (OMB) guidelines for federal agencies in
determining regulatory impacts, among other criteria, and
discussed EPA's analyses with EPA officials.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-763
ACCNO: A74650
TITLE: Aboveground Oil Storage Tanks: Observations on EPA's
Economic Analyses of Amendments to the Spill Prevention, Control,
and Countermeasure Rule
DATE: 07/27/2007
SUBJECT: Cost analysis
Cost effectiveness analysis
Economic analysis
Environmental law
Environmental monitoring
Environmental protection
Federal regulations
Financial analysis
Noncompliance
Oil spills
Pollution control
Public health
Regulatory agencies
Benefit-cost tracking
Program costs
Program goals or objectives
Program implementation
EPA Spill Prevention Control and
Countermeasures Plan
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GAO-07-763
* [1]Results in Brief
* [2]Background
* [3]Limitations in EPA's Analysis of the 2002 SPCC Amendments Re
* [4]EPA's Methodology for Analyzing the 2002 SPCC Amendments
* [5]EPA Did Not Assess the Uncertainty Associated with Key Assum
* [6]EPA's 2002 Analysis Had Other Limitations
* [7]EPA's Economic Analysis of the 2006 SPCC Amendments Improved
* [8]EPA's 2006 Analysis Included Elements Absent from Its Earlie
* [9]EPA's 2006 Analysis Also Had Limitations
* [10]Conclusions
* [11]Recommendation for Executive Action
* [12]Agency Comments and Our Evaluation
* [13]Selection of Survey Respondents
* [14]Questionnaire Design and Pretesting
* [15]Survey Administration
* [16]Content Analysis
* [17]Data Analysis
* [18]Survey Question 1
* [19]Survey Question 2
* [20]Stakeholders Had Mixed Views on the Impacts of the SPCC Amen
* [21]Analysis Methodology
* [22]Changes to Scope of the SPCC rule
* [23]Planning or Notification
* [24]Containment
* [25]Testing
* [26]Training
* [27]Multiple Aspects
* [28]GAO Contact
* [29]Staff Acknowledgments
* [30]GAO's Mission
* [31]Obtaining Copies of GAO Reports and Testimony
* [32]Order by Mail or Phone
* [33]To Report Fraud, Waste, and Abuse in Federal Programs
* [34]Congressional Relations
* [35]Public Affairs
Report to the Honorable James M. Inhofe, Ranking Member, Committee on
Environment and Public Works, U.S. Senate
United States Government Accountability Office
GAO
July 2007
ABOVEGROUND OIL STORAGE TANKS
Observations on EPA's Economic Analyses of Amendments to the Spill
Prevention, Control, and Countermeasure Rule
GAO-07-763
Contents
Letter 1
Results in Brief 4
Background 6
Limitations in EPA's Analysis of the 2002 SPCC Amendments Reduced Its
Usefulness for Informing Decision Makers and the Public About Economic
Trade-offs 12
EPA's Economic Analysis of the 2006 SPCC Amendments Improved on the
Earlier Study but Also Had Limitations 17
Conclusions 20
Recommendation for Executive Action 21
Agency Comments and Our Evaluation 21
Appendix I Objectives, Scope, and Methodology 24
Appendix II Summary of Survey Results 30
Survey Question 1 30
Survey Question 2 32
Appendix III Analysis of the Results of GAO's Survey on the Impacts of the
SPCC Amendments on Industry 41
Stakeholders Had Mixed Views on the Impacts of the SPCC Amendments 41
Analysis Methodology 42
Appendix IV Comments from the Environmental Protection Agency 50
Appendix V GAO Contact and Staff Acknowledgments 52
Tables
Table 1: Estimated Economic Impacts Associated with EPA's 2002 Amendments
to the SPCC Regulation 14
Table 2: Estimated Economic Impacts Associated with EPA's 2006 Amendments
to the SPCC Regulation 18
Table 3: Examples from Industry Comments Regarding the 2002 and 2006
Amendments to the SPCC Regulation 38
Figure
Figure 1: Summary of Industry Stakeholder Views on Impacts of 11 SPCC
Amendment Categories 42
Abbreviations
EPA Environmental Protection Agency
FRP Federal Response Plan
NRC National Response Center
OMB Office of Management and Budget
PE Professional Engineer
SPCC Spill Prevention, Control, and Countermeasure
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
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separately.
United States Government Accountability Office
Washington, DC 20548
July 27, 2007
The Honorable James M. Inhofe
Ranking Member
Committee on Environment and Public Works
United States Senate
Dear Senator Inhofe:
Billions of gallons of oil, from petroleum products to cooking oils, are
produced, distributed, and used each year in the United States. These
oils--often stored in aboveground storage tanks at various types of
facilities--have sometimes leaked into soil and nearby water, posing
threats to public health and to wildlife and their habitats. To prevent
certain oil spills, the Environmental Protection Agency (EPA), under the
authority of the Clean Water Act, issued the Spill Prevention, Control,
and Countermeasure (SPCC) rule in 1973. EPA estimated that, in 2005, about
571,000 facilities in industry sectors such as oil production, petroleum
bulk storage, farming, electric utilities, and manufacturing were
regulated under this rule. Facilities are subject to the rule, as amended,
if they are nontransportation related and have a total capacity of greater
than (1) 1,320 gallons in aboveground oil storage tanks or (2) 42,000
gallons in completely buried oil storage tanks, and if they could
reasonably be expected, due to their location, to discharge harmful
quantities of oil into or upon the navigable waters of the United States
or adjoining shorelines.1
The SPCC rule requires each owner or operator of a regulated facility to
prepare or amend and implement a plan that describes how the facility is
designed, operated, and maintained to prevent the discharge of oil into
navigable waters or adjoining shorelines. The plan must also include
measures to control, contain, clean up, and alleviate the effects of an
oil spill so as to prevent such spills from reaching any navigable waters
or adjoining shorelines. According to industry sectors covered by the
rule, facilities may incur significant costs to develop, revise, and
implement an SPCC plan, for such actions as modifying the facility and
having an engineer review and certify these modifications. The extent of
the costs depends on, among other things, the size and type of facility
and whether the facility is a new or existing one.
1EPA defines harmful quantity as any quantity of discharged oil that
violates applicable water quality standards, causes a film or sheen upon,
or discoloration of, the surface of the water or adjoining shorelines, or
causes a sludge or emulsion to be deposited beneath the surface of the
water or upon adjoining shorelines. 40 C.F.R. S110.3. Section 311 of the
Clean Water Act prohibits the discharge of harmful quantities of oil or
hazardous substances (1) into or upon the navigable waters of the United
States, adjoining shorelines, or into or upon the waters of the contiguous
zone, or (2) in connection with activities under the Outer Continental
Shelf Lands Act or the Deepwater Port Act of 1974, or which may affect
natural resources belonging to, appertaining to, or under the exclusive
management authority of the United States, including resources under the
Magnuson-Stevens Fishery Conservation and Management Act 33 U.S.C.S
1321(b)(3).
In July 2002, as part of an overall government effort to reduce regulatory
burden--and to respond to recommendations made by GAO and an EPA spills
task force--EPA made over 100 amendments to the rule, including 30 that it
considered major. Although the intent of some of the amendments was to
strengthen the rule to better prevent oil spills as GAO and the task force
had recommended, EPA also expected that some of these amendments would,
among other things, reduce inefficiencies, eliminate duplication of
effort, reduce the number of facilities regulated by the rule, and lower
facilities' compliance costs.2 For example, under the 2002 amendments to
the rule, EPA no longer regulates certain completely buried tanks that are
subject to underground storage tank regulations.3 This change eliminated
from the rule some completely buried containers and facilities that were
previously covered by both sets of regulations and, therefore, duplicated
compliance costs. In addition, the agency made changes that, in EPA's
view, clarified the rule's language to better define which facilities are
subject to the rule. However, many industry sectors consider several of
these amendments to be changes to the requirements of the rule rather than
clarifications and, in some cases, maintain that they had not previously
considered themselves subject to the rule prior to these changes.
In 2006, partly in response to industry concerns about the cost of
complying with the 2002 amendments, EPA made several major changes to the
rule to further reduce burden and provide owners and operators of certain
facilities a more cost-effective approach to prevent oil spills, which,
according to EPA, could potentially impact about 62 percent of the
regulated universe. For example, the 2006 amendments allowed qualified
facilities, such as those with an oil storage capacity of 10,000 gallons
or less and that meet a reportable discharge history criterion, to
self-certify their SPCC plans rather than hire a professional engineer for
certification. EPA has extended until July 1, 2009, the date by which
facility owners and operators must prepare or amend and implement SPCC
plans in accordance with the 2002 and 2006 amendments, provided that the
owners and operators of facilities in existence on or before August 16,
2002, maintain their existing plans.
2GAO, Inland Oil Spills: Stronger Regulation and Enforcement Needed to
Avoid Future Incidents, [36]GAO/RCED-89-65 (Washington, D.C.: Feb. 22,
1989); The Oil Spill Prevention, Control, and Countermeasures Program Task
Force, Interim Final Report, May 13, 1988.
340 C.F.R. pts. 280, 281.
When finalizing the 2002 and 2006 amendments to the SPCC rule, EPA
conducted economic analyses of the potential impacts that these amendments
were expected to have on the regulated community. Federal agencies are
generally required by statute and executive order to assess the costs and
benefits of significant regulatory actions, including those that would
have an annual effect on the economy of $100 million or more.4
Furthermore, the Office of Management and Budget (OMB) developed
guidelines under Executive Order 12866 to encourage good regulatory impact
analysis and to standardize the way that benefits and costs of federal
regulations are measured and reported.5 The OMB guidelines generally
direct agencies, in analyzing the impacts of rules, to, among other
things, (1) identify and quantitatively analyze key uncertainties in their
analysis, (2) measure the potential social benefits and costs--including
the effects on public health and welfare and the environment--of
regulatory alternatives incremental to a "baseline," (or the conditions
that would exist in the absence of the proposed regulation), (3) identify
the regulatory alternative that would maximize net social benefits (total
benefits minus total costs), and (4) present benefits and costs that would
occur in different time periods in comparable, present value terms. OMB
guidelines further state that good regulatory analysis includes
identifying the regulatory alternative with the largest net benefits (that
is, that maximizes economic efficiency), and such information is useful
for decision makers and the public, even when economic efficiency is not
the only or the overriding public policy objective. EPA concluded, on the
basis of its economic analyses, that the 2002 and 2006 amendments were
economically justified.
4Executive Order 12866 directs agencies to conduct economic analyses of
significant regulatory actions and to select the policy that maximizes net
benefits to society unless a statute requires otherwise. Further, the
Unfunded Mandates Reform Act of 1995, Pub. L. No. 104-4, 109 Stat. 48
(1995) (codified at 2 U.S.C. S 1531 et seq.), requires agencies to choose
the least costly, most cost-effective, or least burdensome option, unless
inconsistent with law or the agency head explains why this option was not
adopted.
5Office of Management and Budget (OMB): Economic Analysis of Federal
Regulations Under Executive Order 12866 (Jan. 11, 1996) (generally
referred to as "best practices"); OMB, Guidelines to Standardize Measures
of Costs and Benefits and the Format of Accounting Statements (May 22,
2000); and Circular A-4 (Sept. 17, 2003) (replacing earlier guidelines,
effective for significant final rules on January 1, 2005).
In this context, you asked us to review the reasonableness of the economic
analyses EPA performed in support of the 2002 and 2006 SPCC amendments. To
respond to this objective, we evaluated EPA's economic analyses using,
among other criteria, OMB guidelines for federal agencies in assessing
regulatory impacts. In addition, we discussed EPA's analyses with senior
officials in EPA's Office of Emergency Management, which was responsible
for conducting the analyses. We performed our work from June 2006 to July
2007 in accordance with generally accepted government auditing standards.
A more detailed discussion of our objectives, scope, and methodology is
presented in appendix I.
Results in Brief
EPA's economic analysis of the 2002 SPCC amendments had limitations that
reduced its usefulness for assessing the amendments' costs and benefits.
In particular, EPA's analysis did not assess the uncertainty associated
with key assumptions and data, as directed by OMB guidelines. For example,
in conducting its analysis, EPA assumed that certain facilities were
already complying with at least some of the 2002 amendments and, as a
result, these facilities would not incur any additional compliance costs.
In addition, EPA assumed that any compliance costs incurred by facilities
that were not complying with at least some of the amendments should be
attributed in its analysis to the baseline and not to the 2002 amendments.
However, the extent to which facilities were in compliance--or would be in
compliance in the future in the absence of the amendments--was highly
uncertain. EPA stated that it was possible that some facilities
misinterpreted the existing regulation and were not in full compliance
with it but that there was no practical way to measure industry
compliance. Nevertheless, OMB guidelines indicate that, when compliance
with existing regulations is uncertain and different assumptions about
compliance could significantly affect the estimated benefits and costs,
agencies can assess, through uncertainty analysis, the effect of multiple
baselines using different assumptions about the extent of compliance.
Without such an analysis, EPA excluded from its assessment of the total
costs and benefits associated with the 2002 amendments the potential
impacts of the extent of facilities' compliance, thus potentially
misstating these amounts. Furthermore, EPA's 2002 analysis was limited
because it did not
o analyze alternatives to the amendments, such as alternative lead
times for industry to comply or alternative levels of stringency;
o present in comparable present value terms (through discounting)
the compliance costs that EPA expected facilities to incur or save
over time as a result of the amendments; and
o estimate the benefits associated with the amendments but rather
provided only limited general qualitative information on the risk
of an oil spill and the damages to public health and welfare and
the environment that it might cause.
EPA's economic analysis of the 2006 amendments addressed several
of the limitations of its 2002 analysis, but it also had some
limitations that made it less useful than it could have been for
assessing the economic trade-offs associated with the amendments.
For example, in contrast with its analysis of the 2002 amendments,
EPA's 2006 analysis used an alternative baseline to assess the
potential effects of industry noncompliance on the estimated costs
(or cost savings), considered some regulatory alternatives, and
estimated the present value of costs (or cost savings) associated
with different regulatory alternatives for burden reduction that
the agency considered in its analysis. Nevertheless, as with the
2002 analysis, EPA did not estimate the potential benefits of the
2006 amendments, such as the extent to which they would affect the
risk of an oil spill and public health and welfare and the
environment. In addition, EPA did not have available nationally
representative samples for its analysis; therefore, its estimates
of the number of facilities that would be affected by the 2006
amendments may not be accurate. In particular, EPA based its
estimates of the number of facilities that would be affected by
one amendment that would reduce the burden for certain "qualified
facilities" on data available from eight states. Because
facilities in these states may not have been representative of
facilities nationwide, EPA's use of these data in its analysis
could have introduced bias into its estimates of the number of
facilities and costs for this amendment. EPA acknowledged that its
2006 analysis was not a full accounting of all social benefits and
costs, but stated that the results were useful and informative and
were based on the best available information given time and
resource constraints. However, without more substantive
information on the extent to which the 2006 amendments might
affect the risk of an oil spill and public health and welfare and
the environment, it is difficult to confirm that the amendments
were economically justified, as EPA concluded. EPA officials
stated that the agency will continue to work to refine and improve
its analytical methods to address uncertainties in the number of
facilities affected, compliance rates, and benefits analysis, and
to improve its economic analyses for future rule changes. In light
of the limitations of EPA's analysis of the 2002 and 2006 SPCC
amendments, we are recommending that EPA improve its economic
analyses of future changes to the SPCC rule by ensuring that they
include all of the key elements contained in OMB's guidelines.
In commenting on a draft of this report, EPA generally agreed with
our recommendation. According to EPA, consistent with our
recommendation, the agency is taking steps to improve its SPCC
analyses and plans to continue gathering additional data to
improve its understanding of the regulated universe and oil spill
risks and to address uncertainty and quantify benefits.
Background
The Clean Water Act prohibits the discharge of oil into or upon
navigable waters or adjoining shorelines and requires the
President to establish regulations to prevent oil spills. The
President subsequently delegated this responsibility to EPA. To
fulfill this requirement, in 1973, EPA issued its Oil Pollution
Prevention Regulation,6 which outlined actions regulated
facilities must take to prevent, prepare for, and respond to oil
spills before they reach navigable waters or adjoining shorelines.
Under this rule, as amended through 2006, EPA seeks to prevent oil
spills from storage tanks at facilities that (1) have an aggregate
aboveground storage tank capacity of more than 1,320 gallons or a
total completely buried storage capacity greater than 42,000
gallons and (2) could reasonably be expected, due to their
location, to discharge oil in quantities that may be harmful into
or upon the navigable waters of the United States or onto
adjoining shorelines.7 EPA estimated that about 571,000 facilities
were regulated under the SPCC rule as of 2005. Oil production
facilities (an estimated 166,000 facilities or 29 percent of the
total) and farms (an estimated 152,000 facilities or 27 percent of
the total) account for the largest portion of these estimated
facilities. The SPCC rule does not require facilities that are
covered under the rule to report to EPA that they are covered.
Therefore, the agency does not have an inventory of facilities
that it regulates under the program. However, facilities are
required to report discharges of oil in quantities that may be
harmful to navigable waters or adjoining shorelines to the
National Response Center (NRC), but EPA does not consider these
and other data reliable enough for EPA to determine the number of
facilities subject to the SPCC rule that have had oil spills.8
6Oil Pollution Prevention: Non-Transportation-Related Onshore and Offshore
Facilities, 38 Fed. Reg. 34164 (December 11, 1973) (codified as amended
at 40 C.F.R. pt. 112).
7As amended in 2002, total storage capacity excludes containers with
capacity of less than 55 gallons, capacity of containers that are
permanently closed, and facilities or parts of facilities used exclusively
for wastewater treatment. In addition, it excludes completely buried
tanks, associated underground piping, underground ancillary equipment, and
containment systems that are subject to all of the technical requirements
of the underground storage tank regulations.
8NRC is the federal government's national communications center and the
national point of contact for spill reporting. NRC also distributes
reported spill information to agencies--including EPA and the U.S. Coast
Guard--tasked with responding to spills. It is staffed 24 hours a day by
Coast Guard officers and marine science technicians.
The SPCC rule is a cornerstone of EPA's strategy to prevent oil
spills from reaching the nation's waters. The regulation requires
each owner or operator of a regulated onshore or offshore facility
to prepare or amend and implement an SPCC plan that describes the
facility's design, operation, and maintenance procedures
established to prevent spills from occurring, as well as
countermeasures to control, contain, clean up, and mitigate the
effects of an oil spill that could reach navigable waters or
adjoining shorelines. Unlike oil spill [37]contingency plans that
typically address spill cleanup measures after a spill to
navigable waters or adjoining shorelines has occurred, SPCC plans
ensure that facilities put in place containment and other
measures--such as regular visual inspection and integrity testing
of bulk storage containers--to prevent oil spills that could reach
navigable waters or adjoining shorelines. EPA's 10 regional
offices administer an inspection program to ensure compliance with
the regulations.
EPA proposed revisions to the SPCC rule in October 1991 and
February 1993. In addition to clarifying previous regulatory
language, these proposed revisions outlined additional
requirements for regulated facilities. In December 1997, EPA
proposed additional amendments to the SPCC requirements, focusing
on measures to reduce the information collection burden on
affected facilities. Many, but not all, of the amendments to the
rule proposed by EPA in 1991, 1993, and 1997, were made final in
July 2002.
EPA made over 100 amendments to the rule in 2002, including more
than 30 that EPA considers to be major. Several of these
amendments changed the scope of the rule's applicability. For
example, the 2002 amendments
o exempted from the rule containers with a capacity of less than
55 gallons, completely buried storage tanks subject to all of the
technical requirements of underground storage tank regulations,
permanently closed oil tanks as defined in the regulation, and any
facility or part thereof used exclusively for wastewater
treatment; and
o eliminated the provision triggering the requirement for an SPCC
plan when any single container has a capacity of greater than 660
gallons but maintained the 1,320-gallon total capacity threshold.
The 2002 amendments also added to or changed the language of some
definitions in the 1973 rule in order, according to EPA, to
clarify which facilities are subject to the rule and facilities'
responsibilities under the rule. For example, according to EPA,
the 2002 amendments clarified the following:
o A "facility" may be as small as a piece of equipment--for
example, a tank--or as large as a military base; "oil" includes
not only petroleum oil, but such other products as animal fats,
vegetable oils, and oil mixed with wastes, other than "dredged
spoil"; and what "navigable waters" means for purposes of the
rule.9
o The SPCC rule applies to facilities that "use" oil, such as in
the operational use of oil-filled equipment.10
o EPA had always considered statements in the existing (1973) SPCC
regulations that a facility "should" implement a specific rule
provision as meaning that a facility was required to comply with
that provision or, if circumstances warranted, undertake
alternative methods to achieve environmental protection. As a
result, EPA changed "should" to "must" to reflect this
understanding and address any confusion that compliance with such
provisions was optional.
9In 1975, EPA first published a clarification of the rule's definition of
oil, "affirm[ing] that non-petroleum oils, such as fats and oils from
animals and vegetable sources," were subject to the rule. 40 Fed. Reg.
28,849 (July 9, 1975). Wastes can include oil mixed with water--known as
produced water in the oil and gas production sector.
10Facilities that use oil operationally include electrical substations
that contain electrical transformers and certain hydraulic systems.
Oil-filled operational equipment includes an oil storage container in
which the oil is present solely to support the function of the apparatus
or device.
According to EPA, the agency made several of these definitional
changes to clarify the types of facilities that are included under
the rule and facilities' requirements. However, many industry
sectors consider several of these amendments to be changes to the
requirements of the rule rather than clarifications and, in some
cases, maintain that they had not previously considered themselves
subject to the rule prior to these changes. (A summary of
industries' views on the impacts that these and other amendments
to the SPCC rule have had or are likely to have on the regulated
community, and our analysis of these views, are included in apps.
II and III, respectively.)
Several of the rule's amendments also changed requirements for
preparing, implementing, reviewing, and amending SPCC plans. For
example, the 2002 amendments to the rule
o decreased from once every 3 years to once every 5 years, the
frequency with which a facility's SPCC plan must be reviewed;
required that the plan include a diagram of the facility, and that
completely buried storage tanks located on the facility--otherwise
exempt from SPCC rules--be included on the facility diagram; and
o gave EPA regional administrators the authority to require that
any facility within their jurisdiction amend the SPCC plan after
on-site review of the plan and extend the period of time for
facilities already in operation to amend or complete their plans.
Other amendments to the rule in 2002 changed facility requirements
regarding the use and testing of containers, piping, and other
equipment to prevent or mitigate the effects of oil spills from
containers. For example, the 2002 amendments
o amended the integrity testing requirements for aboveground
containers and required brittle fracture evaluation of
field-constructed aboveground containers that may have a risk of
discharge;
o added specificity to the description of secondary containment
requirements, such as detailing that the containment system,
including walls and floors, must be capable of containing oil and
constructed so that any discharge from the primary containment
system is prevented from escaping before cleanup occurs;11 and
o required a facility to conduct periodic integrity testing of
containers and piping, in addition to the other
requirements--i.e., contingency planning and a written commitment
of resources--when the owner/operator determines and clearly
explains that the installation of specific secondary containment
structures or equipment is not practicable.
In December 2006, EPA again made several changes to the SPCC rule,
including several major amendments to provide additional burden
relief to the regulated industries on specific rule provisions.
For example, the scope of the rule's applicability was changed,
potentially reducing the number of facilities under the rule, by
excluding motive power containers from the rule's requirements.12
In addition, the 2006 amendments also changed requirements for
preparing SPCC plans by providing an option for "qualified
facilities" to prepare a self-certified SPCC plan instead of one
that is reviewed and certified by a professional engineer.13 The
2006 amendments also decreased some secondary containment
requirements to reduce the burden for facilities. For example, the
2006 amendments
o exempted facilities from having to construct and meet
requirements for specific sized secondary containment for mobile
refuelers;14 and
o allowed facilities to use alternatives to general secondary
containment requirements for qualified oil-filled operational
equipment, such as preparing an oil spill contingency plan and a
written commitment of resources to control and remove discharged
oil, and requiring an inspection or monitoring program.
11At an SPCC-regulated facility, areas with the potential for a discharge
are subject to either general or specific secondary containment
requirements. Under SPCC, several methods can be used to contain oil from
spilling into or upon navigable waters or adjoining shorelines, such as
dikes and berms. As described in agency guidance, general secondary
containment requirements are intended to address the most likely oil
discharge in loading or unloading areas or areas (not associated with a
rack) with containers and equipment, such as oil-filled operational and
manufacturing equipment, or piping. Specific secondary containment
requirements are intended to address a worst case container failure, such
as for bulk storage containers, certain mobile portable containers, or
loading/unloading racks. These specific provisions prescribe the size of
secondary containment methods used.
12A "motive power" container is any onboard bulk storage container used
primarily to power the movement of a motor vehicle or ancillary onboard
oil-filled operational equipment. Examples of motive power containers
include trucks, automobiles, aircraft, self-propelled cranes, and
locomotives.
13A "qualified facility" is a facility with a limited oil storage capacity
that is eligible for streamlined regulatory requirements. To be eligible,
the facility must have 10,000 gallons or less in aggregate aboveground oil
storage capacity and must not have (1) a single discharge of oil into or
upon navigable waters or adjoining shorelines each exceeding 1,000 U.S.
gallons or (2) two discharges of oil to navigable waters or adjoining
shorelines exceeding 42 U.S. gallons within any 12-month period for the 3
years prior to the SPCC plan certification or since becoming subject to
the rule if the facility has been in operation for less than 3 years. Oil
spills that occur as a result of a natural disaster are not subject to
these criteria.
Although changes to the rule were finalized in 2002 and 2006, EPA
extended the date of compliance in 2003, 2004, 2006, and 2007.
Currently, owners and operators of facilities in existence on or
before August 16, 2002, must continue to maintain their SPCC
plans, and then must amend them to ensure compliance with current
requirements, and implement the amended plan no later than July 1,
2009. Facilities beginning operations after August 16, 2002, must
prepare and implement a plan by July 1, 2009. EPA made this latest
extension to, among other things, allow owners and operators of
facilities the time to fully understand the 2002 and 2006
amendments and the further revisions to the rule EPA plans to make
in 2008 and to make changes to their facilities and SPCC plans.
EPA determined that the 2002 and 2006 amendments constituted
significant regulatory actions under Executive Order 12866. For
significant regulatory actions, Executive Order 12866 requires
agencies to assess the benefits and costs of, and reasonably
feasible alternatives to, the planned regulatory action.15 In
response, EPA conducted an economic analysis to provide estimates
of the potential costs and benefits of the amendments.16 In
addition, the agency conducted economic analyses of the 2006
amendments, both as proposed in 2005 and as made final in December
2006.17 EPA's Office of Solid Waste and Emergency Response
conducted these analyses.
14Mobile refuelers are bulk storage containers onboard a vehicle or towed
that are designed or used solely to store and transport fuel for transfer
into or from an aircraft, motor vehicle, locomotive, vessel, ground
service equipment, or other oil storage container.
15Social costs and benefits represent the opportunity costs of the
resources used or the benefits forgone as a result of the regulatory
action. Opportunity costs include private-sector compliance costs,
government administrative costs, and losses in consumer or producer
surpluses. EPA estimated only the compliance costs (or cost savings)
associated with the rule changes.
16EPA, Economic Analysis for the Final Revisions to the Oil Pollution
Prevention Regulation (40 CFR Part 112) (May 2002).
Limitations in EPA's Analysis of the 2002 SPCC Amendments Reduced
Its Usefulness for Informing Decision Makers and the Public About
Economic Trade-offs
EPA's economic analysis of the 2002 SPCC amendments had a number
of limitations that reduced its usefulness for assessing the
economic trade-offs associated with the amendments. Specifically,
EPA's 2002 analysis was limited because it did not (1) assess the
uncertainty associated with key data and assumptions, such as the
degree to which facilities were already in compliance with the
amendments, (2) analyze the effect of regulatory alternatives to
the amendments, (3) provide the compliance costs that EPA expected
facilities to incur or save as a result of the amendments in
comparable present value terms, and (4) estimate the effect of the
amendments on the risk of an oil spill and on public health and
welfare and the environment. These limitations raise questions
about the reasonableness of the estimates and limit their
usefulness for informing decision makers, stakeholders, and the
public about the potential effects of the 2002 amendments.
EPA's Methodology for Analyzing the 2002 SPCC Amendments
EPA estimated the compliance costs or cost savings to the
regulated community of complying with the 2002 SPCC amendments
using the following methodology:
o First, EPA established a baseline for the analysis, which it
defines as a projection of regulated facility behavior in the
absence of new regulatory provisions.18 For the purposes of its
analysis, EPA assumed that the baseline represented full
compliance by regulated facilities with the existing (1973)
regulation, as well as industry behavior, practices, or standards
that exceed the existing regulation. After establishing the
baseline, EPA classified each regulatory revision or amendment
into one of five categories: baseline, cost increase, negligible
increase, cost savings, or negligible savings.19
17EPA, Regulatory Analysis for the Proposed Revisions to the Oil Pollution
Prevention Regulations (40 CFR Part 112), (November 2005); Regulatory
Impact Analysis for the Final Revisions to the Oil Pollution Prevention
Regulations (40 CFR Part 112), (November 2006).
18OMB guidelines recommend that the benefits and costs of regulatory
alternatives be measured incrementally to a baseline, or the way the world
would look in the absence of the proposed regulatory alternatives. Thus,
the baseline provides a point of comparison for estimating the effects of
different regulatory alternatives.
19EPA assumed that revisions classified as baseline would produce no
substantive change in the existing regulation or were already adhered to
by facilities as good engineering practices or prevailing industry
standards or practices.
o Second, EPA estimated the total number of potentially affected
facilities covered by the regulation to account for differences in
the total potential costs for different sizes of facilities.
Because estimating the economic effects of the amendments first
required information on the size of the regulated community, EPA
used a 1995 survey that it had conducted to determine the
estimated number and size of production and storage facilities in
most regulated industry sectors.20
o Third, EPA estimated the costs of compliance for each regulated
facility (that is, hours multiplied by the wage rate) for certain
amendments, varying costs for each facility by its size. EPA
developed costs for each facility for amendments considered to
have cost increases or cost savings that were not negligible.21
o Finally, EPA estimated the annual total compliance costs (or
cost savings) associated with the amendments by multiplying the
estimated costs per facility by the estimated number of affected
facilities, taking into account whether the facility was small,
medium, or large. EPA then aggregated the first-year and
subsequent-year costs or savings incurred by all facilities.
On the basis of this methodology, EPA estimated the costs that
facilities will incur by implementing the 2002 amendments. As
shown in table 1, EPA estimated that facilities will incur costs
the first year and then save costs in the following years.
20According to EPA's 1995 EPA survey, the survey was designed so that data
on sampled facilities could be extrapolated to the nation as a whole for
all facilities regulated by EPA's SPCC rule.
21To collect data for the estimation of costs, selected EPA and state
officials and contractor staff with experience in the existing SPCC
program and other spill prevention programs were contacted. EPA considered
the cost estimates to be representative of the possible costs to be
incurred by facilities, rather than precise estimates of the actual costs
that will occur.
Table 1: Estimated Economic Impacts Associated with EPA's 2002
Amendments to the SPCC Regulation
Dollars in millions
Year amendments are in effect Costs (cost savings)a Benefits
First year $21.9 Not estimated
Second year (60.2) Not estimated
Each subsequent year (45.0) Not estimated
Source: EPA.
Note: EPA's analysis does not indicate which year the dollars
represent.
aThe estimates represent costs for all facilities (small, medium,
and large) and all amendments for which EPA estimated costs.
EPA Did Not Assess the Uncertainty Associated with Key Assumptions and Data
EPA's estimates of the economic impacts of the 2002 SPCC
amendments are based on assumptions and data that are subject to
uncertainty. In conducting its analysis of the amendments,
however, EPA did not evaluate these uncertainties, as OMB
guidelines advise. For example, EPA did not consider the
uncertainties relating to its assumptions about facilities'
compliance with the existing 1973 SPCC rule and the potential
impacts of revisions that were intended to clarify what types of
facilities are subject to the rule. According to EPA, many of the
2002 SPCC amendments are either clarifications or editorial in
nature, or they do not represent a substantive change in the
existing regulatory requirements. In assessing the economic
impacts associated with these amendments, EPA maintained that the
clarifications were making explicit provisions or requirements
that were already implicit in the existing SPCC rule, rather than
introducing new ones. Therefore, in its analysis, EPA assumed that
all regulated facilities were in full compliance with these
existing provisions and would not incur any additional compliance
costs as a result of the amendments. In addition, to the extent
that regulated facilities were not in compliance with the
provisions being clarified, EPA assumed that any cost they would
incur to comply should be attributed in its analysis to the
baseline and not to the 2002 amendments. However, the extent to
which facilities were in compliance--or would be in compliance in
the future in the absence of the amendments--is highly uncertain.
As a result, EPA's cost estimates do not fully reflect the
potential impacts of the amendments.
If, contrary to EPA's assumption, facilities were not previously
in compliance with the clarified provisions, but are brought into
compliance by the 2002 amendments, the estimated costs (or cost
savings) that should be attributed to the 2002 amendments would be
higher (or lower), all else remaining the same. For example, in
commenting to EPA and OMB on the proposed 2002 amendments, a
representative of the electric utility industry stated that, until
EPA clarified in the 2002 amendments that "users" of oil are
subject to the rule, the electric utility industry did not believe
that the SPCC rules applied to electrical equipment. Because of
EPA's clarification, however, facilities in this industry found
that they were subject to the rule and EPA would consider them to
have been out of compliance. As a result, the representative
stated, the clarification would cause that industry to incur
substantial costs to modify its facilities to meet the
requirements of the amendments, such as installing secondary
containment.
EPA's economic analysis stated that it was possible that some
facilities misinterpreted the existing regulation and were not in
full compliance with it, but there was no practical way to measure
industry compliance. OMB guidelines indicate, however, that
agencies can use uncertainty analysis to assess the effect of
multiple baselines with different assumptions about the degree of
compliance, particularly when industry compliance with existing
regulations is uncertain and when different assumptions about
compliance could substantially affect the estimated benefits and
costs. Without such an analysis, EPA excluded the potential impact
of current industry practice from its assessment of the total
costs and benefits associated with the 2002 amendments, thus
potentially misstating these amounts.
In addition, EPA did not account for the uncertainty associated
with its estimates of the number of facilities affected by the
amendments. Because these estimates were subject to sampling
error, EPA may not have accurately presented the number of
facilities subject to the amendments. For example, for its
estimates, EPA used a 1995 survey, which was based on a
statistical sample of facilities in the 48 contiguous states. On
the basis of this survey and subsequent adjustments agency
officials made using their professional judgment, EPA estimated
that 51,398 facilities would no longer be subject to the
requirements of the SPCC rule as a result of the 2002 amendments.
However, like estimates from all statistical samples, EPA's
estimates are subject to sampling error, which is the imprecision
that results from surveying a sample of facilities rather than
surveying every facility in the country. In its 2002 analysis, EPA
acknowledged the sampling error, stating that its estimates of the
number of facilities were accurate within plus or minus 10
percent. However, EPA did not account for this sampling error when
estimating the costs associated with the amendments.22 OMB
guidelines direct that the agencies ensure that their estimates
reflect the full probability distribution of potential results.
Consequently, to account for the imprecision in the estimated
facilities and costs, it would have been appropriate for EPA to
analyze the uncertainty associated with these estimates.
EPA's 2002 Analysis Had Other Limitations
OMB guidelines direct agencies to consider the most important
alternative approaches to some or all of a rule's provisions and
provide their reasons for selecting the preferred regulatory
action over such alternatives. However, EPA's 2002 analysis did
not assess alternatives to the amendments, such as alternative
levels of stringency or alternative lead times to comply. To
provide decision makers and the public with information on how the
costs and benefits might vary depending on the regulatory
approach, it would have been appropriate for EPA to assess the
effect of alternatives in its analysis of the 2002 amendments.
Without information on the benefits and costs of alternative
regulatory actions, it is difficult to confirm that EPA's
preferred regulatory approach maximizes net benefits.
Moreover, OMB guidelines state that agencies should discount costs
and benefits that accrue in different time periods to present
values. As depicted in table 1, EPA did not present the total cost
estimate (costs incurred minus cost savings) of the amendments in
comparable, net present value terms. Instead, EPA estimated the
costs that would be incurred in the first year that the rule is in
effect and the cost savings that facilities would achieve in the
second and subsequent years. EPA officials stated that the present
value of estimated costs is not significantly different from the
cost estimates in the simple analysis it conducted absent the
discounting. Nonetheless, since EPA estimated costs incurred and
cost savings in the first year and each subsequent year over the
life of the amendments, it would have been appropriate for EPA to
present the total net costs in comparable present value terms. To
compute present value, the agencies are directed to discount the
estimated benefits and costs using interest rates recommended by
OMB.
22For certain industrial categories, EPA did not obtain complete data. In
these cases, it supplemented the 1995 survey data with data from a 1991
study of four states. However, we could not determine whether this caused
additional error or bias.
Finally, OMB guidelines direct agencies to quantify and monetize
the benefits (including the benefits of risk reductions)
associated with the regulatory action, whenever possible.
Moreover, when benefits are difficult to monetize, the OMB
guidelines state that acceptable quantitative estimates of
benefits and costs are preferable to qualitative descriptions. In
cases where quantification is difficult, the guidelines direct the
agencies to present any relevant quantitative information and
describe the unquantifiable effects. In its analysis of the 2002
amendments, however, EPA did not monetize or quantify the
potential benefits expected to result from any of the amendments.
In addition, EPA's qualitative discussion of the potential
beneficial aspects of the 2002 amendments was very limited. For
example, the agency discussed the general risk of an oil spill and
the general damage that might be caused to public health and
welfare and the environment. EPA stated that it assumed that the
amendments would have minimal effects on the risks of a spill,
lessen the burden to the regulated community, and maintain the
existing level of protection to public health and welfare and the
environment. Nonetheless, some of the 2002 amendments are more
stringent than the existing SPCC rule, possibly reducing the risk
of an oil spill, while other amendments are less stringent (that
is, burden reducing), possibly increasing the risk of an oil
spill. Without more substantive information on the potential
effect of the amendments on the risk of an oil spill and the
resulting effect on public health and welfare and the environment,
it is difficult to confirm that the benefits of the amendments
exceed their costs, as EPA concluded.
EPA's Economic Analysis of the 2006 SPCC Amendments Improved on
the Earlier Study but Also Had Limitations
EPA's economic analysis of the 2006 amendments to the SPCC rule
addressed several of the limitations in the agency's 2002
analysis. However, the 2006 analysis also had some limitations
that made it less useful than it could have been for assessing the
economic trade-offs associated with the amendments.
EPA's 2006 Analysis Included Elements Absent from Its Earlier Study
As shown in table 2, EPA estimated the compliance cost savings
that would be generated by the 2006 amendments under (1) a
baseline assuming full compliance with the existing SPCC rule
including the 2002 amendments, (2) an alternative baseline
assuming only 50 percent compliance with the existing SPCC rule
including the 2002 amendments, and (3) different assumptions about
the number of facilities that would be affected by the 2006
amendments.
Table 2: Estimated Economic Impacts Associated with EPA's 2006 Amendments
to the SPCC Regulation
2005 dollars in
millions
Benefits
Cost savings expected
Percentage of Cost savings expected under under full
facilities expected under alternative compliance or
Major components assumed to be baseline of baseline of 50 50 percent
of the 2006 affected by full percent compliance
final rule rule compliancea compliancea baselines
Qualified 100% $38 $19 Not estimated
facilities
eligible for
streamlined
regulatory
requirements
Qualified 25 39 19 Not estimated
oil-filled
operational
equipmentb
50 53 26 Not estimated
75 67 33 Not estimated
Motive power 10 1 < 1 Not estimated
25 3 1 Not estimated
50 5 3 Not estimated
Mobile refuelers 25 17 9 Not estimated
50 34 17 Not estimated
75% $51 26 Not estimated
Source: EPA.
aEstimates are annualized cost savings using 7 percent discount rate; EPA
also estimated savings using a 3 percent discount rate, per OMB's Circular
A-4 guidelines.
bEstimates apply to new facilities only. EPA assumed that existing
facilities would already have secondary containment in place or an
impracticality determination and, therefore, would not benefit from this
burden reduction.
Under the alternative baseline, compliance cost savings would be roughly
half as much as under the full compliance baseline because owners and
operators of facilities that are not currently in compliance will not save
costs as a result of the changes for burden reduction. In addition,
because EPA did not have data on the precise number of facilities that
would be affected by the amendments, EPA assessed the uncertainty
associated with its estimates using arbitrarily developed scenarios for
three of the major components of the rule. Based on this approach, EPA
assumed that various percentages of the facilities would be affected by
the regulatory changes in the rule. For example, for facilities with
qualified oil-filled operational equipment, EPA analyzed the cost savings
under different assumptions about the number of facilities that would be
affected by the rule, ranging from 25 percent to 75 percent of the total
number.
Moreover, unlike its 2002 analysis, EPA's 2006 analysis also analyzed and
discussed some regulatory alternatives. For example, for the version of
these amendments that were proposed in 2005, EPA proposed an exemption on
the oil-filled operational equipment requirement for facilities that had
no reportable discharges from their equipment within the prior 10 years of
the date of their SPCC plan certification. Partly in response to comments
on the proposed rule, EPA narrowed the restriction in the 2006 final rule
to owners and operators that have not had a discharge exceeding 1,000
gallons or two discharges exceeding 42 gallons within a 12-month period in
the 3 years prior to SPCC plan certification. Oil spills that are the
result of natural disasters are not subject to these limitations. In its
economic analysis of the 2006 final rule, EPA discussed the differences
between the cost estimates for the restriction proposed in 2005 and the
estimates for the restriction adopted in 2006. EPA estimated that the
final rule cost savings would be greater under certain conditions (that
is, if 75 percent of facilities are affected by the amendment), than
estimated in the proposed version.
EPA's 2006 Analysis Also Had Limitations
Despite the improvements over its 2002 analysis, EPA's analysis of the
2006 amendments also had some limitations that made it less useful than it
could have been for assessing the economic trade-offs associated with the
amendments. For example, EPA did not quantify or monetize the potential
impacts of the 2006 amendments on the risk of an oil spill and on public
health and welfare and the environment. Instead, EPA provided only a very
limited qualitative discussion of the general risk of an oil spill and the
general potential damages that it might cause. EPA reported that the
reduced compliance costs will translate to net social benefits, but that
these benefits might be partially offset by the potential increase in the
risk of an oil spill (because of the less stringent requirements of the
2006 amendments compared with the existing requirements).23 EPA also
stated that quantifying net benefits (benefits minus costs) associated
with the 2006 amendments was not possible due to unknown future impacts of
the rule, but it concluded that cost savings resulting from the amendments
will not be offset by any significant losses in environmental protection.
Nonetheless, it is difficult to affirm EPA's conclusion without more
substantive information on the potential effect of the amendments on the
risk of an oil spill and the resulting effect on public health and welfare
and the environment.
23In its analysis of the 2006 amendments, EPA used compliance cost savings
to approximate social benefits and considered the impact on public health
and welfare and the environment as representing the potential social costs
of the amendments. To be consistent with the agency's analysis of the 2002
amendments, we present EPA's 2006 estimates of the potential effect on
private-sector compliance as costs (or negative costs) and on public
health and the environment as benefits (or negative benefits). As with its
2002 analysis, EPA did not fully assess the social costs or social
benefits associated with the amendments.
In addition, because EPA's estimates of the number of facilities that
would be affected by the 2006 amendments were not based on nationally
representative samples, the results may not be accurate. In particular,
for the one amendment that would reduce the burden for certain
SPCC-regulated facilities, EPA based its estimates of the number of
facilities that would be affected by this amendment on data drawn from
eight states: Florida, Kansas, Maryland, Minnesota, New York, Oklahoma,
Virginia, and Wisconsin. Because facilities in these states may not have
been representative of facilities nationwide, EPA's use of these data in
its analysis could have introduced bias into its estimates of the number
of facilities and costs for this amendment. Furthermore, EPA excluded from
its analysis more than half of the facilities in these eight states
because the industrial category for these facilities could not be
determined and could not be matched to an additional database. By not
including such a high proportion of facilities on a nonrandom basis,
additional error was likely introduced into EPA's estimates of the number
of SPCC-regulated facilities. It is, therefore, unclear whether the
facilities that EPA included in the analysis are even representative of
the universe of facilities within these eight states. EPA acknowledged
these limitations in its analysis and stated that the analysis provided
the best possible results given time and resource constraints. However,
the actual number of U.S. facilities, and hence the resulting cost
impacts, could be greater or less than EPA estimated.
Overall, EPA reported that its analysis did not fully comply with OMB
guidelines for conducting economic analyses of significant regulatory
actions. It is difficult to confirm, however, that the regulatory changes
are economically justified, as EPA concluded, without an estimate of both
the costs and benefits associated with the amendments.
Conclusions
Because both the 2002 and 2006 amendments to the SPCC rule are significant
regulatory actions, it is important for EPA to have a credible economic
basis for selecting these as the agency's preferred regulatory actions.
However, although EPA's 2006 analysis improved upon its 2002 analysis,
both analyses had limitations that may make it difficult for decision
makers, stakeholders, and the public to verify that the agency has fully
analyzed the economic impacts of its regulatory actions. Specifically,
because EPA did not analyze key uncertainties in its analysis of the 2002
amendments, including the degree to which facilities were in compliance
with some of the revisions, the reliability of the estimated costs and
cost savings is questionable. In addition, EPA did not assess regulatory
alternatives in its analysis for the 2002 amendments, making it difficult
to confirm that EPA's preferred regulatory approach is economically
superior to other possible approaches. Moreover, because EPA did not
estimate the impact of the amendments on the potential risk of an oil
spill and on public health and welfare and the environment for either the
2002 or the 2006 amendments, EPA's economic analyses may not provide
decision makers, stakeholders, and the public with a sufficient basis for
concluding that the benefits of the amendments outweigh their costs, as
EPA did. Although we recognize that evaluating regulatory impacts is a
complex task, unless EPA conducts more thorough economic analyses
consistent with OMB guidelines, decision makers, stakeholders, and the
public may lack assurance that the agency has fully evaluated the economic
trade-offs of its regulatory actions.
Recommendation for Executive Action
To improve the usefulness of the agency's economic analysis for informing
decision makers and the public, we recommend that the Administrator, EPA,
take action to ensure that the agency's economic analysis of future
changes to the SPCC rule includes all of the key elements for such
analyses contained in OMB's guidelines for complying with Executive Order
12866.
Agency Comments and Our Evaluation
GAO provided EPA with a draft of this report for its review and comment.
The agency stated that it generally agreed with the recommendation in the
report to improve the agency's economic analyses for future changes to the
SPCC rule, consistent with OMB guidelines, and has undertaken several
initiatives to improve its analyses. EPA noted that, consistent with our
recommendation, the agency has (1) activated a core SPCC Economic Subgroup
of economic and technical experts; (2) acquired additional expert
contractor support; and (3) hired an experienced senior economist to guide
these efforts, and plans to continue gathering additional data to improve
its understanding of the regulated universe and oil spill risks, and to
address uncertainty and quantify benefits.
In addition, EPA commented that the agency believes that the economic
analyses that it conducted for the 2002 and 2006 amendments to the SPCC
rule are already consistent with, and meet the spirit and intent of, OMB
guidelines, given the limited data, time, and resources available.
However, because both the 2002 and 2006 amendments to the SPCC rule were
significant regulatory actions potentially affecting thousands of
facilities across a wide range of industries, it is important for EPA to
have a credible economic basis for selecting its preferred regulatory
actions. In particular, we found that EPA's analyses were generally not
consistent with OMB guidelines in some key areas, including accounting for
the extent to which facilities were in compliance with the existing 1973
rule and in assessing the impact of the amendments on the risk of an oil
spill and public health and the environment. Decision makers,
stakeholders, and the public may lack assurance that the agency has fully
evaluated the economic trade-offs of its regulatory actions without more
thorough economic analyses consistent with OMB guidelines.
Finally, EPA commented that it does not agree with GAO's characterization
that the agency's sensitivity analysis of the 2006 amendments used
"arbitrarily developed scenarios" for three of the major components
affected by the rule. However, in its economic analysis of the 2006
amendments, EPA stated that it "arbitrarily developed three scenarios" to
estimate the number of facilities that might be affected by these
components. Furthermore, we did not comment on EPA's use of these
scenarios because, according to the agency, data on the number of
facilities that might be affected by the rule were not available.
EPA also provided technical comments on the draft report, which we have
incorporated as appropriate. The full text of EPA's comments is included
as appendix IV.
As agreed with your office, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 20 days from
the report date. At that time, we will send copies to the Administrator of
EPA and other interested parties. We will also make copies available to
others upon request. In addition, the report will be available at no
charge on the GAO Web site at [38]http://www.gao.gov .
If you or your staff has any questions about this report, please contact
me at (202) 512-3841 or stephensonj@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. Key contributors to this report are listed in
appendix V.
Sincerely yours,
John B. Stephenson
Director, Natural Resources and Environment
Appendix I: Objectives, Scope, and Methodology
We reviewed the reasonableness of the economic analyses that the
Environmental Protection Agency (EPA) used in support of the 2002 and 2006
Spill Prevention, Control, and Countermeasure (SPCC) amendments. To
determine the reasonableness of EPA's economic analyses, we assessed EPA's
May 2002 Economic Analysis for the Final Revisions to the Oil Pollution
Prevention Regulation (40 CFR Part 112), November 2005 Regulatory Analysis
for the Proposed Revisions to the Oil Pollution Prevention Regulation (40
CFR Part 112), and November 2006 Regulatory Impact Analysis for the Final
Revisions to the Oil Pollution Prevention Regulations (40 CFR Part 112).
As criteria for evaluating the reasonableness of the economic analyses, we
used guidelines for federal agencies in assessing regulatory impacts that
the Office of Management and Budget (OMB) developed under Executive Order
12866, including its Economic Analysis of Federal Regulations Under
Executive Order 12966; Guidelines to Standardize Measures of Costs and
Benefits and the Format of Accounting Statements; and Circular A-4. We
also reviewed the Unfunded Mandates Reform Act of 1995. In addition, we
discussed EPA's analyses with senior officials in EPA's Office of
Emergency Management, Regulation, and Policy Development Division, which
was responsible for conducting the analyses. We also spoke with officials
representing major industry associations about their views on EPA's
economic analyses and discussed any analysis they may have prepared
regarding the SPCC amendments. Furthermore, we reviewed other documents
related to the rule changes.
We also obtained stakeholders' views on any impacts that they believe the
SPCC amendments will have on either the regulated community or on the risk
of oil spills by administering a survey to key industry associations and
environmental groups, respectively, regarding 43 key SPCC amendments. A
summary of responses to survey questions appears in appendix II, and our
analysis of the results of the survey appears in appendix III.
Selection of Survey Respondents
To administer our survey, we selected a nonprobablity sample of 30 SPCC
stakeholders, including 28 industry associations and two environmental
groups. These organizations were either (1) members of EPA's SPCC
stakeholder group, which was involved with the agency in discussions and
periodic meetings before the rule amendments were made final, or (2)
national organizations that submitted comments to EPA regarding proposed
SPCC rule changes more than once in 1991, 1993, 1997, or 2002. The vast
majority of comments were received from associations and businesses
representing the major industry sectors--such as oil and natural gas
products, petroleum refining, transportation, manufacturing, electric
utilities, and food and agriculture--most likely to be regulated under
SPCC. Only a few environmental associations submitted comments. Results
from this nonprobability sample cannot be used to make inferences about
all industry or environmental associations because not all associations
representing those affected by the SPCC rule had a chance of being
selected as part of the sample.
Questionnaire Design and Pretesting
Our questionnaire asked stakeholders what impact they believe will result
from each of 43 major amendments to the SPCC rule. We selected these
amendments by reviewing the major changes EPA made to the SPCC rule in
2002 and 2006. Our questionnaire provided summaries of each of these
amendments, which, in most instances, were derived from EPA's descriptions
in the Federal Register. In some cases, we developed our summaries by
reviewing the descriptions of the amendments in the rules, and reviewing
comments on the amendments submitted to EPA by both industry and
environmental groups. Of the 43 amendments selected, we included 29
amendments finalized in 2002 that EPA listed as major amendments in the
Federal Register. In addition, we included six amendments from 2006 that
EPA described in the Federal Register and several agency fact sheets as
major amendments to the rule. The remaining eight amendments we included
in our survey--six from 2002 and two from 2006--were frequently mentioned
in industry comments that we reviewed. We asked respondents to assess the
impact of each of these amendments on a five-point scale which ranged from
"very negative impact" to "very positive impact." We asked industry
associations to assess the impact on their industry and environmental
groups to assess the impact on the risk of oil spills. We also asked
respondents to list the five amendments that would have the greatest
positive impact and the five amendments that would have the greatest
negative impact. However, we did not receive a sufficient number of
responses to these questions and so did not include them in our analysis.
The practical difficulties of conducting any survey may introduce errors,
commonly referred to as nonsampling errors. For example, respondents may
have difficulty in interpreting a particular question or may lack
information necessary to provide valid and reliable responses. In order to
minimize these errors, we conducted pretests of the draft questionnaire
with two industry associations by telephone. During these pretests, we
checked whether (1) questions were clear and unambiguous, (2) terminology
was used correctly, (3) the questionnaire did not place undue burden on
respondents, (4) the information could feasibly be obtained, and (5) the
survey was comprehensive and unbiased. In addition, the survey was peer
reviewed by a GAO senior survey methodologist. We made changes to the
content and the format of the questionnaire after each of the pretests
based on the feedback we received.
Survey Administration
We administered our survey in January 2007. We first phoned each
stakeholder group to identify the most appropriate individual to receive
the questionnaire. We then e-mailed the questionnaire to each stakeholder
as a Microsoft Word form that respondents could complete by marking
checkboxes. In addition, we attached copies of the SPCC rule, as amended
in 2002 and 2006, and EPA's 2002 economic analysis to provide stakeholders
a more thorough description of the amendments than we provided in the
survey. On January 17, 2007, we sent a reminder letter to all stakeholders
who had not responded by that date, along with additional copies of the
questionnaire, the SPCC rule, and EPA's economic analysis. Two days later,
we telephoned all stakeholders who had not returned the questionnaire and
asked them to participate in our survey. We received usable responses from
23 of the 28 industry associations and one of the two environmental groups
by January 29, 2007. Following is a list of the associations from which we
received completed questionnaires:
Agricultural Retailers Association Air Transport Association of America,
Inc. Aircraft Owners & Pilots Association Airports Council
International-North America Alliance of Automobile Manufacturers American
Association of Airport Executives American Bakers Association American
Feed Industry Association American Gas Association American Petroleum
Institute American Trucking Associations, Inc. Domestic Petroleum Council
Independent Petroleum Association of America Independent Liquid Terminals
Association Independent Lubricant Manufacturers Association National Air
Transportation Association National Automobile Dealers Association Natural
Resources Defense Council National Stone, Sand, and Gravel Association
Petroleum Marketers Association of America Synthetic Organic Chemical
Manufacturers Association The Associated General Contractors of America
USA Rice Federation Utility Solid Waste Activities Group
Content Analysis
In order to succinctly summarize responses to our survey, we performed a
content analysis in which we grouped each of the 43 SPCC amendments into
major categories. We first reviewed the summary of each of the amendments
that we included in our questionnaire and inductively identified common
groups. We then developed criteria to define which amendments would be
included in each group. To ensure that this process was reliable, each
amendment was independently categorized by three GAO analysts, and
categorization decisions among the three analysts were compared. All
initial disagreements regarding categorization decisions were discussed
and reconciled by refining the criteria used to categorize the amendments.
In a few cases, we were unable to determine the category into which to
place an amendment based solely on the description of that amendment used
in our survey. In these cases, we reviewed the complete description of the
amendment in the Federal Register to determine the appropriate category.
To see the exact wording of the final rule, please refer to the Federal
Register.
We categorized each of the 43 amendments along two dimensions. The first
dimension relates to the actions that regulated facilities are required to
take. The categories within this dimension that we identified during our
content analysis include the following: (1) requirements to develop an
SPCC plan or to notify officials of oil spills; (2) changes to the scope
of those facilities to which the rule applies; (3) requirements for
containers and piping used by SPCC facilities; (4) requirements to test or
inspect containers, piping, and other equipment; (5) requirements
regarding training of SPCC facility employees; and (6) amendments that fit
into more than one of the above categories or did not fit into one of the
above categories.
The second dimension relates to whether the amendment increases or
decreases requirements on facilities. We made this determination based on
whether the amendment uses terms such as "adds new requirements" and
"mandates," which would be considered an increase in requirements, or
terms such as "allows" or "exempts," which would be considered a decrease
in requirements. In some instances, we determined that an amendment does
not imply either an increase or a decrease in requirements, or that an
amendment included provisions that would both increase and decrease
requirements. In these instances we categorized the amendment as having a
"mixed" direction. In some instances we could not determine if the
amendments increased or decreased requirements and, therefore, did not
categorize the amendment along the second dimension.
By categorizing each amendment in terms of both of these dimensions--the
facility actions to which the amendment applies and whether the amendment
increases or decreases requirements on facilities--we identified 11 total
categories of amendments. For example, we developed a category for
amendments that increased requirements on planning and notification and
another category for amendments that decreased requirements on the scope.
Some combinations of categories in these two dimensions contained no
amendments. For example, we did not identify any amendments that decreased
requirements on inspections and testing. For a detailed description of our
coding rules and specific amendments that we placed in each of these
categories, please see appendix III.
Data Analysis
We calculated a score to summarize the industry stakeholders' views of the
impact they believe each type of SPCC amendment will have on their
industries. We collapsed the five-point response options in our survey
into "very positive impact" and "somewhat positive impact" categories from
the survey into one and removed the "no answer/no basis to judge"
responses. We then calculated the average of the responses from all of the
industry associations to questions regarding all of the amendments within
a particular category and developed a score, ranging from -1.0 (entirely
negative impact), to 0.0 (no impact), to 1.0 (entirely positive impact),
for each of the categories of amendments. An entirely positive impact
would indicate that every industry stakeholder reported that every
amendment of a given type would have a positive impact on their industry.
Similarly, an entirely negative impact would indicate that every industry
stakeholder reported that every amendment of a given type would have a
negative impact on their industry. No impact would indicate that either
(1) every industry stakeholder reported that every amendment of a given
type would have no impact on their industry, or (2) an equal number of
responses reported a positive impact as reported a negative impact for all
amendments of a given type. Using these three anchor points, we considered
scores between -1.0 and -0.5 to be mostly negative, scores between -0.5
and 0.0 to be somewhat negative, scores between 0.0 and 0.5 to be somewhat
positive, and scores between 0.5 and 1.0 to be mostly positive. Computer
analysis programs were independently verified by a senior statistician. We
also verified the accuracy of the underlying survey data keypunched by
comparing them with their corresponding questionnaires and found that
there were no errors. Our analysis is limited to the perceived impact of
the amendments on industry. We did not receive sufficient responses from
environmental groups to do a thorough analysis of the perceived impact of
the amendments to the SPCC rule on protecting human health and the
environment.
We performed our work from June 2006 to July 2007 in accordance with
generally accepted government auditing standards.
Appendix II: Summary of Survey Results
The following tables present a summary of our survey of 23 stakeholders to
obtain their views on the impacts that the amendments to the SPCC rule
have had or are likely to have on the regulated community. These
stakeholders included the major associations representing industry that
had submitted comments to EPA on the proposed rule changes and that EPA
had also identified as key stakeholders. We also followed up with
officials from several industry associations to clarify some of their
survey responses.
Survey Question 1
What impact does your association believe each of the following 2006
amendments to the SPCC rule will have on your industry? (We asked survey
recipients to check one box per amendment.)
No
Answer
or No
Very Somewhat Somewhat Very Basis
Reference 2006 Rule Positive Positive No Negative Negative to
letter amendments Impact Impact Impact Impact Impact Judge
S 112.1 General Applicability
a. S 112.1(d)(2)(ii), 10 7 4 2 0 0
S 112.1(d)(7):
excludes `motive
power containers'
(defined in S
112.2) from the
rule, but includes
the transfer of
fuel or other oil
into a motive power
container at an
otherwise regulated
facility.
S 112.2 Definitions
b. S 112.2: adds 5 9 2 6 0 1
several
definitions,
including airport
mobile refueler,
farm, motive power
container, and
oil-filled
operational
equipment.
S 112.3 Requirement to prepare and implement a Spill Prevention,
Control, and Countermeasure Plans
c. S 112.3(a)(2), S 1 3 10 2 0 7
112.3(b)(2): delays
the compliance
dates for farms
until the effective
date of a rule
establishing SPCC
requirements
specifically for
farms or dates that
farms must comply
with the provisions
of this part.
d. S 112.3(g): defines 7 12 4 0 0 0
a qualified
facility eligible
to self-certify
under the
provisions set
forth in S 112.6.
S 112.6 Qualified Facility Plan Requirements
e. S 112.6: allows 10 7 5 1 0 0
qualified
facilities (defined
in S 112.3(g)) to
self-certify and
provides applicable
requirements for
self-certification.
S 112.7 General requirements for Spill Prevention, Control, and
Countermeasure Plans
f. S 112.7(k): allows 5 16 2 0 0 0
owners/operators of
qualified
oil-filled
operational
equipment (defined
in (k)(1)) to meet
alternate
requirements
(defined in (k)(2))
in lieu of the
general secondary
containment
requirements.
S 112.8 Spill Prevention, Control, and Countermeasure Plan
requirements for onshore facilities (excluding production facilities)
S 112.12 Spill Prevention, Control, and Countermeasure Plan
requirements
g. S 112.8 (c)(2), S 10 10 3 0 0 0
112.8 (c)(11), S
112.12 (c)(2), S
112.12 (c)(11):
provides an
exception for
mobile refuelers
from constructing
and meeting
requirements for
secondary
containment.
Subpart C - Requirements for Animal Fats and Oils and Greases, and
Fish and Marine Mammal Oils; and for Vegetable Oils, including Oils
from Seeds, Nuts Fruits, and Kernels
h. S 112.13 - S 0 1 13 0 0 9
112.15: removal of
these sections
because they do not
apply to facilities
that process,
store, use, or
transport animal
fats and/or
vegetable oils.
Survey Question 2
What impact does your association believe each of the following 2002
amendments to the SPCC rule will have on your industry? (We asked survey
recipients to check one box per amendment.)
No
Answer
or No
Very Somewhat Somewhat Very Basis
Reference 2002 Rule Positive Positive No Negative Negative to
letter amendments Impact Impact Impact Impact Impact Judge
S 112.1 General
Applicability
i. S 112.1(b): adds 0 0 3 3 14 3
"users" of oil as
a group subject
to the rule and
expands the
jurisdiction of
the rule as
amended in the
Clean Water Act.
j. S 112.1(d)(2)(i): 3 10 8 1 0 1
does not count
the capacity of
completely buried
tanks (defined in
parts 280 or 281)
or permanently
closed tanks
towards the
threshold.
k. S 2 12 4 3 2 0
112.1(d)(2)(ii):
eliminates the
aboveground
storage capacity
threshold of
greater than 660
gallons for a
single container
but maintains the
greater than 1320
threshold and
establishes a "de
minimis"
container
capacity size of
55 gallons or
greater to
calculate
capacity.
l. S 112.1(d)(4): 0 0 8 11 1 3
requires
completely buried
storage tanks,
otherwise exempt,
to be included on
the facility
diagram.
m. S 112.1(d)(5), 5 12 2 0 2 2
(6): exempts
containers that
are 55 gallons or
less; exempts
facilities (or
parts thereof)
used exclusively
for wastewater
treatment unless
it is used to
meet part 112
requirements.
n. S 112.1(f): gives 0 0 11 6 3 3
the EPA Regional
Administrators
authority to
require an SPCC
plan for any
facility within
the jurisdiction
in order to meet
goals of the CWA.
S 112.2
Definitions
o. S 112.2: adds new 1 3 3 4 11 1
definitions, such
as for
`facility', and
expands the
definition of
`oil',
`discharge',
`navigable
waters',
`offshore
facility', and
`United States'.
S 112.3 Requirement to prepare and implement Spill Prevention,
Control, and Countermeasure Plan
p. S 112.3(a),(b): 1 1 5 8 5 3
requires
facilities in
operation to
prepare or revise
an SPCC Plan
within six months
and implement the
plan within
another six
months; new
facilities must
prepare and
implement an SPCC
Plan before
beginning
operations.
q. S 112.3(d): 0 7 6 6 4 0
requires the
professional
engineer (PE)
attestation to
include that the
PE considered
applicable
industry
standards and
certified that
the Plan is in
accordance with
SPCC
requirements;
also allows an
agent to examine
a facility in
place of the PE,
but the PE must
review the
agent's work, and
certify the SPCC
Plan.
r. S 112.3(e): 0 1 17 4 0 1
requires a copy
of the SPCC Plan
to be maintained
at a facility
attended for at
least 4 hours a
day instead of
the current
requirement of 8
hours.
s. S 112.3(f): 1 13 7 1 0 1
provides for an
extension of time
to be granted by
the Regional
Administrators
(RA) for
amendments of the
SPCC Plan, as
well as the
entire SPCC Plan.
S 112.4 Amendment of Spill Prevention, Control, and Countermeasure
Plan by Regional Administrator
t. S 112.4(a): 6 11 2 2 0 2
raises the
threshold for
reporting two
discharges to
greater than 42
U.S. gallons (1
barrel) per
discharge, but
reduces the
amount of
information to be
submitted to the
RA.
u. S 112.4(b): does 5 11 5 1 0 1
not require
facilities to
meet any
requirements of
this section (S
112.4) until the
new compliance
deadlines to
prepare an SPCC
Plan (specified
in section S
112.3).
v. S 112.4(c): 0 0 22 1 0 0
changes the
requirement from
notification to
the State agency
in charge of
water pollution
control
activities to
notification to
the State agency
in charge of oil
pollution control
activities.
w. S 112.4(d): 0 0 13 8 0 2
provides that the
RA may require a
Plan amendment
after an on-site
review of the
Plan.
S 112.5 Amendment of Spill Prevention, Control, and Countermeasure
Plan by owners or operators
x. S 112.5(a), (b): 0 2 11 8 1 1
requires any
amendment made
under this
section be
prepared within
six months and
implemented in no
more than six
months from when
the amendment was
made.
y. S 112.5(b): 10 10 2 0 0 1
changes the
period of review
for SPCC Plans
from 3 to 5
years, and
requires
documentation of
completion of the
review and
evaluation.
z. S 112.5(c): 8 12 1 1 1 0
clarifies that a
PE must certify
only technical
amendments, and
not non-technical
amendments (ex.
names, phone
numbers).
S 112.7 General requirements for Spill Prevention, Control, and
Countermeasure Plans
aa. S 112.7: allows 3 13 3 1 0 2
differing formats
for the Plan;
other formats
must be
cross-referenced
to the listed
SPCC requirements
and include all
applicable SPCC
requirements.
bb. S 112.7(a)(2): 10 9 1 0 2 1
allows deviations
from most of the
rule's major
requirements
(except secondary
containment),
provided that the
reasons for
nonconformance
are explained,
and equivalent
environmental
protection is
provided.
cc. S 112.7(a)(3): 0 1 11 10 1 0
requires a
description and a
diagram of the
facility layout
in the SPCC Plan.
dd. S 112.7(a)(4): 0 1 9 10 0 3
requires
facilities to
provide
additional
information and
procedures for
reporting a
discharge;
facility response
plan (FRP)
facilities
(defined in S
112.20) are
exempt.
ee. S 112.7(a)(5): 0 2 18 1 0 2
requires
facilities to
organize the Plan
in a readily
usable format for
an emergency;
facility response
plan (FRP)
facilities
(defined in S
112.20) are
exempt.
ff. S 112.7(c): 0 0 12 5 6 0
requires a
containment
system to be
capable of
containing oil
and constructed
to prevent any
discharge from
escaping from the
facility and
reaching
navigable waters
and adjoining
shorelines.
gg. S 112.7(d): adds 0 1 2 9 10 1
new requirements
for periodic
integrity testing
of containers,
and periodic
integrity and
leak testing of
valves and
piping; exempts
FRP facilities
(as defined by
section S112.20)
from having a
contingency plan.
hh. S 112.7(e): 0 13 8 1 0 1
allows use of
usual and
customary
business records
to serve as a
record of tests
or inspections
and records to be
kept separate
from the Plan;
acknowledges the
certifying
engineer as
having a role
developing
inspection
procedures.
ii. S 112.7(f): 0 11 7 3 2 0
mandates training
for oil-handling
employees only,
and specifies
training topics;
also requires
discharge
prevention
briefings at
least once a
year.
jj. S 112.7(i): 1 0 6 5 4 7
specifies a
brittle fracture
requirement for
field-constructed
containers
undergoing
repairs,
alteration,
reconstruction or
change in service
that may affect
the risk of
discharge.
S 112.8 Spill Prevention, Control, and Countermeasure Plan
requirements for onshore facilities (excluding production
facilities)
kk. S 112.8(c)(3), S 0 12 6 2 0 3
112.9(b)(1):
allows National
Pollutant
Discharge
Elimination
Systems (NPDES)
records to be
used for SPCC
purposes in lieu
of events records
specifically
prepared for this
purpose.
ll. S 112.8(c)(6): 0 3 2 8 9 1
requires
integrity testing
on aboveground
containers on a
regular schedule,
and when material
repairs are done;
testing can be
recorded using
usual and
customary
business records.
mm. S 112.8(d)(1): 0 1 5 6 8 3
requires buried
piping installed
or replaced to
have protective
wrapping and
coating and
cathodic
protection or
otherwise satisfy
the corrosion
protection
provisions for
underground
piping (40 CFR
part 280 or 281).
nn. S 112.8(d)(4): 0 2 4 11 4 2
requires
integrity and
leak testing of
buried piping at
the time of
installation,
construction,
relocation or
replacement.
S 112.9 Spill Prevention, Control, and Countermeasure Plan
requirements for onshore oil production facilities
oo. S 112.9(c)(2): 0 0 10 10 2 1
clarifies that
secondary
containment
include
sufficient
freeboard to
contain
precipitation.
S 112.11 Spill Prevention, Control, and Countermeasure Plan
requirements for offshore oil drilling, production, or workover
facilities
pp. S 112.11(i): 0 0 10 0 2 11
requires offshore
oil drilling,
production or
workover
facilities to
simulate
discharges for
testing and
inspecting
pollution control
and
countermeasure
systems.
Subpart C--Requirements for Animal Fats and Oils and Greases, and
Fish and Marine Mammal Oils; and for Vegetable Oils, including Oils
from Seeds, Nuts, Fruits, and Kernels
qq. S 112.12 - S 0 2 8 1 1 11
112.15: adds
sections to apply
to Animal Fats
and Vegetable
Oils based on the
Edible Oil
Regulatory Reform
Act (EORRA)
requirements.
Requirements are
identical to
Subpart B for
petroleum and
non-petroleum
oils.
Our stakeholder survey also allowed respondents the opportunity to
elaborate on their opinions of the SPCC amendments. Table 3 below presents
some illustrative examples of the open-ended comments that we received
from 22 of the 23 industry survey respondents. The examples include
respondents' opinions on the SPCC amendments that they consider to have
the most positive or negative impact on their industry sectors. These
comments provide the current opinions of the industry associations we
surveyed, but they do not necessarily represent the views of the regulated
community as a whole. In addition, these comments do not represent the
views of EPA or GAO.
Table 3: Examples from Industry Comments Regarding the 2002 and 2006
Amendments to the SPCC Regulation
Reference letter and
amendment addressed in
survey Comment
N/A. "The preamble `clarifications' significantly
broadened the scope and reduced the flexibility of
Preamble the 1973 rule. Industry and certifying PEs
[Professional Engineers] always interpreted, and
EPA enforced, the rule containment requirements
applying only to bulk storage tanks. The 2002
clarifications expanded these requirements to
include `containers,' piping, transfer operations,
and equipment containing oil. As a result,
integrity testing requirements were also applied to
this equipment. Additionally, the `should to shall
to must' clarification in the 2002 amendments
resulted in the requirements being more
prescriptive."
i. "This provision expands the scope of the 1973 rule
to include more than the storage of oil increasing
S 112.1(b) the number of facilities and equipment regulated
with no real benefit cited for the change."
"By adding fuel-containing equipment, the universe
of sites that require secondary containment and
SPCC plans increased significantly although engine
crankcases rarely have significant oil leaks."
j. "The existing Underground Storage Tank (UST)
regulations already control leaks and spills.
S 112.1(d)(2)(i) Exempting USTs from the SPCC requirements is a
significant burden reduction, particularly at
gasoline service stations."
o. "EPA significantly increased the number of
facilities covered by the rule in changes of the
S 112.2 definition text and preamble discussion. The
`navigable waters' definition was expanded to EPA's
broad interpretation without considering the recent
court decisions. By defining `storage capacity' as
the `shell capacity' of the container, the non-oil
portions of a container are included in the
applicability and containment capacity
requirements. The definition of oil now includes
virtually any substance that leaves a sheen."
"The definitions have made the rule more confusing.
For example, the addition of a definition of oil
and gas production facility complicates the
applicability determination for multiple facilities
in a single field."
"The definition of oil is also an issue [for us].
The definition in the rule is vague and causes
uncertainty as to whether or not a material is
considered oil under SPCC. As a result, materials
(e.g. solvents, coolants) that would not be
considered intuitively to be oil are pulled into
the regulation. In addition, as mentioned above,
there is no de minimis amount of oil under which a
mixture stops being considered oil. One drop of oil
in a thousand gallons of water would cause the
entire mixture to be considered oil."
d. "The ability to self certify in certain instances
will allow facilities to move forward without
S 112.3(g) requiring the signature of a PE, which can be
costly, and time consuming."
y. "Changing the required review period from 3 to 5
years is an improvement since most E&P [Exploration
S 112.5(b) and Production] facilities are modified
infrequently."
bb. "Deviations for secondary containment should be
allowed where secondary containment is not
S 112.7(a)(2) feasible, and `feasible' should contain some
element of expense, especially for flowlines."
gg.,ll. "Integrity testing for small storage tanks is
expensive - because it must be performed by a PE.
S 112.7(d) EPA should reevaluate any mandate beyond visual
inspection."
S 112.8(c)(6)
"Integrity testing should be left to the assessment
of the operator and PE certifying the plan. Under
the 1973 rule operators have used the flexibility
of the rule to implement appropriate inspections
and leak detections methods. The current system
adequately protects waters of the U.S. from spills
associated with E&P facilities."
ll. "Integrity testing is unnecessary for small
elevated tanks or those with release prevention
S 112.8(c)(6) barriers, as visual inspection will readily detect
leaks. Visual inspection in lieu of integrity
testing was agreed upon by EPA in litigation
settlement and should be incorporated into the
rule. Integrity testing is also not necessary for
small containers and drums, or for mobile
containers which are already regulated by DOT
regulations."
"...the requirement to integrity test all
containers/tanks is overly burdensome. Even
applying the STI [Steel Tank Institute] industry
standard (which was rewritten last year after the
final rules were published) requires a great deal
of recordkeeping and inspections for smaller tanks
and containers. EPA has indicated in the past that
tanks greater than 40,000 gallons present the
greatest risk. [We believe] that the rules should
require integrity testing only for tanks greater
than 40,000 gallons."
jj. "Consistent with API [American Petroleum Institute]
Standard 653, brittle fracture evaluations are a
S 112.7(i) good industry practice to reduce the risk of
releases from tanks."
p., q., ff., gg., mm. "[The amendments] will be extremely costly and time
consuming. Farm tanks, especially those for
S 112.3(a),(b) irrigation, are not situated in centralized
locations that are ideal for one SPCC plan,
S 112.3(d) containment wall, etc. Instead they are spread out
in different fields, parcels, farms (rented and
S 112.7(c) owned) which, by interpretation, may require
separate SPCC plans, containment, security, etc.
S 112.7(d) Seasonal (planting, harvest) requirements mean that
farmers cannot dedicate extensive time to upgrading
S 112.8(d)(1) multiple locations for rule compliance. There is
also an expected shortage of Professional Engineers
for the amount of tanks that may be regulated. Many
tanks must also be mobile to some extent as wells
dry up and new ones are dug. Short answer - the
SPCC rule was made for heavy industry, not farming,
and does not translate, as written, in a common
sense manner to agriculture."
i., o., ff., mm., gg. "We are concerned about the 2002 expansion of the
rules to motive power and other oil-filled
S 112.1(b) equipment that merely uses oil. These issues were
also favorably addressed in the 2006 rule revision.
S 112.2 Finally, we remain concerned about the EPA's
definition of "navigable waters," which broadly
S 112.7(c) extends the Agency's jurisdiction."
S 112.8(d)(1)
S 112.7(d)
i., o., ff., mm., gg. "[Our] chief concern with the 2002 amendments was
the regulation of airport mobile refuelers,
S 112.1(b) requiring them to have sized containment plans for
the trucks when not in service. The 2006 amendments
S 112.2 have essentially eliminated this requirement. [We
also were] very concerned about the 2002 expansion
S 112.7(c) of the rules to motive power and other oil-filled
equipment that merely uses oil. These issues were
S 112.8(d)(1) also favorably addressed in the 2006 rule revision.
Finally, [we remain] concerned about the EPA's
S 112.7(d) expansive and vague definition of `navigable
waters,' which broadly extends the agency's
jurisdiction. We look forward to additional
rulemaking to address this concern."
ll., mm., nn., oo. "Produced water storage tanks typically contain
small volumes of oil that do not represent a
S 112.8(c)(6) significant source of oil storage. Water produced
should be exempt from the SPCC regulations because
S 112.8(d)(1) there is a very low risk of a significant discharge
of oil to Waters of the U.S. Additionally, by
S 112.8(d)(4) expanding the scope of the SPCC program to cover
produced water, it has the effect of capturing
S 112.9(c)(2) hundreds of thousands of natural gas operations
producing natural gas liquids that have previously
fallen below the threshold for planning."
"The containment of produced fluids around oil and
gas fired process vessels, such as heater treaters,
can present a serious safety hazard and it is
impractical for pressurized vessels. In addition,
the rule treats process/operating equipment
inconsistently for 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.
These vessels are flow-through process vessels
rather than containment vessels."
"Requirements for containment around flow lines and
gathering lines are excessive and impractical and
will cause significant and unnecessary disturbance
of the surrounding lands. Installing secondary
containment (including double-walled piping) or
retrofitting all existing flow lines and gathering
lines 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 to prevent
spills. Flow lines are not and should not be
considered oil storage containers."
N/A. "A recurring problem with the SPCC program has been
inconsistent interpretation between EPA's
headquarters and its regions. Consequently, EPA
needs to establish its requirements as regulations
that can be consistently interpreted and applied
equally throughout the country. Guidance documents
fail to provide certainty; rather, they create the
opportunity for different interpretations of the
same requirements in different EPA offices. But,
Guidance documents preclude formal challenges and
therefore create the opportunity for arbitrary and
unsubstantiated decisions by EPA inspectors. The
SPCC programs needs reliability that can only be
achieved in regulations."
Source: Responses to GAO `s survey on EPA's SPCC rule.
Appendix III: Analysis of the Results of GAO's Survey on the Impacts of the
SPCC Amendments on Industry
Stakeholders Had Mixed Views on the Impacts of the SPCC Amendments
Our analysis of the results of our survey of 23 key industry stakeholders
regarding 43 major SPCC amendments indicates that they generally view
increases in SPCC requirements as having a negative impact on their
industries and decreases as having a positive impact.1 However, their
views on the extent of the anticipated impacts varied widely depending on
the type of requirement. Overall, industry stakeholders responded that the
2006 amendments would have a positive impact on their industries and that
the 2002 amendments would have a combination of both positive and negative
impacts. We identified five categories of amendments that increase SPCC
requirements. Of these five categories, we found that industry
stakeholders view two as having a mostly negative impact on their
industry, two as having a somewhat negative impact, and one as having a
somewhat positive impact. In addition, we identified four categories of
amendments that decrease SPCC requirements. Of these four types, we found
that industry stakeholders view three as having a mostly positive impact
on their industry and one as having a somewhat positive impact. Finally,
we identified one category of amendments that both increase and decrease
requirements and another category of amendments for which we could not
determine whether the amendments either increase or decrease the
requirements. We found that industry stakeholders view both of these
categories as having a somewhat negative impact.2
We found that industry stakeholders anticipate a mostly negative impact
from amendments that (1) increased requirements on testing, such as
integrity testing of storage tanks; and (2) increased requirements on
containment, such as secondary containment requirements.
By contrast, these stakeholders anticipate a mostly positive impact from
amendments that decrease requirements on containment, facility oil spill
prevention plans or notification procedures, and what we categorize as
multiple SPCC requirements. Finally, industry stakeholders indicated that
six amendment categories will have a somewhat negative or somewhat
positive impact on their industries compared with the other amendments.
Figure 1 summarizes these views.
1There was one exception to this general pattern: industry associations
generally reported that increasing requirements on employee training will
have a somewhat positive impact on their industry.
2According to EPA, Office of Emergency Management officials, the agency
considers five of the amendments to be clarifications to the scope or
definitions of the SPCC rule. The survey referred to these five amendments
as additions or expansions. To assess the potential for bias among these
questions we removed the questions related to these five amendments from
our analysis and recomputed scores for each of the categories. After
removing these five questions from the multiple aspects category, the
score results were similar to those presented above and in figure 1.
Figure 1: Summary of Industry Stakeholder Views on Impacts of 11 SPCC
Amendment Categories
We received responses to our survey from only one environmental
stakeholder and, therefore, we were unable to comprehensively analyze the
views of environmental groups.
Analysis Methodology
The following is a detailed description of the coding rules used and the
11 categories into which we placed the 2002 and 2006 SPCC amendments. We
summarize the major rule amendments finalized in 2002 and 2006; to see the
exact wording of the finalized rule, please refer to the regulation as
published in the Federal Register. We determined whether the amendment
increases or decreases requirements on facilities based on whether the
amendment uses terms such as "adds new requirements" and "mandates," which
would be considered an increase in requirements, or terms such as "allows"
or "exempts," which would be considered a decrease in requirements. In
some instances, we determined that an amendment does not imply either an
increase or a decrease in requirements, or that an amendment included
provisions that would both increase and decrease requirements. In
addition, there were several instances where we could not determine if the
amendment increased or decreased requirements. For example, several of
these types of amendments made definitional changes to words used in the
rule, but it was unclear from reviewing the text of the amendment whether
these changes were a clarification to the rule or increased or decreased
requirements. 3
Changes to Scope of the SPCC rule
In general, amendments in this category are changes to the criteria for
eligibility or changes to thresholds for oil storage. These amendments
affect either the number of facilities subject to the SPCC rule or the
number of oil tanks at a given facility subject to the SPCC rule. In
particular, the written description of the amendment in our survey should
include words such as increases, adds, eliminate, or exempts. We
identified one of the 43 amendments as expanding the scope of the SPCC
rule, and six as decreasing the scope of the SPCC rule.
2002 amendment that we categorized as expanding the scope of the rule:
o 112.1(f): gives the EPA Regional Administrators authority to
require an SPCC plan for any facility within the region, otherwise
exempt from the rule, in order to carry out the purposes of the
Clean Water Act.4
2002 amendments that we categorized as decreasing the scope of the
rule:
o 112.1(d)(2)(i): excludes the capacity of completely buried tanks
subject to all of the technical requirements of the underground
storage tank regulations from calculation of the threshold, and
states that permanently closed tanks also do not count in the
calculation.
o 112.1(d)(2)(ii): eliminates the aboveground storage capacity
threshold of greater than 660 gallons for a single container, but
maintains the greater than 1,320 threshold and establishes a "de
minimis" container capacity size of 55 gallons or greater to
calculate capacity.
3As previously stated in the report, according to EPA, the agency made
several definitional changes to clarify the types of facilities that are
included under the rule and facilities' requirements. However, many
industry sectors consider these amendments to be increases to the
requirements of the rule rather than clarifications.
4The summaries of amendments presented in this appendix were modified from
the text of amendment summaries in the questionnaire. For the full text of
amendments, see the Federal Register.
o 112.1(d)(4): exempts completely buried storage tanks that are
subject to all of the technical requirements of the underground
storage tank regulations from the rule requirements, but requires
those tanks to be included on the facility diagram.
o 112.1(d)(5), (6): exempts containers that are less than 55
gallons; and facilities (or parts thereof) used exclusively for
wastewater treatment unless it is used to meet part 112
requirements.
2006 amendments that we categorized as decreasing the scope of the
rule:
o 112.1(d)(2)(ii), S 112.1(d)(7): excludes "motive power
containers" (defined in S 112.2) from the rule, but does not
exclude the transfer of fuel or other oil into a motive power
container at an otherwise regulated facility.
o 112.3(a)(2), S 112.3(b)(2): delays the compliance dates for
farms until the effective date of a rule establishing SPCC
requirements specifically for farms or dates that farms must
comply with the provisions of this part.
Planning or Notification
In general, this category refers to requirements to prepare,
implement, amend, or certify SPCC plans or other records or
documents required of regulated facilities. The description of the
amendment includes references to plans, records, diagrams, or any
other documents that facilities are required to have under the
SPCC rule. We identified 17 amendments from 2002 and 1 amendment
from 2006 that fit this category. Of the 17 amendments from 2002,
we categorized 5 amendments as increasing requirements on facility
oil spill prevention plans or oil spill notification procedures, 9
as decreasing requirements, and 3 as either both increasing and
decreasing requirements or neither increasing or decreasing
requirements. The one amendment from 2006 decreased requirements.
2002 amendments that we categorize as increasing planning or
notification requirements:
o 112.3(e): requires a copy of the SPCC plan to be maintained at a
facility attended for at least 4 hours a day instead of the
current requirement of 8 hours.
o 112.4(d): provides that the EPA Regional Administrator may
require an amendment to the SPCC plan after an on-site review of
the plan.
o 112.7(a)(3): requires a description and a diagram of the
facility layout in the SPCC plan.
o 112.7(a)(4): requires facilities to provide additional
information and procedures in the SPCC plan for reporting a
discharge; facility response plan (FRP) facilities (defined in S
112.20) are exempt.
o 112.7(a)(5): requires facilities to organize the SPCC plan in a
readily usable format for an emergency; FRP facilities (defined in
S 112.20) are exempt.
2002 amendments that we categorize as decreasing planning or
notification requirements:
o 112.3(f): allows the EPA Regional Administrator to grant an
extension of time for amendments of the SPCC plan, as well as the
entire SPCC plan.
o 112.4(a): raises the threshold for reporting under the program
to two discharges of greater than 42 U.S. gallons (1 barrel) per
discharge in any 12-month period, and reduces the amount of
information to be submitted to the EPA Regional Administrator.
o 112.4(b): does not require new facilities to meet any
requirements of this section (S 112.4) until the compliance dates
for the initial preparation and implementation of an SPCC plan.
o 112.5(a): requires any amendment made under this section be
prepared within six months and implemented in no more than six
months from when the amendment was prepared.
o 112.5(b): changes the period of review for SPCC plans from 3 to
5 years, and requires documentation of completion of the review
and evaluation.
o 112.5(c): states that a professional engineer (PE) must certify
only technical amendments, and not non-technical amendments (e.g.
names, phone numbers).
o 112.7: allows differing formats for the SPCC plan; other formats
must be cross-referenced to the listed SPCC requirements and
include all applicable SPCC requirements.
o 112.7(e): allows use of usual and customary business records to
serve as a record of tests or inspections and records to be kept
separate from the SPCC plan; acknowledges the certifying engineer
as having a role developing inspection procedures.
o 112.8(c)(3), S 112.9(b)(1): allows National Pollutant Discharge
Elimination Systems (NPDES) records to be used for SPCC purposes
in lieu of events records specifically prepared for this purpose.
2006 amendments that we categorize as decreasing planning or
notification requirements:
o 112.6: allows "qualified facilities" (defined in S 112.3(g) to
self-certify SPCC plans and provides applicable requirements for
self- certification.
2002 amendments that we categorize as both increasing and
decreasing the planning or notification requirements, or that
neither increasing nor decreasing the requirements:
o 112.3(a),(b): requires facilities in operation to prepare or
revise an SPCC plan within 6 months and implement the plan within
one year; new facilities must prepare and implement an SPCC plan
before beginning operations.
o 112.3(d): requires the PEs to attest that they considered
applicable industry standards and that the SPCC plan is in
accordance with SPCC requirements; also allows an agent to examine
a facility in place of the PE, but the PE must review the agent's
work, and certify the SPCC plan.
o 112.4(c): changes the requirement from notification to the state
agency in charge of water pollution control activities to
notification to the state agency in charge of oil pollution
control activities.
Containment
In general, this category refers to requirements for containers or
piping used by SPCC facilities. In particular, the amendment in
our survey should use one or more of the following terms:
container, containment, secondary containment, piping, or tanks to
be included in this category. We identified one amendment from
2002 that increased requirements for containers or piping used by
SPCC facilities and two amendments from 2006 that decreased the
requirements.
2002 amendment that we categorized as increasing containment
requirements:
o 112.8(d)(1): requires all buried piping installed or replaced on
or after August 16, 2002, to have protective wrapping and coating
and cathodic protection or otherwise satisfy the corrosion
protection provisions for underground piping (40 C.F.R. pts. 280
or 281).
2006 amendments that we categorized as decreasing containment
requirements:
o 112.7(k): allows owners/operators of qualified oil-filled
operational equipment (defined in 112.7 (k)(1)) to meet alternate
requirements (defined in 112.7(k)(2)) in lieu of the general
secondary containment requirements.
o 112.8 (c)(2), S 112.8 (c)(11), S 112.12 (c)(2), S 112.12
(c)(11): provides an exception for mobile refuelers from
constructing and meeting certain secondary containment
requirements.
Testing
In general, this category refers to requirements to evaluate,
inspect, and test containers, piping, or equipment to prevent oil
spills. In particular, the written description of the amendment in
our survey should include one or more of the following terms:
test, integrity test, or inspect. We identified five amendments
from 2002 that fit this category. All five of these amendments
were categorized as increasing SPCC requirements.
2002 amendments that we categorized as increasing testing
requirements:
o 112.7(d): adds new requirements for periodic integrity testing
of containers, and periodic integrity and leak testing of valves
and piping when secondary containment is impracticable; exempts
FRP facilities (as defined by section S112.20) from having a
contingency plan when secondary containment is impracticable.
o 112.7(i): specifies a brittle fracture evaluation requirement
for field-constructed containers undergoing repairs, alteration,
reconstruction, or change in service that may affect the risk of
discharge.
o 112.8(c)(6): requires integrity testing on aboveground
containers on a regular schedule (as opposed to periodically), and
when material repairs are done; testing can be recorded using
usual and customary business records.
o 112.8(d)(4): requires integrity and leak testing of buried
piping at the time of installation, construction, relocation, or
replacement.
o 112.11(i): requires offshore oil drilling, production, or
workover facilities to simulate discharges for testing and
inspecting pollution control and countermeasure systems.
Training
This category refers to training of employees that facilities are
required to undertake. Amendments placed into this category must
include the key word "training." We identified one amendment--from
2002--that fits this category. We categorized it as increasing
requirements.
2002 amendment that we categorized as increasing requirements:
o 112.7(f): mandates training for oil-handling employees only, and
specifies additional training topics; also requires discharge
prevention briefings at least once a year.
Multiple Aspects
Amendments in this category either (1) do not fit into one of the
above categories or (2) fit into more than one of the above
categories. Two amendments--one each from 2002 and one from
2006--were categorized as decreasing requirements. In addition,
seven amendments in this category did not fit into the above
categories because we could not determine if the amendments
increased or decreased requirements.
2002 amendment that we categorized as decreasing requirements:
o 112.7(a)(2): allows deviations from most of the rule's
substantive requirements (except secondary containment), provided
that the reasons for nonconformance are explained, and equivalent
environmental protection is provided.
2006 amendment that we categorized as decreasing requirements:
o 112.3(g): defines a qualified facility eligible to self-certify
under the provisions set forth in S 112.6.
2002 amendments that we could not determine if they should be
categorized as increasing or decreasing or neither increased or
decreased requirements:
o 112.1(b): adds "using" to the lists of activities at facilities
subject to the rule and expands the scope of the rule to conform
to the expanded jurisdiction in the Clean Water Act.
o 112.2: adds new definitions, such as for "facility," and
discharge; revises the text of the definitions of "oil" and
"navigable waters"; and includes statutory definitions for
"offshore facility," and "United States" in the rule.
o 112.7(c): states that a containment system must be capable of
containing oil and constructed to prevent any discharge from
escaping from the facility before cleanup occurs.
o 112.9(c)(2): states that secondary containment must include
sufficient freeboard to contain precipitation.
o 112.12 - S 112.15: adds sections to differentiate requirements
for Animal Fats and Vegetables Oils based on the Edible Oil
Regulatory Reform Act (EORRA) requirements. Requirements are
identical to Subpart B for petroleum and non-petroleum oils.5
2006 amendments that we could not determine if they should be
categorized as increasing or decreasing or neither increased or
decreased requirements:
o 112.2: adds several definitions, including airport mobile
refueler, farm, motive power container, and oil-filled operational
equipment.
o 112.13 - S 112.15: removal of these sections because they are
not appropriate for facilities that process, store, use, or
transport animal fats and/or vegetable oils.
5Sections 112.13-112.15 have been deleted per the December 2006
amendments. Section 112.12 was established to provide a platform for any
further differentiation, if necessary. 71 FR 77285, 77293.
Appendix IV: Comments from the Environmental Protection Agency
Appendix V: GAO Contact and Staff Acknowledgments
GAO Contact
John B. Stephenson, (202) 512-3841, [39]stephensonj@gao.gov
Staff Acknowledgments
In addition to the individual named above, Vincent P. Price,
Assistant Director; Kevin Bray; Mark Braza; Greg Carroll; Jennifer
DuBord; Timothy J. Guinane; Jennifer Huynh; Lisa Mirel; and Carol
Herrnstadt Shulman made key contributions to this report.
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Highlights of GAO-07-763, a report to the Honorable James M. Inhofe,
Ranking Member, Committee on Environment and Public Works, U.S. Senate
July 2007
ABOVEGROUND OIL STORAGE TANKS
Observations on EPA's Economic Analyses of Amendments to the Spill
Prevention, Control, and Countermeasure Rule
Oil in aboveground tanks can leak into soil and nearby water, threatening
human health and wildlife. To prevent certain oil spills, the
Environmental Protection Agency (EPA) issued the Spill Prevention,
Control, and Countermeasure (SPCC) rule in 1973. EPA estimated that, in
2005, about 571,000 facilities were regulated under this rule. When
finalizing amendments to the rule in 2002 and 2006 to both strengthen the
rule and reduce industry burden, EPA analyzed the amendments' potential
impacts and concluded that the amendments were economically justified.
As requested, GAO assessed the reasonableness of EPA's economic analyses
of the 2002 and 2006 SPCC amendments, using Office of Management and
Budget (OMB) guidelines for federal agencies in determining regulatory
impacts, among other criteria, and discussed EPA's analyses with EPA
officials.
[46]What GAO Recommends
GAO recommends that EPA improve its analysis of future changes to the SPCC
rule by more closely following OMB guidance. In commenting on a draft of
this report, EPA generally agreed with this recommendation and stated
that, consistent with it, the agency will continue gathering data to
improve its understanding of the regulated universe and oil spill risks
and to address uncertainty and quantify benefits.
EPA's economic analysis of the 2002 SPCC amendments had several
limitations that reduced its usefulness for assessing the amendments'
benefits and costs. In particular, EPA did not include in its analysis a
number of the elements recommended by OMB guidelines for assessing
regulatory impacts. For example, EPA did not assess the uncertainty of key
assumptions and data. In the analysis, EPA assumed that certain facilities
were already complying with at least some of the rule's provisions and, as
a result, they would not incur any additional compliance costs because of
the amendments. However, the extent of facility compliance with the rule
was highly uncertain. EPA did not analyze the effects of alternative rates
of industry compliance on the estimated costs and benefits of the revised
rule and, therefore, potentially misstated these amounts. Furthermore,
EPA's 2002 analysis was limited in that it
o did not analyze alternatives to the amendments, such as
alternative lead times for industry to comply or alternative
levels of stringency;
o did not present the compliance costs that EPA expects facilities
to incur or save in the second and subsequent years under the
amendments in comparable present value terms (through
discounting); and
o provided only limited general information on the amendments'
potential benefits in reducing the risk of an oil spill and its
potential effects on human health and the environment.
EPA's economic analysis of the 2006 amendments addressed several of the
limitations of its 2002 analysis, but it also had some limitations that
made it less useful than it could have been for assessing the amendments'
costs and benefits. For example, EPA's 2006 analysis assessed the
potential effect of industry noncompliance on the estimated costs (or cost
savings) and estimated the present value of costs (or cost savings)
associated with different alternatives for burden reduction. Nevertheless,
as with the 2002 analysis, EPA did not estimate the potential benefits of
the 2006 amendments, such as the extent to which they would affect the
risk of an oil spill and public health and welfare and the environment. In
addition, EPA did not have available nationally representative samples for
its analysis; therefore, its estimates of the number of facilities that
would be affected by the 2006 amendments may not be accurate. In
particular, for one category of facilities, EPA based its estimates of the
number of facilities on data available from eight states. Because
facilities in these states may not have been representative of facilities
nationwide, EPA's use of these data in its analysis could have introduced
bias into its estimates of the number of facilities and costs for this
amendment. EPA acknowledged that its analysis of the 2006 amendments was
not a full accounting of all social benefits and costs but stated that the
results were based on the best available information given time and
resource constraints.
References
Visible links
36. http://www.gao.gov/cgi-bin/getrpt?GAO/RCED-89-65
37. http://www.epa.gov/oilspill/conting.htm
38. http://www.gao.gov/
39. mailto:stephenson@gao.gov
40. http://www.gao.gov/
41. http://www.gao.gov/
42. http://www.gao.gov/fraudnet/fraudnet.htm
43. mailto:fraudnet@gao.gov
44. mailto:JarmonG@gao.gov
45. mailto:AndersonP1@gao.gov
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